Prospect Medical Unit Accuses HHS of Bankruptcy Discrimination

Units of Prospect Medical Holdings Inc. sued the Centers for Medicare and Medicaid Services, alleging reimbursements are being improperly withheld because the hospital network filed for Chapter 11.

After more than a month of negotiations, CMS terminated Medicare enrollment for Prospect’s Pennsylvania ambulatory surgery centers and imaging sites earlier than anticipated, Crozer Chester Medical Center said in its July 11 complaint filed in the US Bankruptcy Court for the Northern District of Texas.

Prospect plans to close a $50.3 million sale of its Pennsylvania sites to ChristianaCare Health System Inc. at the end of July.

Negotiations with CMS over the ...