Community Health Systems of Franklin, Tennessee has announced that the U.S. Department of Justice will sue the company in New Mexico federal court over a billing dispute regarding Medicaid payments to three of the company’s New Mexico hospitals. The government alleges that from 2000 to 2006, the hospitals violated the False Claims Act by receiving $27.5 million in federal Medicaid payments to which the facilities were not entitled. More details were not released.

In 1996, Community Health acquired the three New Mexico hospitals — Mimbres Memorial Hospital in Deming; Alta Vista Regional Hospital in Las Vegas; and Eastern New Mexico Medical Center in Roswell. Community Health Systems Inc. is a for-profit company that operates 119 acute-care hospitals in 29 states.

For the full story, go to Trading Markets.