Tenet Healthcare Corporation agreed to a $21 million civil settlement to resolve the long-running criminal case brought by the U.S. Attorney in San Diego against Tenet, one of its hospitals--Alvarado Hospital Medical Center--and Alvardo’s former CEO. Tenet also agreed to close or sell Alvarado Hospital. In return, the U.S. Attorney in San Diego will dismiss criminal charges against all three defendants and will not file any civil litigation.
Two separate federal juries had deadlocked over whether Alvarado had improperly paid physicians excessive relocation packages to entice them to refer patients. While Tenet and Alvardo maintain that physician relocation agreements are a common practice in the hospital industry, as part of the settlement agreement, they stated, “We were distressed to learn that certain host physicians had obtained excessive payments by representing that they needed money to make tenant improvements to accommodate new physicians when, in fact, they never made improvements. We regret that the hospital did not take adequate steps to assure that money provided to relocated doctors, including money earmarked for tenant improvements and office overhead was in fact used for those purposes and in all instances was justified.” The case, said Tenet, has led to “significant reforms” of its physician relocation arrangements.
