U.S. District Judge Delays Decision on Dismissing Kickback Case Against Alvarado, Tenet
U.S. District Judge M. James Lorenz on Thursday said that he will not immediately rule on Tenet Healthcare's motion to dismiss charges in a federal criminal trial that alleges two former Alvarado Hospital Medical Center administrators illegally negotiated about $10 million in physician-relocation agreements with physician groups to increase patient referrals and revenue, Bloomberg/Los Angeles Times reports.
Lorenz said, "I'm going to let it go to the jury. I'll rule afterward. Maybe it will be necessary and maybe it won't" (Bloomberg/ Los Angeles Times, 2/2).
Attorneys for one of the administrators and Tenet HealthSystem Hospitals, a Tenet Healthcare subsidiary, last week rested their case and filed a motion to dismiss charges in the trial. 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 last 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.
Before closing arguments in the case began, defense attorneys last week requested that the case be dismissed because federal prosecutors failed to prove the government's argument. The attorneys also questioned the government's interpretation of the federal law (California Healthline, 1/28).