A federal grand jury has returned an indictment against the CEO of a Tenet Healthcare Corp. hospital in San Diego for allegedly paying more than $10 million to physicians for making relocation agreements with the hospital.
The criminal indictment, filed by the U.S. Attorney's office in San Diego in U.S. District Court in San Diego, names Barry Weinbaum, 49, CEO of Alvarado Hospital Medical Center.
It charges that Weinbaum was "paying physicians to locate their practices in the Alvarado Hospital service area and refer patients ... knowing that much of the money would be passed through to established practices that Alvarado Hospital targeted for increased referrals."
In a release today, the Santa Barbara, Calif.-based hospital chain defends its relocation agreements with doctors as "a customary and lawful activity," adding that Weinbaum will "vigorously defend himself" against the charges.
The company says the relocation payments were made more than four years ago in connection with a group practice that included Paul Ver Hoeve, M.D., who, the company adds, referred fewer than 150 patients to Alvarado from 1995 to 1998 before giving up his admitting privileges at the hospital.
The company says Weinbaum has been CEO for 12 years at Alvarado, which has more than 600 affiliated physicians and treats more than 100,000 patients every year.
"As is common in the hospital industry, Alvarado Hospital Medical Center assisted in recruiting and relocating additional physicians to the hospital's community" the Tenet release says. "Recruitment and relocation of physicians is a customary and lawful activity engaged in by thousands of hospitals across the country. Such activity serves the vital purpose of ensuring that communities receive ready access to quality medical care."