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USA section    Series :- Tenet Healthcare and its Doctors

Tenet Healthcare's Redding Hospital
Unnecessary Cardiac Procedures II
2007 Web page

Introductory page
This corporate web site addresses the issues of corporate health care within a broad framework. A web page describing this broad context should be considered as an introduction to each page on the web site. If you have not yet read it then
CLICK HERE to open it in another tab or web page.

Content of this page
This page written in 2007 is the second page about the Redding hospital scandal in which 769 patients were alleged to have had unnecessary surgery in order to fuel profits. It provides more information about how and why this happened. It looks at the civil settlements that were reached and the role of whistleblowers. It describes how multiple attempts to get Tenet to confront the problem had failed.


The series:- Tenet and its doctors
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

Unnecessary Cardiac Procedures II 



In 2003 I wrote the first page describing the unfolding scandal at Redding hospital. Many hundreds of patients had unnecessary heart catheterisations and coronary bypass surgery performed in order to boost Tenet's bottom line. This was in order to exploit the potential for profit offered by the outlier scam. You should examine the first Redding page before reading this one.

Click Here to go to this first page about Tenet's Redding hospital.

The 2007 page picks up the story and explains how the scandal worked itself out and the insights obtained as more material became available.

It took 3 years for the Redding hospital scandal to unwind. Ultimately Tenet and the doctors paid out US $500 million and authorities forced Tenet to sell the hospital. None of them admitted guilt. Although the principle doctors will no longer practice in Cardiology they have not been prosecuted for their actions.

By October 2003, a year after the scandal broke the hospital was in tatters and large numbers of staff had been fired.

Oct 2003 Hospital in tatters
Once the preferred destination for heart patients from throughout rural Northern California, Redding Medical Center is on the brink of collapse. Layoffs, a suspended heart surgery program and the threatened cutoff of all federal funding have fueled distrust, frightening many patients away. Half the hospital's beds are empty, and profits are half what they were a year ago.

Critical condition : Will new medical oversight and new leaders be able to revive hospital? Sacramento Bee October 26, 2003

As I predicted in my 2003 page about Redding there was another settlement with more compliance procedures and more oversight. A number of faces changed and were replaced with new faces from the same stable. There weren't even any successful prosecutions.

The parties themselves paid out paltry fines and settlements; little more than compensating those whom they had harmed. While pretending to cooperate Tenet challenged and denied, negotiating settlements without any admissions.

They will once again be putting this all behind them as they get back to the business of serving their shareholders by making as much money as they can from the care they claim to provide.

Their culture is intact and their business practices are largely unchallenged. Can we expect them to change? I won't be holding my breath. We will be waiting for the next installment, perhaps in another 10 years when they are once again share market darlings.

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Why it happened

There have been hundreds of articles written. A January 2007 book "Coronary: A True Story of Medicine Gone Awry " by Steve Klaidman tells the story in great detail. None of this material has caused me to alter my assessment of the underlying processes at work in Redding - or in health care in the USA.

The processes at work

Kurt Eichenwald in a long article in the New York Times has written one of the best assessments of the processes at work. Because it says so much I take the liberty of reproducing a sizeable bit of his assessment.

Stephen Klaidman in his book about the Redding hospital gives much more information about the way the profit first culture of the company operated in the hospitals. He interviewed many participants. It is clear that little had changed since the 1991-1994 scandal. Its business strategies were still intact. The book gives a fascinating insight into what happened and is well worth the read.

Aug. 2003 How it happened
As disturbing as the accusations may be, there would have been a logic to what a patient called Redding's "little house of horrors" - a logic born of the twisted finances of American health care, which may have made the hospital less willing to hear concerns about two of its highest-billing doctors.

Until federal agents raided Redding last fall, Tenet's business model was based on maximizing the dollars it could collect from Medicare, the nation's biggest buyer of health care. And Medicare's complex formulas - the template for private insurers, as well - reward some kinds of health care more richly than others, and few more richly than cardiac care.

So it was that two heart doctors at Redding - Dr. Chae Hyun Moon, the chief cardiologist, and Dr. Fidel Realyvasquez, its top cardiac surgeon - became immensely powerful, people who worked there. Tenet promised investors growing profits, and at Redding, these people said, that required steady growth in cardiac care.
`We were constantly being pushed to bigger budgets, and there was no way to do it without the heart institute," one former Redding administrator said. "People were terrified that Moon would go on vacation, because of the effect a few days would have on the hospital's financial performance."

