Former Alvarado Administrator Pleads Guilty in Kickback Case
Former Alvarado Hospital Medical Center Administrator Mina Nazaryan on Tuesday pleaded guilty to a single count of conspiracy in a federal criminal trial that alleges Tenet HealthSystem Hospitals -- a Tenet Healthcare subsidiary -- Nazaryan and another Alvarado administrator paid illegal kickbacks to physician groups to increase patient referrals and revenue, the San Diego Union-Tribune reports (Soto, San Diego Union-Tribune, 1/6). Under anti-kickback laws for federal health care programs, hospitals cannot directly pay physicians for such referrals.
In July 2003, a federal grand jury issued a 17-count criminal indictment of Nazaryan, Alvarado CEO Barry Weinbaum and Tenet HealthSystem Hospitals over allegations that the hospital paid more than $10 million for more than 100 physician-relocation agreements between 1992 and 2000. Assistant U.S. Attorney Daniel Butcher in his opening statement in the case 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 (California Healthline, 10/27/04).
In her guilty plea, Nazaryan admitted 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.
On March 28, Nazaryan likely will receive a three-year prison sentence. "It's unclear whether Nazaryan will now testify for the government" in the case, the Union-Tribune reports (San Diego Union-Tribune, 1/6). In a statement, Tenet said, "Nazaryan's plea is hers alone. As we have said before, Tenet believes that its physician-relocation policies were appropriate and legal under federal laws and regulations."
Defense attorneys and former prosecutors said that the guilty plea from Nazaryan was a "setback" for Tenet and Weinbaum, the Times reports. George Newhouse, an attorney with Thelen Reid & Priest and a former assistant U.S. attorney, said, "You have to believe that what she offered the government was substantial because they gave her a very good deal in return." Newhouse added that the plea "virtually seals the fate" of Tenet (Girion, Los Angeles Times, 1/6).
In the event that Tenet is found guilty in the case, Alvarado could lose eligibility for participation in Medicare and other federal health care programs. According to the Union-Tribune, the lawsuit has attracted national attention "because it focuses on the widespread practice of luring doctors with relocation agreements" (San Diego Union-Tribune, 1/6).