The Health Care Foundation of Greater Kansas City has won a $162 million judgment against Hospital Corporation of America, owner of the largest hospital system in the Kansas City area.
Jackson County Circuit Court Judge John Torrence issued the decision in connection with a lawsuit filed against HCA in 2009.
The foundation alleged that HCA hadn’t spent promised funds on capital improvements or properly accounted for charity and capital improvements to the 12 former Health Midwest hospitals HCA purchased in 2003 for $1.13 billon.
The decision also awards attorneys’ fees and orders an independent accounting of several hundred million dollars that HCA said it has spent in the Kansas City area.
In the sale contract, HCA agreed to make $450 million in capital improvements to the former Health Midwest hospitals and to donate $300 million more to charity care in the metro area.
Because Health Midwest was a nonprofit institution, the net proceeds from the sale went to two newly created nonprofit foundations, the Health Care Foundation of Greater Kansas City on the Missouri side, and the REACH Foundation on the Kansas side.
The Health Care Foundation received about $425 million and the REACH Foundation about $105 million. From their asset bases, the foundations make grants to health and social service nonprofits in the metro area.
The Health Care Foundation, which monitored HCA’s compliance with the terms of the sale, filed suit after the foundation said it found discrepancies between what HCA spent on hospital capital improvements and what the foundation believed HCA was required to do.
The foundation also contended that there were accounting discrepancies in what HCA said it spent on charitable care.
HCA consistently responded that it met or surpassed its spending obligations.