Community Health Systems 2015 Annual Report Download - page 65

Qui Tam Cases – Government Declined Intervention
On February 4, 2014, a redacted case then styled (Sealed Party) v. Pottstown Hospital Co., LLC d/b/a
Pottstown Memorial Medical Center and Community Health Systems, Inc. was filed in the Eastern District of
Pennsylvania. On May 6, 2014, the district court ordered the seal lifted. The relator is Alan E. Cooper, M.D. The
complaint alleges the hospital traded on call agreements for referrals. There is no indication that the DOJ has
intervened in this matter. This matter was previously reported in prior filings in the Legal Proceedings section as
subpoenas to two Pennsylvania hospitals and one of our subsidiaries concerning on call agreements and
physician directorships. On June 5, 2014, we filed motions to dismiss the complaint and on June 30, 2014 the
relator filed his response. Oral argument occurred on October 15, 2014 and the matter was taken under
advisement and discovery was stayed. Our motions to dismiss were granted with prejudice on March 13, 2015;
the relator filed an appeal and oral argument on the appeal was originally set for November 20, 2015 but by order
of the court was submitted on paper only. We are awaiting a decision. We will continue to vigorously defend this
matter.
On July 28, 2015, a first amended complaint was filed by a relator in the matter of U.S. ex rel. Howard v. Taos
Health Systems, Inc. d/b/a Holy Cross Hospital. Our affiliate Quorum Health Resources, also a defendant in this
case, provides senior level management personnel under contract to the non-affiliated hospital. The action is
pending in the United States District Court, State of New Mexico. Relator, who previously practiced emergency
medicine at the hospital, alleges fraudulent billing for midlevel practitioners by the hospital and retaliation in his
termination. The United States declined to intervene in this matter. This matter has now been settled and is
expected to be dismissed.
Commercial Litigation and Other Lawsuits
Becker v. Community Health Systems, Inc. d/b/a Community Health Systems Professional Services
Corporation d/b/a Community Health Systems d/b/a Community Health Systems PSC, Inc. d/b/a Rockwood
Clinic P.S. and Rockwood Clinic, P.S. (Superior Court, Spokane, Washington). This suit was filed on
February 29, 2012, by a former chief financial officer at Rockwood Clinic in Spokane, Washington. Becker
claims he was wrongfully terminated for allegedly refusing to certify a budget for Rockwood Clinic in 2012. On
February 29, 2012, he also filed an administrative complaint with the Department of Labor, Occupational Safety
and Health Administration alleging that he is a whistleblower under Sarbanes-Oxley, which was dismissed by the
agency and was appealed to an administrative law judge for a hearing that occurred on January 19-26, 2016 and
will be ready for decision pending submittal of final briefing. At a hearing on July 27, 2012, the trial court
dismissed Community Health Systems, Inc. from the state case and subsequently certified the state case for an
interlocutory appeal of the denial to dismiss his employer and the management company. The appellate court
accepted the interlocutory appeal, and it was argued on April 30, 2014. On August 14, 2014, the court denied our
appeal. On October 20, 2014, we filed a petition to review the denial with the Washington Supreme Court. Our
appeal was accepted and oral argument was heard on June 9, 2015. On September 15, 2015, the court denied our
appeal and remanded to the trial court where it is now set for trial on September 12, 2016. We are vigorously
defending these actions.
Eliel Ntakirutimana, M.D. and Anesthesia Healthcare Partners of Laredo, P.A., Jose Berlioz, M.D. and Jose
Berlioz, M.D., P.A. d/b/a Safari Pediatrics v. Laredo Texas Hospital Company, L.P. d/b/a Laredo Medical
Center, CHS/Community Health Systems, Inc., Webb Hospital Corporation, Community Health Systems
Professional Services Corporation, Community Health Systems, Inc., Abraham “Abe” Martinez, Argelia “Argie”
Martinez, Michael Portacci, Wayne Smith, Timothy P. Adams, and Timothy Schmidt. On December 28, 2012, two
physicians and each of their professional associations, who previously contracted as independent contractors with
Laredo Medical Center under contracts that could be terminated without cause upon certain written notice, filed a
first amended complaint. The first amended complaint alleged claims for breaches of contracts, unjust
enrichment, violation of the Texas Theft Liability Act, negligence, breach of fiduciary duty, knowing
participation in breach of fiduciary duty, defamation and business disparagement, R.I.C.O., economic duress/
coercion, tortious interference with contracts or prospective business relations, conspiracy, respondent superior,
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