The lawsuit alleging Fresno, Calif.-based Community Health System misused $1 billion in tax dollars has been paused until June while the health system and the nonprofit plaintiffs negotiate privately, Fresnoland reported Jan. 6.
Community Health System, Cultiva La Salud and Fresno Building Healthy Communities jointly filed a stipulation on Dec. 23 requesting the court to stay the case, which Fresno County Superior Court Judge Kristi Culver Kapetan approved Dec. 30, according to Fresnoland. The stay halts legal proceedings.
The two nonprofit organizations filed the lawsuit in August, alleging the health system misused $1 billion in tax dollars intended to serve low-income patients. They claim Community Health System directed public funding to Clovis (Calif.) Community Medical Center while Fresno (Calif.) Community Regional Medical Center was left understaffed and with outdated equipment and insufficient operating rooms.
The health system previously called the allegations inaccurate and baseless, and on Nov. 12 it filed a motion to dismiss the lawsuit.
"Given our shared ultimate mission of community service, we all have agreed that our time and resources are better spent working together," the parties said in a joint statement shared with Becker's on Jan. 6. "The stay pauses the legal action to give us time to find ways to improve the delivery of medical care to the underserved in our community. By this effort, we also hope to set an example for effective dispute resolution and how hospitals can work with non-profit organizations to prioritize the interests of the people we collectively serve."
Both parties can either request to extend the stay or terminate it early, the latter of which could occur after March 23, according to court records obtained by Fresnoland. The stay follows "several recent productive conferences" that could lead to a potential resolution, the records say.