A Mississippi hospital is seeking $46 million from QHR, the hospital-management arm of Community Health Systems, Franklin, Tenn., alleging in a federal lawsuit that QHR and its employees misled the board about the hospital's financial condition, according to the lawsuit.
Miss. hospital suing QHR for $46 million
The hospital, 155-bed Natchez (Miss.) Regional Medical Center, alleges that QHR relied on one-time Medicaid disproportionate-share hospital payments related to Hurricane Katrina to show profits in fiscal 2006, which ended Sept. 30, 2006. QHR then predicted a $1.5 million profit in fiscal 2007 throughout the year while counting on the same DSH payments, but auditors reported a loss of $1.9 million that year, according to the lawsuit, filed in U.S. District Court in Jackson, Miss.
QHR, Brentwood, Tenn., does not comment on pending litigation, spokeswoman Susan Hassell said.
Other allegations of mismanagement include costly contracts with service providers and vendors that benefited QHR; poor negotiating of managed-care contracts; and hiring or recruiting too many employees and physicians relative to the hospital's patient base. The new management company that started after QHR was fired in 2008 cut staff by a quarter, according to the lawsuit. Natchez Regional filed for bankruptcy in February.
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