Fresno, Calif.-based Community Health System filed a motion to dismiss a lawsuit alleging it misused $1 billion in tax dollars intended to serve low-income patients, Fresnoland reported Nov. 15.
The health system filed the motion to dismiss "with prejudice" on Nov. 12, according to Fresnoland. Nonprofit organizations Cultiva La Salud and Fresno Building Health Communities filed the complaint Aug. 7.
The nonprofits allege the health system directed public funding to Clovis (Calif.) Community Medical Center while leaving Fresno (Calif.) Community Regional Medical Center with outdated equipment, insufficient operating rooms and chronic understaffing. The health system previously called the claims inaccurate and baseless.
In their August complaint, the nonprofits argued that the Hospital Quality Assurance Fee and the Disproportionate Share Hospital programs require hospitals receiving funds to spend it on Medi-Cal patients. In the motion, Community Health System's attorneys said the Medi-Cal reimbursement programs have no "authorities that restrict, condition, or direct" how the money is spent after a hospital receives it, according to the report.
Attorneys for the nonprofit organizations have 14 days from the filing date to respond to the motion, Fresnoland reported.
Michelle Von Tersch, senior vice president of communications and legislative affairs for the health system, said the system "strongly denies" any discriminatory or illegal actions, according to a statement shared with Fresnoland on Nov. 14.
"Given our overlapping missions, it is unfortunate that rather than working together to help those most in need, Cultiva La Salud and Fresno Building Healthy Communities have chosen to file this lawsuit, which serves only to divert precious time, attention and resources away from the people that we both seek to serve," Ms. Von Tersch said in the statement.
"We invite [the system] to re-think: the public provides these funds to protect public health, not to finance hospital facilities modeled on luxury hotel properties and serving upper-income patient populations," Patience Milrod, an attorney representing the nonprofits, said in a statement shared with Becker's.
This story will be updated if more information becomes available.