HEALTHCARE BRIEF June 2006
Tenet Folds Its Alvarado Hand
On May 17th the HHS Office of Inspector General (OIG) announced an agreement with Tenet Healthcare whereby Tenet agreed to sell Alvarado Hospital Medical Center. You may recall that OIG has aggressively pursued Tenet, Alvarado and its executives over physician recruitment and relocation practices. The government brought a criminal case twice, both of which ended in mistrials, and the new agreement saves Tenet and Alvarado the pain and expense of yet a third trial.
Basically, OIG contended that the hospital granted sweetheart relocation packages containing disguised kickbacks. The federal Medicare anti-kickback statue includes an exception for relocation packages, but there are strict requirements that must be met to pass legal scrutiny. Alvarado's physician recruitment director pled guilty to criminal charges last year over their practices, and the government has since gone after both the hospital and its president.
The government pursued its nuclear option and sought to exclude Alvarado across the board from participating in Medicare and Medicaid. If successful, such an exclusion would likely kill the hospital, or at least force a fast sale. This case sends a clear warning to complacent executives who believe that the government will never find out or will not have the time and interest to examine existing arrangements.
This case also highlights the continued government interest in abusive physician payment arrangements, and underscores the need to be sure that your arrangements will pass muster under the physician recruitment safe harbor.
The Law Offices of David E Oles is pleased to review your recruitment and relocation arrangements for compliance with all federal and statute laws and regulations. We can help you sleep at night.
Dave | 
