On October 31, 2002, Federal authorities executed search warrants at Tenet Healthcare Corporation's Redding Medical Center in California. The agents, who reportedly left with large amounts of documents, were seeking evidence of alleged false billings relating to the unnecessary performance of certain cardiac surgical procedures such as angioplasties, coronary bypasses, and heart catheterizations. The hospital's Cardiology Director, who is at the center of the government's accusations, was apparently the subject of a billing probe in 2001 by the Medicare Part B carrier based on billings that allegedly exceeded his peers by three to five times.

Tenet's stock price took a significant drop on the day of the raid, although the company does not believe there is any reason to believe that the government's allegations are true. As Tenet noted in a company statement, the decision to perform surgery belongs solely to the physician and not to the hospital.

To see this week's Health Briefs (a listing of Federal and Texas Register regulations affecting health care), visit our website at http://www.velaw.com/publications/healthcare/HB110102.pdf.

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