Community Health, the No. 2 U.S. hospital company
behind HCA Holdings Inc, also said it was negotiating an agreement
with the U.S. Office of the Inspector General to settle a probe
related to allegations of false claims to the federal Medicare
program for the elderly and disabled. Such deals, called corporate
integrity agreements, typically last five years and involve annual
reviews by an independent organization.
Community Health said it was setting aside $101.5 million in 2013 to
settle those claims and undisclosed issues at a company hospital in
For 2013, it said it expects its adjusted earnings before interest,
tax, depreciation and amortization to range from $1.825 billion to
$1.85 billion, excluding expenses for the settlements and pending
purchase of Health Management. It forecast operating revenue of
$12.975 billion to $13.0 billion.
Results in 2013 reflect a greater-than-expected deterioration in
patient volumes at the company's hospitals, including a 6.7 percent
decrease in admissions for the year, Community Health said.
The company, which said it was providing 2014 projections to reflect
the Health Management acquisition as if it occurred on January 1,
forecast adjusted EBITDA of $2.925 billion to $3.2 billion for the
year ahead. It sees 2014 operating revenue, less a provision for bad
debts, of $19.7 billion to $21.2 billion.
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The 2014 outlook includes a benefit to adjusted EBITDA from
healthcare reform of between 0.5 percent and 0.8 percent of net
Community Health said it anticipates the Health Management
transaction, valued at $3.6 billion plus a contingent value right of
up to $1 per share, to close by the end of this month.
Health Management shareholders are expected to vote on Wednesday on
the pending merger. Health Management's board in November backed the
takeover after a review period spurred by activist investor Glenview
(Reporting by Susan Kelly in Chicago;
editing by Bernard Orr and Lisa Shumaker)
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