Legal woes once again have tripped up Columbia/HCA Healthcare Corp.'s expansion plans in South Carolina.
Late last week, a circuit court judge in Charleston, S.C., said Columbia's proposed lease of the Medical University of South Carolina's teaching hospitals was invalid because it wasn't properly approved by the state.
The court essentially said the relationship between the two companies would be legal if it had been processed correctly, but the entire agreement is void because it was entered improperly in violation of requirements of the state constitution.
Specifically, the court said the state, which controls the university, shouldn't have used special legislation to approve the lease. It also cited other legal technicalities.
MUSC has not yet decided whether to appeal the court's decision.
MUSC agreed to lease its 575-bed, three-hospital system to Columbia in February 1996 after months of negotiations and after rejecting a competing offer from a joint venture of not-for-profit hospitals in the Charleston market. The 30-year lease is worth more than $1 billion over its life.
After surviving a review by the state attorney general and passage of the legislation, the lease was challenged by the Medical Society of South Carolina, which owns two hospitals that wanted to lease MUSC.
In its suit, the society claimed the lease violated a provision of the state constitution that bars joint ventures between state agencies and private corporations.
In a statement, the university reiterated the court's findings that the lease "was not a prohibited joint venture with a private entity."