Tenet's Tight Spot

Tenet slipped 2.1% to $7.79 on Tuesday.

Previously, the OIG has issued similar threats on just a handful of occasions.

Tenet fielded one of those itself. Back in 2003, the OIG announced plans to ban California's Redding Medical Center -- a hospital suspected of performing unnecessary surgeries -- from treating government-insured patients. The news came even after Redding had agreed to pay the government a record-breaking fine just one month earlier. Tenet wound up selling the hospital, once among its most profitable, for a fraction of its former value the following year, before the government carried out its threat.

More recently, the OIG sent a similar notice to a financially strapped hospital in Florida that has no ties to Tenet. The agency expressed frustration because it felt that the hospital, known as South Shore, had flagrantly violated a corporate integrity agreement promising to behave. The hospital wound up filing for bankruptcy protection -- even before losing Medicare payments -- just two months later, according to the Palm Beach Daily Business Review.

Meanwhile, records show, Alvarado has already started bleeding. The hospital swung from a $20.4 million profit in 2003 -- with help from questionable outlier payments -- to a $15.7 million loss last year. Some, including Skolnick, now see a possible fire sale on the way.

Of course, she worries about other Tenet facilities as well.

"This move by the OIG likely casts a further cloud over THC, especially in its attempt to convince physicians to refer more of their patients to THC facilities, not just Alvarado," she wrote. Already, "THC is attempting to attract physicians and their patients while their relocation agreements are under scrutiny and while admissions are falling for its peers.

"There aren't enough patients to fill the beds of the hospitals the doctors like and trust -- much less the Tenet facilities that doctors may be wary of."