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In the second 2002 scandal Tenet was again accused of paying kickbacks to doctors. A test case illustrated the legal problems in this area. After two mistrials the matter was still unresolved and a settlement was negotiated. All of Tenet's hospitals were investigated for kickbacks. The final settlement listed kickbacks amongst its charges but Tenet continued to claim what it did was legal.
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Every attempt is made to provide accurate and well written material. Your contributions, suggestions, additional information and advice sent to the web address at the foot of the page are welcome. Where possible they will be included in revised pages.
The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Material contained here represents my views based on my study of the operation of the health care marketplace and the material available to me. It should not be assumed to represent the views of any other individual or organization.
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The series:- Tenet and its
In July 2003 I wrote a web page titled "Tenet Health Care and its doctors" which included the story of Tenet's relationship with its doctors going back into the 1990s. In 2007 I put the material about Redding hospital into a separate web page and wrote two more about this revealing scandal within a scandal. The kickback allegations too had become a major player in the wider scandal. This has also been moved to a separate web page and updated. More Tenet sagas which involve doctors have come to light and these throw additional light on the many problems in Tenet's operations. While they deal with more than just the doctors they all contribute to the story of doctors and form a saga. I have therefore arranged them as a series called "Tenet and its Doctors".
The web pages are
The Alvarado hospital case is an excellent illustration of the problems when two different understandings are enshrined in two different contradictory laws but applied to the same context. Kickbacks are illegal but incentives which do the same thing are legal. Companies set up tortuous arrangements to make what are essentially kickbacks legal.
The Alvarado kickback case was a test case for the laws and also a test case of Tenet's practices. It probably determined whether it would have a criminal conviction and how much it would pay.
The laws were un-resolvable as the jury were unable to split the legal hairs to reach a decision. Like the Scrushy case the witnesses were compromised by their plea agreements and their own dishonesty. The juries did not accept their testimony. After two mistrials the government gave up and a settlement was negotiated.
Incentives to doctors are one of the key
problems in the health system. At the same time using financial
carrots to get doctors on side is seen as essential for success in
the marketplace. This is one of those areas where the ridiculousness
of the marketplace becomes quite comic.
On the one hand financial agreements with doctors which reward them for support are widely established as a threat to the health system and to patients. They are forbidden by the Stark laws, and representative Pete Stark after whom they are named is a strong critic of the big corporations.
On the other hand modern management strategies all hinge around incentives and a system of rewards and payment for favours or services. Partnerships with doctors means financial partnerships of one sort or another which means that doctors work with corporations for their mutual economic benefit. For some strange reason this is not seen as a threat to patients and the care they receive.
The market resents the Stark laws and sees them as a ridiculous obstruction to legitimate business. To bind doctors to the corporate mission all of the corporations pay doctors what amounts to kickbacks and try to find ways to do this legally. Legislators do their best to help them. The result is a mix of laws and regulations which overlap and contradict one another.
Most corporations (eg. Columbia/HCA, HealthSouth) have believed that they have found a way to do this legally but investigators often disagree. The vast majority of the fraud settlements with hospitals and laboratories involve allegations of kickbacks. Few come to court.
Not surprisingly Tenet's hospitals are once again accused. The real interest is what they did and what it reveals about the system.
While hospitals are not allowed to pay doctors for referrals they are allowed to recruit doctors from other areas and pay the expenses to relocate them close to their hospital so that they will refer patients to the hospital. Quite how this differs in its impact from simply paying for referrals is not clear.
Quite how you control this and stop hospitals from buying in doctors who will refer patients to them (ie kickbacks) is difficult to understand and even more difficult to police and prosecute. How fine can you split a hair?
