Community Health Systems is watching its accounts receivable grow as insurers slow down claims payments and pile on more pre-payment scrutiny, CFO Jason Johnson said on the Franklin, Tenn.-based health system’s second-quarter earnings call July 23.
“One of the challenges that we’re experiencing on the cash flow side is really the slowdown of payments by the payers,” Mr. Johnson said. “Not only just slowing down in the normal course, but they’re now auditing more claims before they pay them and having additional record requests.”
He said payers used to complete those reviews after paying claims, with any discrepancies resolved later through a true-up. Now, he said, insurers are running those audits before payment, which stretches out the process further.
“Our A/R is growing accordingly,” Mr. Johnson said. “We’ve seen some of the payers even talk publicly about increasing their days in A/P. So we’re on the other side of that equation with an increase in days in A/R.”
Mr. Johnson characterized the trend as a timing issue rather than a sign of collection problems, saying the system still expects to collect the cash. “Once we anniversary that, then we’re back on a normal run rate,” he said.
CHS reported an operating income of $389 million (13.8% margin) in the second quarter of 2026, down from $512 million operating gain (16.3% margin) in the second quarter of 2025. Net income dropped 75% year over year to $70 million, and the system’s hospital count shrank to 60 — down from 70 a year earlier — as it continued divesting facilities to focus on core markets.
The system lowered its full-year guidance to net revenue of $11.4 billion to $11.6 billion and adjusted EBITDA of $1.3 billion to $1.375 billion. CHS now projects a net loss of $1.10 to $1.25 per diluted share, and it flagged the expiration of enhanced ACA subsidies as an added risk to its outlook.
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