The literature suggests that innovation allows organizations to reach a desirable level of sustainability. There is evidence to support the role of knowledge management (KM) as well as management capability (MC) in producing a sustainable approach at organizations. Furthermore, organizations commonly achieve sustainable practices through corporate social responsibility (CSR). In particular, the health sector is increasingly implementing CSR strategies, although with a narrow understanding of the factors to success. Hence, trends lead to asymmetric growth between organizations. This study aims to examine the mediating role of KM in the relationship between MC and innovative performance (IP) in 331 Health Provider Institutions (HPIs). The research reflective model was assessed through Partial Least Squares Structural Equation Modeling (PLS-SEM). According to the results, MC has a positive effect on IP, MC has a positive effect on KM, and KM has a positive effect on IP. Likewise, KM significantly mediates the relationship between MC and IP. Our findings support the importance of KM in addressing MCs in HPIs as it enables innovative practices to address CSR goals to achieve a sustainable impact. Moreover, this study contributes by expanding KM to contexts that are not usually studied, such as health in a South American country.