HCA has been ordered by a judge to pay almost $434 million to the Health Care Foundation of Greater Kansas City for failing to follow through on promises made more than a decade ago when it bought the assets of one of the region's largest hospital systems.
In 2003, Nashville-based HCA purchased Health Midwest, based in Kansas City. The deal required HCA to make at least $450 million in capital improvements during the first five years of ownership and provide the region with $653 million a year in charity care over 10 years. The foundation, which was created after the deal, filed a lawsuit against HCA in 2009, alleging it failed to keep its agreement.
A state judge ruled Wednesday that HCA should pay $239.4 million for failing to make the promised improvements, $167.1 million in prejudgment interest and over $27 million in legal fees.
HCA will appeal the ruling. "We are disappointed that the court has issued this judgment," said HCA spokeswoman Ashlee Peterson. "HCA remains committed to providing the people of Missouri and Kansas with high quality healthcare, including in the new state-of-the-art facilities we built in Lee's Summit and Independence, Mo." Peterson said she expects the Missouri Court of Appeals to rule on their appeal by the end of 2016.
HCA and the foundation were involved in a separate suit that also stemmed back to the 2003 purchase. In February, HCA Midwest Health was ordered to pay $15 million to the foundation to settle claims that it didn't provide the agreed-upon level of charitable and uncompensated care to the community that had been required in the 2003 purchase agreement.
According to the Kansas City Star, the judgment will double the size of the endowment of the foundation, which was created with proceeds from the sale of Health Midwest to HCA in 2003 for over $1 billion. The foundation currently funds local safety net clinics and social service organizations.
HCA reported $36.9 billion in revenue for fiscal 2014. It's stock was trading at $66.47 per share this afternoon.
