Community Health System is facing a lawsuit from a pair of Fresno nonprofits alleging that the healthcare provider shifted $1 billion in tax dollars meant for its hospital in downtown Fresno to Clovis Community Medical Center.
The lawsuit was filed by Cultiva La Salud and Fresno Building Healthy Communities on Wednesday.
The big picture: According to the lawsuit, Community misused money that comes from two funds: the Hospital Quality Assurance Fee program and the Disproportionate Share Hospital program.
- Those programs require healthcare providers to use those funds to support Medi-Cal patients and to help pay for the healthcare for low-income children. They also are designed to make healthcare available to Medi-Cal beneficiaries.
- The two nonprofits allege that Community has failed to spend supplemental Medi-Cal funds required by the state on Community Regional Medical Center.
- Instead, that funding was allegedly spent to enhance Clovis Community Medical Center, “which serves a much wealthier, whiter, and healthier population, and far fewer Medi-Cal beneficiaries,” according to the lawsuit.
Go deeper: Per the lawsuit, the nonprofits argue that Community needed to expand the emergency department at CRMC, replace patient towers and adequately staff inpatient floors to ensure sufficient beds.
- The nonprofits accuse Community of spending its funding on “an extravagant building program on its suburban Clovis campus and, more recently, on Community Health Partners, a new provider network whose sites are located far from downtown Fresno’s healthcare desert.”
- The nonprofits also tie the allegations to Granville Homes, who has had ties to the Community Board of Trustees for many years.
- They claim that Community has boosted its Clovis hospital to increase the value of neighboring Granville developments.
- The nonprofits are requesting the court declare that the purpose of Supplemental Medi-Cal payments is to benefit the low-income patients whose care generates those funds, and that those funds must be used exclusively to increase the access to medical care and enhance the care for low-income residents.
- They are also seeking an order requiring Community to spend the funding on CRMC instead of Clovis Community Medical Center.
- Despite its genesis dating back to a 2023 series of investigative reports, the suit’s $1 billion figure is half what reporters initially alleged was misused by Community.
Community’s response: Community Senior Vice President of Communications and Legislative Affairs Michelle Von Tersch said in a statement that the lawsuit is baseless.
- “Community Health System is deeply committed to serving Central Valley patients, particularly those insured by Medi-Cal, so it’s safe to say we are extremely disappointed in this baseless lawsuit,” Von Tersch said. “Addressing inaccurate claims only serves to take time and resources away from our non-profit healthcare mission.”
