Tenet Takes Another Shot

Tenet's (THC Quote) weakened immune system just took another hit.

Late Tuesday, Tenet learned that another hospital-level executive will probably be indicted this week for her role in an alleged kickback scheme. Mina Nazaryan, associate administrator of Tenet's Alvarado Hospital Medical Center in San Diego, could face many of the same criminal charges filed in July against Alvarado CEO Barry Weinbaum. Although she is already accused of obstructing justice in the investigation, Nazaryan could land in prison if the charges prove true and she refuses to cooperate with federal authorities.

Federal investigators allege that both Nazaryan and Weinbaum arranged physician relocation agreements that rewarded doctors with illegal kickbacks. Alvarado is just one of seven Tenet-owned hospitals in the southern California region suspected of participating in the scheme.

Jim Moriarty, a Houston attorney representing hundreds of patients who are suing Tenet's Redding Medical Center in Northern California, predicted three months ago that the indictments would just keep coming.

"The real hammer is going to be when they indict people above the hospital level," said Moriarty, whose clients have accused Tenet of profiting from unnecessary surgeries at their expense. "Then the whole edifice will collapse."

For now, the market is yawning. Tenet shares, battered for months by mounting scandals, inched up 10 cents to $14.80 in Wednesday afternoon trading.

Kicking Back

Nazaryan's indictment, expected as early as Thursday, is just the latest to result from the Tenet kickback probe. A Tenet subsidiary that owns the seven Southern California hospitals under investigation has been indicted as well. But going forward, Moriarty expects federal authorities to keep targeting individual players -- who could face jail time in addition to major fines -- in an effort to deliver justice and deter future wrongdoing.

The California Nurses Association, a vocal critic of the company, hopes the Tenet probe will ultimately bring revolutionary changes to the entire health care industry.