INDIANAPOLIS (AP) — Tenet Healthcare has charged rival hospital operator Community Health Systems with systematically bilking Medicare, and the burgeoning legal fight sent shares of the entire sector sliding Monday.
The charges come months after Community launched a $3 billion hostile takeover bid for Tenet. The Dallas company said it uncovered overbilling by Community Health while researching the offer, which Tenet has already rejected.
Tenet Healthcare Corp. claims that Community Health Systems Inc. has squeezed more money out of Medicare by admitting thousands of patients that should only be kept for observation, which is less expensive.
While Tenet said Community Health is alone in using such practices, the industry was rattled Monday. Investors grew antsy over the possibility that the charges from Tenet have invited the prying eyes of federal regulators.
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