The suit claims CHS failed to provide shareholders with “‘material’ information about how the hospital chain is run and how it handles certain billings,” according to the report. The suit is seeking class action status for holders of CHS stock between July 27, 2006, and April 8, 2011.
The price of CHS has stocked dropped significantly over the last month and a half following a lawsuit by Tenet, which CHS attempted to takeover, claiming CHS had inappropriately billed Medicare resulting in overpayments.
A report in the Wall Street Journal explains that both CHS and Tenet face challenges following the failed takeover. While CHS deals with an overbilling investigation and a stock price that has dropped 17 percent compared to a year ago, Tenet must prove to its investors that its refusal to even hear CHS out was warranted.
Federal and state regulators are currently investigating CHS’ billing practices surrounding one-day stays to determine if the stays should have been billed as observation status visits.
CHS has called the overbilling claims baseless.
Related articles on CHS:
Proxy Advisor Urges CHS Shareholders to Oust Two Directors, CFO
Tenet Rejects Community Health System’s Best and Final Offer
Analysts: CHS Offer Not Enough to Woo Tenet
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