Tenet's Tight Spot

Based on Tenet's latest regulatory filings, the government continues to investigate physician agreements at company-owned hospitals in El Paso, Texas, Memphis, Tenn., New Orleans, St. Louis and Southern California. The last of those probes is criminal in nature.

A former Tenet executive who spoke on condition of anonymity insists that the company has knowingly broken the law -- but has covered its tracks well enough to confuse juries. Indeed, he claims that Tenet actually terminated one Alvarado CEO for bribing doctors before going on to hire a replacement who now faces criminal charges for doing the same.

"This has been going on for a long time," he says. "Tenet found a way to restructure the agreements so that, on the surface, they looked legitimate. That's what confused the jurors. They didn't know the intent -- the documents that went behind -- those agreements."

A Tenet spokesman was tied up with the company's earnings call on Tuesday morning and didn't immediately return a call from TheStreet.com seeking comment.

Tenet has portrayed its physician agreements as legal, if complicated, all along. Meanwhile, the company continues to point out that no jury has been able to decide whether its Alvarado facility intended to violate the law.

Still, the company reminds in its regulatory filings, potentially serious risks remain.

"We believe that all aspects of our relationships with physicians are potentially under review," the company states in its latest annual report. "Proceedings in this area may be criminal, civil or both."

Following the OIG's latest move, Skolnick says she feels especially worried.

"The government is sending a signal to Tenet, saying 'We're not going to let you get away with this. We think you're bad boys,'" she told TheStreet.com on Tuesday. "I recognize this is extreme. ... (But) why doesn't the OIG just put a 'for sale' sign on the entire company?"