Accounting & Tax

Groundhog Day: Tenet Faces New Probe

Latest document request relates to physician-relocation agreements, hospital admissions, and medical procedures.
Stephen TaubAugust 10, 2004

Tenet Healthcare Corp. said the Federal government is seeking information about physician-relocation agreements entered into by current Tenet hospitals in the St. Louis area and a hospital formerly owned by Tenet in Kennett, Mo.

The company said the latest inquiry is consistent with previously disclosed government reviews of Tenet’s physician-relocation agreements in other states. notes that critics have described some of the agreements as little more than illegal kickbacks offered to doctors in exchange for patient referrals.

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The new request for information seeks documents regarding physician- relocation agreements at Saint Louis University Hospital, Forest Park Hospital, Des Peres Hospital and Saint Alexius Hospital, Jefferson Campus (formerly SouthPointe Hospital), all in St. Louis; and Twin Rivers Regional Medical Center, in Kennett, Mo., which Tenet sold in November 2003.

The request also seeks more information regarding certain admissions and medical procedures at Twin Rivers. In its most recent quarterly filing, Tenet disclosed that it had been notified that subpoenas had been issued to Twin Rivers’ current owner seeking documents pertaining to certain cardiac- care patients at that hospital from 2000 to 2003. Tenet explained it retained certain liabilities when it sold the hospital last year.

Last week, Tenet CFO Stephen Farber announced his resignation, the same day the hospital operator received a subpoena from the U.S. Attorney’s Office in New Orleans, requesting documents relating to physician relationships and financial arrangements at three New Orleans area hospitals.

Tenet said on Monday that it is continuing to cooperate with regulatory and enforcement agencies and is in discussions with federal agencies regarding a resolution of physician relocation and other issues. “We are sensitive to the concerns that regulatory agencies have with physician relocation arrangements, and Tenet’s policies reflect the most recent guidance issued on this subject in March of this year by the U.S. Department of Health and Human Services,” said E. Peter Urbanowicz, Tenet’s general counsel, in a statement.