While few doubt the hospital would have responded to explicit evidence of problems in the heart program, like high death rates, the financial pressures created a disincentive to pursue less specific suspicions, people who worked at Redding said.
But the hospital never conducted the peer reviews that might have confirmed the critics' doubts.
By the winter of 1998, Redding Medical Center was virtually bursting at the seams. A conference room was converted into a patient care area. The emergency room was running over capacity.

"We were beyond full," one former administrator said. "We were flying."

That fiscal year, officials said, the hospital exceeded its budget for pretax profit by almost 50 percent, bringing in more than $50 million. And then at a budget meeting with senior Tenet officials, the order came down: Do better next year.

"We said `We don't know how to do it unless we have extra capacity,' " the former administrator said. "They were pushing for what I thought was ridiculous financial results."

Tenet agreed to invest millions of dollars to complete rapidly the construction of a five-story addition to the hospital. People in town came to call it "the tower," a symbol of how a once sleepy hospital, founded by a single local physician in 1945, had truly entered the big time.

The project only heightened Redding's dependence on Dr. Moon and the California Heart Institute.
That willingness to conduct catheterizations and other invasive procedures also helped fuel Dr. Moon's success within Redding Medical Center. Over time, he became one of the hospital's biggest money-makers, conducting more than 35,000 catheterizations during his years there, which other cardiologists say is easily many times the number that they would expect in such a time frame.
By the early 1990's, Dr. Moon's success gave him enormous power in the organization. At one point, according to several Redding doctors, a former administrator and investigative records, Dr. Moon earned the reputation for having been instrumental in persuading Tenet to dismiss one of Redding's chief executives. The event, which became the stuff of hospital legend, only increased Dr. Moon's influence, said one former administrator.

"No one would ever want to take him on," he said. "Moon was Redding Medical Center, and he knew it."
Administrators' pay grew if Redding's profits exceeded Tenet's expectations, so the financial performance of Dr. Moon, Dr. Realyvasquez and their cardiac program was reviewed intently.

As part of a company wide procedure, Redding's chief financial officer prepared a report each month describing important events affecting the hospital's returns.

"They noticed everything," one former administrator recalled. "If Moon's numbers were off a little bit, they asked about it."
The doctors also received particular attention from senior Tenet executives, particularly Thomas Mackey and Neil Sorrentino, according to former Redding executives, doctors and documents obtained by investigators. Mr. Mackey was ultimately the chief operating officer of Tenet, while Mr. Sorrentino was the head of its California hospitals.

Topping it off were the financial rewards. Former Redding administrators said that, around 1997, Dr. Realyvasquez demanded and was given a lucrative contract, paying him huge sums of money.

"He told us the number he wanted, and we had to work backwards to figure out a way to get it to him," one administrator said.
Among that group is Redding Medical Center. According to federal data, outlier payments to Redding were off the charts. Medicare projected that it would pay 5.1 percent of its total standard payments for inpatient care at all hospitals to outliers. At Redding, in fiscal 2002, the payments instead reached 118.6 percent, or $55.7 million.
Indeed, the numbers at Redding raise questions about how problems at the hospital could have been missed. The state filings show, in the 12 months ended June 30, 2002, Redding Medical Center generated pretax net income of $94 million, more than any other of Tenet's 40 hospitals in California. Just down the street, the larger Mercy Medical Center reported pretax net income of about $5 million in the same period.

"When those types of numbers get reported back to the home office, does everyone stay willfully blind and declare a holiday, or does someone say, `Let's postpone the celebration and take a hard look at these,' " said Neil Getnick of Getnick & Getnick, which specializes in business integrity counseling. "Part of business integrity is creating reasonable expectations amongst shareholders of what kind of profits you can achieve, and what we have seen with Tenet indicates that the company departed from that basic model."

In that, analysts say, is the essence of the problem. Different hospitals can be run more efficiently, but ultimately, health care is a commodity; the science available at one hospital is the same across the street. The industry itself is more than a century old. Yet Wall Street expects and rewards double-digit earnings growth from hospital companies, something analysts say is unsustainable.