The case focuses on physician-relocation agreements, which hospitals use to recruit physicians in their areas. Physician-relocation agreements can include salary guarantees and payments to cover the cost of equipment, rent and other expenses related to the establishment a new practice. However, hospitals could use such payments to "disguise bribes and kickbacks that interfere with physicians' medical judgment about where to send patients for hospital care," the Journal reports
Tenet Hospital CEO Indicted for Allegedly Giving Doctors Incentives To Refer Patients to Hospital http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18154 . . . . June 7, 2003
The Alvarado Hospital in San Diego, one of Tenet's hospitals in Texas was raided by the FBI in December 2002 soon after the scandal erupted. Barry Weinbaum, a Tenet employee for 25 years and the hospital's administrator for for over 10, was charged in June 2003. The two Tenet subsidiaries owning the hospital were charged in July 2003. Weinbaum's deputy, Mina Nazaryan, was charged in September 2003. All were charged with manipulating the relocation system to pay $10 million in illegal kickbacks. Nazaryan was also charged with obstructing the investigation.
When does a legal payment to doctors to come and set up close to your hospital become a kickback inducing them to refer patients to your hospital which was the obvious intention in relocating them? Is that a bit difficult to understand? What you are doing is both legal and illegal depending on which laws you use. You need to split hairs to reach a decision.
In this case the legal hair splitting created an impossible situation for jurors. The trials dragged on over nearly 18 months and there were two hung juries before the government finally gave up. What happened is interesting.
US $10 million is a lot of money for one
hospital to pay for relocating doctors practices. The administrator
denied this was a kickback. Tenet insisted this was a normal
corporate practice to bring doctors to areas where they were needed.
They claimed the practice was legal. At least Tenet did not say
appropriate or ethical.
Of equal interest was the revelation that the doctor through which these deals were mediated had been in trouble himself for defrauding Medicare. We should not expect the probity of its partners to be of concern to Tenet. As indicated earlier partnerships involve identifying with Tenet's definition of integrity. Its values and this doctors appear to be congruent.
The problem for Tenet was that people like this would more readily stab them in the back by giving evidence against them. The problem for the jury was that such people could not be trusted and their evidence, traded in return for a lenient sentence, was not credible.
Dec 2002 FBI raid Alvarado
Trouble keeps rolling over Tenet Healthcare Corp., Santa Barbara, Calif., like waves battering a shoreline. The company announced that federal investigators have raided its 193-bed Alvarado Hospital Medical Center, San Diego. The search warrants covered the offices of the hospital's CEO and director of business development, Tenet said. Based on the search warrants, Tenet said, it appeared that investigators were examining physician recruitment, relocation and consulting issues.
Tenet reports a second raid, other woes Modern Healthcare December 20, 2002
Jun 2003 Weinbaum indicted
United States Attorney Carol C. Lam announced today that a federal grand jury in San Diego has indicted Barry Weinbaum, the Chief Executive Officer of Alvarado Hospital Medical Center. The 8-count indictment charges Weinbaum with making illegal payments to physicians to induce the referral of patients to Alvarado Hospital.
According to the indictment, Weinbaum paid more than $10,000,000 to physicians who agreed to relocate their practices to the Alvarado Hospital service area.
According to the indictment, Weinbaum entered into Relocation Agreements with four physicians who joined Ver Hoeve's practice, knowing that at least $600,000 of the money that Alvarado Hospital paid to these physicians would be passed through to Ver Hoeve.
Grand Jury Indictment Press Release OFFICE OF THE UNITED STATES ATTORNEY SOUTHERN DISTRICT OF CALIFORNIA June 6, 2003
Jun 2003 Tenet defends Weinbaum
"We believe in the personal and professional integrity of Barry Weinbaum and we expect him and the hospital to be fully vindicated from these unfortunate allegations," said Trevor Fetter, Tenet's president and acting chief executive officer.
Recruitment and relocation of physicians is a customary and lawful activity engaged in by thousands of hospitals across the country. Such activity serves the vital purpose of ensuring that communities receive ready access to quality medical care.
Tenet Statement Press Release June 06, 2003
Jun 2003 Weinbaum
Weinbaum has been Alvarado's chief executive officer since 1991 and has worked with Tenet or its predecessor companies for 25 years. He received a Bachelor of Arts degree in history from Hofstra and a Master of Arts in health sciences from Johns Hopkins University. Weinbaum has been a member of the Federation of American Hospitals Board of Governors, and is currently on the San Diego State University Dean's Advisory Panel and is a Board Member of the Hospital Council of San Diego and Imperial Counties.
