U.S. District Judge Schedules Retrial of Tenet Kickback Case

U.S. District Judge M. James Lorenz on Tuesday announced that he has March 29 as the date for a possible retrial of a federal criminal case against Tenet HealthSystem Hospitals -- a Tenet Healthcare subsidiary -- Alvarado Hospital Medical Center and a former Alvarado administrator that alleges the defendants paid illegal kickbacks to physician groups to increase patient referrals and revenue, the San Diego Union-Tribune reports. Lorenz last week declared a mistrial in the case after jurors could not reach a unanimous decision (Skidmore, San Diego Union-Tribune, 2/23).

Under anti-kickback laws for federal health care programs, hospitals cannot directly pay physicians for referrals. In July 2003, a federal grand jury issued a 17-count criminal indictment of Alvarado administrator Mina Nazaryan, former 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. Nazaryan last month pleaded guilty to charges that she conspired with Weinbaum to pay physicians for patient referrals (California Healthline, 2/23).

Lorenz also rejected Tenet's motion to dismiss the case, saying he believed there was "sufficient evidence" on one of the counts to deny the request (Bloomberg/Los Angeles Times, 2/23). According to the Union-Tribune, Lorenz is "reserving judgment" on whether to dismiss the remaining 18 charges (San Diego Union-Tribune, 2/23). The motion for dismissal had been pending since before jurors began deliberations (Bloomberg/Los Angeles Times, 2/23).

According to the Union-Tribune, officials for the U.S. Attorney's Office in San Diego would not comment on whether they would pursue another trial (San Diego Union-Tribune, 2/23). However, Bloomberg/Times reports that prosecutors said they would retry the case (Bloomberg/Los Angeles Times, 2/23).

E. Peter Urbanowicz, Tenet's general counsel, said, "If the prosecutors retry this case, it will be expensive, time-consuming and unfortunate. We still hope the prosecutors decide that it serves no purpose to retry this case and it is in the best interests of everyone to move forward and address the bigger issues. If necessary, however, we will defend ourselves vigorously against these charges in a second trial because we still believe they are unwarranted" (San Diego Union-Tribune, 2/23).

Alvarado attorney Robert Brewer said, "We're ready to go to trial" (Bloomberg/Los Angeles Times, 2/23).