Tenet Tangles With Locals on Cutback Plans

Interestingly, both Centinela and Daniel Freeman Memorial -- now under government scrutiny for their own physician contracts -- employ CEOs who held top positions at Alvarado when some of the alleged kickbacks took place. Genevieve Clavreul, a hospital consultant with long ties to Tenet, claims that even corporate-level executives have engaged in such practices.

Before signing on as a consultant for Tenet in the early '90s, Clavreul made a name for herself by negotiating a major settlement between AIDS researchers in France and the U.S. Tenet then hired Clavreul to help lure two world-renowned AIDS doctors from France to its teaching hospital at the University of Southern California. But the deal started to unravel, Clavreul says, when current Vice Chairman Barry Schochet got involved.

"From the beginning, I told Schochet that I did not want the physicians to get kickbacks," Clavreul said. "And he kept saying they should. ... They always offer them."

Despite her track record, Clavreul suddenly found herself stripped of the power to negotiate two simple physician contracts. The AIDS project ultimately fell through, she said, and Tenet refused to pay her. A frustrated Clavreul then took her complaints to Christi Sulzbach, who resigned last year as the company's lead counsel. While meeting with Sulzbach, Clavreul says she threatened to take her labor case to state authorities and mentioned the doctor kickbacks as well.

"Of all the group, she was the smartest," Clavreul said. "Within 24 hours, I got my check."

Sulzbach could not be located for comment. But the federal government has already singled out Tenet's USC hospital -- together with Centinela and Daniel Freeman Memorial -- for a fresh round of questioning. The company said in October that federal authorities are primarily interested in "certain cardiac physician arrangements, coronary procedures and billing practices" at the three Los Angeles hospitals.

Booming Business

One Centinela practice, in particular, has publicly boasted about its booming cardiac business.

During a public hearing in late 2001, held as Tenet negotiated to buy the two Daniel Freeman hospitals, cardiologist Philip Frankel stressed the prominence of both himself and his partners. He held himself up not only as a board member of Centinela but also as a leader -- and former chief of staff -- at one of the Daniel Freeman hospitals Tenet hoped to buy. He then showcased his entire practice as a powerful group that endorsed the Tenet deal.