Tenet Selling Redding Medical Center

By GARY GENTILE

AP Business Writer

December 11, 2003, 6:43 PM EST
LOS ANGELES -- Tenet Healthcare Corp. is selling the hospital at the center of a federal investigation that resulted in the largest fine ever paid for Medicare fraud.
Tenet said Thursday it will sell its Redding Medical Center as part of an agreement with the Office of Inspector General in the U.S. Department of Health and Human Services.

The OIG said last September it would seek to exclude Redding from further participation in Medicare and other federal health care programs. That was despite Tenet's agreement to pay $54 million to settle allegations that at least two of its doctors subjected patients to unnecessary heart operations and defrauded government insurance programs.

Tenet said Thursday that the OIG will suspend its effort to exclude the 269-bed hospital from Medicare while Tenet searches for a buyer. The new owner will be able to buy the hospital without the threat of Medicare exclusion, Tenet said.

"The company believes that, under these circumstances, a sale would be in the best interests of the hospital's employees, patients, physicians and the Redding community," Tenet said in a statement.

The medical center, 180 miles north of Sacramento, Calif., was among Tenet's most profitable hospitals, largely because of its extensive cardiac program. After news of the investigation, patient revenue plummeted 33 percent and the hospital said it would have to lay off 150 of its 1,200 employees.

FBI agents raided the offices of Dr. Chae Hyun Moon, who was director of cardiology, and Dr. Fidel Realyvasquez Jr., who was chief of cardiac surgery. No charges have been brought against the doctors, who allegedly performed needless catheterizations, angioplasty and open heart surgeries.
Santa Barbara, Calif.-based Tenet, the nation's second-largest hospital chain, owns and operates 114 hospitals in 16 states.
Its shares rose 24 cents Thursday to close at $14.74 on the New York Stock Exchange.