CHS under investigation by DOJ

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Community Health Systems is under investigation by the Department of Justice, the company revealed in a filing last week with the Securities and Exchange Commission.

On January 11, CHS said it 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 admissions and inpatient dialysis at its hospitals. 

"We are cooperating fully with this investigation," CHS said.

WHY THIS MATTERS

In the SEC filing of February 21 for the year ended December 31, 2023, the large, for-profit health system outlined the risk from numerous legal proceedings or inquiries from state regulators, state Medicaid Fraud Control units, the Centers for Medicare and Medicaid Services, the DOJ and other government entities regarding Medicare and Medicaid issues, as well as lawsuit and claims.

"Based on current knowledge, management does not believe that loss contingencies arising from pending legal, regulatory and governmental matters, including the matters described herein, will have a material adverse effect on the consolidated financial position or liquidity of the company," the SEC filing said. "However, in light of the inherent uncertainties involved in pending legal, regulatory and governmental matters, some of which are beyond our control, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to our results of operations or cash flows for any particular reporting period. Settlements of suits involving Medicare and Medicaid issues routinely require both monetary payments as well as corporate integrity agreements." 

During CHS's fourth quarter earnings call on February 21, Miguel Benet, executive vice president for clinical operations, spoke in detail about the company's new partnership with Google Cloud, which was announced in January.

The partnership is enabling CHS to unify its data into a single platform called THIA, for Tactical Health Engine for Intelligent Analytics, Benet said. It facilitates greater transparency and enables more real-time decision-making that will serve as the foundation for the future use of AI in healthcare settings, he said.

"As we leverage AI, we expect to drive efficiencies that enable our healthcare professionals to focus even more of their time on high-value patient interactions," Benet said. "For example, we can deploy this technology for continuous monitoring of patients in the acute care setting using algorithms and near real-time data to identify the potential need for early intervention."

CHS is already seeing benefits in a variety of quality metrics and operational benchmarks such as reductions in mental state.

"There are endless possibilities, and we are just beginning to see the power of artificial intelligence and healthcare," Benet said.

THE LARGER TREND

In 2014, the Department of Justice Department announced that Community Health Systems, the nation's largest operator of acute care hospitals, agreed to pay $98.15 million to resolve multiple lawsuits alleging that the company knowingly billed government healthcare programs for inpatient services that should have been billed as outpatient or observation services. 

In 2014, CHS had around 200 hospitals, but the number had declined to around 85 in 2021.

Email the writer: SMorse@himss.org

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