Hospitals Spar In Takeover Bid
The tough talk involved in Community Health's bid to take over Tenet involves fraud allegations.
The Wall Street Journal: Tenet Suit Against Community Health Draws Bears
Options traders seem to fear the worst for Community Health Systems and Tenet Healthcare. There was a surge of interest in bearish puts to sell both hospital companies' stock after Tenet on Monday accused Community Health of overbilling Medicare, a new defense in Tenet's effort to fend off a hostile takeover by its rival hospital operator. Analysts said the lawsuit was likely to trigger more scrutiny of billing practices across the industry (Conway, 4/11).
The Associated Press: Tenet, Community Health Fight Gets Nasty
Tenet Healthcare Corp. has accused rival hospital operator Community Health Systems Inc. of systematically bilking Medicare, and the burgeoning legal fight sent shares of the entire sector sliding Monday (Murphy, 4/11).
The Texas Tribune: Hospitals Spar Over Takeover Bid, Fraud Allegations
Tenet Healthcare Corp., a Dallas-based hospital company under siege by Community Health Systems, has sued its competitor and potential parent for allegedly overbilling Medicare. Tenet alleges - and has hired outside analysts who agree - that CHS, which operates 18 hospitals in Texas, consistently admits emergency room patients who should only be billed for observation, charging Medicare an additional $3,300, on average, per patient. Their analysis indicates that CHS, which follows its own unique admissions protocol, keeps patients in the less-costly observation status far less than many other hospitals, at a cost to Medicare of between $280 million and $377 million between 2006 and 2009 (Ramshaw, 4/11).
Related, earlier KHN story: Growing Number Of Patients Find A Hospital Stay Does Not Mean They're Admitted (Jaffe, 9/7/2010).
Reuters: Tenet Suit Claims Community Improperly Admitted Patients
Tenet Healthcare Corp fired explosive charges against unwanted suitor Community Health Systems Inc, accusing the rival hospital operator of admitting patients for needless stays and bilking the U.S. government and private insurers. The allegations come at a particularly sensitive time for the hospital industry, as the Obama administration and Congress are looking for ways to curb runaway health care costs to rein in the U.S. budget deficit and debt burden. Shares of Community Health, which denied the charges, fell 36 percent on the New York Stock Exchange on Monday. Tenet shares also fell 15 percent as investors doubted a merger between the two leading hospital chains would now take place (Kelly, 4/11).
Dallas Morning News: Tenet Healthcare Suit Alleges Medicare Fraud By Bidder Community Health Systems
Dallas-based Tenet Healthcare Corp. filed a Medicare fraud lawsuit Monday as part of an effort to fight off a hostile takeover bid. In the suit, filed in U.S. District Court in Dallas, Tenet accuses Community Health Systems Inc., the company that is pursuing Tenet, of overbilling Medicare. Tenet estimates Community Health's potential liability and damages at more than $1 billion (Roberson, 4/11).