"The hospital industry is by its very nature a mature industry," said Mr. Reinhardt, the Princeton economist. "It is not a high-margin business. It can't be a growth industry like some Internet company. That is just unreasonable."
How One Hospital Benefited on Questionable Operations New York Times (KURT EICHENWALD) August 12, 2003

Jan 2007 Lessons at Redding
One of the things Gibson (new employee) learned immediately in his new job was that the pressure to produce income for the hospital and for Tenet was enormous.
He told his bosses that it couldn't be done, but they insisted not only that it could be done, but that if he knew what was good for him, it would be done.
Another thing Gibson learned quickly at RMC was that Moon and Realyvasquez both seemed to be completely untouchable and were the beneficiaries of a great many expensive perks. Moon for example, used the hospital aircraft to go to golf tournaments. The rules didn't apply to them.
"Coronary: A true story of medicine gone awry" by Stephen Klaidman Scribner New York 2007 (page 98) (see also section on Dennis Brown)

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Dr Moon - the man

We get a slightly conflicting view of the all powerful Moon from different people who worked with him. Perhaps the second excerpt was when Moon had a moment of insight and was sarcastically expressing his frustration with the hospital. Perhaps it was real but if so it is out of character with his other statements and his belief that he was really serving patients and saving their lives.

My guess is that he was living out the two different roles that the context within which he worked forced him to adopt. I have analysed why this happens and have called it "split consciousness" (see pdf file).

Jan 2007 Saving lives
Commenting on Moon much later, Linda (a RMC nurse) said "I don't think that he's malignant. I think he's crazy. I think that he has an ego so large that it would never occur to him that he could be wrong. I don't think he's motivated by money, I think he's motivated by power. I believe that he in his heart probably really believes that he's saving everyone's life. I think he believes in his heart that he's right and the rest of the world is wrong.
"Coronary: A true story of medicine gone awry" by Stephen Klaidman Scribner New York 2007 (Page 99-100) (page 126)

Jan 2007 Chasing money
When she (another nurse concerned about a child with incurable cancer) met Moon in the elevator one day she asked him "Dr Moon isn't there anything we can do to save this baby? I love this baby. I want him to be okay.". Moon's reply was "There's no money in the cure, there's only money in the treatment."
"Coronary: A true story of medicine gone awry" by Stephen Klaidman Scribner New York 2007 (Page 99-100) (page 128)

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Insight or lack of it

As in the earlier psychiatric scandal Tenet seemed to have no insight into the enormity of what it had done. As in the 1991 scandal it set up what it claimed was an independent review and boasted about this. When this clearly did not meet its expectations it refused to release the review.

Even after this it assumed that it would be allowed to restart its heart program at the hospital with a number or internal processes overseen by outside authorities.

Jul 2003 The Mercer report
Earlier, Tenet had rushed to reassure investors by hiring the prestigious Mercer Consulting Group to independently evaluate Redding's past activities. But the company has since refused to share results of that study even as it volunteered another Mercer report -- showing a smattering of unnecessary surgeries -- at a different California hospital.
"Roughly two years ago, Tenet bragged about Redding, indicating it was a cutting-edge facility and how pleased they were with the shop, volumes and types of procedures," Young said. "They knew then Redding's profile was abnormal. ... They were looking to replicate that model."
Whistleblower Wants Tenet to Come Clean The Street.Com (Melissa Davis) Jul 25, 2003

Aug 2003 Resuming cardiac care
Tenet Healthcare Corp. has named a new director at its Redding Medical Center and plans to soon resume treating heart patients at the facility.
The company also has agreed to random reviews of its cardiac procedures by doctors from outside Redding Medical Center.

Tenet also has named Candace Mark, 54, as the Redding hospital's new CEO. She replaces Hal Chilton, who has moved to a Tenet office in Orange County.
Tenet to resume treating heart patients at Redding facility San Francisco Chronicle August 23, 2003

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Getting community groups to speak for it

As has happened so often in this industry, Tenet found (or established) and surreptitiously funded a community group which would act on its behalf. Doctors were more realistic. They wanted the hospital to continue with a new owner.

Oct 2003 Different approaches
Critics claimed that lax oversight at the hospital had created an environment where unnecessary heart procedures could go undetected. They said cardiologist Moon was too powerful. He lacked board certification in cardiology but oversaw peer review of his program and sat on the hospital board.
The hospital has given Friends of RMC money for mailings, provided office space and a Web site and sponsored invitation-only meetings for the group. However, the mailings do not name Redding Medical Center or Tenet as sponsors of the organization.
The doctors are gathering signatures and political resolutions urging the federal government to allow the hospital to continue operating until another company can take over -- if it decides to strip the Redding Medical Center of Medicare.
Critical condition : Will new medical oversight and new leaders be able to revive hospital? Sacramento Bee October 26, 2003

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The Settlements

Tenet ultimately paid out over $500 million in settlements and was forced to sell the hospital. This was not a simple process and dragged on for several years.

