The foundation created after HCA's purchase of Health Midwest is suing the hospital giant, claiming HCA has not properly accounted for $750 million in promised charity and capital improvements.
The lawsuit, filed today in Jackson County Circuit Court by the Health Care Foundation of Greater Kansas City, seeks an order directing HCA to provide information demonstrating that it has lived up to its commitments.
The nonprofit foundation was created in 2002 as part of HCA’s $1.125 billion purchase of nonprofit Health Midwest, which operated 11 hospitals and other facilities in Missouri and Kansas. The foundation received 80 percent of the proceeds and uses the money to improve health care quality and access for uninsured and underinsured people in the greater Kansas City area.
At the time of purchase, HCA agreed to make $450 million in capital improvements to the hospitals it bought from Health Midwest and to donate $300 million in charity care.
The foundation alleges in the lawsuit that it has repeatedly sought information from HCA to verify that HCA had met those obligations but received only sketchy answers.
“In the best interest of the community, we feel as if we had no choice but to seek a court’s approval in these matters. The action filed today is an attempt to gather the information needed to determine if HCA has indeed met its obligation as called for in the post-closing covenants,” Larry Blankinship, chairman of the foundation’s board, said in a statement.
“As a voice for the uninsured and underserved in our region, we want to make sure that this particular population has been afforded the services promised ... through the sale of Health Midwest to HCA.”
A written statement by HCA said it had not only met its obligations but surpassed them.
The company said it had invested more than $600 million in capital improvements and more than $784 million in charity care.
The statement quoted HCA Midwest President Steve Corbeil as saying that HCA leaders had met with Health Care Foundation leaders “on numerous occasions” and “willingly provided details and answered detailed questions above and beyond what’s required.”
In addition to seeking more information about its capital outlays and charitable care, the lawsuit asks the court to rule that the foundation doesn’t need HCA’s approval before making grants of more than $250,000. The foundation said HCA recently informed it that it needed such approval.
Recipients of such grants have included Children’s Mercy Hospital, Legal Aid of Western Missouri, Aim4Peace, El Centro, the Independence School District, the Samuel U. Rodgers Health Center, Jewish Family and Children Services, Kansas City Free Health Clinic, Child Protection Center, Guadalupe Center, Catholic Charities of Kansas City-St. Joseph and Swope Health Services, according to the lawsuit.
Surely, you jest.