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If you’re a bored in-house attorney looking for more action � including some meaty criminal defense work � then maybe you should consider a job in the health care industry. First HCA Inc. got hit with a batch of nasty and costly legal woes, then it was HealthSouth Corporation’s turn, and now Tenet Healthcare Corporation is the latest for-profit hospital chain to keep its lawyers working overtime. Tenet GC Christi Sulzbach won’t talk about how she’s coordinating the company’s defense. But several outside counsel who advise other health care companies say that if they were in her shoes, they’d try to resolve the criminal investigations first. And indeed, that’s what Tenet, the second-largest hospital operator in the country, seems to be doing. In August it reached a settlement with the U.S. attorney’s office in Sacramento over charges that doctors at its Redding Medical Center in northern California conducted unnecessary heart procedures on hundreds of patients. Though the company didn’t admit to any wrongdoing, it’s shelling out $54 million, most of which will go to the federal government. Prosecutors said in a press release that while they won’t pursue criminal charges against Tenet, they might charge some individual employees. From Hot Streak To Hot Water But Tenet still has plenty of other fires to put out. According to its latest quarterly financial report, released in August, the company is the target of at least four unrelated criminal investigations. It also faces civil probes by the U.S. Securities and Exchange Commission, the Internal Revenue Service, the U.S. Department of Health & Human Services, the Federal Trade Commission, and a congressional subcommittee. Last but not least, Tenet must contend with some 50 private lawsuits, ranging from shareholder actions to tort claims over alleged unnecessary surgeries. The company has steadfastly denied wrongdoing in all these cases. Based in Santa Barbara, California, Tenet was on a hot streak until legal problems started cropping up in the summer and fall of 2002. During a four-month period, it agreed to pay $84.8 million to settle two sets of Medicare fraud charges at several hospitals; federal prosecutors began their probe into unnecessary surgeries at the Redding hospital; and Health & Human Services began a global probe of Medicare payments to Tenet. Tenet’s PR staff said that no one, including GC Sulzbach, could talk for this article. But in its August quarterly report, the company said, “We presently cannot determine the timing or the amounts of any potential liabilities resulting from the ultimate resolutions of these investigations and lawsuits. However, we will incur significant costs in defending them, and their outcomes could have a material adverse effect on our liquidity, financial position, and results of operations.” A handful of corporate attorneys who represent other health care companies (but not Tenet) agreed that Sulzbach should start with the criminal claims. “That has to be your top priority,” says Deborah Gersh, cochair of the health care practice group at Piper Rudnick in Chicago. “Look at Arthur Andersen or Enron. When the criminal charges hit, the house of cards falls.” Winston Walp II, a health care transaction attorney in the Dallas office of Jenkens & Gilchrist, seconds this advice. “Anything regarding the government becomes difficult to fight,” he says, “[because] they have unlimited resources.” Experts add that criminal investigations are especially problematic because civil inquiries and lawsuits tend to follow in their wake. Though Tenet resolved the Redding case, it has failed to come to terms with the government in other areas. The company’s widely reported talks with the U.S. Department of Justice, for example, seem to have collapsed without reaching a settlement. Gersh thinks this may be part of the reason why government probes into Tenet have multiplied. She explains, “Oftentimes, if the government is getting pushed back and receiving no cooperation, they will find other avenues [to go after a target].”

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