SOURCE: Kaplan Fox & Kilsheimer LLP

June 22, 2011 16:00 ET

Kaplan Fox Files Securities Class Action on Behalf of Purchasers of Community Health Systems, Inc. Common Stock During the Period July 27, 2006 Through April 11, 2011

NEW YORK, NY--(Marketwire - Jun 22, 2011) - Kaplan Fox & Kilsheimer LLP ( has filed a class action suit against Community Health Systems, Inc. ("Community Health Systems" or the "Company") (NYSE: CYH) and certain of its officers and/or directors that alleges violations of the Securities Exchange Act of 1934 on behalf of purchasers of Community Health Systems common stock during the period July 27, 2006 through April 11, 2011, inclusive (the "Class").

The case is pending in the United States District Court for the Middle District of Tennessee (Civil Action No. 11-00601). A copy of the complaint may be obtained from Kaplan Fox or the Court.

The Complaint alleges that, throughout the Class Period, defendants emphasized the Company's positive financial performance and future business prospects, but failed to disclose or recklessly disregarded that the Company's performance has been driven by the improper and undisclosed practice of systematically admitting patients into Community Health Systems' hospitals despite no clinical need. According to the Complaint, Community Health Systems artificially increased inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources that wrongfully inflated its financial performance.

The Complaint further alleges that the true facts, which were known by defendants but concealed from the investing public during the Class Period, were that (1) the Company had for years engaged in the improper practice of systematically admitting patients into hospitals despite no clinical need, most notably by unnecessarily converting emergency-room visits into more lucrative inpatient admissions; (2) the Company's wrongful admissions procedures were designed to overbill Medicare and other sources for patient admissions; (3) as a result of the improper admissions and improper billing practices, the Company's reported revenues and earnings were materially and wrongfully inflated; and (4) based on the foregoing, defendants lacked a basis for their positive statements about the Company's prospects and growth.

It is further alleged that on April 11, 2011, amidst Community Health Systems' $3.3 billion hostile takeover bid of Tenet Healthcare Corp. ("Tenet"), investors and analysts were shocked to learn that Tenet had filed a lawsuit against Community Health Systems, its Chairman and Chief Executive Officer, and its Chief Financial Officer alleging that Community Health Systems had failed to disclose for years certain fraudulent admissions and billing practices, including its practice of systematically admitting, rather than observing, patients despite no clinical need, in order to artificially increase inpatient admissions for the purpose of receiving substantially higher and unwarranted payments from Medicare and other sources.

Following the April 11, 2011 disclosures, Community Health Systems' common stock declined by $14.41 per share, or 35.7%, on unusually heavy trading volume from a closing price of $40.30 per share on April 8, 2011, to close at $25.89 per share on April 11, 2011.

If you are a member of the proposed Class, you may move the court no later than July 8, 2011 to serve as a lead plaintiff for the Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.

Plaintiff seeks to recover damages on behalf of the Class and is represented by Kaplan Fox & Kilsheimer LLP. Our firm, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions and actions involving financial fraud. For more information about Kaplan Fox & Kilsheimer LLP, or to review a copy of the complaint filed in this action, you may visit our website at

Contact Information

  • If you have any questions about this Notice, the action, your rights, or your interests, please contact:
    Pamela A. Mayer
    850 Third Avenue, 14th Floor
    New York, New York 10022
    (800) 290-1952
    (212) 687-1980
    Fax: (212) 687-7714
    E-mail address:

    Laurence D. King
    350 Sansome Street, Suite 400
    San Francisco, California 94104
    (415) 772-4700
    Fax: (415) 772-4707
    E-mail address: