Tenet Units, Exec Plead Not Guilty

Two units of Tenet Healthcare Corp. and the chief executive of its San Diego hospital pleaded not guilty Friday to federal charges of paying illegal kickbacks to doctors, the hospital said.

Tenet Health System Hospitals Inc. and Alvarado Hospital Medical Center were indicted Thursday by a federal grand jury in San Diego. They are accused of paying millions of dollars over 10 years to help recruit doctors to the area in return for guarantees of referrals to the hospital.

Such agreements, which are regulated by the federal government, are used by hospitals when doctors move to new communities and fulfill specialties.

Inadequate managed-care payments, complicated government regulation and a high cost of living make it “very, very difficult” to draw young physicians to San Diego, which has a severe doctor shortage, said Robert Brewer, Alvarado’s attorney.

Last month, Barry Weinbaum, CEO of the Alvarado facility, was indicted on the same charges.

Tenet, which also is under investigation by several federal agencies including the Securities and Exchange Commission over its billing practices, said Tuesday that it had been subpoenaed by the U.S. attorney’s office in Los Angeles about physician relocation agreements.

The hospital chain said it believed its policy on the relocation agreements, in place since 1996, was lawful.

A status conference in the case has been set for Aug. 4, Brewer said.

Tenet shares rose 21 cents to $12.06 on the New York Stock Exchange.

The company, based in Santa Barbara, is the nation’s No. 2 hospital firm with 114 hospitals in 16 states.