Tenet to sell hospital besieged by fraud charges

Tenet Healthcare Corp. is selling a California hospital in the wake of allegations that hundreds of unnecessary heart procedures were performed there.

The company announced on Dec. 11, 2003, that under an agreement with the Dept. of Health and Human Services Office of the Inspector General, it must sell the Redding Medical Center. Otherwise, the hospital could be excluded from participating in Medicare and other federal health programs.

Tenet revealed in September 2003 that the OIG was moving to exclude Redding Medical Center from the programs because the regulators determined that the hospital furnished unnecessary cardiac procedures and failed to meet professionally recognized standards of care.

That disclosure came little more than a month after Tenet agreed to pay the federal government $54 million to settle claims that unnecessary procedures were performed at the hospital and billed to government programs. Tenet did not admit any wrongdoing. As part of the settlement, the government reserved the right to pursue administrative action against the Santa Barbara, Calif.-based hospital chain.

Tenet said it would seek a buyer for the hospital, and it expects to close the sale in mid-2004. A new owner would be able to buy Redding Medical Center without the threat of exclusion from Medicare, the company said.

"The company believes that, under these circumstances, a sale would be in the best interest of the hospital's employees, patients, physicians and the Redding community," Tenet said in a written statement.

Meanwhile, the U.S. Senate Finance Committee has subpoenaed documents from BlueCross of California as part of its investigation of Tenet. The panel is seeking information related to an independent study that Blue Cross conducted about coronary procedures at two Tenet hospitals.

The review of 52 bypass procedures at Redding Medical Center and Doctor's Medical Center in Modesto, Calif., found that more than half of the procedures were unnecessary. In the aftermath, Blue Cross launched proceedings to terminate its contract with Doctor's but later rescinded the order.

A spokesman said Tenet believes the study was based on a small sample size using outdated standards. An independent study by Tenet found no unnecessary procedures at Doctor's. The company did not review the Redding hospital because the coronary program was suspended there.

In other Tenet news, the company announced that it intends to close the Medical College of Pennsylvania Hospital on March 31.

Tenet said the 379-bed hospital in Philadelphia had experienced sizeable losses during the past year.