To avoid a jail sentence, Ver Hoeve agreed in 2001 to provide information in return for a sentence of probation, community service and restitution of $50,000.
Tenet Statement Press Release June 06, 2003
Jun 2003 Details
The indictment describes Mr. Weinbaum, 49, as paying doctors to move their practices near the hospital with the understanding that "much of that money would be passed through to established practices that Alvarado Hospital had targeted for increased referrals, and to established practices that were loyal referrers of patients to Alvarado Hospital." Mr. Weinbaum paid doctors and practices more than $10 million, according to the indictment. Chief of Tenet-Owned Hospital Is Indicted The New York Times June 7, 2003
Jun 2003 More details
The indictment states that in 1996 Weinbaum entered a "personal services" contract with Ver Hoeve in which Alvarado would pay Ver Hoeve $3,000 a month.
In 1997, Weinbaum approved a 1998 goal for an Alvarado administrative employee that instructed the employee to "grow Dr. Paul Ver Hoeve's practice and strengthen alliance with Alvarado Hospital Medical Center," according to the indictment.
The goal was also to recruit a doctor, identified in the indictment as Dr. L, and to grow hospital admissions by 24 a year.
Later that year, Weinbaum recruited Dr. L. to Ver Hoeve's practice, knowing that at least $194,000 of the money paid under the agreement would flow through to Ver Hoeve, the indictment stated.
The indictment listed such recruitment of several other doctors. It also alleged Weinbaum offered a bribe to Dr. L to induce him to refer patients to Alvarado. "
Chief of Tenet Hospital in San Diego Indicted Reuters June 6, 2003
Jul 2003 Tenet companies indicted
A federal grand jury Thursday indicted two subsidiaries of Tenet Healthcare Corp. on charges they paid illegal kickbacks to doctors who referred patients to a San Diego hospital.
Between 1992 and 2002, Tenet HealthSystem Hospitals Inc. and Alvarado Hospital Medical Center Inc. paid more than $10 million to a fund that helped recruit doctors to the area, purportedly to fill needs in Alvarado's service area, according to the 17-count indictment returned in San Diego.
``Kickbacks to doctors can wear many disguises, including sham relocation agreements. They are still kickbacks, they are still illegal, and they threaten the integrity of our medical system,'' U.S. Attorney Carol C. Lam said in a statement.
``We believe this very broad indictment mistakenly attacks a well-established, lawful and common means by which U.S. hospitals attract needed physicians to their communities,'' Trevor Fetter, Tenet's president and acting chief executive, said in a statement. ``We intend to defend ourselves vigorously. This prosecution, if successful, threatens a practice in the health care industry that is beneficial to communities.''
Grand Jury Indicts Tenet Subsidiaries New York Times July 17, 2003
Jul 2003 Other doctors named
But the new indictment names seven other doctors or medical groups that it says received the payments.
In one case, it says, physicians in the Mid-City Medical Group solicited money from Alvarado, promising that "patient load that we are capable to expand will definitely help to increase the flow of admissions."
In another case, the indictment said, Alvarado paid relocation money to the wife of a doctor already practicing in its community.
U.S. Indicts Tenet Hospital on Charges of Illegal Patient Referrals New York Times July 18, 2003
Sept 2003 Nazaryan charged
The associate administrator of Tenet Healthcare Corp.'s 193-bed Alvarado Hospital Medical Center, San Diego, was charged with obstruction of a healthcare criminal investigation and witness tampering, according to a complaint filed yesterday in U.S. District Court, San Diego. Prosecutors allege that Mina Nazaryan sought and received kickbacks totaling about $80,000 from five physicians who switched their practices to Alvarado between 1995 to 2002, the complaint said. Nazaryan negotiated agreements for three of the physicians. The physicians, four of whom are siblings to each other, also said that Nazaryan attempted several times to influence their statements to authorities, including suggestions of how to explain checks totaling $53,300 made on the physicians' practice account.
