TenetHealthcare Corp. finalized an agreement with state and federalprosecutors in a kickback case that will require three years of compliancemonitoring and a slight increase to the company's reserve.

As a result of the settlement with the U.S. Department ofJustice and the attorneys general for South Carolina and Georgia, Tenet raisedits reserve $1million, to $517 million. The company expects to fund the payment during thefourth quarter using available liquidity, including cash and borrowings underits revolving credit facility.

Pending court approval, the agreement resolves the Clinicade la Mama civil litigation and criminal investigation. It releases Tenetand certain subsidiaries from further monetary claims arising from allegedviolation of federal and state anti-kickback and false claims laws related toreferral arrangements with Hispanic Medical Management Inc.

State and federal prosecutors will choose an independentmonitor to oversee compliance. As part of the agreement, two subsidiaries thatoperated hospitals in Georgia will plead guilty to violating kickback and fraudlaws. Atlanta Medical Center Inc. and North Fulton Medical Center Inc. agreedto pay $146 million.

Tenet has expanded its policies related to referral sourcearrangements and altered its vendor selection process, the company said in apress release.