Founding and early years (1985–2014)
E. Thomas Chaney, former executive of Hospital Affiliates, Inc. and David Steffy and Richard Ragsdale, former executives at Hospital Corporation of America spinoff Republic Health Corporation, formed Community Health Systems in 1985.[9]
The company made its initial public offering in 1991. In 1996, the company was purchased by private equity firm Forstmann Little & Company.[10] Community Health Systems went public again in 2000.[11] In August 2003, the company acquired Southside Regional Medical Center.[12] On October 10, 2015, the 372-bed Grandview Medical Center began operating in Birmingham, Alabama, replacing Trinity Medical Center.[13]
In 2000, Community Health Systems paid $31 million to the United States Department of Justice to settle a review of its billing practices.[14]
In 2007, Community Health Systems purchased Plano, Texas-based Triad Hospitals for $6.8 billion, adding nearly 50 hospitals, hospital management and consulting business Quorum Health Resources, and nearly doubling the size of the company. Among the facilities included in the deal was McKenzie-Willamette Hospital in Springfield, Oregon; Trinity Medical Center in Birmingham, Alabama; and the seven hospitals of Lutheran Health Network in the Ft. Wayne, Indiana region.[15][16][17]
In 2010, McKenzie-Willamette's healthcare workers' union, SEIU, Local 49, claimed that workload increases, slashed benefits, and staff reductions had lowered the quality of both patient care and quality of life for employees.[18] The union, in its "Profits Before Community" campaign against the hospital, continues to highlight that profits have tripled while charitable care and employee benefits have steadily decreased since the hospital moved from a non-profit to a for-profit enterprise under CHS.[19]
In 2011, it was accused by Tenet Healthcare of overbilling Medicare in its aggressive admissions policy compared to its peers. It was subpoenaed by Medicare on its aggressive billing to the Medicare systems.[20]
In 2013, Community Health Systems entered into an agreement with Health Management Associates to purchase HMA for about $3.6 billion in cash and stock.[21] The merger was completed in January 2014 and made Community Health Systems the largest for-profit hospital operator at the time,[22] with 206 hospitals in 29 states.[23] The acquisition of HMA brought with it liability for lawsuits and criminal charges of fraudulent claims against Medicare and other federal programs. CHS settled these claims for $262 million in October, 2018.[24]
On August 4, 2014, Community Health Systems paid $95.14 million to the United States Department of Justice to resolve multiple lawsuits "alleging that the company knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services".[25] As part of the agreement, Community Health Systems was required to enter into a corporate integrity agreement that required the company to participate in compliance efforts.
It was reported on August 18, 2014, that hackers broke into Community Health System's records system and stole data on 4.5 million patients. These data included names, Social Security numbers, physical addresses, birthdays and telephone numbers. CHS provided all patients whose records were impacted with free identity theft protection.[26]
Recent developments (2015–present)
On February 2, 2015, Community Health Systems was required to pay $75 million to settle allegations "that they made illegal donations to county governments to reap more federal dollars under a now-discontinued matching program".[27] The allegations were brought about by a former CHS employee in a complaint under the False Claims Act.[28]
In October 2015, Community Health Systems paid $13 million to the United States Department of Justice to resolve allegations related to the False Claims Act.[29]
After CHS agreed in 2015 to sell Memorial Hospital of Salem County in New Jersey to Prime Healthcare Foundation,[30] a nonprofit affiliated with Prime Healthcare Services;[31]
