Attorneys for Alvarado, Tenet Ask Federal Judge To Dismiss Kickback Case
Attorneys for an Alvarado Hospital Medical Center administrator and Tenet HealthSystem Hospitals, a Tenet Healthcare subsidiary, on Wednesday rested their case and filed a motion to dismiss charges in a federal criminal trial that alleges two former Alvarado administrators illegally negotiated about $10 million in physician-relocation agreements with physician groups to increase patient referrals and revenue, the San Diego Union-Tribune reports (Skidmore, San Diego Union-Tribune, 1/27). Under antikickback laws for federal health care programs, hospitals cannot pay physicians directly for such referrals.
In July 2003, a federal grand jury issued a 17-count criminal indictment of former Alvarado Administrator Mina Nazaryan, Alvarado CEO Barry Weinbaum and Tenet HealthSystem Hospitals. Assistant U.S. Attorney Daniel Butcher in his opening statement last October said that Weinbaum, who joined Alvarado in 1991, spent $15 million on 99 physician-relocation agreements that included excessive salaries and overhead compensation. Weinbaum hired Nazaryan in 1995 to expand physician recruitment efforts, Butcher said.
Nazaryan earlier this month pleaded guilty to a single count of conspiracy in the case, admitting that she conspired with Weinbaum to pay physicians for patient referrals. Nazaryan did not admit that she accepted kickbacks from physicians with whom she worked. In exchange for her plea, prosecutors agreed to drop other charges against Nazaryan, which included bribery and witness tampering, although she still faces tax-evasion charges. Nazaryan likely will receive a three-year prison sentence (California Healthline, 1/7).
Defense attorneys on Wednesday requested that the case be dismissed because federal prosecutors failed to prove the government's argument. Attorneys also questioned the government's interpretation of the federal law.
According to the filing, defense attorneys said there is "no need to delay the case any longer." The filing states that the prosecution "attempted to transform wholly innocent, legitimate business practices into alleged violations of federal law." Attorneys did not call any witnesses in the case (San Diego Union-Tribune, 1/27).
The filing also stated, "Despite the government's best efforts, one fact has emerged from this very long and document-intensive case -- no one from Alvarado Hospital ever compromised the medical judgment of a single physician by making payments pursuant to a relocation agreement" (Bloomberg/Los Angeles Times, 1/27).
In a statement, Tenet officials said, "At most, there was some evidence suggesting that a few relocation agreements may have violated internal policy or may have been poor business decisions. But there was no evidence presented to suggest that any defendant knowingly entered into a relocation agreement as part of a willful attempt to influence any doctor's medical judgment."
Federal prosecutors said they plan to oppose the request.
If the judge does not dismiss the case, closing statements likely will begin next week (San Diego Union-Tribune, 1/27).