Tenet’s Bid for Hearing Denied

A federal judge Friday denied Tenet Healthcare Corp.’s motion for a hearing over allegations that prosecution witnesses lied in a criminal case in which the company is accused of improperly paying kickbacks to doctors in exchange for patient referrals.

U.S. District Judge M. James Lorenz in San Diego ruled that if prosecutors called any of the witnesses in question, Tenet’s lawyers could attempt to discredit them during cross-examination by asking them about any evidence of lies in their grand jury testimony.

Santa Barbara-based Tenet, the nation’s second-largest hospital chain, asked for the hearing a day earlier after being notified by the U.S. attorney’s office that prosecutors believed several government witnesses might have lied about certain aspects of their testimony.

Jury selection is set to begin Tuesday.

It is unclear how much damage the questionable testimony could do to the government’s case. Prosecutors have said they might call more than 100 witnesses.

The case focuses on the nature of payments and physician-relocation agreements used by Alvarado Hospital Medical Center in San Diego to draw doctors to its service area.

The government contends that in 99 cases, Alvarado went beyond the bounds of what is legal to attract doctors. Much of the money paid to doctors allegedly was passed through the relocating physicians to local physician groups that the new doctors had joined. In exchange, these groups allegedly were expected to refer their Medicare patients to the 311-bed hospital.

If convicted, Alvarado could be dropped from the government-funded Medicare program, a move viewed as a financial death knell for a hospital.

Lorenz agreed to set a hearing on the prosecution’s request for sanctions against Tenet’s lawyers for their alleged improper release of grand jury testimony. Tenet included grand jury testimony in papers it filed asking for the perjury hearing.