Tenet Hospital Under Investigation

The U.S. attorney’s office in San Francisco is investigating medical directorships and physician relocation agreements at Tenet Healthcare Corp.’s San Ramon Regional Medical Center, the company said Wednesday.

Santa Barbara-based Tenet said it was cooperating with a subpoena demanding documents regarding medical directorships granted at San Ramon in the last four years, as well as a “small number” of physician relocation agreements at the 123-bed acute-care center in Northern California.

The subpoena is the latest in a series of demands and requests in recent months by federal investigators into physician recruitment practices at the nation’s second-largest hospital chain.

A Tenet company faces an Oct. 14 criminal trial in San Diego on charges that its Alvarado Hospital paid improper kickbacks through relocation contracts to physicians to steer patients to the facility.

Tenet has said that its corporate physician relocation policy is legal.

Earlier this year, Tenet paid $31 million to resolve two federal inquiries, including allegations of improper financial arrangements with doctors at a Florida hospital.

“We believe this subpoena is consistent with previously disclosed federal reviews of Tenet’s physician relationships and medical directorships at a number of its hospitals in several states,” said E. Peter Urbanowicz, Tenet’s general counsel.

Urbanowicz, a former deputy general counsel for the U.S. Department of Health and Human Services, also said the company was continuing to negotiate with government agencies to resolve the physician relocation investigations and other government inquiries into Medicare bills, medical procedures and other issues.

Sources familiar with those talks said the federal government might want Tenet to pay as much as $1.6 billion to resolve the outstanding probes.

The company also faces lawsuits filed by hundreds of former patients and family members who allege that doctors at Redding Medical Center, until recently a Tenet-owned hospital, performed unnecessary cardiac procedures, including open-heart surgeries.

Tenet paid $54 million last year to end a government investigation into the heart procedures at that hospital.