An appeals court on Tuesday dropped more than half of a $434 million settlement HCA is paying for failing to follow through on part of a 14-year deal. HCA will pay $188 million to the Health Care Foundation of Greater Kansas City for not investing in capital improvements as part of a merger deal.
The original settlement was ordered by a state judge in December 2015 after the foundation filed a lawsuit alleging HCA didn't provide the capital investments required when it bought the assets of Health Midwest, one of the region's largest hospital systems, for more than $1 billion.
The 2003 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 a decade.
The state judge ruled that HCA should pay $239.4 million for failing to make the improvements, $167.1 million in prejudgment interest and over $27 million in legal fees.
HCA immediately appealed the judgement.
The Missouri Court of Appeals on Tuesday ruled the amount owed to the foundation should be reduced because HCA funded two new hospitals, the Kansas City Star reported. The foundation said the deal was to invest in the existing facilities.
In response to the ruling, HCA spokeswoman Christine Hamele said the chain, the nation's largest investor-owned hospital company, is considering its options. She added, “We are pleased the Missouri Court of Appeals held 'it is uncontested' that we 'spent in excess of $450 million during the five-year term following closing...' living up to our agreement to do so.”
Wayne Powell, board chair of the Health Care Foundation of Greater Kansas City, said, “We respect the Missouri Court of Appeals' decision and realize that additional legal proceedings may occur. HCF remains committed to its mission of eliminating barriers and promoting quality health for the underserved and uninsured in the region.”
The foundation, which funds local safety net clinics and social services, said it will review how to use the settlement money.
HCA and the foundation were involved in another lawsuit in February 2015 also related to the 2003 deal. HCA Midwest Health was ordered to pay $15 million to the foundation to settle claims that it didn't provide the level of charitable and uncompensated care to the community that had been required in the deal.
HCA is expecting to report $4.5 billion in income before taxes for 2016, a 13.7% increase from the previous year.