Tenet in deal to sell Alvarado Hospital
Hospital operator Tenet Healthcare Corp. said Friday that it had agreed to sell its Alvarado Hospital Medical Center in San Diego to Sherman Oaks-based Plymouth Health for pretax proceeds of $36.5 million.
Under terms of the agreement, Plymouth Health will take over the 306-bed acute care hospital and retain most of the employees. The sale is expected to close by the end of the year.
For the record:
12:00 a.m. Nov. 3, 2006 For The Record
Los Angeles Times Friday November 03, 2006 Home Edition Main News Part A Page 2 National Desk 2 inches; 73 words Type of Material: Correction
Tenet Healthcare: An article in Business on Saturday about Tenet Healthcare Corp.’s agreement to sell a hospital in San Diego said that the Dallas-based company operated more than 70 general hospitals and that it faced a federal probe of its billing practices. Tenet operates 66 acute-care hospitals and this year settled charges that it overbilled federally insured patients. The company is under investigation by the Securities and Exchange Commission regarding previous financial disclosures.
Plymouth Health is a physician-owned company formed specifically to acquire and operate Alvarado Hospital. Plymouth Health’s owners include physicians Pejman Salimpour, a professor of medicine at UCLA, and Pedram Salimpour, who owns healthcare technology company CareNex Health Services.
Dallas-based Tenet agreed in May to sell the hospital by February as part of a settlement with the U.S. attorney’s office in San Diego. Alvarado and its former chief executive were accused of paying kickbacks to induce doctors to refer patients for services and items paid for by federal health programs. Tenet also paid $21 million in fines.
“This is great news for San Diego and the 900,000 people depending on Alvarado’s care,” San Diego County Supervisor Dianne Jacob said. “The emergency room service is critical, as are the medical center’s comprehensive rehabilitation program and its nationally acclaimed cardiac program.”
The purchase will allow the hospital to continue participating in federal health insurance plans. The U.S. government had threatened in May to exclude the hospital from Medicare, a program for the elderly and disabled, and Medicaid, for the poor, because of the alleged kickbacks.
Tenet, which operates more than 70 general hospitals, also faces investigations by federal officials of its past billing for high-cost patients.
Tenet’s shares rose 27 cents, or 3.4%, to $8.30 on Friday.