Complaint filed against second Tenet hospital exec Modern Healthcare's Daily Dose Sept. 24, 2003
The Alvarado action was a test case prior to reaching a global settlement with the company, probably with a criminal conviction for paying kickbacks. Authorities soon started investigating Tenet hospitals for similar practices across the country. They subpoenaed documents from other hospitals and medical groups looking for evidence. This continued into 2006. We don't know what they found.
Apr 2003 California and Nevada
Tenet Healthcare Corporation (NYSE: THC) said it had received today a civil subpoena from the Office of Inspector General in the Department of Health and Human Services, seeking documents related to its agreements with a physician group affiliated with five Tenet hospitals in California and Nevada. Tenet Receives OIG Civil Subpoena for Information Regarding Agreements With Physician Group Tenet Healthcare web site April 17, 2003
Jul 2003 Another 7 in California
Tenet said it had received subpoenas from the United States attorney's office in Los Angeles seeking information about physician relocation agreements related to seven hospitals in Southern California, mainly in the Los Angeles area. The subpoenas also seek more general information about physician-relocation agreements at all of Tenet's 114 hospitals, the company said.
In yet another investigation of its relationships with doctors, Tenet said in April that it had received a subpoena from the Office of Inspector General in the Department of Health and Human Services regarding its agreements with the Women's Cancer Center, a physicians' group affiliated with five Tenet hospitals in California and Nevada.
U.S. Expands Investigation of Tenet Healthcare Deals New York Times July 15, 2003
Aug 2003 San Diego in California
In a widening of the probe of whether doctors at Tenet Healthcare Corp.'s hospital in San Diego received illegal kickbacks, federal prosecutors Tuesday subpoenaed physician- recruitment records at all of its 114 hospitals and sought detailed information about seven of its Southern California hospitals, Tenet said.
U.S. probe at Tenet hospital expands Los Angeles Times July 16, 2003
Aug 2003 Florida
State officials issued a subpoena June 6 requesting employee records and doctor contracts at Florida hospitals from 1992 to the present, Tenet said in a regulatory filing. The records include loan, purchase and sale agreements, Tenet said.
Tenet Healthcare Says It Faces Florida Medicaid Investigation The New York Times August 9, 2003
Sept 2003 Texas
It (Twelve Oaks in Texas) is also accused of bribing physicians for patient referrals, an alleged practice that has already triggered several indictments at Tenet's Alvarado Medical Center in San Diego and government probes of at least six other southern California hospitals in the Tenet chain.
Whistleblowers Piping Up at Tenet The Street.com (Melissa Davis) September 30, 2003
Oct 2003 Cardiac practices in Los Angeles
Tenet said the subpoena seeks documents up to five years old "primarily regarding certain cardiac physician arrangements, coronary procedures and billing practices" at three Tenet hospitals in the Los Angeles area. The U.S. attorney's office now is investigating relocation agreements at eight Tenet hospitals in the area.
Tenet receives new subpoena over doc deals Modern Healthcare's Daily Dose Oct. 31, 2003
Oct 2003 Cardiac practices in Los Angeles
The embattled company - - - - - said the new request centers on certain cardiac physicians at the Centinela Hospital Medical Center, Daniel Freeman Memorial Hospital and USC University Hospital. The three hospitals are owned by Tenet subsidiaries.
Prosecutors Widen Probe of Tenet The Boston Globe October 31, 2003
Mar 2004 El Paso California
The probe now appears to involve the financial arrangements of up to 23 doctors with two acute-care hospitals owned by Tenet in El Paso, Sierra Medical Center and Providence Memorial Hospital, according to a company filing detailing what investigators have asked it to turn over.
In addition, the Justice Department has asked Tenet to submit documents related to the financial relationships between those two hospitals and two physician groups in El Paso.
