Community Health Systems and the company’s top executives face another shareholder lawsuit as the hospital chain’s stock price hits historic lows. This time, officials are accused of misleading investors with an accounting change.
Just before the Franklin-based hospital chain reported earnings for the end of 2017, it warned that a new method to account for unpaid hospital bills would lead to lost profits. In one day, shares in the company plunged 17%. And they’ve fallen much further since then, to
around $2.00 per share.
A shareholder seeking class-action status is
suing the company, accusing Community Health Systems of withholding knowledge it was obligated to make public sooner about the negative effects of this new accounting. And the investor, named Faisal Hussain, says the damage is ongoing as the company’s reputation has suffered through what he calls a “liar’s discount.”
Community Health, which employs thousands of people in Cool Springs and Antioch, also faces a
nearly $900 million class-action lawsuit for not being upfront with investors about the impacts of a change to patient admitting policies.
A spokesperson says both cases are “without merit” and the company will “vigorously defend” itself.
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