Community Health Systems has secured two loans totaling $4.54 billion that will be used to pay off a $4.6 billion loan due in 2021, according to a filing with the Securities and Exchange Commission.
The first, a $1.6 billion loan, has an interest rate of LIBOR plus 275 basis points and matures at the end of 2019. The second loan of $2.94 billion matures in January 2021 and carries an interest rate of LIBOR plus 300 basis points. The 2021 loan being paid off has a rate of LIBOR plus 325 basis points.
The Department of Justice and the owners of 16 hospitals have reached an agreement to settle False Claims Act allegations related to their use of intensive outpatient psychotherapy services from 2005 to 2013. The federal authorities claim the organizations didn't meet various requirements for Medicare billing.
Of the hospitals, 14 were under the banner of Health Management Associates until early last year and are now owned by Community Health Systems. A 15th hospital in Mississippi also is owned by CHS, while the last of the bunch is a 60-bed facility in North Texas. CHS will pay $210,000 for the Mississippi settlement while HMA's tab runs to $15 million.
“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said U.S. Attorney Christopher Thyer of the Eastern District of Arkansas. “Medical care providers who abuse Medicare hurt all taxpayers, and today’s announcement highlights our commitment to protecting our national health care system, as well as the Arkansans who depend on it.”
Read the full DOJ statement here.
Community Health Systems is in talks to buy a struggling Georgia hospital, according to The Ledger-Enquirer.
The Franklin company could fully or partially acquire the 376-bed hospital, which recently completed a $150 million expansion and disclosed an accounting error of nearly $30 million. The Ledger-Enquirer reports the Columbus hospital then began looking for a strategic partner.
St. Francis Hospital said Thursday it has begun 'exclusive discussions' with a subsidiary of Franklin, Tenn.-based Community Health Systems, with an agreement of some sort between the two expected in the 'near future.'
CHS currently operates five hospitals in Georgia. Shares of the company (Ticker: CYH) were down to $52.81 around noon Friday. Year to date, they're down 2 percent.
National health care industry group The Center for Medical Interoperability has announced its board of directors, which includes five big-time Nashville health care leaders.
The local quintet consists of: Dr. Jeffrey Balser, vice chancellor of health affairs at Vanderbilt University Medical Center; Bill Carpenter, CEO of LifePoint Hospitals; Milton Johnson, CEO of HCA Holdings; Michael Schatzlein, CEO of Saint Thomas Health on behalf of Ascension Health; and Wayne Smith, CEO of Community Health Systems.
The Center for Medical Interoperability's goal is to spearhead integration of medical technologies. The organization will develop a research and development lab to build standardized "plug-and-play" solutions for electronic medical records.
"It is vital that all forms of health care technology, including medical devices and electronic health records, be able to seamlessly exchange information so that the quality and safety of care can be improved and costs can be reduced," Dr. Michael Johns, board chairman, said in a release.
The board of directors also includes representatives from Northwestern Memorial HealthCare, the Robert Wood Johnson Health System, Cedars-Sinai Health System, Hennepin Health System, Johns Hopkins University School of Medicine, West Health Institute, West Health and Scripps Health.
Community Health Systems executives have amended their credit agreement to repay in full a $1.7 billion loan that was set to mature in January 2017.
The new $1.7 billion loan carries the same interest rate as the company's previous loan, LIBOR plus 3.25 percent, and expires nearly two years later, on Dec. 31, 2018.
Shares of CHS (Ticker: CYH) fell 3.5 percent Monday to $48.97. In the last three months, they're down nearly 5 percent.
A handful of executives at some of Middle Tennessee's most prominent public companies saw last week as a good time to book some profits on their stock holdings. Here's a rundown:
As part of a trading plan, HCA Holdings Controller Don Stinnett exercised almost 10,500 options that would have expired in early 2017 for about $5 each and then sold the same number of shares for $76. His profit on the transactions came to more than $740,000. HCA shares (Ticker: HCA) are essentially flat for the year.
Over at Community Health Systems, Chief Administrative Officer Kevin Hammons exercised 8,000 options that would have expired this summer, then sold that number of shares. On top of that, he also sold more than 10,600 other shares. His total proceeds on the deals topped $600,000. In addition, Division President Michael Portacci sold about a quarter of his stock in the Franklin-based company. His bank account is now almost $750,000 to the good. Fellow Division President Bill Hussey grossed $454,000 from a similar sale. He still owns almost $6 million of CHS shares (Ticker: CYH), which are down about 6 percent year to date.
Cracker Barrel Old Country Store's marketing chief Chris Ciavarra also was a seller, unloading a quarter of his stake in the restaurant and retail company for more than $670,000. The sale comes after Cracker Barrel (Ticker: CBRL) popped to an all-time high in the wake of strong earnings. Year to date, the stock is up 5 percent.
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