Healthcare Business News

Judge orders mediation in Kentucky hospital dispute

By Associated Press
Posted: February 16, 2014 - 6:00 pm ET

A judge has ordered mediation in a lawsuit filed over a partnership between Kentucky's two children's hospitals.

Kosair Children's Hospital in Louisville and the University of Kentucky HealthCare's Kentucky Children's Hospital in Lexington announced last year that both institutions had signed a letter of intent to partner.

The announcement brought a quick reaction from the University of Louisville, which said the partnership could jeopardize U of L's relationship with Norton Healthcare, which owns Kosair. U of L then accused Norton of violating a land-lease agreement by entering into the partnership.

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The Courier-Journal reports Franklin Circuit Judge Thomas Wingate told both sides last week that he would appoint a mediator. He did not set a deadline to resolve the dispute.

The judge's decision came a week after Gov. Steve Beshear sent a letter to U of L executive vice president for health affairs David Dunn and Norton CEO Stephen Williams. The letter urged both to seek mediation to avoid "costly and protracted litigation" in a dispute that he said had unfolded to his "disappointment and dismay."

When the partnership was announced, officials said it was expected to help both hospitals recruit more pediatric specialists, open more outreach clinics and develop a statewide network of doctors who provide perinatal and neonatal care for high-risk mothers and babies.

U of L objected to the plan, saying it would threaten its teaching mission and finances. The dispute then became enmeshed in negotiations for an agreement that would govern operations and finances at Kosair. Norton built and operates the hospital, but U of L uses it under a state land lease as its pediatric teaching and research hospital.

"We look forward to the mediation process and continue to believe that these issues can be resolved without costly, unnecessary litigation if the two sides can sit at the table and negotiate in good faith," U of L spokesman Gary Mans said.

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