Health and Human Services subpeonas CHS

Watchdog wants info on ER processes, relationships with docs; stock falls further

Federal regulators are investigating Community Health Systems' emergency department operations and have subpoenaed the Franklin-based hospital chain for records related to procedures and practices at its facilities.

The subpoena from the Office of the Inspector General at the Department of Health and Human Services was disclosed by CHS in a late-Friday filing with the Securities and Exchange Commission. It requests documents from all CHS hospitals and "appears to concern emergency department processes and procedures, including [CHS'] hospitals’ use of the Pro-MED Clinical Information System," which tracks admissions and recommendations by ER physicians. The OIG also wants information on how CHS has structured its relationships with those doctors.

CHS said the IOG information request is very similar to one submitted by the Texas Attorney General's Office last November about its ER operations at 18 hospitals in that state. The company also said it's not clear if — as most investors and observers might at first think — the watchdog's inquiries are related to Tenet Healthcare's recent lawsuit against it. In both cases, the company said it's cooperating with regulators and can't yet assess the potential impact of their investigations.

Shortly after 6 p.m., shares of CHS (Ticker: CYH) were down 12 percent in after-hours action, adding to losses of about 2 percent during heavy-volume regular trading. Since last Friday's close, they're down about 30 percent.