Tenet labeled JUNK?

  1. http://www.latimes.com/business/la-f...lines-business
    Tenet's Debt Lowered to Junk by Moody's
    From Bloomberg News

    June 26, 2003

    Tenet Healthcare Corp.'s debt was cut to junk, or below investment grade, by Moody's Investors Service after the U.S. hospital chain reduced profit forecasts for the third time since November.

    Moody's cut its rating on Tenet's senior unsecured debt three levels to Ba3 from Baa3, the lowest investment grade, and said the rating may be reduced further.

    Lower ratings raise borrowing expenses because investors consider the debt more risky. Santa Barbara-based Tenet, whose Medicare billing is being probed by the U.S., said this week that second-quarter and full-year profit would be lower than forecast.

    Shares of Tenet fell 5 cents to $11.95 on the NYSE.

  2. Visit pickledpepperRN profile page

    About pickledpepperRN

    Joined: Mar '99; Posts: 13,361; Likes: 1,375


  3. by   geekgolightly
    So they have striking nurse's, the stock is below investment grade and they are being investigated for possible fraud of Medicare.

    I think I will avoid this hospital system. eeek!
  4. by   NRSKarenRN
    Stepping up its probe of Tenet Healthcare Corp., the Securities and Exchange Commission has launched a formal investigation and subpoenaed Medicare billing records and other documents dating back to 1997.

    Los Angeles Times, July 10, 2003


    A spokesman said a civil subpoena from the SEC was served Tuesday afternoon.

    "The inquiry has taken on a more formal tone," said the spokesman, Steve Campanini. "They have expanded the scope. They are looking at a broader range of items and issues."

    The SEC began an informal investigation in November, looking into Santa Barbara-based Tenet's aggressive strategy of charging Medicare at rates well above the industry average in so-called outlier payments to cover costly hospital cases. The subpoena sought documents about the outlier payments, as well as about certain payments from health maintenance organizations and increases in Tenet's gross charges for hospital care, the company said.

    The nation's second-largest for-profit hospital chain, Tenet is also under investigation by the Justice Department, which started a probe last fall of Tenet's practice of boosting profit with outlier payments.

    Since October, Tenet's stock has lost more than three-quarters of its value. The shares hit a high of $52.50 in October. On Wednesday, they fell 5 cents to $12.10 on the New York Stock Exchange.

    Tenet's problems have been mounting. Federal agents late last year raided the offices of two heart specialists suspected of conducting unnecessary surgeries at Tenet's hospital in Redding. In May, Tenet's chief executive, Jeffrey Barbakow-then the highest-paid executive of a publicly traded company-was forced to resign.

    And last month, a federal grand jury indicted the CEO of Tenet's Alvarado Hospital Medical Center in San Diego on eight counts of violating anti-kickback laws by allegedly authorizing illegal payments to doctors.

    Wall Street analysts disagreed Wednesday about the significance of the elevated SEC probe, but agreed that it was another blow to efforts to pull the company out of its tailspin.

    "You could almost invest in a bank certificate of deposit and make as much money with far less risk" than investing now in Tenet's stock, said Nicholas Jones, a portfolio manager at Ashland Management Corp. in New York. Jones said he felt betrayed by Tenet's management after his firm was forced to sell its 400,000 shares of Tenet stock last year at about $30 a share.

    "It was a bloodbath," Jones said.

    Analyst Sheryl Skolnick of Fulcrum Global Partners said Tenet's problems could get worse because the SEC probe could delve into what the company's management knew about its billing problems last year. SEC spokesman John Nestor wouldn't comment on the probe.

    Given that the SEC has informally been looking into Tenet's practices since fall, analyst Jeffrey Hoffman of Buckingham Research Group said he believed that the agency "hasn't found anything illegal."

    "And this is how they punish you-by adding to your legal costs with these demands," Hoffman said.

    Tenet has slashed its profit estimates three times since November.

    The company, which had booked $65 million a month in outlier payments, stopped billing Medicare for the controversial outlier fees earlier this year.

    The change contributed to the company's first negative quarterly earnings in nearly four years. In the first quarter, Tenet's outlier revenue fell to $18 million, compared with $197 million a year earlier.

    Tenet, which owns 114 hospitals in 16 states, also has been hit with lawsuits filed on behalf of shareholders, and an Internal Revenue Service demand for $269 million in back taxes and interest over the firm's deduction of a portion of a civil settlement that Tenet paid the federal government in June 1994.
  5. by   pickledpepperRN
    Still more:
    (Photo of hospital on link)
    July 16, 2003
    U.S. Expands Investigation of Tenet Healthcare Deals

