Former Tenet Exec Charged with Concealing Payments

The U.S. Department of Justice has filed a civil complaint against Christi Sulzbach, the former general counsel and chief compliance officer of Tenet Healthcare Corp., accusing her of intentionally concealing payments Tenet made to doctors for patient referrals that netted the company millions in illegal Medicare payments.

Tenet has paid $22.5 million to settle its portion of the case, which allegedly involved kickbacks to dozens of physicians in exchange for referrals to the company’s North Ridge Medical Center in Florida. But the Justice Department claims that Sulzbach is still liable for “false declarations” she made that Tenet was in material compliance with all federal program legal requirements.

The Justice Department’s action comes on top of civil fraud charges filed in April by the U.S. Securities and Exchange Commission against Tenet, Sulzbach and three other former Tenet executives. Sulzbach has yet to settle that case and could face penalties from both the Justice Department and the SEC.

Dallas-based Tenet provides health care services through hospitals, outpatient centers, diagnostic imaging centers and health clinics.  The company once was the second largest publicly traded healthcare company in the country, with its shares trading in the $50 range. Tenet stock closed Friday at $3.55.

Last year Tenet had $4.8 billion in sales, down from $5.2 billion a year earlier.  And although analysts project 2007 revenues will reach $8.9 billion and increase again in 2008, they continue to predict losses through 2008.