Community Health Systems (NYSE:CYH) is facing a new challenge. A nonprofit group has claims against it citing that it has failed at offering sufficient indigent care at some two CHS hospitals in Eastern Washington. The top provider has for sometime been considering selling them off.
A Washington nonprofit, Empire Health Foundation on Monday moved ahead to file a lawsuit in U.S District Court in Spokane, Washington. It was accusing CHS along the lines of fair dealing and the breach of implied duty of good faith.
The embattled Franklin-based hospital operator has been going through challenges recently and the lawsuit is the most recent. This top notch company has lately been engaging in the sale of hospitals hoping that would help pay down more than $14.7 billion of debt. According to the company’s insiders, the debt culminated from its 2014 acquisition of Florida-based Health Management Associates.
Empire was founded in 2008 using funds emanating from the sale of the hospitals by the nonprofit Empire Health System. This foundation seeks to help improve health in the region.
According to the terms associated with the suit, when CHS subsidiaries acquired Valley Hospital and Deaconess Medical Center, it accepted that it would provide essential health services at levels that meet or exceed the average of charity care delivered in Eastern Washington. The provision of charity care is a matter that the provider takes with much seriousness.
The Washington state law is pushing for all hospitals in the state to make efforts deliver charity care to all those patients who happen to be living below the federal poverty line.CHS has given its statement downplaying the allegations strongly. It insists Deaconess and Valley hospitals have done their part towards fulfilling their obligations. They have boosted the amount of charity care provided and that was from the 2008 acquisition.
According to Bizjournals.com, the lawsuit provided that the company forwarded policies that “appear to be part of a planned effort to drive indigent patients away from the hospitals, and, if they nonetheless sought services from the hospitals, to overcharge them.”
However, it is important to outline that challenges are normal and what really matters is how any provider chooses to handle them.