Tenet Healthcare Agrees To Sell Redding Medical Center to North Carolina-Based Health Partners
Officials for Santa Barbara-based Tenet Healthcare, the nation's second largest for-profit hospital chain, on Friday announced that the company has agreed to sell its Redding Medical Center to North Carolina-based Hospital Partners of America for about $60 million, the Los Angeles Times reports (Girion, Los Angeles Times, 4/17). Tenet agreed to sell the 246-bed hospital last year after federal regulators moved to ban the facility from Medicare, Medicaid and other government programs, which would have been a "financial death knell" for Redding, the Times reports (Los Angeles Times, 4/17). In August, Tenet officials agreed to pay $54 million to settle allegations that Dr. Chae Hyun Moon, Redding's former chief cardiologist, and Dr. Fidel Realyvasquez, formerly a cardiac surgeon at the facility, performed unnecessary heart surgeries and defrauded Medicare (California Healthline, 1/8). In the past, government-sponsored health programs have generated about 75% of Redding's revenue, the Sacramento Bee reports. Tenet officials said that federal regulators will allow Redding to continue to participate in Medicare and Medicaid under the new ownership. Under the deal, Tenet will retain all liability for any damages stemming from the hundreds of lawsuits filed since October 2002 over the allegedly unnecessary surgeries. In addition, the deal, which is expected to be completed by June 30, calls for HPA to retain "substantially all of the employees who are working at the time the sale is finalized," a Tenet spokesperson said (Rapaport/Griffith, Sacramento Bee, 4/17). According to the Times, HPA will operate the hospital in partnership with a local group of physicians. "It was Tenet's decision to sell (Redding Medical Center) and one that the company made reluctantly," Steven Campanini, a spokesperson for Tenet, said, adding, "Faced with the real possibility that Medicare exclusion could happen, Tenet had to do the right thing for its employees, the patients, physicians and the community of Redding" (Los Angeles Times, 4/17). Candy Markwith, CEO of Redding, said that the sale "is very exciting, positive news for this hospital to finally be able to move forward" (Sacramento Bee, 4/17).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.