Tenet to sell Alvarado hospital to physicians

Tenet Healthcare Corp. has agreed to sell the San Diego hospital that was at the center of a kickback investigation to a company led by physicians.

The Dallas-based hospital chain announced on Oct. 27 that it had reached an agreement to sell the 306-bed Alvarado Hospital Medical Center to Plymouth Health of Los Angeles for about $36.5 million. The deal, subject to regulatory approval, was expected to close by the end of the year.

Plymouth Health was formed for the purpose of acquiring the hospital and is led by pediatricians Pejman Salimpour, MD, and Pedram Salimpour, MD, Tenet said. The two doctors are brothers. They own Los Angeles-based CareNex Health Services, which offers patient management services to hospitals and health insurers. They also own NexCare Collaborative, a nonprofit that helps poor Los Angeles families find affordable health insurance and public health services.

Pejman Salimpour, MD, also led a well-documented fight against hospitals setting up exclusive contracts with specialists. After his lawsuits against a Burbank, Calif., hospital and state lobbying officials, a judge and two state regulators ruled in 2000 that it was illegal for California hospitals accepting state money to set up exclusive contracts with any physicians outside of the hospital-based specialties of pathology, radiology and anesthesiology.

Tenet announced last May that it would sell or close Alvarado and pay $21 million to settle a civil complaint alleging that it paid kickbacks to physicians for referrals to the acute care hospital. The case had previously gone to trial twice, each time ending in mistrial with a deadlocked jury. Under the settlement, Tenet did not admit any wrongdoing.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2006/11/20/bibf1120.htm.