Indianapolis-based Community Health Network has set aside $75 million for a potential settlement agreement with the Justice Department and a former CFO who filed a whistleblower suit against the system almost 10 years ago, Inside Indiana Business reported Nov. 2.
In an Oct. 26 financial filing, the 10-hospital system reported a $39.5 million increase (28.4%) in miscellaneous expenses related to higher legal reserves.
In August, CHN recorded an additional $50 million of reserves related to the whistleblower case. And, as of Sept. 30, the system has a total loss contingency reserve of $75 million related to the litigation according to financial documents.
Court documents filed this week indicated that both parties have reached an agreement in principle to settle much of the case, according to Inside Indiana Business.
Thomas Fischer served as CHN's CFO for eight years until he was fired in 2013, according to the Indiana Business Journal. Mr. Fischer argued in a 2014 lawsuit that he was terminated in retaliation for raising concerns about an alleged scheme in which the system paid and accepted illegal kickbacks and incentives to physicians to receive referrals to its facilities.
A spokesperson for CHN told Becker's that the system is unable to comment on pending litigation.