Freeze Urged on Deals by 2 Hospital Firms

Two consumer groups are urging state attorneys general to freeze pending hospital acquisitions by Columbia/HCA Healthcare and Tenet Healthcare corporations.

In a letter sent to all 50 of the state officials, Consumers Union’s West Coast regional office and Community Catalyst of Boston argued for a moratorium they said should remain in effect until all federal and state investigations of the companies are resolved.

“It is rare to pick up a daily newspaper anymore without seeing a news account about possible health-care fraud at Columbia/HCA Healthcare Corp. and Tenet Healthcare Corp.,” said Julio Mateo, an attorney with the Consumers Union office in San Francisco.

Jeff Prescott, a spokesman for Nashville-based Columbia/HCA,said he doubts the groups’ action will affect any pending transactions.

“We believe that when faced with decisions like this, attorneys general will continue to do the right thing,” he said.

Last week, three mid-level Columbia/HCA executives were indicted in Florida on charges that they falsified cost reports used for Medicare reimbursement. A federal investigation of the hospital chain is continuing.

Santa Barbara-based Tenet agreed last week to pay about $100 million to former patients who claimed they were illegally held in the company’s psychiatric hospitals in the 1980s and early 1990s.

Columbia/HCA and Tenet were discussing a merger of the two companies in late July. The two consumer groups also raised antitrust concerns about that transaction.