Tenet Files to Dismiss Case Over Referrals

Tenet Healthcare Corp., the second-largest U.S. hospital chain, rested its defense Wednesday without calling witnesses in a San Diego trial over what prosecutors claim were illegal payments to doctors in exchange for patient referrals.

Tenet also filed a motion to dismiss the government’s case, arguing that prosecutors failed to show that Alvarado Hospital Medical Center, its former chief executive or the company “knowingly and willfully violated any law.”

A jury trial began in October in the case that claims Tenet paid about 100 physicians more than $10 million through relocation agreements intended to encourage the doctors to refer patients to Tenet’s Alvarado hospital. If convicted, Alvarado could be excluded from some government programs.

“Despite the government’s best efforts, one fact has emerged from this very long and document-intensive case -- no one from Alvarado Hospital ever compromised the medical judgment of a single physician by making payments pursuant to a relocation agreement,” Tenet said in court documents.

Debra Hartman, a spokeswoman for the U.S. attorney’s office in San Diego, didn’t immediately return a call for comment.

Prosecutors in at least four other cities are investigating similar claims.

This month, a former administrator at the hospital pleaded guilty to one count of conspiracy during the middle of the trial. Mina Nazaryan, the former associate administrator of Alvarado, then testified as a government witness.

In a statement released Wednesday, Tenet said the government showed that at most “a few relocations agreements may have violated internal policy, or may have been poor business decisions, but there was no evidence presented to suggest” that any of the defendants knowingly entered into a relocation agreement in an attempt to influence a physician’s judgment.

Shares of Tenet fell 18 cents to $9.94 on the New York Stock Exchange.