Tenet subsidiaries indicted on doctor kickback charges

The hospital chain defends its policy on physician relocation agreements.

By Katherine Vogt, AMNews staff. Aug. 4, 2003.

Two subsidiaries of Tenet Healthcare Corp. have been indicted on charges of paying illegal kickbacks to doctors who referred patients to a San Diego hospital, and the federal government has expanded its inquiry into the company's physician relocation agreements.

The indictment alleges that Alvarado Hospital Medical Center and Tenet Health System Hospitals Inc. paid more than $10 million to fund more than 100 physician relocation agreements between 1992 and 2002 to recruit medical services to the Alvarado service area. But the indictment said a "substantial portion" of the money went to established doctors to induce them to make referrals to Alvarado.

"Kickbacks to doctors can wear many disguises, including sham relocation agreements. They are still kickbacks, they are still illegal and they threaten the integrity of our medical system," said U.S. Attorney Carol Lam.

Trevor Fetter, Tenet's president and acting chief executive officer, said the indictment was a broad attack on "a well-established, lawful and common means by which U.S. hospitals attract needed physicians to their communities. We are confident that our corporate policy on physician relocation agreements is entirely appropriate under the law, and we intend to defend ourselves vigorously."