HCA and Mission respond to lawsuit, denying breach of contract allegations; ask to dismiss

ASHEVILLE – HCA Healthcare and Mission Hospital responded Feb. 13 to the lawsuit brought by North Carolina Attorney General Josh Stein, which alleged that HCA failed to provide the level of emergency and cancer care it agreed to when it purchased the Mission Health system in 2019.

In a 66-page legal filing, attorneys representing the hospital and its corporate owner denied allegations that the company is not providing the level of emergency services and cancer care required as part of the 2019 agreement to buy the system. They argued that the hospital maintained the services required by the contract.

The filing, submitted in North Carolina Business Court, denied allegations about the hospital’s inadequate staffing levels in the emergency department, at times shifting the blame to employees.

“Mission strives to maintain staffing levels that are adequate based on patient acuity and volume,” according to the reply brief, which at multiple points notes the hospital’s attempt to add staff. “When circumstances beyond Mission’s control dictate, such as when staff unexpectedly call out from scheduled shifts, certain units may have higher nurse to patient ratios.”

Attorneys for HCA and Mission blamed issues with the emergency department on the hospital’s role as a tertiary care center for the area and on the physical construction of the department, which they called inefficient, blaming the former owners for the faulty design. The legal team also denied that staffing in the oncology department was not adequate, despite Stein’s assertions. HCA and Mission’s response used the word “denied” 102 times.

Lawyers for Asheville-based Roberts and Stevens, and international law firm Latham and Watkins, filed the lawsuit. The lawyers also asked to dismiss legal entities they said were not relevant to the case.

“We are confident that Mission has fulfilled its obligations under the Asset Purchase Agreement, and we intend to defend the lawsuit filed by the Attorney General aggressively,” Mission Health spokesperson Nancy Lindell told the Citizen Times in a Feb. 13 statement. “The pleadings that we filed speak for themselves. Unfortunately, the lawsuit continues to be a distraction from the important work that Mission continues to do in Western North Carolina.”

In September, Messino Cancer Center, a Western North Carolina medical oncology provider, chose to stop providing inpatient complex hematology treatment at Mission for adults with leukemia or central nervous system lymphoma. Doctors at the center made the decision because they thought HCA did not provide requisite staffing to support the intensive treatment. Lawyers for HCA and Mission characterized this move as an “independent decision” in the reply brief, denying the allegations about staffing deficiencies.

Lawyers for the hospital laid out 10 defenses against Stein’s lawsuit ranging from failing to state a claim, to arguing that the attorney general did give Dogwood Health Trust adequate notice about the hospital’s noncompliance with the 2019 agreement. Dogwood is the grantmaking nonprofit charged with reviewing the terms of the contract.

021324 Answer and Counterclaims by Mitchell Black on Scribd

“We’re confident the court will see through HCA’s attempt to evade responsibility for Western North Carolina patients,” North Carolina Attorney General spokesperson Nazneen Ahmed told the Citizen Times in a Feb. 13 message on behalf of the office. “We look forward to continuing to vigorously pursue this case on their behalf.”

Mission and HCA filed two counterclaims, asking for a judge to make official declarations about the 2019 agreement to buy the hospital system and whether HCA broke the contract. They asked the court to dismiss Stein’s complaint with prejudice.

Stein’s office originally filed the lawsuit Dec. 14. North Carolina Supreme Court Chief Justice Paul Newby designated the lawsuit as a mandatory complex business case. The lawsuit will be heard in North Carolina Business Court, which presides over significant issues of corporate and commercial law. Greensboro-based Judge Julianna Theall Earp will hear the case.

The state attorney general accused HCA of failing to provide the level of emergency and cancer care it agreed to when it purchased the Mission Health system in 2019 for $1.5 billion. Stein is running for governor.

“HCA cannot prioritize paying dividends to its shareholders over honoring its legal commitments to provide health care services to the people of western North Carolina,” the complaint read.

Stein asked the court to demand HCA restore Mission’s oncology and emergency services to its pre-sale conditions. He also requested the court award additional relief.

Since Stein filed the lawsuit, federal regulators have also sounded the alarm about conditions at the hospital.

The Centers for Medicare and Medicaid Services declared that conditions at Mission created an “Immediate Jeopardy” situation, the most serious deficiency regulators can assign. CMS informed Mission Hospital CEO Chad Patrick about the declaration in a Feb. 1 letter.

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According to the letter, Mission is not compliance with six federal regulations regarding the hospital’s governing body, patients’ rights, quality assessment and performance improvement program, nursing, laboratory and emergency services. Mission’s noncompliance threatened the hospital’s Medicare and Medicaid reimbursements.

Mission submitted a plan for correcting the specific deficiencies cited by the federal government on Feb. 6, meeting the deadline set by CMS. This was a critical step to avoiding the federal government canceling the hospital’s payments.

The report detailing the specific deficiencies that led to the Immediate Jeopardy declaration will not be available until the federal government receives an acceptable Plan of Corrections, or March 3, whatever comes first. State Sen. Julie Mayfield expressed frustration that the report is not yet available during a recent news conference discussing the declaration.

Stein’s office notified Dogwood Health Trust in a late October letter that HCA was not in compliance with the 2019 agreement. That letter allowed Dogwood 40 days to work with HCA to fix the violations, in accordance with the contract. When that window expired, Stein’s office became eligible to sue.

Mitchell Black covers Buncombe County and health care for the Citizen Times. Email him at mblack@citizentimes.com or follow him on Twitter @MitchABlack. Please help support local journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: HCA and Mission deny breach of contract allegations; ask to dismiss