Community Health Systems has filed a motion today to dismiss what it calls a "baseless" lawsuit brought on by Tenet Healthcare, according to a CHS news release.
Tenet filed a federal lawsuit last week, claiming CHS has systematically overbilled Medicare from 2006 to 2009. Tenet alleges CHS owes more than $1 billion for billing inpatient hospital stays that should have been observation status.
CHS says the all-cash offer for Tenet, announced yesterday, eliminates any basis for a federal securities lawsuit. The Franklin, Tenn.-based system says the revised $6-per-share all-cash offer has eliminated the stock component of the transaction, thus eliminating Tenet's pretext for alleging a securities law violation. CHS had originally offered Tenet $5 per share in cash and $1 per share in CHS common stock, which was rejected in Dec. 2010.
CHS also says the lawsuit attacks the ethics of thousands of physicians at CHS-affiliated hospitals — "which has no basis and is not material to the proxy contest concerning the election of Tenet's directors," according to the release. It says Tenet is attempting to compel CHS to "confess some sort of culpability," which has no basis under securities laws.
Read the news release on CHS' move to dismiss the Tenet lawsuit.
Read more about Tenet and CHS:
- CHS Stock Dips After Receiving Subpoena
- CHS Still Wants Tenet: Revised All-Cash Offer Stands at $6 Per Stock
- Tenet Sues CHS: New Battle Lines in Healthcare Takeovers — Whistleblowing
Tenet filed a federal lawsuit last week, claiming CHS has systematically overbilled Medicare from 2006 to 2009. Tenet alleges CHS owes more than $1 billion for billing inpatient hospital stays that should have been observation status.
CHS says the all-cash offer for Tenet, announced yesterday, eliminates any basis for a federal securities lawsuit. The Franklin, Tenn.-based system says the revised $6-per-share all-cash offer has eliminated the stock component of the transaction, thus eliminating Tenet's pretext for alleging a securities law violation. CHS had originally offered Tenet $5 per share in cash and $1 per share in CHS common stock, which was rejected in Dec. 2010.
CHS also says the lawsuit attacks the ethics of thousands of physicians at CHS-affiliated hospitals — "which has no basis and is not material to the proxy contest concerning the election of Tenet's directors," according to the release. It says Tenet is attempting to compel CHS to "confess some sort of culpability," which has no basis under securities laws.
Read the news release on CHS' move to dismiss the Tenet lawsuit.
Read more about Tenet and CHS:
- CHS Stock Dips After Receiving Subpoena
- CHS Still Wants Tenet: Revised All-Cash Offer Stands at $6 Per Stock
- Tenet Sues CHS: New Battle Lines in Healthcare Takeovers — Whistleblowing