Tenet Shareholders Demand New CEO

  1. http://story.news.yahoo.com/news?tmp...shareholders_1
    Tenet Shareholders Demand New CEO

    MIAMI - A shareholder group said Monday it won't wage a proxy contest to name an alternative slate of directors at Tenet Healthcare Corp.

    Investor M. Lee Pearce, the group's leader, said he was persuaded by Tenet's newly appointed independent director, Edward Kangas, that Tenet is committed to serious reform. In a letter sent Monday to non-management board members, Peace said Tenet must replace its senior management, name a chief executive from outside the company and adopt tougher standards for director independence.
    Last month, Jeffrey Barbakow said he would step down as chairman and a director of Tenet later this year, but planned to remain chief executive.
    Pearce added the troubled hospital company also must name a physician as its chief quality assurance officer, stop spending resources on share repurchases, and move Tenet's headquarters to Dallas from Santa Barbara, Calif.
    In December, Tenet admitted that its previously reported revenue and profit growth was driven by outlier payments, which are fees Medicare makes for expensive treatments that exceed fixed rates provided under the federal healthcare insurance program.
    Last month, Pearce's group concluded after a two month investigation that Tenet may face up to $6 billion in legal liability to the federal government as a result of the scheme to defraud Medicare.
    In April, Tenet filed a federal lawsuit against the committee and Pearce for allegedly using a "misleading and false" press release to illegally influence shareholders. Pearce filed a countersuit against the company last week.
    It remained unclear Monday how Pearce's announcement would effect the litigation with Tenet.
    New York Stock Exchange (news - web sites)-listed shares of Tenet closed Monday at $15.96, down 12 cents, or 0.7 percent.
  2. Visit pickledpepperRN profile page

    About pickledpepperRN

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


  3. by   pickledpepperRN
    Tenet Healthcare CEO Steps Down
    NEW YORK (Reuters) - Tenet Healthcare Corp. (NYSE:THC - news), the No. 2 U.S. hospital chain at the center of a government probe into its billing practices, on Tuesday said Jeffrey Barbakow has stepped down as chief executive officer.

    Tenet said President Trevor Fetter will serve as acting CEO.
    Barbakow, 59, who gave up the title of chairman last month, will not stand for reelection to the board, the Santa Barbara, California-based company said in a statement.
    A dissident shareholder group had been agitating for Barbakow's removal from the company.
  4. by   pickledpepperRN
    Tenet Healthcare CEO Barbakow Resigns

    By GARY GENTILE, AP Business Writer
    LOS ANGELES - The board of Tenet Healthcare Corp. has replaced the hospital chain's chief executive and started a search for a successor who will restore investor confidence in the troubled company.

