About Tenet Healthcare

Tenet Healthcare Corporation (Tenet) operates as a diversified healthcare services company. The company operates its nationwide care delivery network through direct and indirect subsidiaries, as well as downstream partnerships and joint ventures. Segments The company operates through two separate reporting segments: Hospital Operations and Services, and Ambulatory Care. Hospital Operations and Services (‘Hospital Operations’): This segment includes acute care and specialty hospitals, a network of employed physicians, and outpatient facilities, including imaging centers, urgent care centers (each, a ‘UCC’), ancillary emergency facilities and micro-hospitals; and the revenue cycle management and value-based care services that the company’s Conifer Health Solutions, LLC joint venture (‘Conifer JV’) provides to hospitals, health systems, physician practices, employers and other clients. Ambulatory Care: This segment includes the operations of the company’s subsidiary USPI Holding Company, Inc. (‘USPI’), which held indirect ownership interests in ambulatory surgery centers (each, an ‘ASC’) and surgical hospitals. Hospital Operations and Services segment In 2023, the company continued to pursue advantageous opportunities to grow the company’s portfolio of hospitals and other healthcare facilities. In December 2023, the company completed a joint venture transaction with NextCare, Inc. (‘NextCare’) and certain of its affiliates pursuant to which the company acquired ownership interests in 56 fully operational UCCs and one telehealth center located in Arizona. NextCare will continue to provide management services to each UCC pursuant to the terms of a management services agreement, and the centers will continue to operate under the NextCare brand. In addition, the company is constructing a new medical campus located in the Westover Hills area of San Antonio, Texas, that is expected to include a 104-bed acute care hospital, an ASC and medical office space. The project is on schedule for completion in mid-2024. During 2023, the company also broke ground on a new medical campus located in Port St. Lucie, Florida that is expected to include a 54-bed hospital, as well as medical office space. The company expects to complete construction of the Port St. Lucie medical campus in late 2025. In November 2023, the company entered into a definitive agreement to sell three of the company’s South Carolina hospitals, their affiliated physician practices and other related hospital operations, and that transaction closed on January 31, 2024. Also in January 2024, the company entered into a definitive agreement for the sale of four acute care hospitals and related operations in Orange County and Los Angeles County, California. The transaction is expected to be completed by early 2024, subject to customary regulatory approvals, clearances and closing conditions. In addition, the company exited some service lines at individual facilities in 2023, in each case because they are no longer a core part of the company’s long-term growth and synergy strategies. The company may decide to sell, consolidate or close facilities or service lines in the future to eliminate duplicate services or excess capacity or because of changing market conditions or other factors. The company’s subsidiaries operate hospitals serving primarily urban and suburban communities in nine states. The company’s subsidiaries had sole ownership of 53 of these hospitals, six were owned or leased by entities that are majority owned by a Tenet subsidiary, and two were owned by third parties and leased by the company’s wholly owned subsidiaries. The company’s Hospital Operations segment also include outpatient centers, the majority of which are provider-based and freestanding imaging centers, freestanding UCCs, off-campus hospital emergency departments (‘EDs’) and micro-hospitals. In addition, as of December 31, 2023, the company’s subsidiaries owned or leased and operated: a number of medical office buildings, all of which were located on, or nearby, the company’s hospital campuses; nearly 770 physician practices with a network of employed physicians; and other associated healthcare businesses. Each of the company’s general hospitals offers acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories and pharmacies; in addition, most have: intensive care, critical care and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal and obstetrics services; and outpatient services, including physical therapy. Many of the company’s hospitals provide tertiary care services, such as cardiothoracic surgery, complex spinal surgery, neonatal intensive care and neurosurgery, and some also offer quaternary care in areas, such as heart and kidney transplants. Moreover, a number of the company’s hospitals offer advanced treatment options for patients, including limb-salvaging vascular procedures, acute level 1 trauma services, comprehensive intravascular stroke care, minimally invasive cardiac valve replacement, cutting-edge imaging technology, surgical robotic capabilities and telemedicine access for select medical specialties. All of the hospitals in the company’s Hospital Operations segment are licensed under appropriate state laws, and each is accredited by The Joint Commission. With such accreditation, the company’s