Across the country, rural and community hospitals are being offered a familiar pitch: access to a premium electronic health record (EHR) platform at a fraction of the cost, thanks to a partnership with a larger health system. These so-called Community Connect arrangements promise improved care coordination, seamless data sharing, and financial relief. But behind the headlines, these models carry tradeoffs that many smaller hospitals overlook—chief among them, the potential loss of independence.
While some Community Connect partnerships deliver value, others ensnare hospitals in legal entanglements, restrict operational flexibility, and limit future options. At their core, they often ask hospitals to trade local control for digital infrastructure.
What Is a Community Connect Model?
A Community Connect model occurs when a large health system hosts its EHR infrastructure—most commonly Epic, but also available via Cerner and MEDITECH—for affiliated hospitals, clinics, or physician groups. Federal Stark Law exemptions allow the host to subsidize up to 85% of the implementation cost, making it appear financially attractive.
But the smaller hospital becomes a tenant, not the owner—an essential distinction when it comes to governance, data access, and long-term strategy. As documented in the Coker Group’s 2024 whitepaper [1], such agreements can restrict license ownership, complicate data portability, limit third-party integrations, and subordinate governance to the host health system.
Case Study 1: A Careful Success in Iowa
In June 2024, Veterans Memorial Hospital, a 25-bed critical access hospital in Waukon, Iowa, went live on Epic through a Community Connect agreement with the University of Iowa Health Care. The $3.88 million implementation brought impressive results:
- Registration times fell from 12–17 minutes to under four
- OB documentation shifted from hours to minutes
- Patients gained MyChart access for virtual scheduling, messaging, and test results [2]
Despite the success, Waukon doesn’t own the EHR license. Any future customizations, upgrades, or data migrations will fall under UI Health Care’s purview. If priorities shift, Waukon may have little autonomy—despite everything it gained.
Case Study 2: Ethical Concerns in Fresno
In stark contrast stands Fresno, California, where Community Connect-style EHR expansion became a federal scandal.
In May 2025, the U.S. Attorney’s Office (Eastern District of California) announced that Community Health System and its affiliate Physician Network Advantage would pay $31.5 million to resolve allegations of violating the False Claims Act and Anti-Kickback Statute [3].
Per DOJ findings:
- CHS/PNA created a “recruitment lounge” known as HQ2, stocked with over 1,000 bottles of wine, liquor, and cigars
- Physicians were enticed with luxury gifts, travel, and event tickets to adopt Epic and refer patients to CHS facilities[4]
- The settlement resolves allegations that Community paid bonuses to certain physicians ostensibly for participation in clinical integration activities, when the real purpose of the bonuses was to reward referrals.[3]
The arrangement didn’t just subsidize technology—it became a conduit for improper financial inducements. The settlement confirmed that what began as EHR rollout evolved into an unethical—and illegal—recruitment engine.
Common Risks and Hidden Costs
Both stories—one of promise, one of scandal—underscore the underlying risks:
- No ownership — Most affiliates don’t own their license or instance, making exit difficult.
- Vendor lock-in — Migration requires full reimplementation, costly data conversion, and retraining.
- Customization constraints — Workflows, templates, and integrations often require host approval.
- Governance misalignment — Upgrades, support, and interoperability rules are dictated by the host.
- Legal exposure — As in Fresno, when financial incentives are tied to adoption or referrals, compliance issues can follow.
Alternatives That Preserve Independence
Community Connect doesn’t have to be a binary decision. Today, cloud-native, modular EHR systems tailored to community hospitals provide full-featured inpatient and outpatient workflows, ambient documentation, interoperability, and patient engagement—without sacrificing governance or flexibility.
These platforms allow hospitals to:
- Own their software and data
- Customize systems to local needs
- Retain control over upgrades and integrations
Final Thought
When implemented transparently, Community Connect can benefit smaller hospitals—as Waukon’s experience shows. But without cautious diligence, those benefits can come at an unacceptable price: control.
As Fresno’s example demonstrates, the intersection of technological access and financial incentives can spiral into legal danger—yet another reason to proceed with eyes wide open.
Don’t confuse access with ownership. Don’t mistake support for sovereignty. The best care happens in hospitals that control their own systems and shape their own futures.
Because in healthcare, “free” is rarely free—and independence may be the most valuable resource of all.
About Jay Adams
Jay Adams is Executive Vice President of Altera Sunrise. A U.S. Navy veteran, he brings over two decades of leadership experience in healthcare IT, managed services, and enterprise software. Jay is passionate about restoring autonomy and clarity to community health systems through smarter, more sustainable technology strategy.
References
- Coker Group. HCIT Insights on Community Connect Models. February 2024. PDF link
- Becker’s Hospital Review. How a Small Hospital Was Able to Afford Epic. June 2024. https://www.beckershospitalreview.com
- U.S. Department of Justice – Eastern District of California. Fresno-Based Community Health System to Pay $31.5 Million to Resolve Allegations of False Claims Act Violations. May 1, 2025. https://www.justice.gov/usao-edca/pr/fresno-based-community-health-system-agree-pay-315-million-resolve-allegations-false
- The Fresno Bee. Community Health System to Pay Millions Over Physician Recruitment, Epic Ties. April 2025. https://www.fresnobee.com/news/local/article306592056.html