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Settling government charges

The first settlement was a modest one of $60 million - $54 million initially and then another $6 million later. This was strongly criticised as it was felt that the sum was far too small and the hospital was protected from further criminal action. What it did do was to open the gates so that civil actions could get under way more rapidly. Elderly people would be compensated before they died.

Aug 2003 First payment
Tenet HealthCare Corp. THC.N will pay $54 million to settle government charges that the No. 2 U.S. hospital operator performed unnecessary heart surgeries at its Redding Medical Center hospital in California, the U.S. Justice Department said on Wednesday.
- - - - the settlement covered procedures performed on Medicare, Medicaid and Tricare patients.
U.S. says in $54 million settlement with Tenet Reuters August 6, 2003

Aug 2003 The terms
The settlement covers only patients who get health insurance through U.S. government programs, the Justice Department said in an e-mailed statement. Tenet didn't admit guilt and won't face criminal charges.
Health and Human Services officials also will continue their review of whether to exclude the hospital from Medicare, the Justice Department said.
Tenet Healthcare to pay $54 million settlement BLOOMBERG NEWS Aug 7, 2003

Sept 2003 Settlement opposed
The settlement, which was approved by officials at the Justice Department in Washington, D.C., relieves Tenet of potential criminal charges against the company and the hospital, but a federal grand jury continues to consider evidence against physicians and administrators at the medical center.
A lawyer for Dr. Patrick Campbell (Whistle blower), an internal medicine specialist at the hospital since 1993, is asking a federal judge to inquire into last month's settlement assessing the hospital's parent company, Tenet Healthcare Corp., for alleged unnecessary heart surgeries and tests. Campbell and attorney David Rude claim the settlement should be for approximately $500 million.
While federal officials had heralded the pact as the largest-ever medical necessity settlement, Rude claims in court documents that it is dwarfed by earlier false claims resolutions and that the government settled for 12 cents on every dollar it could have recouped.
Redding hospital's settlement opposed Sacramento Bee September 9, 2003

Nov 2005 Top up payment
Tenet Healthcare Corp. (THC) agreed to pay $6.5 million to resolve two remaining issues related to a hospital in Redding, Calif., previously owned by a Tenet unit.

In a press release Tuesday, Tenet said it will pay $1 million to settle its portion of a civil "whistleblower" lawsuit alleging that false claims had been submitted to private insurance companies.

In addition, the Tenet unit will make a final adjusted payment of $5.5 million that will conclude the federal government's three-year investigation of alleged unnecessary cardiac procedures performed at Redding Medical Center.
Tenet To Make Final Payment In Federal Settlement November 15, 2005

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Forced to sell the hospital

The government barred Redding hospital from receiving Medicare payments, then relented on condition that Tenet sold the hospital.

Sept 2003 Reasons
Tenet said the government found that the center "furnished cardiology and cardiac services that were medically unnecessary and failed to meet professionally recognized standards of health care."
Tenet Says Medicare May Exclude Redding Hospital Reuters September 4, 2003

Sept 2003 During 1999 to 2002
The government determined that the improper treatments and procedures were provided at least from 1999 through 2002.
Such a move could be financially devastating; American hospitals often depend on such payments for half of their revenue or more.
U.S. May Stop Reimbursing Tenet Hospital The New York Times September 5, 2003

Oct 2003 Tenet allowed to respond
The Redding case is the first time since 1980 that the inspector general's office has sought a discretionary exclusion - - one not mandated by a criminal conviction - - against an acute-care hospital.
HHS gives Tenet more time to defend Calif. hospital Modern Healthcare's Daily Dose October 6, 2003

Dec 2003 Tenet decides to sell
Tenet said Thursday that the OIG will suspend its effort to exclude the 269-bed hospital from Medicare while Tenet searches for a buyer. The new owner will be able to buy the hospital without the threat of Medicare exclusion, Tenet said.
Tenet Selling Redding Medical Center Yahoo & Associated Press December 11. 2003

Apr 2004 Sold
The Tenet Healthcare Corporation, the hospital chain being investigated by federal authorities, has agreed to sell a hospital in Redding, Calif., to the privately held Hospital Partners of America for about $60 million.
Tenet to Sell a Hospital The New York Times April 17, 2004

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California Department of Health

The California Department of health felt they had also been defrauded and recovered monies from Tenet.