    LOS ANGELES, July 15-Tenet Healthcare said today that federal authorities were expanding their investigations of the deals the company makes to recruit doctors to practice in its hospitals.
    Tenet said it had received subpoenas from the United States attorney's office in Los Angeles seeking information about physician relocation agreements related to seven hospitals in Southern California, mainly in the Los Angeles area. The subpoenas also seek more general information about physician-relocation agreements at all of Tenet's 114 hospitals, the company said.
    The inquiry into the Los Angeles-area hospitals comes as a grand jury continues to investigate Tenet's Alvarado Hospital Medical Center in San Diego. Tenet said today that it expected that hospital, and possibly the company itself, to be indicted later this week.
    The chief executive of Alvarado, Barry Weinbaum, was indicted last month on charges of making illegal payments to doctors to induce them to refer patients to the hospital.
    Tenet, the nation's second-largest for-profit hospital chain, behind HCA, is facing a number of investigations involving Medicare billing; accusations of unnecessary heart operations at its hospital in Redding, Calif.; and questions about the extent of its disclosures to shareholders. Concerns about payments to doctors had seemed to be confined to the one hospital in San Diego, but the new inquiry in Los Angeles indicates that the issue is looming larger for the authorities.
    Tenet, which said it would cooperate with new requests, said it did not know the scope or focus of the Los Angeles inquiry. It was not clear what connection, if any, it had with the one in San Diego. But the subpoenas issued in Los Angeles were not from a grand jury.
    Tenet said that physician-relocation agreements are common in the hospital industry. Typically, hospitals pay a portion of the costs for a doctor to move from one community to another and also guarantee the doctor's income for a certain period, usually one year. The agreements permit doctors to refer patients to any hospital, not just the one that helped them move, the company said.
    "We believe we have a solid physician-relocation policy that is entirely appropriate under the law," said Steven Campanini, a spokesman for Tenet, which is based in Santa
  6. by   pickledpepperRN
    U.S. Probe at a Tenet Hospital Expands
    Inquiry into alleged kickbacks to doctors leads to records request at all of firm's facilities.
    By Debora Vrana
    Times Staff Writer

    July 16, 2003

    In a widening of the probe of whether doctors at Tenet Healthcare Corp.'s hospital in San Diego received illegal kickbacks, federal prosecutors Tuesday subpoenaed physician- recruitment records at all of its 114 hospitals and sought detailed information about seven of its Southern California hospitals, Tenet said.

    In addition, the Santa Barbara-based company said it expected a grand jury to return an indictment this week against its Alvarado Hospital Medical Center in San Diego, which has been under investigation for the last year, and possibly against the company as well.

    Last month, Alvarado's chief executive was indicted on eight counts of violating anti-kickback laws for allegedly authorizing illegal payments to doctors to win more referrals of Medicare patients.

    The subpoenas from the U.S. attorney's office in Los Angeles seek physician-relocation agreements since 1995 at seven Southern California hospitals, the company said.

    Those hospitals are Centinela Hospital Medical Center in Inglewood, Daniel Freeman Memorial Hospital in Inglewood, Daniel Freeman Memorial Hospital in Marina del Rey, John F. Kennedy Memorial Hospital in Indio, Brotman Medical Center in Culver City, Encino-Tarzana Regional Medical Center in Tarzana and Century City Hospital.

    Relocation agreements help hospitals recruit doctors and usually involve reimbursements for moving costs and salary guarantees on promises that the physicians will stay at a hospital for a certain amount of time. About 1,000 doctors who have admitting privileges at Tenet's 114 hospitals nationwide have relocation agreements, based on company estimates.

    "We believe we have a solid relocation policy that is entirely appropriate under the law," said Steven Campanini, a Tenet spokesman. "Physician recruitment and relocation is an accepted and common hospital industry practice."

    Tenet executives said they didn't know why investigators singled out seven hospitals for detailed information. Some of those hospitals were bought by Tenet in recent years and have beefed up specialty departments such as cardiology.

    Thom Mrozek, spokesman for the U.S. attorney's office in Los Angeles, said he couldn't comment on the situation.

    Tenet, the nation's second-largest hospital chain, has been beset by investigations and lawsuits since last fall, when it was revealed that the firm received excessive Medicare reimbursements by sharply increasing its charges at some hospitals. Tenet has 40 hospitals in California.

    The company is under investigation by at least three federal agencies. Besides looking into Tenet's Medicare billings, U.S. officials also are probing whether doctors at a Tenet hospital in Redding, Calif., performed unnecessary heart surgeries.

    Since the investigations started in October, the company's stock has lost about two-thirds of its value.

    "It's not only a widening of the investigation from San Diego to Los Angeles, but across the whole company," said Sheryl Skolnick, an analyst with Fulcrum Global Partners. "This is no longer fun and games here. This is serious stuff."

    In December, federal authorities armed with warrants raided Alvarado, looking for various records.

    In June, a federal grand jury indicted its chief executive, Barry Weinbaum, alleging he authorized Alvarado to pay more than $10 million in relocation packages to doctors who joined medical groups in Alvarado's service area.

    Weinbaum has denied the accusations.

    The latest subpoena news was announced after the stock market closed. Tenet stock closed Tuesday at $12.45, up 65 cents on the New York Stock Exchange.

