Tenet Healthcare Corp., Dallas, said it signed a definitive agreement to sell 151-bed Alvarado Hospital Medical Center, San Diego, for about $36.5 million to Plymouth Health, Los Angeles. Plymouth was formed by physicians Pejman and Pedram Salimpour specifically to operate Alvarado. The brothers currently operate CareNex Health Services, a healthcare technology and patient-care management firm. Alvarado will mark their entry into hospital ownership, Plymouth spokesman Larry Edwards said. The deal is expected to close by year-end, pending completion of due diligence.
Tenet agreed to sell Alvarado as part of a civil fraud settlement announced earlier this year with HHS inspector generals office. The hospital and its chief executive officer had been under investigation for allegedly paying kickbacks to physicians for patient referrals. After two juries failed to reach a verdict in a criminal case, the government dropped the criminal charges, and a civil settlement was signed. Alvarado lost $25 million on operations in fiscal 2004 and 2005 combined, but it was profitable prior to the federal investigation, according to the American Hospital Directory, an online database. -- by Mark Taylor