Community health faces new subpoena into Medicare admissions practices

Jul 20 2013

Community Health has received a subpoena for two executives to testify in an investigation into its Medicare admissions. The hospital operator also reports its income fell 57 percent on weak patient volume and debt.

The Wall Street Journal: Community Health Slashes Outlook, Gets Another Subpoena
Hospital operator Community Health Systems Inc. CYH +0.13%slashed its second-quarter earnings forecast and said it was served with an additional subpoena from the government as part of an investigation into Medicare admissions. The double dose of bad news sent shares of Community Health and its peers sharply lower in after-hours trading (Tadena, 7/18).

Modern Healthcare: Community Health Systems Faces New Subpoena, Reports 57% Fall In Net Income
The U.S. Justice Department hit Community Health Systems with an additional subpoena and a request to interview two high-ranking executives, escalating a two-year Justice Department investigation into the company's admissions practices from its emergency departments. The Franklin, Tenn.-based chain disclosed the revelations in an earnings preview that also showed a sharp 57.2 percent decline in net income, which it attributed to weak patient volume, higher-than-expected bad debt and an adverse payer mix (Kutscher, 7/18).

Also, a St. Louis-based drugmaker will pay federal authorities millions to end a doctor-kickback lawsuit --

The Associated Press/Washington Post: St. Louis Drug Maker Mallinckrodt To Pay Feds $3.5M To Settle Lawsuit Over Doctor Kickbacks
A St. Louis-based drug maker will pay $3.5 million to settle allegations that it paid doctors to prescribe "outdated, third rate" antidepressants and sleep aids, the U.S. attorney's office in San Francisco announced Thursday. A former employee of Mallinckrodt LLC originally filed the lawsuit in 2008 under the federal False Claims Act. The employee alleged that between 2005 and 2010, the company paid doctors consulting and speaking fees and other inducements in exchange for prescribing drugs that otherwise would not have been prescribed (7/18).