| Company: | Community Health Systems, Inc. |
| Ticker Symbol: | CYH |
| Class Period: | Jul-27-06 to Apr-11-11 |
| Date Filed: | Jun-22-11 |
| Lead Plaintiff Deadline: | Aug-21-11 |
| Court: | Middle District of Tennessee |
| Allegations: | |
The case is pending in the United States District Court for the Middle District of Tennessee (Civil Action No. 11-00601).
The Complaint alleges that, throughout the Class Period, defendants emphasized the Company's positive financial performance and future business prospects, but failed to disclose or recklessly disregarded that the Company's performance has been driven by the improper and undisclosed practice of systematically admitting patients into Community Health Systems' hospitals despite no clinical need. According to the Complaint, Community Health Systems artificially increased inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources that wrongfully inflated its financial performance.
The Complaint further alleges that the true facts, which were known by defendants but concealed from the investing public during the Class Period, were that (1) the Company had for years engaged in the improper practice of systematically admitting patients into hospitals despite no clinical need, most notably by unnecessarily converting emergency-room visits into more lucrative inpatient admissions; (2) the Company's wrongful admissions procedures were designed to overbill Medicare and other sources for patient admissions; (3) as a result of the improper admissions and improper billing practices, the Company's reported revenues and earnings were materially and wrongfully inflated; and (4) based on the foregoing, defendants lacked a basis for their positive statements about the Company's prospects and growth.
It is further alleged that on April 11, 2011, amidst Community Health Systems' $3.3 billion hostile takeover bid of Tenet Healthcare Corp. ("Tenet"), investors and analysts were shocked to learn that Tenet had filed a lawsuit against Community Health Systems, its Chairman and Chief Executive Officer, and its Chief Financial Officer alleging that Community Health Systems had failed to disclose for years certain fraudulent admissions and billing practices, including its practice of systematically admitting, rather than observing, patients despite no clinical need, in order to artificially increase inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources.
Following the April 11, 2011 disclosures, Community Health Systems' common stock declined by $14.41 per share, or 35.7%, on unusually heavy trading volume from a closing price of $40.30 per share on April 8, 2011, to close at $25.89 per share on April 11, 2011.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
