Proxy Advisor Urges CHS Shareholders to Oust Two Directors, CFO

Institutional Shareholders Services, an independent proxy advisor, has advised shareholders to vote against the re-election of Community Health Systems directors James Ely II and John Fry as well as CFO Larry Cash at the board's election on May 17, according to a news release by CtW, the union pension fund advisor that first brought potentially fraudulent billing practices to the attention of the board in Sept. 2010.  

ISS has recommended shareholders oppose the re-election of Mr. Ely and Mr. Fry, both members of CHS' audit committee members for failure to take appropriate action regarding the allegations concerning the company's Medicare billing practices related to allegedly overbilling observation status patients as one-day stays. The recommendation from ISS also expressed concern regarding the lack of adequate disclosure to shareholders regarding the billing practices and the subsequent state and federal investigations into potential Medicare fraud.

CHS is now being investigated by state and federal regulators for the alleged overbilling.

In Sept. 2010, CtW voiced concern over the stays, which they believed could attract regulatory scrutiny. CtW urged the board to establish a special committee to address billing practice issues, but no such committee was established, according to the report.

CHS denies any wrongdoing.

Read the CtW release on Community Health Systems.

Related articles on Community Health Systems:

Tenet Rejects Community Health System's Best and Final Offer
CHS Presentation to Investors Reiterates Stance That Tenet Lawsuit is Without Merit

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