HCA Midwest Health has agreed to pay the Health Care Foundation of Greater Kansas City $15 million to settle part of a long-running dispute with the foundation over HCA’s charitable obligations.
The agreement is the latest development in a lawsuit filed in 2009 by the foundation, which was created from the proceeds of the sale of Health Midwest to HCA in 2003.
The lawsuit concerns whether HCA met its contractual obligations following its purchase of Health Midwest to provide at least $653 million in charity and uncompensated care over 10 years.
Last April, HCA agreed to pay $77 million to the foundation, on top of nearly $162 million that a judge ordered it to pay in 2013. The central issue in those earlier phases of the case was whether HCA’s construction of new hospitals counted toward commitments it made to spend $450 million in capital expenditures over five years.
HCA has preserved its right to challenge the judge’s ruling.
The latest settlement does not affect an ongoing dispute between HCA and the foundation over whether HCA met its capital expenditure obligations.
“The foundation is pleased to have reached this settlement and will use the proceeds to continue our mission of improving health for the uninsured and underserved in the Kansas City community,” Kenneth Southwick, chairman of the foundation’s board, said in a news release about the settlement.
M.L. Lagarde, president and CEO of HCA Midwest Health, said in the release that while the company believed it had “fully satisfied and exceeded its charity and uncompensated care obligations,” the settlement “provides additional funds for the benefit of the healthcare needs of Kansas City’s uninsured and underserved population.”
HCA is the largest for-profit hospital chain in the country. The company paid $1.3 billion in 2003 to acquire Menorah Medical Center, Research Medical Center, Overland Park Regional Medical Center and other non-profit health care facilities owned by Health Midwest.
Proceeds of the sale were used to set up the Health Care Foundation of Greater Kansas City on the Missouri side of the state line and the REACH Healthcare Foundation on the Kansas side.
This story was updated to include additional information about the underlying lawsuit and HCA Midwest Health's holdings.
Editor's note: The Health Care Foundation of Greater Kansas City helps fund Heartland Health Monitor's health coverage.
Dan Margolies, editor of the Heartland Health Monitor team, is based at KCUR.
