said a federal grand jury in San Diego returned an indictment accusing Alvarado Hospital Medical Center and Tenet HealthSystem Hospitals of illegally using physician relocation agreements.
The company said earlier this week that it expected the indictment. The hospital operator revealed a
fresh wave of subpoenas on Tuesday, this time from the U.S. Attorney's office in Los Angeles, seeking information about the company's business practices dating back to 1995. The subpoenas come just a week after the
Securities and Exchange Commission
formalized its own probe of Tenet.
Tenet HealthSystem Hospitals is the legal entity that was doing business as Alvarado Hospital Medical Center during part of the period mentioned in the San Diego indictment.
"We believe this very broad indictment mistakenly attacks a well-established, lawful and common means by which U.S. hospitals attract needed physicians to their communities," Trevor Fetter, Tenet's president and acting chief executive, said in a press release.
"We are confident that our corporate policy on physician relocation agreements is entirely appropriate under the law, and we intend to defend ourselves vigorously," he continued. "This prosecution, if successful, threatens a practice in the health care industry that is beneficial to communities."
Alvarado Hospital Medical Center is a 311-bed facility that is one of two hospitals serving a population of about 470,000 in eastern San Diego County, Tenet said.
The company said in a press release that it believes its corporate policy on physician relocation agreements, which has been in place since 1996, is "entirely appropriate under the law."
Shares of Tenet closed
New York Stock Exchange
trading Thursday at $11.85.