New Data Sought in Federal Probe of Tenet: The investigation centers around two Texas hospitals and their financial relationships with doctors. LA Times March 4, 2004
Mar 2004 Settlement in Florida
Meanwhile, Tenet and the federal government finalized a $30.8 million agreement to settle two Medicare fraud cases. Under the agreement, disclosed earlier this month. Tenet will pay $22.5 million and sign a five-year corporate integrity agreement for North Ridge Medical Center, Fort Lauderdale, Fla., to resolve allegations that the hospital's financial arrangements with some physicians violated the antikickback statute, self-referral laws and the False Claims Act. Sal Barbera, the whistleblower whose 1997 lawsuit launched the investigation, will receive $5.2 million of the settlement. Tenet will pay $8.3 million to settle allegations that 106 hospitals owned by the company at varying times between 1992 and 2000 improperly coded discharges of Medicare inpatients. The discharge investigation was part of a national probe of Medicare transfers and discharges.
Shrinking Tenet may say goodbye to Santa Barbara Modern Healthcare's Daily Dose Mar. 25, 2004
Aug 2004 New Orleans
Tenet also said Tuesday in a filing with the Securities and Exchange Commission that on July 30 it received a subpoena from the United States Attorney's Office in New Orleans, requesting documents relating to physician relationships and financial arrangements at three New Orleans area hospitals - Memorial Medical Center, Kenner Regional Medical Center, and St. Charles General Hospital.
A federal attorney general's office has also subpoenaed documents of physician relationships and financial arrangements at the hospital operator. CFO Magazine (www.CFO.com) August 4, 2004
Oct 2004 San Ramon in California
A subpoena from the government soon followed. The Office of Inspector General, inside the Department of Health and Human Services, requested documents about arrangements between a group of physicians, San Ramon and four other Tenet-owned hospitals in the region. Then-general counsel Christi Sulzbach quickly downplayed the probe.
Tenet Doctor Probe Widens The Street.com (Melissa Davis) October 13, 2004
Oct 2004 Investigating Medical Directorships
Now, however, they are starting to question medical directorships -- often filled by powerful, established doctors -- at the company's San Ramon Regional Medical Center as well.
While legal and often useful, medical directorships can also be abused, observers say. Hospitals have come under fire in the past for illegally offering directorships in exchange for patient referrals.
Some former Tenet employees foresee bigger penalties to come. Specifically, they view Century City Hospital -- among the first of many California facilities Tenet recently shed -- as a source of major exposure.
Gil Mileikowsky, a fertility specialist who practiced at the hospital for years, claims that Century City paid some of his competitors $5,000 a month for "totally phony" directorships. Indeed, he says that the vast majority of the physicians practicing in a building adjacent to Century City received some kind of financial assistance "in exchange for bringing in patients."
Tenet Doctor Probe Widens The Street.com (Melissa Davis) October 13, 2004
Apr 2005 Memphis Tennessee
Tenet Healthcare Corp., Dallas, said it received a subpoena from the U.S. attorney in Memphis, Tenn., seeking documents regarding physician-relocation agreements at Tenet's St. Francis Hospital in Memphis since Jan. 1, 1999.
Tenet discloses Tenn. probe into doc-relocation deals Modern Healthcare April 29, 2005
Mar 2006 California, St. Louis, Memphis and New Orleans
Tenet also has faced questions over its contractual relationships with doctors that have led to investigations in California, St. Louis, Memphis and New Orleans. Tenet's corporate troubles have reverberated in all of its markets, including Florida, particularly as some doctors referred patients to non-Tenet hospitals because of the uncertainty surrounding the company.
The Palm Beach Post, Florida March 27, 2006
Tenet was kept under pressure as the Alvarado case dragged on. Tenet and the market were anxious for a global settlement with the government so that they could get back to business.
I suspect that the government wanted a criminal conviction. Other reports suggest government were looking for a US $1.6 billion settlement. If so then the Alvarado case was critical to this. When the case collapsed government settled for US $900 million.
