Well, that’s set­tled ...

... but Spheris, Com­mu­nity of­fer no specifics

Modern Healthcare - - The Week In Healthcare - Vince Gal­loro

Spheris, a med­i­cal tran­scrip­tion provider that is in bank­ruptcy, and Com­mu­nity Health Sys­tems have reached a set­tle­ment, ac­cord­ing to bank­ruptcy court records, but nei­ther com­pany will spec­ify what the set­tle­ment set­tles.

In Oc­to­ber 2008, Com­mu­nity agreed to hire Spheris to pro­vide tran­scrip­tion ser­vices to all of its hos­pi­tals, to in­vest $10 mil­lion in the com­pany and to place two Com­mu­nity ex­ec­u­tives on Spheris’ board. Both com­pa­nies are based in Franklin, Tenn.

Wayne Smith, chair­man, pres­i­dent and CEO of Com­mu­nity, had joined the board of To­tal eMed in 2001; that com­pany merged with an­other med­i­cal tran­scrip­tion com­pany, EDiX, to form Spheris in 2003. Smith stepped down from the board of Spheris when Com­mu­nity made its in­vest­ment, ac­cord­ing to Spheris’ Oc­to­ber 2008 an­nounce­ment of the in­vest­ment. The two ex­ec­u­tives who joined the board of Spheris at that time also have stepped down, Spheris spokes­woman Lisa DeMoss said.

The set­tle­ment al­lows the trans­fer of $9.2 mil­lion that can be traced back to that in­vest­ment be­tween Spheris af­fil­i­ates, but it does not rep­re­sent a set­tle­ment pay­ment from Com­mu­nity to Spheris, as some pre­vi­ous news re­ports have in­di­cated, DeMoss said.

Nei­ther DeMoss nor Tomi Galin, a spokes­woman for Com­mu­nity, would pro­vide any other de­tails about the set­tle­ment. Com­mu­nity re­mains a cus­tomer of Spheris’ tran­scrip­tion ser­vices, Galin said.

When Spheris filed for Chap­ter 11 pro­tec­tion on Feb. 3, it also an­nounced a $75.2 mil­lion deal to sell its do­mes­tic as­sets to MedQuist, Mount Lau­rel, N.J., and its In­dian sub­sidiary to a wholly owned af­fil­i­ate of CBaySystems Hold­ings, which is based in the Bri­tish Vir­gin Is­lands and is the prin­ci­pal in­vestor in MedQuist. An auc­tion giv­ing other in­vestors a chance to bid is sched­uled for April 13 in U.S. Bank­ruptcy Court in Wilm­ing­ton, Del., ac­cord­ing to MedQuist.

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