Photo: Flickr / Andy DE
Healthcare stocks are way down today on news that Tenet Healthcare has filed a federal lawsuit against Community Health Systems, accusing the company of unnecessarily admitting patients to hospitals in order to collect more money from insurers like Medicare.Share of Community Health are down over 32% and Tenet shares are down around 15%.
Here is what you need to know via Reuters:
- According to Tenet’s lawsuit, Community Health goes by a different set of criteria for deciding whether patients should be admitted or not to help boost revenue.
- Community Health made a bid for Tenet in December for $3.3 billion which is when Tenet started investigating the company’s admissions practice in case the takeover went through.
- In order to fend off a Community Health takeover, Tenet has also delayed its shareholder meeting this year and adopted a defensive poison-pill shareholder rights plan.
Here is a roundup of other hospital stocks that are down today:
- HCA Holdings down 3.53%
- Universal Health Services down 3.40%
- Health Management Associates down 6.47%
- Kindred Healthcare down 2.14%