A coordinated investigation by federal agencies may cause a two-to-three year “investigation overhang” for Community Health Systems, according to a BusinessWeek report.
In the report, Citi analyst Gary Taylor said CHS has been downgraded from “buy/medium risk” to “hold/high risk.” Mr. Taylor said the investigation is likely to have implications beyond a settlement or earnings risk due to more conservative admissions guidelines, according to the report.
The system may take a more conservative approach to admissions since Dallas-based Tenet Health’s lawsuit accuses CHS of systematically overbilling Medicare and unnecessarily converting emergency department visits, or observation stays, into inpatient admissions.
Investigations may take years to fully conclude, possibly affecting physician recruitment, employee retention and transactions with non-profit hospitals, according to the report.
Read the BusinessWeek report on Community Health Systems.
Related Articles on Community Health Systems:
Federal Agencies Coordinate Investigation Into CHS’ Billing Practices
Community Health Issues Response to Tenet’s Rejection
Tenet Rejects Community Health’s All-Cash Bid
