Tenet Tangles With California Blue Cross

Tenet (THC - Cramer's Take - Stockpickr) continues to make others heartsick.

The giant hospital operator -- once a self-proclaimed leader in the area of cardiac care -- has now left its biggest home-state health insurance company feeling rather ill. Blue Cross of California told TheStreet.com on Monday that it was "shocked" to discover an extraordinary rate of unnecessary heart procedures at the only two Tenet facilities it has scrutinized so far -- a finding that provoked it to withdraw coverage of certain operations at one of those hospitals.

"Three independent, blinded experts who did not know what they were looking at uniformly agreed that the surgical procedures were not indicated," said Jeff Kamil, a physician at the big insurance company. "The overall results said that 73% of the patients evaluated did not need surgery."

The "highly placed, highly esteemed" experts -- hailing from the Mayo Clinic, Stanford University and the University of Pennsylvania -- began reviewing past heart-bypass surgeries at two Tenet facilities after one of hospitals, Redding Medical Center, came under heavy fire last year. The physicians ultimately concluded that 83% of the procedures at Redding were unwarranted. But they also determined that 59% of the bypasses at neighboring Doctors Medical Center in Modesto -- a hospital overshadowed by Redding so far -- were unnecessary as well.

"Redding was probably [worse] than we expected," Kamil said. "But Modesto was a true surprise."

Blue Cross took no immediate action against Redding because it has shut down its heart program already. But it requested that Modesto halt future heart bypasses until a thorough investigation of the hospital's heart program could be conducted.

"They declined to do that," said Blue Cross spokesman Michael Chee. "That is, in fact, what triggered the termination" of Blue Cross coverage of elected bypasses at the facility.