KANSAS CITY, MO – The Health Care Foundation of Greater Kansas City (Foundation) filed a lawsuit today against the Hospital Corporation of America (HCA) and its affiliate, HM Acquisition, LLC, to ensure that HCA has complied with its more than $750 million obligation to the people of the Greater Kansas City area.
The Foundation was created in 2002 as part of HCA’s purchase of Health Midwest, a regional nonprofit health care provider which operated 11 hospitals and other facilities in Missouri and Kansas. As part of that sale, HCA entered into an Asset Purchase Agreement (APA), and later settlement agreements with the states of Missouri and Kansas, that transferred to the Foundation 80% of the net proceeds of the sale of Health Midwest’s hospitals. The purpose of the Foundation is to use that money to eliminate barriers to quality health for the uninsured and underserved residents of Health Midwest’s prior service area.
Under Article 5 of the APA, HCA was obligated to make $450 million in capital improvements to the hospitals it purchased from Health Midwest and to provide over $300 million in charity care in the Greater Kansas City area. The Foundation has attempted many times to obtain this information to verify that HCA has met these obligations, but unfortunately the information provided was not detailed enough to determine if the post closing covenants have been met. Through the lawsuit filed today, the Foundation is requesting access to information from HCA to ensure that those obligations have been met.
Additionally, the Foundation hopes through the lawsuit to clarify its compliance with a non-compete section of the APA regarding grants awarded by the Foundation in excess of $250,000 to competitors of HCA.
“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,” said Larry Blankinship, Chairman of the HCF Board of Directors. “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 to them through the sale of Health Midwest to HCA.”
The law firm of Seyferth Blumenthal & Harris is handling this matter for the Foundation. Media may contact Paul Seyferth at 816-756-0700 for further inquiries.