Health Care Foundation of Greater Kansas City to Receive $162 Million in Settlement

The for-profit Hospital Corporation of America system has been ordered to pay $162 million to the Health Care Foundation of Greater Kansas City after a Missouri judge ruled that HCA failed to abide by an agreement to repair several rundown community hospitals it purchased in the Kansas City area from Health Midwest, the New York Times reports.

HCA acquired the hospitals in 2003 from the nonprofit healthcare system on the condition that it make capital improvements to the facilities and maintain the level of care that had been provided to low-income residents by Health Midwest. But a 2004 report provided by HCA to the foundation, which was created with a portion of the proceeds from the sale of the hospitals, revealed that the company was failing to deliver on its commitments. Indeed, in the first two years after its acquisition of the hospitals, HCA only spent about $50 million of the $300 million it had agreed to spend, while the level of care provided at the system's large inner-city hospital dropped, even as charitable care at its more affluent suburban hospital rose.

Pleading its case in Jackson County Circuit Court, HCA argued that it spent hundreds of millions of dollars constructing two new hospitals rather than on repairing older facilities. But Judge John Torrence ruled that the agreement called for improvements to existing hospitals and that HCA still owed $162 million, the Times reports.

The settlement funds will be used by the Health Care Foundation to provide care for uninsured or underinsured Kansas City residents. In the meantime, a court-appointed accountant is working to determine whether HCA provided the level of charitable care it said it would. If it didn't, said Paul Seyferth, the foundation's legal counsel, HCA might end up paying even more to the foundation. And, added Seyferth, "We think they're going to have a tremendously difficult time convincing anybody that they spent what they claim they spent."

Julie Creswell. "Judge Orders HCA to Pay $162 Million to Foundation." New York Times 01/24/2013.