Dec 2004 Holding up a global settlement
"As a practical matter, while the government is trying to convict our hospital and CEO in San Diego, it makes settlement discussions with them on other matters difficult," Tenet general counsel Peter Urbanowicz told investors at a conference.
Tenet Says Trial Poses Hurdle to Settlement LA Times December 16, 2004
Dec 2005 Still a problem
And "in our view, an acquittal will likely extend some of the stock's current rally, as it would not only serve as a psychological victory for Tenet but also take the company one step closer to overcoming its litigation woes and achieving a much-awaited global settlement with the government."
Tenet's Day in Court The Street.com (Melissa Davis) December 5, 2005
Dec 2005 Settlement must come soon
Shove, who rates the stock neutral, believes that Tenet will finally take a turn for the better after wrapping up a high-profile criminal trial in San Diego -- regardless of the jury's verdict.
The jury has gone weeks without reaching a decision on the complex case, leading some to believe that another mistrial could be on the way.
If that happens, experts feel, prosecutors will give up on the case instead of trying it yet again -- paving the way for the company to negotiate a long-awaited global settlement with the government. But Shove sees that settlement coming no matter what.
By now, he notes, the government's investigation of Tenet has dragged on for more than three years. In comparison, he notes, other fraud probes -- including an earlier inquiry into Tenet itself -- ended sooner. Thus, he concludes, a settlement of the current Tenet probe is now "long overdue."
Push Comes to Shove at Tenet The Street.com (Melissa Davis) December 9, 2005
Jun 2006 Resolution leads market to hope for a settlement"
Considering the stakes involved, we feel Tenet achieved a favorable resolution in this long-standing litigation. We view the sale of an unprofitable facility as a small sacrifice in the pursuit of a greater goal - a master resolution," Prudential Equity Group LLC said.
Citigroup "saw the case as the last remaining obstacle, and think this paves the way for a global settlement of all outstanding matters," including a key issue, Tenet's previous handling of Medicare outlier cases. "We view this as a very good development given the small settlement relative to the government's allegations."
Tenet Settles Probe of San Diego Hospital http://www.smartmoney.com June 08, 2006
The trial got under way in October 2004. There were some preliminary skirmishes about the witnesses and other matters. Three months into the trial Nazaryan entered into a plea agreement and gave evidence in return for a reduced sentence.
In the first trial, lasting 4 months, Tenet rejected the opportunity to make its case in its defence simply claiming that government had failed to make its case. Some jurors agreed and they could not reach a verdict. A mistrial was declared.
In the second trial Tenet mounted a strong defence and it dragged on for 12 months with another hung jury and a second mistrial.
The problem for the jury, were conflicting laws, a complex structured kickback system, lack of written material ordering fraud, and reliance on evidence given by witnesses who had traded their evidence for reduced sentences and so lacked credibility.
Oct 2004 Problem witnesses challenged
Tenet Healthcare Corp., Santa Barbara, Calif., accused U.S. Attorney Carol Lam's office in San Diego of withholding evidence that several witnesses made false statements in the criminal kickback case against Tenet's Alvarado Hospital Medical Center, San Diego, and two of the hospital's executives.
The accused witnesses include Paul Ver Hoeve, a physician whose charges helped launch the case, and members of the Mani family, some of whom received physician relocation agreements from Alvarado.
Tenet alleges some accusers lied in Alvarado case Modern Healthcare October 14, 2004
Oct 2004 A test case of complex laws
``How this trial goes, I assume, will drive what other U.S. attorneys decide to do,'' said Joseph Chiarelli, an analyst with Oppenheimer & Co.,
Tenet argues in court papers that laws surrounding such agreements are ``uniquely complicated and dynamic'' with the government often changing regulations in the past 10 years.
Tenet Says Payments to Doctors Were for Relocation, Not Bribes Bloomberg October 21, 2004
Jan 2005 Nazaryan makes plea bargain
A former Tenet Healthcare Corp. hospital executive has agreed to plead guilty to a single count of criminal conspiracy, the company said Wednesday, making a deal in the midst of her trial on charges that she helped arrange kickbacks to persuade doctors to refer patients to Alvarado Medical Center.
