A Medical Device Daily
The Health and Human Services' Office of Inspector General (OIG) on Monday moved to bar Alvarado Hospital Medical Center (San Diego), a hospital owned by Tenet Healthcare (Dallas), from Medicare and other government programs because of alleged kickbacks to doctors.
The move could be costly to Tenet, possibly forcing it to close the hospital – which has been profitable – or sell it at a fire-sale price.
The OIG action is based on allegations that Alvarado paid kickbacks over 10 years to induce doctors to refer patients for services and items paid for by the federal programs, Inspector General Daniel Levinson said in a statement.
The OIG charges that Alvarado entered into excessive physician relocation agreements that provided a monthly salary, a monthly guarantee for overhead expenses as well as money for office improvements. It said that the money primarily benefited practices where the new doctors were placed.
Tenet on Monday issued a response, saying that it has “explained” to the OIG that excluding Alvarado Hospital from the Medicare program “would be unfair and unwarranted. It could ultimately force Alvarado Hospital Medical Center to close, thus eliminating the jobs of hundreds of healthcare workers and reducing needed access to care for the communities of eastern San Diego County.”
It went on to say that it has been attempting to resolve “the Alvarado matter” with the federal government, adding: “We believe that nothing in the hospital's practice of recruiting physicians to eastern San Diego County warrants a forced sale or closure of the hospital – especially given the lack of any evidence that any physician compromised his or her medical judgment when referring a patient to Alvarado.”
Tenet, Alvarado and a former hospital administrator have been tried twice on related criminal charges. Both ended in mistrial after jurors were unable to agree on a verdict.
Tenet's statement noted the two trials, saying the juries had not been able to determine if anyone at Alvarado intended to violate the laws.
The company's statement concluded: “Despite this unfortunate action by the OIG, we will continue to discuss an overall resolution and we hope to reach an equitable result.”
Tenet has 30 days to submit evidence and would have the right to appeal an exclusion.
Tenet, through its subsidiaries, owns and operates acute care hospitals and related healthcare services.