Community Health Systems Q3 net income drops 91 percent
Third-quarter net income for Community Health Systems Inc. dropped 91 percent from $44.2 million last year to just under $4.1 million this year, according to the company's latest report.
CHS, a national for-profit hospital chain based in Tennessee, owns Memorial Hospital in York and is seeking regulatory approval to acquire Florida-based national for-profit hospital chain Health Management Associates Inc., which owns three local hospitals: Carlisle Regional Medical Center, Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center.
CHS said net income was up 0.2 percent from the same period last year, but it put $98 million in reserves to cover a situation about which it is currently in negotiations with the Department of Justice and its “investigation into the company’s short stay hospital admissions for the years 2005-2010, as well as their investigation at our hospital in Laredo, Texas.”
Based on those negotiations, which are not final, CHS said, it believes the reserve “is sufficient to cover the federal government’s claims for Medicare admissions, certain claims specifically related to our hospital in Laredo, Texas, and on other related legal expenses. This reserve is not meant to include claims in this investigation arising from Tricare, Medicaid, or third party legal expenses.”
The company has also had expenses related to the proposed acquisition of HMA and early extinguishment of debt, the report said. Total admissions were also down 6.7 percent over the same period in 2012.
“We are pleased with our results for the third quarter of 2013 during what has continued to be a very challenging operating environment for healthcare providers,” said Wayne T. Smith, chairman, president and CEO of CHS. “Our net operating revenues improved over the prior year period on both a consolidated and same store basis in spite of ongoing volume weakness. We have begun to realize the benefits of our cost management initiatives, and we remain focused on driving operating efficiencies across our hospital network. We believe we have the right strategies in place as we continue to position Community Health Systems to fully benefit from healthcare reform.”