    AP Photo

    Chairman and chief executive Jeffrey C. Barbakow submitted his resignation after the board met by phone Friday and decided to seek new leadership-a decision Barbakow agreed to, the company said Tuesday.
    The board appointed Tenet's president, Trevor Fetter, 43, as acting CEO of the nation's second-largest for-profit hospital chain.
    "As Tenet begins a new chapter in its history, I consider this step a part of my personal commitment to do anything I can to restore Tenet to its rightful place of leadership in our industry," the 59-year-old Barbakow said Tuesday.
    The move comes less than two weeks after Barbakow wrote in his annual letter to shareholders that he looked forward to continuing as chief executive, although he planned to resign from the board and relinquish his role as chairman.
    Barbakow's departure was welcomed by investors, who saw Tenet's stock plunge in October after several investigations into the company were launched. Shares of Tenet rose 59 cents, or more than 3 percent, Tuesday, to close at $16.14 on the New York Stock Exchange (news - web sites).
    The move also applauded by M. Lee Pearce, a Florida physician who is head of the Tenet Shareholders Committee. "Barbakow had to go," Pearce said. "I congratulate Tenet's Board for finally realizing that."
    Barbakow will receive severance payments for the next three years equal to his annual salary and target bonus as of the date of his resignation. Barbakow's stock options, granted over the past 10 years, will also vest immediately. He will have three years to exercise them, the company said.
    Barbakow was among eight big corporate CEOs whose pay prompted controversy and who declined invitations from the Senate Commerce Committee to testify at a hearing last week on executive compensation and its possible negative effect on investor confidence.
    Barbakow was credited with saving the scandal-plagued company known as National Medical Enterprises when he joined the board in 1990.
    He became chief executive in 1993, when NME was accused of holding some patients against their will in its psychiatric hospitals and treating them until insurance benefits ran out.
    Barbakow quickly settled the resulting lawsuits and oversaw the transformation of NME into an owner of acute care general hospitals. It was under his leadership that NME became Tenet Healthcare, a name chosen because it represented integrity and "shared values."
    Problems returned last fall. In a matter of days, investigations were launched into charges that two doctors at a Tenet hospital in Redding performed hundreds of unnecessary heart surgeries, and doctors at a San Diego hospital might have paid to recruit patients.
    A federal audit was launched after it was revealed that the company relied more heavily than most on Medicare outlier payments. Outliers are payments to reimburse hospitals for extra care given to the sickest patients beyond fixed charges set by Medicare.
    In response to the crisis, Barbakow replaced two top executives and brought back Fetter, a former executive, as president.
    Barbakow also announced a plan to sell non-core assets, cut annual costs by $100 million and adopt voluntary guidelines that drastically reduced Tenet's reliance on outlier payments.
    The company adopted several corporate reforms, including changing its fiscal year and expensing stock options.
    The appointment of two new independent directors may have led to the decision to replace Barbakow.
    "The influence of the new board members is likely what is being felt here," said Sheryl Skolnick, an analyst at Fulcrum Global Partners LLC.
    That interpretation was bolstered by the fact that Tenet chose to quote a new, independent director in Tuesday's statement announcing the management change.
    "It is the right time for Tenet to have new top leadership with a demonstrated ability to address issues facing the company and restore the confidence of our investors," Edward Kangas, former chairman of the accounting firm of Deloitte Touche Tohmatsu, said Tuesday.
    A board committee made up of Tenet directors is conducting a search for a permanent replacement for Barbakow; Fetter will be considered, the company said.
    On the Net:
    Tenet Healthcare: http:www.tenethealth.com
  5. by   JillRene
    O' What a tangled web we weave when first we practice to deceive. The sad part about this is I'm not at all shocked. I wonder when corporate America will get it. How many times is this going to happen?? The only people that get hurt by this are the ones that have invested their retirements, (hopefully they diversified after Enron), and the people that work for the company. BFD, the CEO steps down, that's after he has scooped up on millions. He gets a slap on the hand and loses his job---Do you think he cares?? He doesn't need to work anyways, he'll be able to live off the interest from the money he has gotten in bonuses from falsely declaring income that wasn't there.
  6. by   pickledpepperRN
    Tenet Says the IRS Seeking $269 Million
    Mon June 2, 2003 09:15 AM ET
    NEW YORK (Reuters) - Tenet Healthcare Inc. THC.N , the No. 2 U.S. hospital operator, said the U.S. Internal
    Revenue Service is asking it to pay about $269 million in additional taxes and interest for the years 1995, 1996
    and 1997.
    The adjustment includes $157 million in taxes and an estimated $112 million in interest, Tenet said in a filing
    with the U.S. Securities and Exchange Commission.
    Tenet, which saw its chief executive resign last week, said it disputes the ruling and will appeal the decision.
  7. by   pickledpepperRN
    I know a certified nursing assistant, not at a Tenet facility, who got worried in December of 2000. She was old enough to cash in her 401K and bought an apartment building.

    She bought a duplex and is landlady to a nurse she once worked with.
  8. by   oramar
    There was a show on CNN where they said that unless these CEOs start doing some time things are not going to change. The business reporter said they are slapping fines on people who are worth billions. It just does not hurt them enough for them to change their behavior.
  9. by   pickledpepperRN
    Originally posted by oramar
    There was a show on CNN where they said that unless these CEOs start doing some time things are not going to change. The business reporter said they are slapping fines on people who are worth billions. It just does not hurt them enough for them to change their behavior.
    I think the crime against all taxpayers (Medicare & Medicaid) plus what we pay for health insurance is not only theft. It is manslaughter. I would call it MURDER if I believed they knew the result of taking $$$ from patient care!
    June 3, 2003

    IRS Says Tenet Owes Money
    Hospital chain disputes finding that it has to pay $269 million in back taxes and interest.
    By Ronald D. White, Times Staff Writer
    The Internal Revenue Service is asking Tenet Healthcare Corp. to pay $269 million in back taxes and interest, the company said in a filing Monday with the Securities and Exchange Commission.

    Santa Barbara-based Tenet, the nation's second-largest hospital chain, had previously disclosed that the IRS had been examining company income tax returns for the years that ended May 31 of 1995, 1996 and 1997. Tenet said it was disputing the IRS finding.

