Psychiatric Care Problems Involving Tenet Healthcare

Janet Reno

"Let the message be very, very clear: We've made health care fraud a major law enforcement priority, and we're going to pursue it as vigorously as we possibly can." Attorney General Janet Reno

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Accusations begin to surface that National Medical Enterprises (now called Tenet Healthcare Corporation) was bribing politicians. NME responds: "This company does not engage in illegal and improper conduct. God help anyone that does."


NME memo: "To Clear up misconceptions. Example. We exist as a company to provide a high quality service to our patients (and in some cases society). I have heard individuals within the company make remarks along these lines and it is absolute nonsense. Lets call a spade a spade: We are here for one reason only - to make a profit for the shareholders who put up the money so that we could exist in the first place."


Allegations surface that NME's huge profits are a result of criminal and unethical conduct and exploitation of the people who had come for help. Dr. Robert Stuckey, NME high-ranking official, appears on a Discovery Channel special, The Justice Files, and admits that, among other things, if a person entered one of their hospitals with a diagnosis of alcoholism and the insurance would pay $10,000, but would instead pay $50,000 for depression, the diagnosis would be changed to depression.

Senator Mike Moncrief (Texas) opens a Senate inquiry, and hundreds come forward to speak about the abuse and fraud, as well as the personal misery they had gone through under the care of NME. Texas Attorney General obtains a settlement from NME for $10 million, the maximum penalty allowed. The settlement required that each of NME's hospitals have an ombudsman on staff.


Dr. Michael Wynne, a surgeon in Australia begins to gather information and investigate NME as it attempts to move into Australia and Singapore. Legal threats against Dr. Wynne begin, including a defamation action (all suits were eventually dropped and the plaintiffs were ordered to pay court costs).


Shareholders begin suing NME, claiming they were defrauded. SEC commences an action and obtains injunctions to restrain NME from engaging in illegal activities. SEC says that unless they're monitored, NME will keep doing what they've been doing.


Dr. Stuckey, the whistle blower who had the longest association with NME's Psychiatric Institutes of America (PIA) and who had dealings with senior staff, dies suddenly, alone on his boat, shortly before he was to give evidence to the US House of Representatives inquiry in 1992.

Led by Congresswoman Pat Schroeder (Colorado), the US House of Representatives opens an inquiry, leading to a report entitled "Profits of Misery." It was shown that children were a potential "gold mine" to hospitals, because insurance would allow up to six months of inpatient treatment. 19 insurance companies begin actions against NME, alleging fraud and NME settles, paying $89 million and $125 million in two separate settlements.

"The introduction of the commercial enterprise mentality to psychiatric care, the abandonment of ethical, scientific principles by many mental health care providers, and the indulgence of greed have allowed these developments to occur. The provision of mental health care, especially as it relates to the psychiatric hospital industry, has largely changed from what was once a professional and caring environment and an honourable part of the medical world, to one that is based on commercialism and profit. The changes that have developed over the past decade are very pervasive, deeply entrenched, and have occurred across the entire United States." Dr. Charles Arnold in his testimony to Congress.

June 1994

Former psychiatric division executive in Dallas pleads guilty to arranging up to $40 million in bribes to doctors and others.

The U.S. government formally announces that it has settled its giant fraud case with National Medical Enterprises, but it said it continues a far-reaching investigation into individuals and businesses suspected of accepting kickbacks and bribes.

The $379 million settlement is the largest in American history. The settlement, which includes a $33-million criminal fine, settles charges that NME paid kickbacks and bribes to doctors, referral services and other people so they would refer patients to the company's psychiatric and substance abuse hospitals in 30 states, then fraudulently billed Medicare, Medicaid and other federal programs for those services. The settlement also includes NME pleading guilty to six counts of paying illegal kickbacks for patient referrals.

Oct 1994

Doctors caught up in the scandal sue patients who complained, charging defamation, slander and libel. But Robert F. Andrews, a Ft. Worth attorney who is named in the psychiatrists' suit, likens the doctors to "a bunch of deer that are caught in the headlights. They have struck out at the only people who they perceive to be weaker than them, which is their former patients."


New NME CEO Jeffrey C. Barbakow: "The number one priority for our board is to drive shareholder value."


NME changes name to Tenet Healthcare

NME official files defamation suit against Dr. Wynne. Wynne makes three court requests to get documents and detailed complaints, but the papers are never produced. Complaint withdrawn and official is ordered to pay Dr. Wynne's legal costs. Three days later, Dr. Wynne is hit with another defamation suit, but it also ends up being dismissed.

Charles E. Trojan a former chief executive of a then-NME-owned psychiatric hospital in Chula Vista is convicted on one felony charge of sending threatening communications to a former top manager of the hospital. In the letter to Clawson, Trojan wrote, in part: "The value of your life decreases every day. We have your address. So expect company one dark night when you least expect it. Your life is worthless now."


Tenet lawyer addresses the governmental investigation: "They treated us like criminals. We had to enter into an agreement with the government. It was a very irritating process for some of us to go through....We have to do background checks and can't hire anybody with criminal backgrounds;...We worry about DFEs (disgruntled former employees) and PWBs (potential whistle blowers) reporting problems on their own..."

Dr. Michael Wynne writes to CEO Jeffrey C. Barbakow about his concerns that Tenet has not changed its corporate policy. Barbakow never responds. "I believe that Tenet's committees inaction in these matters and the company's repeated efforts to ensure my silence speaks loudly for the seriousness and validity of these matters," says Dr. Wynne. Tenet responds with lawsuits.


Ontario government files $175 million suit against Tenet, alleging it defrauded the province and went "trolling" for patients to ship into Wisconsin in order to milk the Ontario health plan. The suit claims that Tenet employees referred to the health plan as the "Canadian gravy train."

