Franklin, Tennessee-based Community Health Systems has agreed to settle a long-standing dispute for $53 million.
Tuesday, the Norfolk County Retirement System in New York and the publicly traded health giant notified the U.S. District Court for the Middle District of Tennessee of their intent to settle. The parties told the court they are in the process of preparing a stipulation of settlement and expect documents to be filed by Jan. 21.
RELATED: Community Health Systems-owned hospital chain agrees to pay $262M settlement for kickback, fraud allegations
The suit dates back to May 2011 when the pension fund brought a federal securities fraud class action suit against CHS on behalf of shareholders between July 2006 and April 2011. They alleged that during that period, the health system "systematically overcharged Medicare for hospital services, artificially inflating its share prices.
"Because approximately 27.2% of CHS’ net operating revenue is derived from Medicare reimbursement payments, the Company’s profitability is highly dependent on its relationship with the agency and compliance with Medicare requirement," the original complaint said.
As the Nashville Business Journal reported , Dallas-based Tenet Healthcare filed a separate complaint in federal court against CHS regarding its Medicare charges. The suit came after a failed attempt by CHS to buy Tenet .
RELATED: Community Health Systems-owned hospital chain agrees to pay $262M settlement for kickback, fraud allegations certified the $891 million class-action lawsuit. The case consolidated three class-action cases seeking class certification on behalf of purchasers of common stock between July 27, 2006, and April 11, 2011.
I've reached out to officials from CHS and Norfolk County for comment and will update you when I hear back.
CHS officials have previously denied the claims. "We believe this matter is without merit and will vigorously defend this case," CHS officials said last year in a Securities and Exchange Commission filing .
