The chief executive officer of Tenet Healthcare Corp.'s Alvarado Hospital Medical Center in San Diego was charged last week with paying illegal kickbacks of more than $10 million to physicians who agreed to relocate their practices to the hospital's service area.
Barry Weinbaum, 49, who has been CEO of the hospital since 1991, is the only executive in the 114-hospital chain to be charged in recent company scandals. Last year, Tenet was hit with a federal investigation of its Medicare outlier payments and a federal raid of its 188-bed Redding (Calif.) Medical Center, where two physicians were suspected of performing unnecessary heart surgeries.Separately last week, the Associated Press reported that the California Medical Board has accused the former head of the Redding cardiology department, Chae Hyun Moon, of insurance fraud, gross negligence, dishonest or corrupt acts and incompetence.
The developments followed the May 27 announcement that Tenet Chairman and CEO Jeffrey Barbakow was stepping down (June 2, p. 4).
Tenet said it believes its 311-bed Alvarado hospital subsidiary also may be charged.
According to an eight-count indictment announced by the U.S. Attorney for the Southern District of California, Weinbaum entered into relocation agreements in the mid-to-late 1990s with four physicians who joined the practice of Paul Ver Hoeve, a primary care physician with a large Medicare patient base. According to the indictment, Weinbaum knew that at least $600,000 of the money the hospital paid the relocating physicians would be passed to Ver Hoeve.
Each of the eight counts carries up to five years in prison and a $25,000 fine.
Tenet said Weinbaum described the allegations as "absolutely false" and said he would vigorously defend himself in court. Tenet President and Acting CEO Trevor Fetter said company officials "expect (Weinbaum) and the hospital to be fully vindicated."
Last December, Tenet disclosed that federal agents had raided administrative offices at the hospital looking for evidence relating to "physician recruitment, relocation and consulting issues."
The company said Ver Hoeve, the physician who is believed to have made the allegations against Weinbaum, referred fewer than 150 patients to Alvarado between 1995 and 1998 and relinquished admitting privileges in 1998 before being indicted two years later on 64 felony Medicare fraud charges. To avoid a jail sentence, Ver Hoeve agreed in 2001 to provide information to prosecutors in return for avoiding a jail sentence, Tenet said.