Nov 2003 Overcharged
The California Department of Health Services will audit billing practices at all 40 Tenet Healthcare-owned hospitals in the state after finding that Redding Medical Center overcharged state programs by nearly $12 million, the Los Angeles Times reports.
The review also found that Redding's financial records revealed "numerous inaccuracies
and questionable costs for which Medi-Cal and CMSP should not have paid, including: inflated billing charges;
Medi-Cal billing codes;
inappropriate recording of costs and charges;
cost report errors consistently favorable to the hospital;
undocumented depreciation expenses;
unsubstantiated interest expense charges; [and]
inflated workers' compensation costs."

The Redding facility has repaid almost $8.9 million of the overpayments and has 60 days to repay an additional $3 million and appeal the decision, state officials said.
California To Audit Billing Practices at 40 Tenet Healthcare Hospitals for Potential Medicaid Fraud Unknown source approx November 3, 2003

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The Senate Finance Committee

The Senate Finance Committee under Senator Charles Grassley commenced an investigation and requested masses of documents, correspondence and emails. It requested the controversial Mercer report on Redding hospital which Tenet had refused to disclose. Two months later Grassley had to threaten. Whether it was ever produced I do not know but there does not seem to have been much publicity about its content. Grassley's comments about Tenet were scathing.

Sept 2003 Long list of disclosures
1. The findings and results of the Mercer Consulting Group's review of the cardiology program and all related programs at RMC (Mercer Report).
3. All documents provided to or made available to the Mercer Consulting Group, which either directly or indirectly support or provide the basis for the findings and results of the Mercer Report.
11. From 1990 through the present, all documents relating to communications between any doctor - - - , and Tenet administrators, officers or directors - - - - - that raise questions or concerns regarding Tenet's cardiac or related programs, including, but not limited to the necessity for cardiac procedures and surgeries.
Letter from Senator Grassley, chairman of the Senate Committee on Finance to Trevor Fetter, CEO Tenet Healthcare September 5, 2003

Sept 2003 Among worst wrongdoers
The Senate Finance Committee is joining the legion of federal investigators probing Tenet Healthcare Corp., Santa Barbara, Calif. In a letter seeking documents from Tenet, Committee Chairman Charles Grassley (R-Iowa) said, "In the annals of corporate fraud, Tenet more than holds its own among the worst corporate wrongdoers."
Senate Finance Committee also investigating Tenet Modern Healthcare's Daily Dose Sept. 8, 2003

Nov 2003 Threats
The Senate Finance Committee threatened to subpoena Tenet Healthcare Corp., Santa Barbara, Calif., if the company fails to release a consultant's report about the cardiology program at Redding (Calif.) Medical Center.
Panel may subpoena Tenet for consultant's report Modern Healthcare's Daily Dose Nov. 3, 2003

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Class action by 769 patients

A class action by the patients got under way. There was a dispute between whistle blowers. Government got involved and played a role in sorting out the mess and getting to a settlement.

Klaidman in his book "Coronary" indicates that there was some dispute about what was happening. The decision not to prosecute the company criminally was a bitter disappointment to many investigators, patients and whistle blowers. This was because the company was able to produce an expert who disputed some of the mountain of medical opinion and so could throw doubt into the multitude of other opinions. All the company and the doctors needed was one contrary opinion to show that medical opinion about what happened differed and so sink a criminal case.

The company settled by paying US $395 million to 769 patients or their relatives.

Aug 2003 Class action commences
Eight Redding heart specialists, Redding Medical Center and its parent corporation were named Friday in the largest single civil suit to date alleging unnecessary and invasive heart procedures were performed at the hospital.
Reiner contends the doctors and hospitals were warned about the allegedly unnecessary procedures at least six years ago but ignored the warnings and spent millions of dollars expanding and touting the RMC heart program.
Eight doctors, RMC, Tenet accused of profit scheme (Maline Hazle ) August 16, 2003

Jun 2004 Settlement talks
Settlement talks with government representatives and lawyers for more than 750 Redding patients are moving along parallel tracks. Sources said the amount under discussion to settle the Redding litigation would far exceed the $60 million Tenet expects to collect when it completes the sale of the hospital.
Tenet Could Pay $1 Billion to Settle Claims LA Times June 11, 2004

Dec 2004 Tenet settles
Embattled hospital operator Tenet Healthcare Corp. on Tuesday said it will pay $395 million to settle litigation with patients claiming one of its hospitals performed unnecessary heart surgeries.
Tue, Tenet Settles Lawsuits for $395 Million Reuters December 21, 2004

