Dispute between Community Health Systems, Quorum Health settled by arbitrators

Gavel on top of cash
Tennessee-based hospital company Quorum Health Corporation will have to pay $1.5 million in disputed payments it withheld from general hospital healthcare services giant Community Health Systems, an arbitrator ruled. (alfexe/iStock/Getty Images Plus)

Tennessee-based hospital company Quorum Health Corporation will receive $11.4 million in payments it made under transition agreements with health giant Community Health Systems (CHS), an arbitrator ruled last week.

However, an arbitration panel also ordered Quorum to pay $1.5 million of disputed payments it withheld from CHS.

The issue dates back to 2016, when CHS first spun off nearly 40 hospitals to form Quorum as a separate company which would receive transition services from CHS such as information technology, payroll, billing and collections services, according to HealthLeaders.

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In 2017, CHS brought arbitration against Quorum over certain amounts of money that Quorum withheld claiming it was being forced to pay more than originally anticipated. 

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In March, Quorum received notice that CHS was seeking to terminate its agreements with the hospital company effective in September. Quorum said it amended its counterclaims saying CHS would be in violation of the terms if it pursued the termination of the agreement. At the time, Quorum was ordered to resume all payments to CHS pending a final ruling.

An arbitration panel ultimately found in favor of Quorum in its claim that CHS was improperly billing the company under some of its agreements and said Quorum would not be required to pay about $9.3 million in the contested payments. CHS will be required to repay $2.1 million in disputed payments made by Quorum.

But the panel denied Quorum's claim that CHS improperly billed the company under a separate IT agreement. Other counterclaims made by Quorum against CHS were also denied by the arbitration panel.

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