U.S. Settles With Tenet, Doctors on Surgeries

Times Staff Writer

Federal prosecutors said Tuesday that they lacked evidence to bring criminal charges against physicians implicated in an alleged scheme to perform hundreds of unnecessary open-heart surgeries at a Redding hospital formerly operated by troubled Tenet Healthcare Corp.

Instead, they agreed to settle civil claims, including allegations of improper billing, in exchange for $1.4 million each from cardiologist Chae Hyun Moon and surgeon Fidel Realyvasquez, and $250,000 from another surgeon.

Realyvasquez’s surgical group also agreed to allow its insurance carrier to pay $24 million toward settling pending patient lawsuits.


Tenet will pay $1 million to the California Department of Insurance, which pursued a separate investigation.

In addition, the company, which sold the hospital after the scandal broke, agreed as part of Tuesday’s settlement to add $5.5 million to the $54 million it consented to pay under an earlier settlement, reflecting the government’s final accounting of its claims of fraudulent billing.

The deal all but closes the book on a high-profile scandal that began with an FBI raid on the hospital three years ago. The case threw the necessity of hundreds of surgeries into question and cast a giant shadow over the company. Moon and Realyvasquez, who maintain they did nothing wrong, said the settlement vindicated them.

Tenet, which also has admitted no wrongdoing, previously agreed to pay $395 million to resolve hundreds of patient claims. Tuesday’s settlement brings the total payments pledged by all defendants since the surgeries first were disputed to more than $500 million.

The announcement appears to end one of many scandals that have battered the company in recent years.

A San Diego jury is expected this week to begin considering charges that Tenet’s Alvarado Hospital bribed physicians to refer patients.

“This settles all significant litigation and investigations having to do with Redding,” Tenet spokesman Harry Anderson said. Tenet shares rose a penny to $7.53.

Federal prosecutors said they decided against criminal charges in the case because they did not believe they could have obtained convictions.

One prosecutor, however, said that there was evidence that the doctors had put healthy patients’ lives at risk.

“The evidence shows these doctors ran a high-turnover, high-volume surgery mill,” Michael A. Hirst, assistant U.S. attorney in Sacramento, said in written comments.

Shasta County District Attorney Jerry C. Benito, who also has jurisdiction over the hospital, said his office did not have the resources to pursue its own criminal investigation. He added that the statute of limitations had run out on many possible charges.

Benito said he learned of the impending settlement a few weeks ago from FBI agents who were “not pleased” about it. Later, he said, the U.S. attorney’s office asked him to join the settlement, but he declined.

Moon retired three years ago. His lawyer, Jim Brosnahan, praised U.S. Atty. McGregor W. Scott for allowing defense lawyers to meet with prosecutors on four occasions and mount a detailed defense of several disputed surgeries.

The lawyers compiled medical records and obtained expert testimony supporting their clients’ actions in each case, Brosnahan said.

“What’s a little frightening is the different points of view that different doctors have,” he said. “That’s why it’s not a criminal case. It’s a complex medical decision.... The Department of Justice didn’t want to intervene in that decision making.”

Realyvasquez said he agreed to the settlement to put the case behind him.

“This settlement ends an investigation that has been flawed from the beginning,” the surgeon said in a statement.



Surgical outcome

* Oct. 31, 2002: The FBI says it is investigating whether two doctors at a Tenet Healthcare Corp. hospital in Redding performed unnecessary heart procedures on Medicare patients.

* Jan. 28, 2003: Chae Hyun Moon, the head of the cardiology department at Tenet’s Redding Medical Center, says he is suspending his practice because he is losing his malpractice insurance.

* May 27, 2003: Tenet Chief Executive Jeffrey C. Barbakow resigns amid government investigations into the Redding surgeries and company billing practices.

* Aug. 6, 2003: Tenet agrees to pay $54 million to settle government allegations of unnecessary heart surgeries at Redding Medical Center.

* Aug. 15, 2003: Attorneys for 366 former patients at the Redding hospital sue the company and eight doctors.

* April 16, 2004: Tenet agrees to sell Redding Medical Center to Hospital Partners of America Inc.

* Dec. 21, 2004: Tenet says it will pay $395 million to compensate patients treated at Redding Medical Center.

* Nov. 15, 2005: Tenet and doctors agree to pay an additional $38 million, tying the case’s loose ends and ending the possibility of federal criminal charges.

Source: Times research

Los Angeles Times