The U.S. Justice Department has widened and is coordinating a probe by several agencies into the billing practices of Community Health Systems (NYSE: CYH), report Reuters and Healthcare Finance News.
Franklin, Tenn.-based Community disclosed today the expansion of the investigation in a filing with the Securities and Exchange Commission. The DoJ is coordinating probes with the U.S. Attorneys' offices and the Office of the Inspector General of the U.S. Department of Health and Human Services, according to motions it filed in federal court on Friday.
The filings come amid a bitter takeover battle by Community of Dallas-based Tenet Healthcare (NYSE: THC). Tenet has rejected Community's buyout offer and filed suit against the hospital chain, claiming it had inflated its profitability through overbilling. The federal government's motions suggest Tenet's accusations are related to a qui tam suit filed against Community two years ago in Indiana. The lawsuit had been under seal, but it was lifted late last week.
The suit claims "false 23-hour observation after outpatient surgeries and procedures, and intentional assignment of inpatient status to one-day stays for cases that do not meet Medicare criteria for inpatient intensity of service or severity of illness."