    The IRS demand adds to several government investigations and shareholder lawsuits that have hit Tenet since last fall, when a federal probe was launched into the company's practice of boosting profit with special payments that Medicare makes for the sickest patients.

    Last week, Jeffrey C. Barbakow stepped down as Tenet's chief executive after a decade in the job. He was the third top executive to leave the company since Tenet's troubles began in October.

    Investors took the latest news in stride; Tenet shares were down 2 cents to $16.67 on the New York Stock Exchange.

    However, some analysts said the IRS dispute could be cause for concern.

    "We knew that this was an ongoing issue," said Sheryl Skolnick of Fulcrum Global Partners in New York. "It will be a big deal if they have to pay it."

    Tenet said the dispute with the IRS is partly about the company's deduction of a portion of a civil settlement that Tenet paid the federal government in June 1994. The settlement was related to the company's discontinued psychiatric hospital business.

    The denial of this deduction would result in additional income taxes and interest, before any federal or state tax benefit, of about $100 million, Tenet said.

    The company added that it was anticipating a $70-million after-tax charge in the second quarter related to discontinued operations.

    Tenet and the IRS also are disputing the company's treatment of the timing of the recognition of income pertaining to Medicare and Medicaid revenue.

    "We believe our original deductions and methods of accounting were appropriate and we plan to appeal each of these matters," the company said in its SEC filing.
  10. by   pickledpepperRN
    June 4, 2003
    Tenet Plans to Spend Millions to Block RN Voting Rights As Federal Labor Board Hearings Begin in Los Angeles
    At a time when Tenet Healthcare is facing multiple federal and state investigations into its billing and patient care practices that have already contributed to the loss of hundreds of millions of dollars for Tenet shareholders, Tenet is preparing to spend up to millions of dollars more to block efforts by its registered nurses to hold democratic representation elections, the California Nurses Association charged today.

    Federal labor board hearings began Tuesday on petitions filed by more than 4,000 RNs at 13 Tenet hospitals in California who are seeking federally supervised secret ballot elections to affiliate with CNA.

    Employing a team of high priced attorneys and offering repeated indications that it intends to use an array of legal maneuvers in stalling tactics, "Tenet has signaled that it plans to use a scorched earth policy of legal machinations to stymie the voting rights of its RNs, no matter what the cost," said CNA Executive Director Rose Ann DeMoro.

    The hearings opened with the room filled with RNs, CNA supporters, from the 13 hospitals. Notably, only attorneys represented the other participants - Tenet, and two organizations that have signed an illegal backroom agreement with Tenet, the Service Employees Union (SEIU) and the State, County, and Municipal Employees (AFSCME).

    That agreement, in which Tenet seeks to coerce employees to join SEIU or AFSCME to receive a raise and accept a contract below industry standards, directly violates federal labor law on numerous grounds, including a prohibition against company unions. CNA has challenged the agreement, and filed the petitions for federal elections in half of Tenet's California hospitals where the RNs are non-union.

    "Tenet appears to be devoted to pursuing their illegal agreement, while engaging in expensive and heavy handed union busting against the RNs who are increasingly demanding a democratic choice on who should represent them," DeMoro said.

    In attorney fees alone, Tenet will spend at least $300 an hour, per attorney, CNA estimates. That does not include scores of other fees, such as on anti-union consultants probably now being employed as Tenet has begun anti-CNA activities in the 13 hospitals.

    "At a time when Tenet has multiple legal troubles, and has just reported substantial losses in its profit line, this is a colossal waste of vital health care resources," said DeMoro. "Tenet should drop its attack on its RNs, work on rebuilding its tattered reputation and establish a productive, working relationship with CNA."

    NLRB hearings continue Thursday and Friday.