Dec 2004 More details
Under the settlement announced on Tuesday, without legal fees, patients would receive average payments of about $500,000, the Los Angeles Times reports. However, Tenet will determine final payments based on factors such as the severity of injuries, economic losses and age.
In addition, Tenet officials said that the company might have to cover the full cost of the settlement because insurers likely would not provide coverage.
Hospitals & Health Systems; TENET Agrees to $395M Settlement of Unnecessary Surgery Lawsuit American Health Line December 22, 2004

Still later, Tenet said it would pay $395 million to 769 patients who said they underwent unneeded cardiac procedures at Redding. Moon's cardiology group also settled with patients, paying $24 million to 345 plaintiffs.
CHRONIC CONDITION The Waste in Medicare Spending: At California Hospital, Red Flags and an FBI Raid: State Regulators Cited Concerns but Say They Couldn't Force Change by GM Gaul The Washington Post July 25, 2005

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The doctors

The doctors were not prosecuted criminally. Their insurers paid out the maximum the doctors' insurance covered. What interested me was the small amount that the principle doctors actually paid. They had made millions and lived lavish lives on expensive properties.

Also very interesting is that although Moon went to ground Realyvasquez did express his views and spoke to Klaidman. I don't think these people were being deliberately dishonest. They really believed they were being targeted. The views they expressed are what you would expect from the sort of people who get involved in something like this.

Aug 2003 Criminal investigation
Together, Dr. Moon, who also sat on the hospital's board, and Dr. Realyvasquez directed the California Heart Institute, the cardiac program that Redding had started in the 1970's, and it proved to be a bonanza.
A criminal investigation of Drs. Moon and Realyvasquez is continuing, though no charges have been filed. Their work at the heart institute has been suspended, and Dr. Moon has surrendered his medical license pending resolution of the matter. Lawyers for each of them say that, while other doctors' opinions about their decisions may differ, neither did anything illegal.
How One Hospital Benefited on Questionable Operations New York Times (KURT EICHENWALD) August 12, 2003

Nov 2005 Doctors settle
United States Attorney McGregor W. Scott announced today that four doctors accused of performing unnecessary heart surgeries at Redding Medical Center in Redding, California, have agreed to a total settlement worth over $32.5 million to the victims of the procedures and the Medicare and Medi-Cal programs.
To compensate the victims of the surgeries who filed medical malpractice actions against the doctors in Shasta County Superior Court, the settlement requires Dr. FIDEL REALYVASQUEZ, Dr. KENT BRUSETT, and Dr. RICARDO JAVIER MORENO-CABRAL to provide their insurance carrier with a consent to settle for their insurance policy limits, which total $24 million.

In addition, Dr. FIDEL REALYVASQUEZ, 57, a heart surgeon, and Dr. CHAE MOON, 58, a cardiologist, will each pay $1.4 million in the settlement. Dr. KENT BRUSETT, 46, a heart surgeon in Dr. Realyvasquez’s group, will pay $250,000 over 10 years.

Also included as part of the settlement terms, Drs. MOON and REALYVASQUEZ each agreed never to perform any cardiology procedures or surgeries on any Medicare, Medi-Cal or TRICARE patients.
Under the terms of the settlement, the doctors will be given a letter advising that the U.S. Attorney’s Office will not initiate criminal charges against the physicians.
Redding Cardiologists Agree to Pay Millions in Settlement Press Release from Insurance Journal November 15, 2005

Nov 2005 Doctors claim they are vindicated
Moon and Realyvasquez, who maintain they did nothing wrong, said the settlement vindicated them.
Federal prosecutors said they decided against criminal charges in the case because they did not believe they could have obtained convictions.

One prosecutor, however, said that there was evidence that the doctors had put healthy patients' lives at risk.

"The evidence shows these doctors ran a high-turnover, high-volume surgery mill," Michael A. Hirst, assistant U.S. attorney in Sacramento, said in written comments.
Benito (Shasta County District Attorney Jerry C. Benito) said he learned of the impending settlement a few weeks ago from FBI agents who were "not pleased" about it. Later, he said, the U.S. attorney's office asked him to join the settlement, but he declined.
U.S. Settles With Tenet, Doctors on Surgeries LA Times November 16, 2005

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The Whistle Blowers

There were many people who took the matter up with Tenet's hospital administrators, and who cooperated with the FBI investigation. Two lodged Qui Tam actions. Dr Patrick Campbell, a physician at the hospital and John Corapi, a priest, medical ethicist and patient. He was assisted by his friend Mr Zerga.

