HCA must pay $162 million for charity care problems

Healthcare giant HCA, based in Nashville, TN, must pay a Kansas City, MO, charitable foundation $162 million and undergo extensive auditing after a judge found that the for-profit hospital operator broke key agreements regarding charity care and capital expenditures in its billion-dollar purchase of hospitals from Health Midwest in 2002.

Judge John Torrence, JD, of the Circuit Court of Jackson County, MO, ruled that HCA, the nation’s largest investor-owned hospital company, did not spend as much money improving Health Midwest’s existing facilities as it said it would. The judge also ruled that HCA did not abide by an agreement to provide at least as much charity care to the community as the Health Midwest’s not-for-profit hospitals had provided before the sale. That amount was said to be $65 million annually.

The Health Care Foundation of Greater Kansas City (HCF) had sued HCA in October 2009 to ensure that it had complied with its more than $950 million obligation to charity care in the Kansas City area. The purpose of the lawsuit was to determine if HCA had complied with its obligations to make $450 million in capital improvements to existing Health Midwest facilities and provide over $500 million in charity care. HCF Chairman Karen Cox, RN, supported the ruling, saying “As a voice for the uninsured and underserved, the HCF Board of Directors felt it had the fiduciary responsibility to make sure that this population had been afforded the services promised to them through the sale of Health Midwest.”

HCA issued a statement saying it would appeal the decision. “Rather than simply put money into the repair of old facilities, we built two new hospitals, spending hundreds of millions of dollars to ensure this community has high quality care,” the company said in a written statement. “We believe we have complied with our agreement, exceeded our promises, and we continue to spend millions for the benefit of a community we love.”

Health Midwest had operated 11 not-for-profit hospitals in Missouri and Kansas before the sale.