HCA violated terms of Mission purchase agreement, North Carolina AG alleges

The North Carolina attorney general's office could sue HCA Healthcare for an alleged violation of the 2019 asset purchase agreement to acquire Asheville, N.C.-based Mission Health, according to a formal notice of breach sent Oct. 31 to Dogwood Health Trust. 

The agency notified Dogwood — the nonprofit entity established to receive the proceeds of the $1.5 billion sale — of its intent to sue if violations HCA allegedly committed around the reduction in cancer and emergency room services at Mission Hospital are not resolved.

"For a period of 10 years immediately following the closing date of the transaction," Nashville, Tenn.-based HCA "shall not discontinue the provision of the services" outlined in the purchase agreement, the North Carolina AG wrote in its letter to Dogwood. The APA lists a range of inpatient and outpatient services that should not be discontinued at Mission facilities. They include: 

- Behavioral health
- Cardiac
- Emergency and trauma
- General medicine
- Imaging and diagnostic
- Neurotrauma
- Obstetrical
- Oncology
- Pediatric
- Surgical

Under the terms of the APA, Dogwood is responsible for enforcing the obligations HCA made to comply with the terms of the sale, according to the Citizen Times. Dogwood would generally become aware of potential violations through an annual reporting process between HCA, Dogwood, the North Carolina AG and the independent monitor that provides recommendations to Dogwood about breaches.

The North Carolina AG can enforce the agreement if Dogwood fails to correct a violation within 40 days of becoming aware of it, according to the report. Dogwood received the notice on Oct. 31, meaning the state attorney general can file a suit by Dec. 10.

"We are confident that we have and will continue to meet our commitments under the APA," a spokesperson for HCA told Becker's.

North Carolina AG Josh Stein has been investigating Mission Hospital for potentially not adhering to the APA after recent deficiencies in cancer care services, according to the Asheville Watchdog. Since February, he has sent four letters to HCA and two to Gibbins Advisors seeking information and warning that HCA and Mission face potential litigation if they do not honor the purchase agreement.

Mr. Stein cited public reports that the Messino Cancer Group will no longer provide inpatient hematology treatment at Mission Hospital to adults with leukemia and lymphoma because HCA allegedly failed to adequately staff and provide resources to support the chemotherapy treatments. 

Another private oncology group,GenesisCare, filed for bankruptcy in June and its physicians will no longer staff Mission's oncology practice, meaning many cancer patients will have to travel hours from western North Carolina to Charlotte, the Research Triangle Park or out of state to receive the care they need, according to Mr. Stein.

"People in western North Carolina are worried and scared and frustrated because they can't get the care they need at Mission," he said in a Sept. 29 news release. "HCA agreed to provide cancer care in Western North Carolina, and I will not stand by and let them fail cancer patients. We need answers from HCA — now."

The formal notice of breach comes shortly after 50 physicians penned a letter to Gibbons Advisors criticizing HCA's "for-profit-driven-changes" to Mission. The physicians raised concerns about an alleged decline in care quality, including the loss of physicians and long wait times at Mission Health Transylvania Regional Hospital's emergency department in Brevard, N.C.

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