Mina Nazaryan, Alvarado's physician recruiter, had been indicted on several counts of conspiracy and other crimes and faced the possibility of more than 10 years in prison. With the plea deal, Nazaryan's sentence could be five years or fewer, according to legal experts following the trial in federal court in San Diego.
If Nazaryan testifies, Tenet's lawyers will try to discredit her by claiming that she would say anything to save her own skin, Newhouse said. But if jurors believe Nazaryan, hers will be "very powerful testimony . It virtually seals the fate of the company."
Tenet Ex-Exec Pleads Guilty in Referral Case : Mina Nazaryan was accused of arranging kickbacks for doctors who sent patients to a San Diego hospital. LA Times January 6, 2005
Jan 2005 Guilty plea
Nazaryan, the hospital's former associate administrator, pleaded guilty to a conspiracy charge Jan. 4, admitting that she plotted with former chief executive Barry Weinbaum to overpay doctors in exchange for patient referrals.
Witness didn't see M.D. deals as bribes: Ex-Alvarado official testifies she knew relocations illegal UNION-TRIBUNE January 13, 2005
Jan 2005 Tenet says case unproven
Tenet Healthcare Corp., Dallas, said defendants - - - - , have asked the judge in U.S. District Court there to dismiss the charges. Tenet said the defendants, which include the hospital, a Tenet subsidiary and two former Alvarado executives, will not call any witnesses, even if the motion is denied. Tenet said the U.S. attorney's office in San Diego proved only that some relocation agreements may have been poor business decisions or may have violated internal policies, but the office did not prove that the defendants knowingly signed agreements that influenced any physician's medical decisions.
Defendants in Alvarado kickback case seek dismissal Modern Healthcare January 25/2005
Feb 2005 Case rests on testimony of two felons
Closing arguments began Wednesday after Judge M. James Lorenz decided to delay ruling on a motion by the three defendants to dismiss the charges on grounds of insufficient evidence. Prosecutors told the jury that the testimony of Mina Nazaryan, a former Alvarado Hospital Medical Center executive in charge of physician relocation agreements, was enough to convict all three defendants -- the hospital, a Tenet subsidiary and Alvarado's former administrator, Barry Weinbaum -- on at least some charges. The defense argued that the government's case rests on the testimony of two admitted felons, Nazaryan and physician Paul ver Hoeve, who made deals with the prosecution.
Judge Delays Ruling on Tenet Bid to Dismiss Case Bloomberg News February 2, 2005
Feb 2005 Mistrial declared
After more than a week of deliberations, the jury reported it was unable to reach a unanimous verdict, prompting U.S. District Judge M. James Lorenz to declare a mistrial, Tenet said. The case went to the jury nearly two weeks ago, after a four-month trial and three days of closing arguments.
Judge declares mistrial in Tenet kickback case Modern Healthcare Alert February 17, 2005
Feb 2005 New trial starts in March
U.S. District Court Judge M. James Lorenz also set March 29 as a tentative date for a retrial of the physician kickback case against the three defendants.
Conspiracy charges to stand in Tenet kickback case Modern Healthcare February 23, 2005
Dec 2005 Second trial dragging on without a verdict
By now, California jurors have gone more than a week without reaching a decision in a high-stakes criminal case about the company's financial contracts with physicians.
The current trial has now stretched on for nearly twice as long as the original one did.
Tenet's Day in Court The Street.com (Melissa Davis) December 5, 2005
Dec 2005 Juror dismissed. Jury to start from scratch
A federal judge in San Diego dismissed a juror Tuesday in the criminal kickback case against Tenet Healthcare Corp. after the man discussed the case outside of court.
After a morning hearing, U.S. District Judge M. James Lorenz announced he would replace the juror with an alternate.
He directed the 12-member jury, which was in its 17th day of discussion, to start deliberations from the beginning when it reconvened this morning.
