KING OF PRUSSIA, Pa., April 20 /PRNewswire-FirstCall/ -- Universal Health Services, Inc. (NYSE: UHS) announced today an update to the previously disclosed regulatory matter related to Southwest Healthcare System ("SWHCS"). As previously disclosed, during the third quarter of 2009, SWHCS, which operates Rancho Springs Medical Center and Inland Valley Regional Medical Center in Riverside County, California, entered into an agreement with the Centers for Medicare and Medicaid Services ("CMS") which required SWHCS to engage an independent quality monitor to assist SWHCS in meeting all of CMS' conditions of participation. The agreement also provided that, during the last 60 days of the agreement, CMS would conduct a full Medicare certification survey, which took place the week of January 11, 2010.
We've received notification from CMS that it intends to effectuate the termination of SWHCS's Medicare and Medicaid provider agreements effective June 1, 2010. SWHCS has commenced discussions with officials from CMS regarding an agreement that will potentially rescind the provider agreement termination action. Should we be unable to reach an agreement with CMS, we intend to file an administrative appeal with the Department of Health and Human Services and/or pursue other such remedies that may be available to us.
We've also received notification from the California Department of Public Health ("CDPH") indicating that they plan to initiate a process to revoke SWHCS's hospital license. We plan to appeal CDPH's action and SWHCS will remain operational pending the appeal. In that notice CDPH has indicated its willingness to rescind this revocation should SWHCS demonstrate its ability to meet all state licensing requirements.
Rancho Springs Medical Center and Inland Valley Medical Center remain fully committed to providing high-quality healthcare to their patients and the communities they serve. We therefore intend to work expeditiously and collaboratively with both CMS and CDPH in an effort to resolve these matters although there can be no assurance we will be able to do so. Failure to resolve these matters could have a material adverse effect on us. For the year ended December 31, 2009, after deducting an allocation for corporate overhead expense, SWHCS generated approximately 4% of our income from operations after net income attributable to non-controlling interest.Universal Health Services, Inc. is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals and ambulatory centers nationwide and in Puerto Rico. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE: UHT). For additional information on the Company, visit our web site: http://www.uhsinc.com . This press release contains forward-looking statements based on current management expectations. Many of the factors related to these issues are beyond our ability to control or predict. These statements are subject to risks and uncertainties. Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. SOURCE Universal Health Services, Inc.