Community Health Systems has reduced its second quarter earnings forecast and announced it has received another subpoena related to an ongoing Department of Justice investigation into the hospital operator’s admissions practices.
In a preview of its quarterly financial and operating results, CHS announced yesterday that its new operating revenues for the second quarter will be about $3.236 billion. Dow Jones Business News reported that analysts from Thomson Reuters had estimated revenues would be $3.37 billion.
CHS also said that its pre-tax income is expected to be around $65 million, compared to $151.7 million from the same period in 2012. Adjusted earnings before interest, taxes, depreciation and amortization is estimated at $414 million, compared to $483 million from the same period last year.
The company explains the results are due to weak patient volume, especially in May and June, higher-than-expected bad debts and a deterioration in payer mix. Complete financial results for the second quarter will be available on July 29. A live earnings call is scheduled for July 30.
NASDAQ reported the company’s stock had declined by 17.76 percent to $38.91 in after-hours trading on Thursday. By mid-morning Friday, it was trading at $42.12.
In its financial preview, CHS also noted that the DOJ has served the company another subpoena seeking “additional documents related to the admission of inpatients from its emergency departments, as well as documents that support the factual refutations and defenses that the company has articulated during its discussions with the government.”
The documents requested, the company said, are similar to the ones the government requested in April 2011, but are for additional custodians and locations and other general documents related to the investigation.
The DOJ’s investigation into CHS’ Medicare short-stay admissions from the emergency room was made public in 2011.
[See also: Feds widen probe of Community Health Systems' outpatient billing methods.]
The government will also be interviewing a division president and one senior vice president from the company. CHS said it is continuing to cooperate with the government in the investigation.