The Indianapolis-based hospital system has agreed to pay $20.3 million to settle claims that it overbilled the Medicare and Medicaid programs.
Community Health Network said Thursday that it will spend $175 million to build a hospital on its East campus instead of renovating existing facilities. It also plans to build a $60 million cancer center on its North campus in the Castleton neighborhood.
Hospitals around the state have been trying to cut emergency room visits—and Obamacare was supposed to help. But the results have been mixed, according to some local hospitals.
Community executives said the investment and projects, which will begin this fall and extend over several years, prove their long-term commitment to the east side of the city.
The hospital network will close the 221-room hotel along the Interstate 69 corridor by the end of the year and will begin exploring redevelopment opportunities to meet the growth of the network.
Community Health Network and Eskenazi Health quietly called off their engagement months ago, when they found out federal laws effectively prohibited their marriage. Now they’re trying to figure out how to just be friends.
Before local hospitals slashed staff and expenses last year, they had been boosting the pay packages of their top executives faster than hospitals around the country. Seven of every 10 senior executives at the major hospital systems in Indianapolis saw their total compensation rise more than 10 percent from 2010 to 2012.
Tom Fischer, the chief financial and chief operating officer of Community Health Network, departed suddenly this month. Sources with knowledge of the situation described Fischer’s exit as a firing. But a Community spokeswoman said Fischer resigned in a private meeting with Community CEO Bryan Mills.
For years, the county-owned hospitals ringing Indianapolis have watched warily as the city’s four major hospital systems used their superior size and resources to push ever outward into the suburbs.
Aggressive construction wiped out historical territories, thus opening the door to insurers playing hospitals off each other.
The recent flurry of big announcements portends well.
The sequestration plan kicking in Friday will chop Medicare payments to hospitals, doctors and nursing homes by 2 percent, beginning April 1. One study estimates that the cuts could result in 10,000-plus job losses in Indiana alone.
The new partnership between Community Health Network and Wishard Health Services could put a third health care entity in an awkward position: the Indiana University School of Medicine. Virtually all of the nearly 1,100 physicians who practice at Wishard Memorial Hospital and its community clinics come from the IU medical school.
The partnership will create a new board to oversee and coordinate the operations of both systems, according to internal messages sent to Community stakeholders. Community Health CEO Bryan Mills will be the CEO of the new joint-operating entity.