    "When you go through the litany of things this company is facing, you wonder how it will manage through all this," said Skolnick, the Wall Street analyst.
  7. by   pickledpepperRN
    Tenet Hospital Indicted Over Doctor Payments
    Grand jury alleges the facility and a company unit bribed physicians to refer patients.
    By Debora Vrana and Ronald D. White
    Times Staff Writers

    July 18, 2003

    A federal grand jury accused a San Diego hospital and its owner Thursday of paying millions of dollars in illegal kickbacks to induce doctors to refer patients to the hospital.

    Alvarado Hospital Medical Center and Tenet Health System Hospitals Inc., a unit of Tenet Healthcare Corp., were charged in a 17-count indictment with violations of federal laws carrying maximum fines of $425,000. The indictment claims Alvarado and Tenet paid more than $10 million to recruit doctors to the San Diego area and that much of it was bribe money to get the doctors to send patients to Alvarado.

    Santa Barbara-based Tenet Healthcare, which said this week that it expected the indictment, issued a statement defending the way it recruits physicians.

    "We believe this very broad indictment mistakenly attacks a well-established, lawful and common means by which U.S. hospitals attract needed physicians to their communities," Trevor Fetter, Tenet's president and acting chief executive, said.

    The indictment came more than a month after the grand jury indicted Alvarado Hospital's chief executive, Barry Weinbaum, on eight counts of breaking anti-kickback laws. Weinbaum, 49, has pleaded not guilty.

    Tenet Healthcare wasn't named in either indictment. Tenet Health System Hospitals is one of many subsidiaries that operate 114 hospitals the parent corporation owns nationwide. There are 40 Tenet hospitals in California.

    Tenet has been reeling from numerous government probes into a wide array of its practices. Analysts said the latest indictment could make matters much worse.

    "The fact that the grand jury found enough cause for a criminal indictment is very serious," said Sheryl Skolnick, a health-care analyst with Fulcrum Global Partners. She added, "Who wants to be admitted to a hospital chain that has been indicted?"

    The indictment was the latest in a widening probe by federal prosecutors of Tenet's doctor recruitment practices. This week, the U.S. attorney's office in Los Angeles subpoenaed Tenet for information about physician recruitment practices at all of its hospitals, and for specific recruitment records at seven of its Southern California hospitals.

    A key part of the probe involves complex contracts known as physician recruitment agreements that are signed by some doctors when they join or set up a new practice.

    The contracts are regularly used by hospitals to help build specialty departments or to attract doctors to remote locales or areas where the cost of living is high. The contracts typically include income guarantees for up to three years as well as promises of money for moving costs and even for office supplies.

    Although aggressive recruiting is common in sports and many business sectors, experts say that in the health care industry, offering rich incentives to doctors can easily run afoul of federal and state laws that prohibit the use of inducements to get doctors to refer patients to certain hospitals.

    Physicians are obligated by law to be their patients' unfettered advocates and to ensure that they get the best care. Agreements-written, spoken or unspoken-that give doctors any type of incentive to funnel patients to one hospital are illegal, because that hospital might not be the best for the patients.

    Such agreements are illegal even if incentive payments are made to a third party, such as the person who recruited the physician who signed the agreement. That is one of the allegations in the Alvarado Hospital case.

    The indictment charging Weinbaum says that physician Paul Ver Hoeve claims that he received nearly $700,000 in kickbacks from Alvarado Hospital after he recruited four doctors to join his medical practice in the San Diego area.

    Health-care lawyers and other experts say it isn't uncommon for hospitals to push the legal limit. "There are hospitals out there all the time that are giving inducements for referrals," said Jim Owens, a health-care attorney with Paul Hastings Janofsky & Walker in Los Angeles. "Some are done sloppily, others are more savvy," such as putting a doctor on payroll as a "medical director" at an a exorbitant six-figure fee but requiring no real work.

    "Hospitals are facing pressure to make a bottom line," he said.

    Jack Lewin, chief executive of California Medical Assn., said: "Some hospitals have taken to various recruiting practices, some of which frankly are illegal. You have hospitals trying to capture patients by buying off the doctors."But doctors say that many physicians would be reluctant or unable to relocate without income guarantees, or money to help pay the cost of moving or starting up a new medical practice.

    "It was a good thing for me," said one doctor who recently moved her Southern California practice to Napa Valley, where rents and costs are high; she asked not to be identified. "It would've been very, very hard to do this without some help with the start-up costs."

    The indictment handed up Thursday could have a chilling effect on the industry. "Recruitment will be drying up," said Jeremy Miller, a Century City attorney who often consults on recruitment agreements. "It will hurt communities that need specialists, like pediatricians. Physicians will say, 'I can't afford to move or sign any agreement that might lead me into trouble.' "

    Tenet has said that less than 2.5% of its 41,000 doctors nationwide-or about 1,000 physicians-have relocation agreements in place. The company has been among the most aggressive in establishing and expanding specialty departments, such as cancer and heart centers, which are successful only if fully staffed with highly trained doctors.

    Tenet shares fell 28 cents to $11.85 on the New York Stock Exchange.