  11. by   pickledpepperRN
    San Diego Tenet Hospital Chief Indicted
    Fri June 6, 2003 11:33 AM ET
    NEW YORK (Reuters) - The chief executive of a Tenet Healthcare Corp. THC.N hospital in California has been charged by federal prosecutors with offering kickbacks and bribes to physicians to win patient referrals to the hospital.
    Barry Weinbaum, chief executive of Alvarado Hospital Medical Center in San Diego, allegedly signed relocation packages worth more than $10 million with various doctors who joined the practice of a local physician who received kickbacks to refer patients to Alvarado, according to a copy of the indictment.
    The indictment was filed in U.S. District Court for the Southern District of California.
    Weinbaum, 49, who has been chief executive of Alvarado for 12 years, said in a statement on Friday that the allegations were "absolutely false," and he would "vigorously defend himself in court." He was not immediately available for additional comment.
    Tenet said that Paul Ver Hoeve, the doctor who allegedly took hundreds of thousands of dollars in bribes from Weinbaum, referred fewer than 150 patients to Alvarado Hospital between 1995 and 1998. The company said Alvarado has more than 600 affiliated physicians and treats more than 100,000 patients each year.
    Ver Hoeve was not charged in the indictment.
    "There is no indication that he referred many, many patients to Alvarado, which makes this indictment puzzling to us," said Harry Anderson, a spokesman for Tenet.
    The indictment is just the latest in a series of missteps in the past year that forced out the CEO at Tenet, the nation's second-largest hospital operator.
    Tenet was forced to change the way it bills the federal Medicare system after an investigation into how it billed the government for the sickest patients. In addition, the U.S. Department of Health and Human Services is investigating a hospital merger in Missouri, and two doctors at a Tenet hospital in Northern California were charged with conducting hundreds of unnecessary heart procedures.
    Tenet said it believes its Alvarado subsidiary may be charged at a later date as a result of the conduct alleged in the indictment, which claims Weinbaum signed relocation agreements with several doctors, knowing some of the payments from the relocation packages would flow back to Ver Hoeve.
    Tenet said last December that officials from the U.S. Attorney's Office in San Diego had searched two administrative offices at Alvarado as part of an investigation into physician recruitment and consulting.
    Shares of Tenet were up 9 cents at $16.09 on the New York Stock Exchange in late morning trade.
  12. by   pickledpepperRN
    Ex-Tenet Doctor Faces Hearing on Alleged Fraud, Misconduct
    Ronald D. White

    June 6, 2003

    The California Medical Board has accused a doctor, suspected of performing unnecessary surgeries, of insurance fraud, gross negligence, dishonest or corrupt acts and incompetence, a board official said Thursday.

    Dr. Chae Hyun Moon, former head of the cardiology department at Tenet Healthcare Corp.'s Redding Medical Center in Redding, Calif., faces a hearing before an administrative law judge, the medical board said.

    Moon's office and that of heart surgeon Dr. Fidel Realyvasquez, who also practiced at the Redding Medical Center, were raided by federal agents in October in an investigation into whether the two were involved in unwarranted heart surgeries. No charges have been filed.

    Moon said in January that he was suspending his practice because he was losing his medical malpractice insurance.

    Attempts to reach Moon and his attorneys were unsuccessful.
  13. by   pickledpepperRN
    PLEASE TELL ME IF THESE POSTS ARE ANNOYING YOU SO I CAN STOP! I worked at a hospital that was really good and has gone downhill since Tenet bought it. The nurses are still great, but many have quit.

    At a Loss Over CEO Compensation

    June 8, 2003

    I accept, although I do not understand, that in the world of greed enough is never enough, but "Barbakow Quits as Tenet's CEO" (May 28) stunned me.

    In a country where so many people have no or little medical insurance, this man was paid $116 million for running a medical-care company at a loss.

    Along with the $116 million comes an astonishing "retirement" package that we mere mortals can hardly imagine.

    Not only does this seem to be ludicrous from a business point of view, but also raises the question of just how much profit is made from people's sickness if a company can afford to pay one man such an egregious amount of money.

    Perhaps it is time to take the profit from the "health industry." Perhaps it is time to accept that the system we have is wasteful, encourages the avaricious, and is eventually destructive to the lives of the average American citizens.

    For shame, Tenet, Mr. Barbakow and your ilk, for shame.

    David Lewis

    Studio City
  14. by   pickledpepperRN

    Tenet Seeks Suits of Individual Hospitals
    From Bloomberg News

    June 11, 2003

    Tenet Healthcare Corp. said the Justice Department should be forced to sue member hospitals individually on allegations that they submitted phony Medicare claims.

    Tenet asked a federal judge in Los Angeles to exclude the company as a defendant in a suit seeking $323 million in damages. That would give prosecutors the more difficult task of proving fraud against individual hospitals in the Santa Barbara-based chain.

    The government's suit, filed in January, accused the company of improperly classifying illnesses to inflate Medicare reimbursement claims for six years in the 1990s.

    Shares of Tenet rose 21 cents to $16.21 on the NYSE.