Community Health System: Lawsuit alleging misuse of $1B in public funds ‘baseless’

Community Health System has issued a response to a lawsuit by two Fresno nonprofits, Cultiva La Salud and Fresno Building Healthy Communities, alleging misuse $1 billion in public funds.

News of the lawsuit was first published by Fresnoland .

The complaint was filed by attorneys Patience Milrod and Amelia Arámbula, alleging the provider misused funds received from two state programs serving Medi-Cal and low-income patients. The complainants say the funding was intended for low-income patients at Downtown Fresno’s Community Regional Medical Center, but were used for upgrades at Clovis Community Medical Center instead.

Community Health System SVP, Communications and Legislative Affairs representative Michelle Von Tersch released a statement addressing the allegations.

“We just learned of this complaint this morning, so it’s difficult to comment, as it would be for any pending litigation,” Von Tersch said in an email. “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.”

Fresnoland reports that more than 70% of Community Health System’s revenue has come from public sources over the past five years, much of that revenue coming from two government programs – the Hospital Quality Assurance Fee Program and the Disproportionate Share Hospital Program – both which serve Medi-Cal patients.

The complaint goes on to note demographic disparities, with the downtown hospital serving a higher number of Black, Latino and homeless patients than its Clovis counterpart.

The complaint also calls into question the Board of Trustees , alleging that their financial decisions were made to “further developer interests.”

“Continuing a trend begun in 2009, of the fourteen current members of CHS’s Board of Trustees, six are or were land developers or bankers with close ties to prominent developer Granville Homes, and/or with projects or holdings in the vicinity of Clovis CMC,” the complaint reads.