Federal Lawmakers Question Tenet's Use of CARES Act Funds

Four Massachusetts lawmakers are seeking answers from Tenet Healthcare about how the sprawling system used federal taxpayer funds, including grants and loans from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The group questioned whether Dallas-based Tenet used the funds "to enrich its executives and shareholders rather than meet the needs of its healthcare providers and patients during the COVID-19 pandemic," in a June 29 letter to the system's Executive Chair and CEO, Ronald Rittenmeyer. The lawmakers -- Senators Elizabeth Warren (D-Mass.) and Edward Markey (D-Mass.), and Representatives James McGovern (D-Mass.) and Lori Trahan (D-Mass.) -- said they believe the misalignment is evidenced by an ongoing nurses' strike in their state and at other facilities across the country.

The letter comes as hundreds of nurses continue a strike that began in March at Tenet's Saint Vincent Hospital in Massachusetts, Becker's Hospital Review reported.

"In the early months of the public health and economic crisis, Tenet furloughed staff and postponed the delivery of employee benefits, while seeking over $2 billion in loans and grants from the federal government, an effort you admitted was aimed at 'maximizing [Tenet's] cash position,'" the group wrote in the letter.

The lawmakers noted that despite the pandemic, Tenet reported annual earnings of more than $3.1 billion and available credit of $2.9 billion last year. They added that the system has received more than $936 million in grants from the Provider Relief Fund and some $1.5 billion more in relief from Medicare Advance Payments and payroll tax match deferrals.

"Meanwhile, Tenet Healthcare workers in hospitals across the country are currently on strike, seeking better pay and conditions," the group wrote, adding that at Saint Vincent Hospital, Tenet recently walked away from a 2-year negotiation.

"Since the beginning of last year, nurses at St. Vincent's filed more than 710 'unsafe staffing' reports, informing management that patient care conditions jeopardized patient safety," the letter stated. "According to the nurses, their patients in Worcester are 'experiencing an increase in patient falls, an increase in patients suffering from preventable bed sores, potentially dangerous delays in patients receiving needed medications and other treatments -- all due to lack of appropriate staffing, excessive patient assignments, and cuts to valuable support staff.'"

In California, Tenet Healthcare workers are striking over what they say is understaffing and a lack of health insurance, the lawmakers added. "Even at the height of the pandemic, Tenet pursued cost-cutting measures: from April to June of 2020, Tenet slashed hospital spending by 11% or $377 million, while receiving more than $850 million of federal stimulus money."

As the pandemic "exerted an extraordinary physical, mental, emotional, and economic toll on patients and health care providers," the system's "top executives and major shareholders profited greatly from the COVID-19 public health emergency," the lawmakers asserted. That included multimillion-dollar compensation for top executives, according to the group.

This year, the group added, Tenet plans to spend $150 million on acquiring more ambulatory surgery centers.

"Although we do not agree with many of the statements and characterizations in the recent letter from the Congressional members from Massachusetts, we will of course respond appropriately to the questions asked," a spokesperson for Tenet said in an emailed statement.

The spokesperson said that, since the beginning of the pandemic, it has supported its hospitals and caregivers, providing them with the resources and equipment needed to safely deliver care for tens of thousands of COVID patients.

"The CARES Act has been vital in helping to partially offset the unprecedented strain on the healthcare system caused by the pandemic," the spokesperson said. "The government support we received was used solely for the purpose of providing COVID relief in accordance with the terms and conditions of the support funding. Further, to help ensure resources would be available so that critical healthcare could continue without interruption, we also took a number of steps to preserve cash and strengthen our balance sheet during the pandemic, including borrowing $1.3 billion of new debt in the second quarter of 2020 and increasing our line of credit."

"Despite the new interest costs on this borrowing we incurred, we did it to safeguard the communities in which we operate by ensuring we would have resources to continue providing lifesaving care even if government lockdowns were extended," the spokesperson added.

As for the nurses' strike, the spokesperson said Tenet has reached dozens of agreements with unions during the pandemic, including with the United Food and Commercial Workers International Union at Saint Vincent Hospital.

"We brought that same spirit to the table with the Massachusetts Nursing Association," the spokesperson said, "holding over 30 bargaining meetings and delivering multiple proposals with improved terms as we work in earnest to reach an agreement."

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