For the first time, Tenet Healthcare Corp. is acknowledging that it may make sense to close the company's Santa Barbara, Calif., headquarters and consolidate operations at another corporate office. Tenet confirmed local media reports that company President and Chief Executive Officer Trevor Fetter sent a memo earlier this month to the 140 employees at the Santa Barbara headquarters saying consolidation of corporate support services may be necessary after Tenet completes its planned divestiture of 31 hospitals. Tenet declined to release the memo, but Tenet spokesman Steven Campanini confirmed that Fetter's memo noted that the Santa Barbara location was chosen largely for the convenience of the company's previous management team, led by former Chairman and CEO Jeffrey Barbakow. Campanini said the company would make a decision within 90 days, but any headquarters move wouldn't occur until mid-2005. Campanini said a consolidation of corporate support services is natural as the company shrinks from its size a year ago -- 114 hospitals -- to the post-divestiture size of 69 hospitals.
Meanwhile, Tenet and the federal government finalized a $30.8 million agreement to settle two Medicare fraud cases. Under the agreement, disclosed earlier this month. Tenet will pay $22.5 million and sign a five-year corporate integrity agreement for North Ridge Medical Center, Fort Lauderdale, Fla., to resolve allegations that the hospital's financial arrangements with some physicians violated the antikickback statute, self-referral laws and the False Claims Act. Sal Barbera, the whistleblower whose 1997 lawsuit launched the investigation, will receive $5.2 million of the settlement. Tenet will pay $8.3 million to settle allegations that 106 hospitals owned by the company at varying times between 1992 and 2000 improperly coded discharges of Medicare inpatients. The discharge investigation was part of a national probe of Medicare transfers and discharges. Tenet denied any wrongdoing in the settlement. -- by Vince Galloro