hospitals are deemed to meet the Medicare Conditions of Participation and Conditions for Coverage, and they are eligible to participate Medicare, Medicaid and other government-sponsored provider programs. The company’s Hospital Operations segment also includes imaging centers, off-campus EDs and ASCs, all of which are operated as departments of the company’s hospitals and under the same license, as well as separately licensed, freestanding outpatient centers – typically at locations complementary to the company’s hospitals – consisting of 58 UCCs (56 of which are jointly owned with and managed by NextCare in Arizona), 25 imaging centers, 15 emergency facilities (14 of which are licensed as micro-hospitals) and one ASC. Approximately 60% of the outpatient centers in the company’s Hospital Operations segment are in Arizona and Texas. In addition to the hospitals and outpatient facilities discussed above, the company’s Hospital Operations segment now includes its Conifer JV’s revenue cycle management and value-based care service offerings. As of December 31, 2023, the company owned 76.2% of the Conifer JV, and Catholic Health Initiatives (‘CHI’) had a 23.8% ownership position. The term ‘Conifer’ refers to the company’s Conifer JV and its direct or indirect wholly owned subsidiaries. The revenue cycle management solutions the company offers consist of patient services, including centralized insurance and benefit verification; financial clearance, pre-certification, registration and check-in services; and financial counseling services, including reviews of eligibility for government healthcare or financial assistance programs, for both insured and uninsured patients, as well as qualified health plan coverage; clinical revenue integrity solutions, including: clinical admission reviews; coding; clinical documentation improvement; coding compliance audits; charge description master management; and health information services; and accounts receivable management solutions, including: third-party billing and collections; denials management; and patient collections. All of these solutions include ongoing measurement and monitoring of key revenue cycle metrics, as well as productivity and quality improvement programs. In addition, the company provides customized communications and engagement solutions to optimize the relationship between providers and patients. The company also offers value-based care services, including clinical integration, financial risk management and population health management, all of which aim to assist clients in improving the cost and quality of their healthcare delivery, as well as their patient outcomes. As of December 31, 2023, the company provided one or more of the business process services described above to approximately 675 Tenet and non-Tenet hospitals and other clients nationwide. Tenet and CHI facilities represented approximately 43% of these clients, and the remainder were unaffiliated health systems, hospitals, physician practices, self-insured organizations, health plans and other entities. Conifer’s agreement with CHI to provide patient access, revenue integrity, accounts receivable management and patient financial services to CHI’s facilities expires on December 31, 2032. Ambulatory Care segment As of December 31, 2023, USPI held indirect ownership interests in over 460 ASCs and 24 surgical hospitals in 35 states. USPI’s facilities offer a range of procedures and service lines, including among other specialties: orthopedics, total joint replacement, and spinal and other musculoskeletal procedures; gastroenterology; pain management; otolaryngology (ear, nose and throat); ophthalmology; and urology. In addition, the company is taking steps to grow its Ambulatory Care segment business by replacing high-volume, low-acuity service lines with service lines involving higher acuity cases. To that end, the company closed or sold its ownership interests in a small number of centers that are no longer part of the company’s long-term growth strategy. Operations of USPI—USPI acquires and develops its facilities primarily through the formation of joint ventures with physicians and health system partners. USPI’s subsidiaries hold ownership interests in the facilities directly or indirectly and operate the majority of its facilities on a day-to-day basis through management services contracts. The company operates USPI’s facilities, structures its joint ventures, and adopts staffing, scheduling, and clinical systems and protocols with the intention of increasing physician productivity and satisfaction. This focus on physicians, combined with providing high-quality healthcare in a convenient environment for patients, will continue to increase the number of procedures performed at the company’s facilities over time. The company’s joint ventures also enable health systems to offer patients, physicians and payers the cost advantages, convenience and other benefits of ambulatory care in a freestanding facility and, in certain areas, establish networks needed to manage the full continuum of care for a defined population. Further, these relationships allow the health systems to focus their attention and resources on their core businesses without the challenge of acquiring, developing and operating ancillary facilities. Real Property The company leases