Judge Ousts Tenet Juror: The panelist had been overheard discussing the criminal kickback trial outside of court. Deliberations will begin anew with an alternate. LA Times December 21, 2005
Jan 2006 Tenet asks for mistrial
Tenet sought a mistrial after a recently seated juror sent a note to Judge James Lorenz complaining that he felt rushed by other panelists.
Tenet's Request for Mistrial Is Denied LA Times January 19, 2006
Apr 2006 Mistrial finally declared
U.S. District Judge M. James Lorenz declared a mistrial Tuesday after jurors notified him that they were hopelessly deadlocked after 4 1/2 months of deliberation.
"The government continues to believe that it is important to address violations of the Medicare anti-kickback statute," Lam's office said in a statement. "We regret that the jury was unable to reach a verdict in this trial, and we will report back to the court with respect to our intentions regarding the case."
The first trial, which lasted four months and ended in February 2005, also resulted in a hung jury, reportedly split 9 to 3 in favor of conviction.
Tenet rested the first time around without presenting testimony, but the company put on a full defense in the second trial, which included seven months of testimony. One source said the second jury was evenly split on a verdict, but that could not be confirmed Tuesday.
Kalifon said jurors might have had trouble sorting out the tangle of laws governing hospital payments to physicians, especially in a criminal trial, in which the level of proof required is beyond a reasonable doubt. In civil cases, jurors may be swayed by a preponderance of the evidence, a lower threshold.
2nd Tenet Trial Ends in a Hung Jury LA Times April 5, 2006
Thwarted by the Alvarado case the government excluded Alvarado from Medicare giving it the right to appeal to a tribunal without jurors and where a lesser burden of proof existed. It then negotiated a settlement in which Tenet agreed to sell the hospital and pay a settlement of US $21 million without admitting guilt. It admitted to excessive payments to doctors ut claimed they were not illegal.
The hospital was sold to a group of doctors and Tenet went on to negotiate a US $900 million settlement without admitting guilt.
May 2006 Exclusion from Medicare
HHS' Inspector General Daniel Levinson's office today notified Tenet Healthcare Corp. that it intends to exclude Tenet's Alvarado Hospital Medical Center, San Diego, from the Medicare and Medicaid programs for allegedly violating federal anti-kickback provisions. - - - - - - Alvarado has 30 days to challenge the proposed exclusion and the right to an HHS' administrative hearing. -
HHS to exclude Tenet hospital from Medicare, Medicaid Modern Healthcare May 1, 2006
May 2006 Negotiating a settlement
Tenet Healthcare Corp. <THC.N> on Wednesday said it had agreed to pay $21 million in a civil settlement with the U.S. Attorney in San Diego to resolve long-running criminal charges of kickbacks to doctors, and the hospital chain's shares rose 8 percent in premarket trading.
Tenet admitted no wrongdoing, but did say it was "distressed" by several instances of excessive payments the hospital made to doctors.
"Tenet's agreement to sell Alvarado Hospital ensures that this egregious pattern of kickbacks in San Diego has truly come to an end," said U.S. Attorney Carol Lam. In a statement, she said she would not try the case a third time.
The company also agreed to a demand from the Office of Inspector General in the U.S. Department of Health and Human Services to sell or close the hospital or have it face exclusion from federal health care programs such as Medicare.
Tenet settles San Diego case The Boston Globe May 17, 2006
Jun 2006 Tenet's distress?
"We were distressed to learn that certain host physicians had obtained excessive payments by representing that they needed money to make tenant improvements to accommodate new physicians when, in fact, they never made improvements," Alvarado and the Tenet unit said as part of a statement.
Tenet Settles Probe of San Diego Hospital http://www.smartmoney.com June 08, 2006
Oct 2006 Alvarado bought by group of doctors
Plymouth Health is a physician-owned company formed specifically to acquire and operate Alvarado Hospital. Plymouth Health's owners include physicians Pejman Salimpour, a professor of medicine at UCLA, and Pedram Salimpour, who owns healthcare technology company CareNex Health Services.
Tenet in deal to sell Alvarado Hospital Bloomberg News and the Associated Press October 28, 2006
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