FRANKLIN, Tenn.--(BUSINESS WIRE)--Aug. 4, 2014--
Community Health Systems, Inc. (NYSE: CYH) announced today that it has
resolved the investigation by the U.S. Department of Justice into short
stay admissions through emergency departments at certain affiliated
hospitals. The parties have entered into a settlement agreement, which
concludes the government’s review into whether these 119 hospitals
billed Medicare, Medicaid and TRICARE for certain inpatient admissions
from January 2005 to December 2010 that the government believed should
have been billed as outpatient or observation cases.
The settlement agreement reflects the Company’s desire to end the
investigation, which began in 2011, and to avoid the significant expense
and distraction of litigation. Under the terms of the agreement, there
is no finding of improper conduct by Community Health Systems or its
affiliated hospitals, and the Company has denied any wrongdoing. The
Company has agreed to pay $88,257,500 in resolution of all federal
government claims, including Medicare, TRICARE and the federal share of
the Medicaid claims, and an additional $892,500 to the states for their
portions of the Medicaid claims.
As is customary at the conclusion of many government investigations,
Community Health Systems has entered into a five-year Corporate
Integrity Agreement (CIA) that will be incorporated into the Company’s
existing and comprehensive compliance program. Community Health Systems
established the compliance program on its own initiative in 1997 and has
since maintained robust training, reporting and review processes.
The settlement will also result in the unsealing and dismissal of qui
tam actions filed in Illinois, Tennessee, North Carolina and Texas, as
well as the previously unsealed case in Indiana. Two of these cases also
name Health Management Associates (HMA) as defendants and were partially
unsealed in December 2013 when the government intervened in those and
six other cases pending against HMA. The portion of the settlement that
will be paid to the relators, as well as which of the relators will
share in the award, has not yet been disclosed by the government. Claims
by the relators for attorneys’ fees remain to be resolved.
The settlement agreement does not cover current government
investigations into certain hospitals formerly affiliated with HMA,
which were initiated before Community Health Systems’ acquisition of HMA
in January 2014. The Company continues to cooperate with the government
and is working to bring resolution to these investigations.
The settlement also resolves the government’s investigation into a
CHS-affiliated hospital in Laredo, Texas. The government’s review in
Laredo centered on whether the hospital submitted claims for inpatient
procedures that should have been billed as outpatient procedures as well
as the financial relationship between the hospital and a member of its
medical staff. The hospital has agreed to pay $9 million to resolve this
investigation. The CIA includes Laredo-specific reviews of physician
The Company previously established a $102 million reserve to cover these
settlements and related legal costs.
Commenting on the agreement, Chairman and Chief Executive Officer Wayne
T. Smith said, “Our organization is dedicated to high ethical standards
as we strive to operate in a complex and ever changing regulatory
environment. The question of when a patient should be admitted to a
hospital is, and always has been, a matter of medical judgment by the
individual physician responsible for a patient’s care. Unfortunately,
shifting and often ambiguous standards make it extremely difficult for
physicians and hospitals to consistently comply with the regulations. We
are committed to doing our best, despite these challenges. Because this
is an industry-wide issue, we hope the government will work to devise
sound and reasonable rules for the important decision about whether to
admit an individual for inpatient care, and we appreciate the
opportunity to engage in meaningful dialogue with the government over
these incredibly complicated issues.”
In closing, Smith added, “I am deeply grateful for the loyalty and
patience of our hospital teams as we have worked to resolve this matter.
During the course of the investigation, thousands of physicians,
employees and hospital administrators demonstrated an unwavering
commitment to their primary purpose – delivering quality, safe and
effective care for their patients. As we move forward now, I am certain
this experience will make us a stronger and even more committed
About Community Health Systems, Inc.
Community Health Systems, Inc. is one of the largest publicly-traded
hospital companies in the United States and a leading operator of
general acute care hospitals in communities across the country. Through
its subsidiaries, the Company currently owns, leases or operates 206
affiliated hospitals in 29 states with an aggregate of approximately
31,100 licensed beds. The Company’s headquarters are located in
Franklin, Tennessee, a suburb south of Nashville. Shares in Community
Health Systems, Inc. are traded on the New York Stock Exchange under the
symbol “CYH.” More information about the Company can be found on its
website at www.chs.net.
Statements contained in this news release are forward-looking statements
that involve risk and uncertainties. Actual future events or results may
differ materially from these statements. Readers are referred to the
documents filed by Community Health Systems, Inc. with the Securities
and Exchange Commission, including the Company’s annual report on Form
10-K, current reports on Form 8-K and quarterly reports on Form 10-Q.
These filings identify important risk factors and other uncertainties
that could cause actual results to differ from those contained in the
forward-looking statements. The Company undertakes no obligation to
revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information,
future events or otherwise.
Source: Community Health Systems, Inc.
Community Health Systems, Inc.
President of Financial Services and Chief
Senior Vice President, Corporate Communications,
Marketing and Public Affairs