Universal Health Services, King of Prussia, Pa., said that federal prosecutors are investigating whether the companys South Texas Health System complied with a previously announced subpoena seeking physician contract details. UHS disclosed the widened scope of the investigation in its third-quarter earnings release. The investigation appears to focus on possibly illegal payments made to physicians and other individuals, UHS said.
Universals third-quarter earnings rose from last years third quarter, once a hurricane insurance settlement of $130.3 million, pretax, is removed from the year-ago quarter. Universal recorded net income of $28.9 million in the third quarter ended Sept. 30, compared with $113.9 million in the year-ago quarter. Revenue increased 13.1%, to $1.18 billion. Bad debt was stable as a percentage of revenue, but the overall costs of charity care and uninsured discounts were up by half, to $149 million in the quarter, compared with $99 million in the year-ago quarter.
The company said admissions increased by more than 3% in the quarter at both its acute-care and psychiatric facilities. For the nine months ended Sept. 30, Universal reported profits of $130.4 million, compared with profits of $225.3 million in the year-ago period. Revenue for the nine months increased 13.8% to $3.56 billion. The company owns or operates 23 acute-care hospitals and 111 inpatient psychiatric facilities. -- by Vince Galloro