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HCA Healthcare accused of violating purchasing agreement of Mission Health, faces potential legal action

by John R. Fischer, Senior Reporter | November 09, 2023
Business Affairs
Mission Hospital (Photo courtesy of Mission Health)
According to North Carolina Attorney General Josh Stein’s Office, HCA HealthCare was given 40 days to correct alleged conduct that violates its purchasing agreement for Mission Health or potentially face legal action.

The agency sent a notice on October 31 to Dogwood Health Trust, a nonprofit set up to receive the proceeds from the $1.5 billion acquisition in 2019, saying that HCA HealthCare, the largest healthcare system in the U.S., failed to comply with two sections of the asset purchase agreement it signed when it discontinued oncology and emergency and trauma services at Mission Health, in Asheville, reported The Asheville Citizen-Times.

“Section 7.13 of the APA states that for a period of ten years immediately following the closing date of the transaction, HCA Healthcare shall not discontinue the provision of the services set forth on Schedule 7.13 at the various Mission Health facilities, subject to force majeure making the provision of such services impossible or commercially unreasonable,” said the North Carolina attorney general's office in its letter.

According to the Asheville Citizen-Times, Dogwood is responsible for enforcing HCA’s obligations in the agreement and keeps track of its compliance through an annual reporting process between it, HCA, the NCAG’s office, and Gibbons Advisors, a firm acting as an Independent Monitor that provides recommendations to Dogwood about breaches of contract.

In a statement, Dr. Susan Mims, CEO of Dogwood, told HCB News that it has heard the community’s concerns about the quality of care by Mission Health under HCA Healthcare and is “reviewing the AG’s letter, and looks forward to meeting with his office soon to discuss the matter.”

Nancy Lindell, director of public and media relations for HCA Healthcare North Carolina Division/Mission Health, also told HCB News that the organization was “confident that we have and will continue to meet our commitments under the APA.”

In addition to oncology and emergency and trauma services, HCA HealthCare cannot discontinue behavioral health, cardiac, general medicine, imaging and diagnostic, neuro trauma, obstetrical, pediatric, and surgical care services for 10 years after the purchase.

Back in September, Stein’s office requested 41 documents from HCA with several requests, including information about the number of patients seeing oncologists, the number of unoccupied hospital beds at Mission, and concerns received by Mission among others, according to WLOS News 13.

His office previously expressed concerns at the time of the sale that the bidding process was rigged, accusing then Mission CEO Ronald Paulus of “coaching HCA behind the scenes” and strategic advisor Philip Green, who had an undisclosed “prior business relationship with HCA” of unfairly influencing Mission Health’s board of directors, which only considered one other bid, reported North Carolina Health News.

It also referenced a case from 2017 in which HCA agreed to pay a $188 million settlement for its failure to abide by the terms of its purchase of nonprofit Health Midwest hospitals in the Kansas City area.

Ronald Winters, Gibbins' co-founder, and managing director, told The Asheville Citizen-Times that his firm is investigating the allegations listed in the letter and encouraged the community to share any relevant information with the investigation.

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