Tenet Ex-Exec Pleads Guilty in Referral Case

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.

A spokeswoman for the U.S. attorney’s office declined to say whether Nazaryan would testify against the other defendants in the case: Barry Weinbaum, Alvarado’s former chief executive, and Tenet, which owns the San Diego hospital.

Lawyers for Nazaryan and Weinbaum didn’t return phone calls seeking comment.

Tenet, a financially troubled company that completed the move of its headquarters from Santa Barbara to Dallas on Monday, said in a statement that the plea wouldn’t affect its efforts to defend itself and Weinbaum.

“Nazaryan’s plea is hers alone,” the statement said. “As we have said before, Tenet believes that its physician relocation policies were appropriate and legal under federal laws and regulations.”

Criminal defense lawyers and former prosecutors not involved in the trial said the development was a setback for Tenet and Weinbaum.

“You have to believe that what she offered the government was substantial because they gave her a very good deal in return,” said George B. Newhouse, a former assistant U.S. attorney and now a defense lawyer at Thelen Reid & Priest in Los Angeles.

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.”

Nazaryan was in charge of the hospital’s physician recruitment contracts. Prosecutors contend that Alvarado used them to cover up as much as $15 million in kickbacks to 99 physicians. The payments, the prosecutors say, were meant to induce the doctors to send patients to the facility over a 13-year period.

Tenet has a lot riding on the trial, which began in October. If the company is convicted, Alvarado might be dropped from Medicare and other federal reimbursement programs, which could be a financial death knell.

U.S. attorneys in several other cities have launched their own probes into relocation deals that Tenet hospitals made with physicians. And the San Diego trial is being closely watched by other hospitals that use relocation contracts to recruit physicians.

Lawyers said payments to doctors made through relocation contracts were legal if they met certain requirements, such as reducing a local shortage in a particular medical specialty.

At the same time, federal law prohibits payments to doctors for patient referrals.

Tenet issued its statement about the plea agreement after the stock market closed. Its shares fell 13 cents to $10.48 on the New York Stock Exchange.