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CHS accused of Medicare fraud
YOUNGSTOWN
Community Health Systems, which purchased bankrupt Forum Health’s assets in Mahoning and Trumbull counties last year, has been accused of defrauding Medicare in federal court in Texas by Tenet Healthcare Corp.
CHS is attempting a hostile takeover of Tenet.
In its action, filed in U.S. District Court for the Northern District of Texas, Tenet says CHS, through its practice of admitting patients who should be treated in observation, enabled CHS to receive between $280 million and $377 million more that it should have from Medicare between 2006 and 2009.
CHS, which bought Forum’s Northside Medical Center, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland, for $120 million, has denied any wrongdoing. CHS operates 130 hospitals in 29 states and is doing business here as ValleyCare Health System.
In its suit, Tenet said its shareholders are “at risk of being harmed by false and misleading statements and omissions by failing to disclose that it had for at least a decade ... implemented admissions criteria ... to systematically steer medically unnecessary impatient admissions ... and artificially increase inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources.”
“CHS may well be subject to liability and damages of well over $1 billion for its practices during the 2006-2009 period,” according to the Tenet complaint, which CHS called “baseless.”
“Tenet’s allegations are completely without merit and we intend to vigorously defend ourselves against these unfounded and irresponsible claims. Providing high-quality patient care is the Company’s most important priority. CHS conducts its business with the utmost integrity and adheres to the highest business practice standards,” CHS said in a statement on its website.
“The bottom line is that these self-serving allegations are an attempt by Tenet’s management and board to continue their entrenchment strategy and to distract Tenet shareholders from CHS’s pending offer,” CHS said.
Community Health Systems has proposed to pay $7.3 billion for Tenet or $6 a share, $1 of which would be paid in CHS stock.