Tenet Hospital Is to Begin Trial In Kickback Case | WSJ | 10.12.04
In a case with broad significance for the hospital business, a criminal trial against Alvarado Hospital Medical Center is set to begin Thursday in U.S. District Court in San Diego. …
Federal prosecutors have accused Tenet, one of the nation’s largest hospital companies, of illegally paying more than $10 million to physicians who agreed to relocate their practices to the area around the hospital over a decade beginning in the early 1990s. The hospital’s former chief executive, Barry Weinbaum, and former administrator, Mina Nazaryan, are also charged with being part of a criminal conspiracy. …
Relocation agreements are commonly used by hospitals to draw doctors to rural areas or other communities suffering from physician shortages. But hospitals aren’t allowed to pay doctors directly in exchange for referrals, under the antikickback statute governing federal health-care programs. Relocation agreements may include a salary guarantee and payments to cover equipment, rent and other costs of establishing a medical practice. There are few legal precedents in this complex area of health-care law. …
A conviction would result in an automatic cutoff of the hospital from government health-care programs, which would likely force Tenet to divest itself of the hospital so that it could survive under different ownership. More important, a conviction would send a strong message that Tenet’s physician-recruitment policies cross the line. …
A convction is tantamount to a death sentence if Tenet does not divest. This is a very serious case to follow. Also see here.