NC Attorney General: HCA Healthcare failed to comply with Mission purchase contract

Mitchell Black, Asheville Citizen Times
Updated ·4 min read

ASHEVILLE – The North Carolina Attorney General’s office delivered notice to Dogwood Health Trust Oct. 31 that HCA Healthcare violated the commitments it made as part of the 2019 agreement to purchase the Mission Health system, according to a letter obtained by the Citizen Times.

Dogwood has 40 days to work with HCA to fix the problems the letter identified, otherwise the state is authorized to bring a lawsuit. The violations identified pertain to HCA's commitment to maintain oncology and emergency room services at Mission Hospital in Asheville, according to the letter, sent by N.C. Deputy Attorney General and General Counsel Sarah Boyce. This contract is commonly known as the "Asset Purchase Agreement."

"When HCA Healthcare violates section 7.13, the APA authorizes the Attorney General to enforce the APA," the letter reads. "But before the Attorney General can do so, he must notify Dogwood Health Trust of the alleged violation."

Mission Hospital, October 3, 2023.
Mission Hospital, October 3, 2023.

As part of that section of the agreement, HCA cannot discontinue the following services for 10 years after the purchase of the hospital:

  • Behavioral health

  • Cardiac

  • Emergency and trauma

  • General medicine

  • Imaging and diagnostic

  • Neuro trauma

  • Obstetrical

  • Oncology

  • Pediatric

  • Surgical

"If, despite Dogwood Health Trust’s best efforts, HCA Healthcare remains in violation of the APA 40 days from now, the Attorney General reserves the right to take appropriate action," the letter continues.

More: Mission Hospital patients, staff, decry poor care to HCA Healthcare independent monitor

Dogwood is the nonprofit entity that formed to receive the proceeds of the $1.5 billion sale. It delivers community grants that focus on housing, education, economic opportunity and access to care and health resources. According to the agreement, Dogwood is also responsible for enforcing the obligations HCA made to comply with the terms of the sale. Typically, Dogwood becomes aware of these violations through an annual reporting process between HCA, Dogwood, the NCAG’s office and Gibbins Advisors, the Nashville-based firm that provides recommendations to Dogwood about breaches, known as the Independent Monitor.

Ronald Winters, Gibbins' co-founder and managing director, told the Citizen Times Nov. 1 that his firm is currently investigating the issues raised in the letter and that Dogwood is aware of the investigation. He also said that Gibbins will be speaking to Dogwood and the N.C. AG's office to discuss these issues and encouraged the community to share information relevant to their investigation.

Letter Re APA Breach 10.31.23 by Mitchell Black on Scribd

Boyce sent the letter to Dogwood's General Counsel Rachel Ryan.

"Let me begin by saying that like the Attorney General, and so many throughout our region who have come forward with concerns about quality of care, we share their desire for everyone in Western North Carolina to have access to high quality healthcare," Dogwood's chief executive, Susan Mims, said in an Oct. 31 statement.

"We are grateful to community members who have taken the time to share their concerns and we encourage them to continue to do so. It’s only through ongoing dialogue and exchange of information that all of us – the Attorney General, HCA and Dogwood – can move forward to address any issues of potential noncompliance."

"We are reviewing the AG’s letter and look forward to meeting with his office soon to discuss the matter, with an eye towards the best resolution for the community."

Dr. Susan Mims is the interim CEO for Dogwood Health Trust.
Dr. Susan Mims is the interim CEO for Dogwood Health Trust.

More: North Carolina Attorney General issues investigative demand against Mission Hospital

The N.C. Attorney General’s office can enforce the agreement if Dogwood fails to correct a violation within 40 days of becoming aware of it, according to the APA. Because Dogwood received the letter Oct. 31, the Attorney General’s Office can file a lawsuit by Dec. 10.

"We are confident that we have and will continue to meet our commitments under the APA," Mission Health spokesperson Nancy Lindell said in an Oct. 31 statement.

“While I’m glad that the AG’s office is taking formal legal action in response to diminished oncology services at Mission, it is incredibly sad that one of the largest and wealthiest healthcare companies in America cannot seem to find the resources to provide this care to the people of WNC,” state Sen. Julie Mayfield said in an Oct. 31 message to the Citizen Times.

“This is a failure of leadership to foster a healthy hospital culture and to keep patient care, rather than profit, at the forefront of decision-making.”

Attorney General Josh Stein visited Asheville in his bid for Governor, October 11, 2023.
Attorney General Josh Stein visited Asheville in his bid for Governor, October 11, 2023.

Stein, who is running for governor, helped negotiate the commitments HCA agreed to as part of the sale. Stein said at a recent campaign event in Asheville that he “stretched” his authority to broker those commitments but had little power to dictate the sale.

Stein’s office recently demanded that HCA deliver 41 sets of documents and communications regarding the oncological, emergency and surgical services provided at Mission Hospital.

More: Mission Hospital wins CON approval to build new emergency room in Candler

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: NC Attorney General says HCA Healthcare failed to comply with contract