Chief Counsel, Compliance Officer at Tenet Healthcare Resigns
Santa Barbara-based Tenet Healthcare's top legal counsel on Friday resigned effective Nov. 1 amid increased criticism from the chair of the Senate panel that is investigating the company, the Los Angeles Times reports. Christi Sulzbach, who had been with the company for 20 years, had served as both the company's general counsel and chief compliance officer, raising concerns that Sulzbach had a conflict of interest to ensure both that Tenet was following federal guidelines and that company was protected from charges of wrong-doing (White, Los Angeles Times, 9/27). In August, Tenet officials agreed to pay $54 million to settle allegations that two physicians at Tenet-owned Redding Medical Center in California performed unnecessary heart surgeries and defrauded Medicare. Tenet officials earlier this month announced that Senate Finance Committee Chair Charles Grassley (R-Iowa) had requested documents related to corporate governance practices at the company, such as those related to the Redding physicians and the formula used by the company to calculate Medicare outlier payments. In addition, the Securities and Exchange Commission, the HHS Officer of Inspector General and the Federal Trade Commission have launched investigations into Tenet since October 2002; the company also faces investigations by the Florida Medicaid Fraud Control Unit and the U.S. Attorney's office in Los Angeles (California Healthline, 9/17). In a letter sent Sept. 8 to Trevor Fetter, Tenet's newly appointed CEO, Grassley wrote of Sulzbach's dual role, "It doesn't take a pig farmer from Iowa to smell the stench of conflict in that arrangement."
Sulzbach said in a statement on Friday that "while we have made progress in recovering from our many challenges, I realize that I have become a focal point for some Tenet critics, thus I believe it is in the best interest of the company for me to leave at this time" (Los Angeles Times, 9/27). Fetter said that Tenet "will benefit from a fresh perspective on legal matters going forward" (Rundle, Wall Street Journal, 9/29). Andreas Dirnagl of Harris Nesbitt Gerard, a New York-based investment firm, said that Sulzbach's resignation is "perhaps one of the first signs that Fetter has the decisiveness and wherewithal to clean house" (Los Angeles Times, 9/27). Details of Sulzbach's severance package have not been finalized, company spokesperson Harry Anderson said (Sherman/Borden, Reuters/Philadelphia Inquirer, 9/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.