Tenet Healthcare has agreed to pay $21 million to settle charges that its Alvarado Hospital in San Diego paid illegal kickbacks to doctors to increase patient admissions. The hospital chain will also sell or close Alvarado Hospital, which had been threatened with exclusion from Medicare and Medicaid participation.
Alvarado Hospital allegedly recruited new doctors with lucrative "relocation" packages into "host" practices in San Diego, disguising payments to the host physicians as "tenant improvements" and "overhead." The indictment alleged that the defendants made the payments to the host physicians with the intent to induce patient referrals to the hospital.
Additional information can be found in the press release issued on May 17, 2006 by the U.S. Attorney's Office, a May 17, 2006 article at thestreet.com, and in a May 18, 2006 news story in the Los Angeles Times.