Watchdogs have identified what they consider three instances of “potential noncompliance” by HCA Healthcare in its operations of Asheville-based Mission Health System, which the hospital operator acquired in 2019 for $1.5 billion.
The findings prompted a notification letter to the state attorney general’s office from Dogwood Health Trust, the Asheville-based charity established under the state’s nonprofit conversion law. Among the trust’s duties is keeping an eye on HCA’s compliance with deal terms.
The notification is the first step in a process that could set the stage for a future court fight between Dogwood and HCA. But Dogwood officials they don’t have authority to levy fines or pressure HCA to selll Asheville’s Mission Hospital and other regional facilities. Several Asheville-area elected officials have called for such a sale
“The only remedy under the asset purchase agreement is what we refer to as specific performance,” said Rachel Ryan, Dogwood’s general counsel. “There’s no monetary penalties or anything like that.”
Specific performance amounts to “working with HCA to get them back into compliance,” she added.
HCA is already the focus of a state lawsuit that alleges the publicly traded company broke its promises by cutting back on staffing in the hospital’s emergency and oncology departments. Those allegations are the core of the first instance of potential noncompliance found by a Dogwood-hired independent monitor.
The deal required HCA to maintain services for 10 years. But critics contend staff shortages have “limited access to certain specific services so dramatically that those services should be considered constructively ‘discontinued,’” the monitor’s report says.
Mission Hospital’s oncology units, meanwhile, suffered a setback when a local medical practice, Messino Cancer Centers, severed relations and stopped treating patients at the hospital.
HCA has found another oncology partner, and contends that it is ensuring Mission Hospital remains ab option for physicians who want to care for patients, Dogwood’s monitors say.
“We believe that the Superior Court — and not the independent monitor — is the most appropriate forum to resolve this issue,” they added.
The second prospective violation centers on Mission’s trouble with the federal Centers for Medicare & Medicaid Services, which late last year said there were safety and care problems that put patients in “immediate jeopardy.”
The purchase agreement requires that Mission participate in Medicare and Medicaid, and remain in “good standing” with those programs, the monitors say.
HCA’s remediation just means the matter’s “on its way to being resolved,” said Gerald Coyne, who led the monitoring effort. “I wouldn’t suggest that it is resolved yet,” he added.
The third issue concerns charity care, and a change HCA made to one of three policies that govern its handling of patients’ debts.
While company officials have signaled that they won’t use “liens, collection suits or credit reports as a means of collecting debt,” Mission’s specific charity care policy deleted a provision barring the imposition of liens on property valued under $300,000, the monitors say.
“It certainly opens the door that if a future administration or future leadership in the company were to change” positions on the broader question, Coyne said. In that case, “the people of Western North Carolina would have lost an important protection.”
Attorney General Josh Stein has staff 30 days to respond to Dogwood’s notice. Stein is the Democratic candidate for governor in November’s election. Stein’s office or Dogwood has until Oct. 27 to provide notice of potential noncompliance to HCA.
“Our main goal is to make sure that we have health care for western North Carolina,” said Dr. Susan Mims, Dogwood’s CEO. “And we do want to work cooperatively with HCA to get to that place.”
HCA says it’s reviewed the report. The company operates 186 hospitals and 2,400 care sites in 20 states and the United Kingdom.
“We value the work of the independent monitor and are confident that we continue to be in compliance with the terms of the asset purchase agreement,” Mission spokeswoman Nancy Lindell said.
