Written by Andrew R. Jones, Asheville Watchdog.
HCA never promised to provide quality healthcare, lawyers for the hospital chain argue in asking a court to dismiss North Carolina Attorney General Josh Stein’s lawsuit alleging broken commitments in the purchase of nonprofit Mission Health in 2019.
HCA noted in its response that the Asset Purchase Agreement (APA) — the contract covering the $1.5 billion sale — is “silent as to the quantity or quality of services required” at Mission Hospital.
“The contractual language, as well as the underlying negotiations, demonstrate that Mission’s Hospital Service Commitments are not promises to meet subjective healthcare standards,” the response stated. “HCA promised only to continue to make its facilities, staff, and equipment available to medical staff physicians who want to use those facilities to offer the same services that Mission offered before HCA acquired it.”
The legal response to the state’s litigation was filed Tuesday in North Carolina Business Court, two months after Stein filed the lawsuit, in which he noted that his office had received hundreds of complaints from patients, physicians, nurses, and others about the quality of care since HCA’s takeover of the six-hospital system in western North Carolina.
“At bottom … this legal dispute is about a contract and whether it has been breached. The Hospital Service Commitments are simple and clear: they require that HCA continue certain service lines that existed in January 2019,” the 66-page response stated. “HCA has absolutely done so.”
The response, prepared by HCA’s law firm Latham & Watkins, and Mission’s Asheville-based law firm Roberts & Stevens, also states that, during sale negotiations, Mission’s former owners “sought to include specific requirements by which to measure HCA’s performance of the Hospital Service Commitments.”
HCA declined, the response states, recognizing “that it would be impractical and irresponsible to make such specific promises on a ten-year time horizon, given the rapidly changing landscape of healthcare services in the United States and HCA’s desire to be able to respond with flexibility to the needs of patients in western North Carolina.”
HCA has asked North Carolina Business Court Judge Julianna Theall Earp to dismiss the lawsuit, which stated the nation’s largest hospital chain did not honor its commitments to keep cancer care and emergency services at the level they were at the time it bought Mission for $1.5 billion. Those commitments were part of the asset purchase agreement (APA) that Stein, Mission and HCA negotiated with HCA before the sale.
HCA’s response comes less than two weeks after the U.S. Centers for Medicare & Medicaid Services (CMS) notified Mission Hospital CEO Chad Patrick that a North Carolina Department of Health and Human Services investigation in late 2023 had found that conditions at the hospital “posed immediate jeopardy to patients’ health and safety.”
An immediate jeopardy finding is the most serious sanction a hospital can receive. Mission faces a Feb. 24 deadline to provide CMS with a plan to correct deficiencies or lose its Medicare and Medicaid funding, which would threaten the hospital’s financial viability.
HCA noted in its response that the APA is “silent as to the quantity or quality of services required” at Mission Hospital. It also argued that Stein had the power to seek more changes in the APA before approving it.
Stein filed his lawsuit Dec. 14 following his office’s 2023 investigation into issues with oncology and emergency department services at Mission Health’s flagship hospital.
His lawsuit alleges that HCA has mismanaged Mission, endangering patients and prompting an exodus of doctors and nurses, and has shuttered or reduced some services, moves that Stein alleges breach parts of the APA.
“We are confident that Mission has fulfilled its obligations under the Asset Purchase Agreement, and we intend to defend the lawsuit filed by the Attorney General aggressively,” Mission Health spokesperson Nancy Lindell said Wednesday. “The pleadings that we filed speak for themselves. Unfortunately, the lawsuit continues to be a distraction from the important work that Mission continues to do in Western North Carolina.”
Attorney General spokesperson Nazneen Ahmed said, “We’re confident the court will see through HCA’s attempt to evade responsibility for western North Carolina patients. We look forward to continuing to vigorously pursue this case on their behalf.”
Even though Stein already had added the 15 commitments to the APA to maintain and expand services, secured the right to sue if those commitments weren’t followed, and required the use of an independent monitor to make sure HCA honored its promises, HCA argued he could have done more.
“The Attorney General did not … seek or secure any changes to the Hospital Service Commitments,” the response states, referring to the APA.
“Various factors beyond Mission’s control”
Though HCA denied a majority of Stein’s specific allegations about how care had declined and argued it had instead grown services and garnered accolades since the 2019 sale, it also pointed to several factors it essentially characterized as beyond its control, including:
- Doctors and practices voluntarily leaving the hospital
- A national crisis in nursing vacancies
- National chemotherapy shortages
- “Artificial” inpatient capacity constraints “imposed by the State”
- A failed attempt to add 67 beds to the Asheville hospital; those beds were awarded by NCDHHS to AdventHealth
“Although Mission now provides high-quality emergency and trauma care, it always strives to improve the care provided to western North Carolinians,” the response states in a section addressing allegations about lack of staff in Misssion’s emergency department. “Various factors beyond Mission’s control have sometimes led to increased wait times and created challenges in Mission’s emergency department.”
An Asheville Watchdog investigation in August 2023 found that nurses had been filing complaints to NCDHHS about management issues since early 2022, specifically related to the lack of a clear communication method when nurses handed off patients one to another.
Additionally, The Watchdog reported that Mission’s last medical oncologist left in November. At the time of the sale, there were 14 working at Mission.
HCA said in its response to Stein’s litigation that it has hired more doctors, brought on more nurses and traveling staff, and added more advanced surgical tools in the past year.
Its response states that “the firm that Dogwood engaged as the Independent Monitor (Gibbins Advisors) of HCA’s compliance with the APA, did not even raise any issues of potential noncompliance in either of the past two reporting periods.” The nonprofit Dogwood Health Trust was created from the 2019 sale’s proceeds and is responsible for ensuring that HCA remains in compliance with the APA.
The most recent compliance report, which states that HCA “complied with all APA requirements in 2022,” is attached to the response.
Gibbins advisors will no longer continue as independent monitor, as Asheville Watchdog first reported Feb. 7. Dogwood opened up requests for proposals for an independent monitor suddenly in January, noting the attorney general’s lawsuit would create more work than in past years. Gibbins declined to submit a bid.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Andrew R. Jones is a Watchdog investigative reporter. Email [email protected]. The Watchdog’s reporting is made possible by donations from the community. To show your support for this vital public service go to avlwatchdog.org/donate.