Tenet's Stock Hammered on News of Probe
Federal authorities are investigating whether two doctors at a Tenet Healthcare Corp. hospital in Northern California performed numerous unnecessary heart procedures on Medicare patients since late 1998.
In an affidavit made public Thursday, FBI Agent Michael Skeen said the two doctors, who practice at Redding Medical Center, performed an unusually heavy volume of heart catheterizations and other coronary procedures, of which as many as half -- based on the opinions of other doctors -- may have been unnecessary.
The affidavit said 167 of the patients later died, but did not attribute their deaths to the two doctors.
The 57-page document stated that Dr. Chae Hyun Moon and Dr. Fidel Realyvasquez Jr. billed Medicare for millions of dollars. Authorities said the investigation involves possible health-care fraud and making false billings. No charges have been filed against either man. Neither doctor could be reached for comment, but Realyvasquez's attorney said the case is simply a disagreement between doctors and insurers over what constitutes proper medical care.
News of the investigation, which included a Wednesday raid at the 238-bed hospital, was another setback for Tenet, the nation's second-largest hospital company.
Tenet had been a star on Wall Street since early 2000, but since Monday, when an analyst questioned the hospital chain's Medicare reimbursements, its stock has been under severe duress. Thursday's disclosure of the raid and investigation created a full-blown crisis of confidence with investors.
After falling about 20% in the prior three days, Tenet shares lost an additional 26% on Thursday, down $10.22 to $28.75, and it triggered a broader sell-off on Wall Street.
Before the afternoon ended, trading in Tenet was halted momentarily and the company, at the behest of New York Stock Exchange officials, issued a second news release, which denied rumors spreading on the trading floor that federal agents had raided Tenet's corporate headquarters in Santa Barbara.
"This is the last thing the company needed," said Sheryl Skolnick, a managing director at Fulcrum Global Partners in New York, which provides research on health-care companies to investors. "It's so sad, I can't tell you."
Tenet executives, saying they learned Thursday of the Redding hospital probe, stressed that decisions on medical procedures are those of the attending physicians and that Tenet would conduct its own probe of the allegations.