the majority of its outpatient facilities in both the company’s Hospital Operations segment and the company’s Ambulatory Care segment. These leases typically have initial terms ranging from five to 10 years, and most of the leases contain options to extend the lease periods. The company’s subsidiaries also operate a number of medical office buildings, all of which are located on, or nearby, the company’s hospital campuses. The company owns many of these medical office buildings; the remainder are owned by third parties and leased by the company’s subsidiaries. Healthcare Regulation and Licensing The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the ‘Affordable Care Act’), extended health coverage to millions of uninsured legal U.S. residents through a combination of private sector health insurance reforms and public program expansion. The initial expansion of health insurance coverage under the Affordable Care Act resulted in an increase in the number of patients using the company’s facilities with either private or public program coverage and a decrease in uninsured and charity care admissions, along with reductions in Medicare and Medicaid reimbursement to healthcare providers, including the company. A number of federal statutes, and the regulations implementing them, govern the company’s participation in the Medicare and Medicaid payment programs, including: The anti-kickback and antifraud and abuse amendments codified under Section 1128B(b) of the Social Security Act (the ‘Anti-kickback Statute’), which prohibit the knowing and willful remuneration of anything of value intended to induce or reward patient referrals or the generation of business involving any item or service payable by federal healthcare programs, subject to certain government-established ‘safe harbor’ exceptions; The False Claims Act (‘FCA’), which prohibits the submission of claims for payment to government programs that are known to be, or should be known to be, fraudulent; The Stark law, which generally restricts physician referrals of Medicare or Medicaid patients to entities the physician or an immediate family member has a financial relationship with, regardless of any intent to violate the law, unless one of several exceptions applies; and The Civil Monetary Penalties Law, which authorizes the Secretary of the U.S. Department of Health and Human Services (‘HHS’) to impose civil penalties for various forms of fraud and abuse involving the Medicare and Medicaid programs. The company regularly enters into financial arrangements with physicians and other providers in a manner that complies with the Anti-kickback Statute, the Stark law, and other applicable antifraud and abuse laws. The company has developed an expansive set of policies and procedures in its efforts to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and similar state privacy laws, under the guidance of the company’s ethics and compliance department. The company’s compliance officers and information security officers are responsible for implementing and monitoring enterprise-wide compliance with its HIPAA privacy and security policies and procedures. The company has also created an internal web-based HIPAA training program, which is mandatory for all employees. Under HIPAA, the company is required to report breaches of unsecured PHI to affected individuals without unreasonable delay, but not longer than 60 days following discovery of the breach. The company is also required to notify HHS and, in certain situations involving large breaches, the media. The company is also subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA. Laws and Regulations Affecting Revenue Cycle Management Services The federal Fair Debt Collection Practices Act (‘FDCPA’) regulates persons who regularly collect or attempt to collect, directly or indirectly, consumer debts owed or asserted to be owed to another person. Certain of the accounts receivable handled by Conifer’s third-party debt collection vendors are subject to the FDCPA, which establishes specific guidelines and procedures that debt collectors must follow in communicating with consumer debtors, including the time, place and manner of such communications. Conifer is also subject to both federal and state regulatory agencies who have the authority to investigate consumer complaints relating to unfair, deceptive and abusive acts and practices, as well as a variety of consumer protection laws, including but not limited to the Telephone Consumer Protection Act and all applicable state equivalents. Laws and Regulations Affecting GBC The company’s operations at its GBC in the Philippines are subject to certain U.S. healthcare industry-specific requirements, as well as the U.S. and foreign laws applicable to businesses generally, including anti-corruption laws. One such law, the Foreign Corrupt Practices Act (‘FCPA’), regulates the U.S. companies in their dealings with foreign officials, prohibiting bribes and similar practices, and requires that they maintain records that fairly and accurately reflect transactions and appropriate internal accounting controls. FCPA enforcement actions continue to be a high priority for the SEC and the U.S. Department of Justice. History Tenet Healthcare Corporation was founded in 1967. The company was incorporated in the state of Nevada in 1975.