Feb 2000

Federation of American Hospitals issues statement calling for a grassroots movement to oppose an expanded Whistleblower's Act. The Federation is a powerful lobbying group dominated by the two largest healthcare corporations, one of whom is Tenet. They have an entire "do-it-yourself grassroots" section that tells corporations how to recruit employees to start campaigns that will benefit their goals.

"Since 1966, The Federation, through its dedication to a market-driven philosophy, has evolved into one of Washington's most influential health care policy advocacy organizations."

The Washington Post recently printed a story about the growth of "grassroots movements" that are actually implemented by huge corporations.

"It's ethically problematic when a company creates entities but then tries to pass them off as authentic and spontaneous grass-roots organizations," said Thomas Murray, president of the Hastings Center, a nonprofit group that examines medical ethics. "What bothers me is the deceptiveness."

Aug 2000

Mrs. Kathleen Garrett of St. Louis receives shock treatments that she has repeatedly said she doesn't want. Her son contacts activists in the area who spring into action. A public campaign against the treatment is waged, and Tenet-owned Des Peres Hospital calls Mrs. Garrett's son, Steve Vance to announce they will release her the following day.

A celebratory welcome is planned to welcome Kathleen back to freedom, but that morning, her son learns that she has been shocked again.

Upon arrival to the hospital, Mrs. Garrett tells her son that they were trying to coerce her into signing a statement saying she wanted more shock. "I don't want it," she tells her son. "Please."

Mrs. Garrett returns home and receives phone calls from a "home health care aide" from Des Peres who want to visit. Concerns are raised that the hospital will show up and take her away for more shock while Steve is at work. He changes her phone number. A home health care aide shows up at Mrs. Garrett's residence, but per strict instructions, they are turned away and not allowed to see Mrs. Garrett.

Sept 2000

Juli Lawrence, owner of Shocked! ECT/ (this website) receives a letter from a law firm that claims it represents Tenet Healthcare Corporation. Their demands include removing all items from the website with "notoriety and prominence," and they threaten legal action if she does not comply.

QBVII by Leon Uris. Ms. Lawrence responds with a letter asking for detailed information, but does not receive a reply. She fully expects to be hit with a SLAPP (Strategic Lawsuit Against Public Participation) lawsuit, and is standing by. She vows that she will not be silenced.

She suggests, as the Shocked! ECT book of the month: QBVII by Leon Uris.

Feb 2001

Tenet finds itself at the edge of controversy once again when federal and state officials threaten to shut down its SouthPointe Hospital in St. Louis because of conditions and treatment in its psychiatric unit. SouthPointe is one of the hospitals involved in forcibly electroshocking Kathleen Garrett in the summer of 2000.

SouthPointe Hospital in St. Louis is under investigation by state and federal authorities because of numerous incidents that threatened the safety, health and privacy of its psychiatric patients.

A listing of psychiatric facilities in St. Louis. Tenet-owned hospitals are in red.

SouthPointe Hospital in St. Louis will remain open -- for now -- while state investigators assess the hospital's plan to correct conditions they say put psychiatric patients in danger.

Missouri Health Department officials have approved SouthPointe Hospital's plans for correcting conditions that government inspectors said endangered psychiatric patients. The approval averts a shutdown of the south St. Louis hospital.

Bedlam at SouthPointe: You might expect hefty fines for such shocking breeches of federal and state regulations. You might expect heads to roll at SouthPointe Hospital, where it all happened in the psychiatric ward. You might expect the hospital's psychiatric unit to be shut down, at least for an hour or two. You might, but most hospital administrators wouldn't. They know better.

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Be sure and sign the guestbook. I'll be putting quick updates there about Mrs. Garrett and the case (because it's quick and easier than actually writing out some HTML)

Read some of the news stories about NME's exploits.

The horrors of being a patient at NME: She had agreed as a 17-year-old to enter the hospital, expecting a brief respite from troubled family relationships. But once the doors closed, Ms. Stafford said, she remained inside for 309 days, many of them behind blackened windows in cruel darkness.

Has Jeffrey Barbakow changed Tenet's stripes? Critics don't think so; they think his policies hurt patients; employees resent his grandiose salary and bonuses. Claim he's "not sharing the wealth."

Owner admits kickbacks: One of the nation's largest psychiatric hospital chains yesterday pleaded guilty to kickback and health care fraud charges and agreed to pay a record $379 million in penalties for illegal conduct in hospitals in New Jersey and 29 other states.

Medical firm to plead guilty: A division of National Medical Enterprises will plead guilty to charges of Medicare fraud and conspiracy and pay a record fine of $362.7 million to settle a sweeping federal investigation, company officials said Tuesday.

Ex-psychiatric exec pleads guilty: A former Dallas hospital executive confessed Monday that he bought patients with at least $20 million in bribes to referring physicians and other health care professionals.

61 sue NME: Sixty-one plaintiffs sued National Medical Enterprises Inc. on Monday, alleging that they were "lured or forced" to its psychiatric treatment centers as part of a fraudulent scheme.

American health care. Mishap in the operating theatre: From the Economist (UK), an informative article about the economics of the health care business. Included is a paragraph about Tenet, formerly known as NME.

Ontario sues Tenet Healthcare; says Tenet employees called Ontario health system the "Canadian gravy train."

next: Psychologist Jailed 2 Years For Sex With His Patients
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APA Reference
Staff, H. (2007, February 20). Psychiatric Care Problems Involving Tenet Healthcare, HealthyPlace. Retrieved on 2024, July 18 from

Last Updated: June 23, 2016

Medically reviewed by Harry Croft, MD

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