Franklin, Tenn.-based Community Health Systems filed a lawsuit Nov. 2 alleging Steward Health Care failed to pay over $10 million in costs related to the acquisition of eight CHS hospitals.
Dallas-based Steward bought the hospitals, spread across Ohio, Florida and Pennsylvania, in February 2017. Steward entered into numerous transition services agreements with CHS to maintain operations during the transfer of ownership. Steward also agreed to take over certain contracts, including equipment and software leases. CHS is suing Steward for breach of contract for failing to pay $9,329,198 in transition services fees.
Although many of its transition services agreements have expired and its fees are unpaid, Steward remains connected to CHS' network. In addition to unpaid transition services fees, CHS alleges Steward has neglected to pay other contracts, including a telecommunications bill over $2 million. In its lawsuit, CHS said it appears Steward will continue to utilize services such as check printing and IT in 2019 despite these factors.
Steward filed a notice of removal Dec. 6 to move the lawsuit from state to federal court.