Corapi was the index case and his involvement is described on the first Redding page I wrote in 2003. Corapi and Zerga lodged their Qui Tam action first, followed a few days later by Campbell. There was a dispute as to who was the legitimate whistleblower to be rewarded. Corapi and Zerga were approved by the court. Campbell then appealed the decision. Ultimately the US $9.5 million Qui Tam pay out was shared by Corapi, Zerga and Campbell.

The extracts tell the story of Campbell and others, and the resolution of the dispute. Once again I have taken the liberty of quoting extensively from the excellent review by Kurt Eichenwald in the New York Times.

Aug 2003 Many people had warned the hospital
Dr. Campbell, an internist, first suspected trouble in Redding Medical Center's cardiology program soon after joining the hospital in 1993, according to papers obtained by federal investigators. That year, one of his patients underwent open-heart surgery even after the surgeon told Dr. Campbell the procedure was unnecessary. Two years later, another patient received a coronary bypass, though the cardiologist's report said it was not necessary.

Then there were the numbers - tens of thousands of diagnostic tests, thousands of surgical coronary procedures. The totals seemed more likely for a major university medical center than for a hospital in a rural community of about 90,000 people.

Dismayed, Dr. Campbell brought his concerns to Stephen E. Corbeil, the hospital's chief executive at the time. Though Dr. Campbell declined to comment on the meeting and Mr. Corbeil did not return telephone calls, the papers obtained by federal investigators indicate that the administrator's response was succinct: The young internist, he said, should mind his own business.
And there were many suspicions. Besides Dr. Campbell, more than half a dozen doctors, along with medical technicians and patients, expressed concerns to multiple administrators, according to people interviewed and records obtained by investigators. There were also questions of competence: one former executive said that two years ago, a representative of the company whose ultrasound machine Dr. Moon relied on for many of his diagnoses warned that he was misusing it.
A surgeon working with Dr. Realyvasquez telephoned Dr. Campbell, vehemently arguing that no surgery was needed. Dr. Moon's view prevailed, and the once-reluctant surgeon performed the operation. Ms. Rosburg died from complications several months later.
Dismayed, Dr. Campbell took Ms. Montgomery's records to another local cardiologist, Dr. Roy Ditchey, who was astounded to hear that the patient had undergone surgery, according to information obtained by federal investigators.
In the fall of 1996, Mr. Corbeil was succeeded by Kenneth Rivers. The following spring, according to court documents and records obtained by federal investigators, a group of doctors including Dr. Campbell, Dr. Kittrick and two others approached him to discuss the cardiac program.

According to the papers, Dr. Kittrick spoke for the group and asked for an independent peer review of the cardiology program, to determine if the catheterizations were reliable. Mr. Rivers replied that he would have to ask Tenet's lawyers whether such a study would violate patient confidentiality, the records say.

No such study was ever done, according to doctors at the hospital.

As new administrators arrived, the same pattern was repeated. According to court papers and other records, Dr. Roy Pick, a local cardiologist, approached Mr. Rivers's successor, Stephen Schmidt, and Mr. Schmidt's replacement, Hal Chilton, the current chief executive. Each time, Dr. Pick, who had reviewed the records of some of Dr. Moon's patients, raised concerns about the heart program and asked for an independent peer review. None was undertaken.

Dr. Thomas Drakes, a board-certified oncologist who worked at Redding for two decades and taught at the University of California at Davis, said he, too, raised his concerns with Mr. Schmidt, with little result.

"Here I am, a guy on his staff who has some credibility, and I go to Schmidt and tell him he's going to have a `60 Minutes' episode on your hands here if you don't do something," Dr. Drakes said. "He just said, `Don't worry about it.' "

But, by 2002 the secrets at Redding Medical Center were about to burst into public view.
Within days, agents found their way to Robert G. Simpson, a lawyer in Redding for whom Dr. Moon had recommended a four-way bypass last summer. Mr. Simpson had challenged Dr. Moon's diagnosis after getting a second and a third opinion. Mr. Simpson has since been interviewed by federal investigators and is now representing numerous patients suing Redding.
How One Hospital Benefited on Questionable Operations New York Times (KURT EICHENWALD) August 12, 2003

Sept 2003 Campbell's suit dismissed
Campbell also is facing a big financial blow. His suit was dismissed Aug. 1, because the federal False Claims Act allows whistle-blower payments only to the first person to sue seeking such a designation, and Campbell's suit came three days after a similar one filed on behalf of a patient.

