What’s at stake?
The lawsuit alleges Community Health System – which operates Community Regional Medical Center and Clovis Community Medical Center – misused roughly $1 billion in taxpayer dollars.
Two Fresno nonprofits are suing the operator of Community Regional Medical Center and Clovis Community Medical Center, arguing it siphoned off $1 billion in public dollars intended to offset the costs of caring for the downtown hospital’s large share of low-income patients to instead fund lavish upgrades to the campus in affluent Clovis.
Attorneys Patience Milrod and Amelia Arámbula filed the complaint against Community Health System, the operator of the two hospitals, on behalf of petitioners Cultiva La Salud and Fresno Building Healthy Communities in Fresno County Superior Court Wednesday morning.
The complaint alleges Community Health System misused funds received under two state programs for hospitals serving Medi-Cal and low-income patients.
Instead of using that taxpayer money to improve the aging equipment and facilities at Community Regional Medical Center in downtown Fresno, the complaint accuses the hospital operator of using that money as a “slush fund for glamorizing Clovis CMC.”
All the while, the downtown hospital serves the lion’s share of Medi-Cal patients between the two campuses.
“It is egregious to me that the hospital system has taken resources that were generated by serving vulnerable Medi-Cal participants,” said Veva Islas, executive director of Cultiva La Salud, in an interview with Fresnoland, “and not reinvested those dollars in the service of those same Medi-Cal, vulnerable residents – that instead, they’ve taken those resources to another community that doesn’t have the same demographics, doesn’t have the same healthcare needs.”
The complaint asks for a court order demanding the health system stop misappropriating public dollars and begin dedicating funds to improving the downtown hospital’s facilities, equipment and staffing levels.
“My clients are not asking for any money or the return of any money. They want the money that the government gives the hospital system to be spent for the people whose health it is intended to secure and improve,” attorney Patience Milrod told Fresnoland. “That’s what we’re asking the judge to do.”
In a statement Wednesday afternoon, Community Health System’s senior VP of communications and legislative affairs Michelle Von Tersch said they’d just learned of the complaint Wednesday morning.
“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,” she said. “Addressing inaccurate claims only serves to take time and resources away from our non-profit healthcare mission.”
What does the complaint against Community Health System say?
More than 70% of Community Health System’s revenue over the past five fiscal years has come from public sources, according to the complaint.
Much of that comes from two government programs for hospitals that serve Medi-Cal patients.
One is the Hospital Quality Assurance Fee Program, which offers supplemental payments to private hospitals that serve Medi-Cal and uninsured patients.
Another is the Disproportionate Share Hospital Program, which also offers supplemental Medi-cal payments to hospitals that serve disproportionate numbers of Medicaid and uninsured patients.
The complaint accuses the hospital system of illegally funneling funds from these programs toward a hospital serving a “wealthier, whiter, and healthier population” in Clovis.
The complaint also notes other disparities between the demographics each hospital serves.
The downtown hospital treats far more Black and Latino patients than the Clovis hospital, according to the complaint, citing data from the California Department of Healthcare Access and Information.
It also tends to treat more homeless patients than the Clovis campus.
The complaint additionally alleges Community Health System’s “developer-heavy” Board of Trustees made strategic decisions regarding the Clovis hospital 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 stated.
How did we get here?
Islas cited an August 2022 Fresno Bee investigation into the funding disparities between the downtown and Clovis hospitals as the impetus for the lawsuit.
In the wake of that investigation, Islas said they worked with legal counsel to seek answers and remediation from Community Health System.
But they were stonewalled, she said.
“In light of all the resistance,” she said, “it forced this lawsuit to come forward in order to get that accountability that these community members need.”
What’s next?
Milrod, one of the attorneys representing the nonprofit petitioners, said now that they’ve filed the complaint, it’s the hospital system’s turn to respond.
Its attorneys have 30 days from the date they formally receive the complaint to respond.
Islas expects a difficult road ahead as the nonprofit petitioners go up against a “Goliath” like Community Health System.
“This was not necessarily an easy decision,” she said. “The hospital system is very well-resourced. We’re a small, community-based nonprofit. We do not have the equivalent of resources and disposable income that the hospital system will use against us and against this case.”
Islas hopes the lawsuit puts Fresno’s most vulnerable on a path toward healthier lives.
She’s seeking improved access to care for some of the residents Cultiva works with, “so that they could live a life where they’re able to provide for their children,” she said, “where they’re able to walk their daughters down the aisle, where they’re able to see their children graduate.”
Editors’ note: Amelia Arambula is a donor to Fresnoland. Our donors do not have the ability to assign, review, or edit stories prior to publication. Visit this page for more information on our donor transparency policies or donors.
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