CHS under federal investigation

Franklin, Tenn.-based Community Health Systems is under federal investigation, according to a statement in a Feb. 21 filing with the SEC by the 71-hospital system.

"On January 11, 2024, we received a Civil Investigative Demand from the Department of Justice for documents and information relating to a variety of subjects, including practices and procedures related to utilization review, inpatient admission and inpatient dialysis at our hospitals," the health system revealed in a 10-K filing on Feb. 21. "We are cooperating fully with this investigation."

CHS told Becker's the system is familiar with the facts and circumstances around the information request and previously investigated them "to satisfaction."

"We believe the CID stems from allegations by a former employee at one of our hospitals," the health system said in a statement to Becker's.

We are cooperating with the DOJ and look forward to bringing this inquiry to closure. Community Health Systems and our affiliated hospitals are committed to ethical business practices and to following the laws governing our operations.

This is not the first time CHS has been under investigation.

In 2018, CHS subsidiary Health Management Associates agreed to pay the federal government $262 million to resolve allegations it billed government payers for outpatient and observational services as inpatient services, and paid physicians for referrals. The allegations also included falsely inflating emergency department facility fee charges in claims from 2003 to 2012. The issues occurred before CHS acquired HMA in 2014.

The most recent investigation announcement coincided with the for-profit health system's earnings call, which reported $967 million in operating income for 2023, which is $821 million more than 2022. CHS also sold several hospitals over the last few years, and CEO Tim Hingtgen said his team is examining options for sales that could bring in $1 billion or more.

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