The patient, Redding-area priest John Corapi, was diagnosed at the heart center and filed his suit Nov. 5, seeking whistle-blower status.
Redding hospital's settlement opposed Sacramento Bee September 9, 2003

Jan 2004 Corapi and Zerga to get reward
The two whistleblowers who launched the federal investigation of Redding (Calif.) Medical Center will share a reward of $8.1 million, or 15% of the $54 million that Tenet Healthcare Corp., Santa Barbara, Calif., paid in August 2003 to settle most of its potential liabilities in the case. The U.S. attorney in Sacramento, Calif., announced the deal between the federal government and the whistleblowers, the Rev. John Corapi and Joseph Zerga.
Tenet whistleblowers to receive $8 million Modern Healthcare's Daily Dose January 8, 2004

Mar 2004 Campbell challenges
The TAF Education Fund has filed a brief asking the Ninth Circuit to reinstate Dr. Patrick Campbell's qui tam action against Redding Medical Center, a Tenet Healthcare hospital.
TAF Files Brief on First-to-File San Francisco Chronicle March 9, 2004

Nov 2005 They will share it
Under the terms of the settlement, the whistle-blowers will divide a 15% share of the total $62.55 million recovery for the government ($54 million previously from Tenet, plus another $5.5 million from Tenet, $1.4 million each from Drs. Realyvasquez and Moon, and $250,000 from Dr. Brusett). Corapi and Zerga will each receive $2,712,281, for a total recovery of $5,424,562. Campbell will receive $4,457,938.
Redding Cardiologists Agree to Pay Millions in Settlement Press Release from Insurance Journal November 15, 2005

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Redding Hospital, Oversight and Accreditation

Redding hospital was another example of the failure of the oversight and accreditation processes in the USA. The hospital boasted of its high turnover, the quality of its work and the high scores it received from the accreditation by the JCAHCO.

Moon and Realyvasquez were on the hospitals committee and Moon was head of the hospitals Cardiology Care Committee so in charge of peer review of his own work. The committee hardly ever met.

These failings had been documented by the accreditation review for JCAHCO. The hospital had promised to redress the problem. Moon and the hospital simply ignored this. A subsequent review found that the situation was unchanged but nothing was done about this. Moon and Realyvasquez were too busy to participate. Only 6 of 3,240 cardiac catheterisations were reviewed. The agency did nothing about this and Redding's unblemished accreditation record continued.

Tenet had two staff members in senior positions in the JCAHCO. The many failures of the accreditation process in assessing Tenet's hospitals are described on another web pages

Click Here to look at the accreditation of Tenet's facilities.

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"Coronary" The Book


Journalist Steve Klaidman has investigated the Redding scandal in depth interviewing the many participants including whistle blowers and investigators. He documents what happened in detail and the views of all these participants. It reads like a novel and is a fascinating account. It provides a closer understanding of what happened. 

Jan 2007 review
The book, about the 2002 FBI investigation into Tenet Healthcare and accusations of unnecessary heart surgeries at Redding Medical Center, was released Jan. 9. Local bookstores can hardly keep it in stock.
Coronary‚ cuts to heart of Tenet scandal
Redding Record (Kelly Brewer) January 21, 2007

see "Coronary: A true story of medicine gone awry" by Stephen Klaidman Scribner New York 2007

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From Singapore to Redding
A Long Trail to follow

I am particularly interested in Tenet's regional vice president, Dennis Brown who Klaidman indicates was actively involved in the administration of Redding hospital and in dealing with its doctors. I first knew of Brown during the 1980s when he was the CEO of a Tenet (then called NME) hospital in Singapore. In 1991 he became CEO of NME's Australian enterprise. I blew the whistle on NME's conduct and lodged objections with Australian authorities. He commenced a defamation action that he withdrew when I pressed him to get the action to court.

When Tenet was forced out of Australia in 1995/6 he returned to the USA. It is interesting to review his career and my impression of him at the time, with what Stephen Klaidman's interviewers said about him and what he did at Redding.

I have devoted a separate page about Brown's career and believe it provides additional insights into the company's culture and its persistence after the 1991-4 scandal.

Click Here for the Dennis Brown page

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Web Page History
This page created April 2007 by
Michael Wynne