Dive Brief:
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The Missouri Court of Appeals reduced a judgment against the Hospital Corporation of America (HCA) from $434 million to $188 million, the Kansas City Business Journal reported.
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In December, the Jackson County Circuit Court in Missouri had ordered HCA to pay the higher amount to resolve an ongoing legal dispute with the Health Care Foundation (HCF) of Greater Kansas City.
- HCF initially filed suit against HCA in 2009, alleging that the for-profit hospital chain had fulfilled capital improvement spending obligations agreed to in its 2003 acquisition of Health Midwest hospitals.
Dive Insight:
A legal battle more than 13 years in the making is not resolved quite yet. The HCF case against HCA revolves around a commitment to spend $450 million on capital improvements when it purchased Health Midwest, according to the Kansas City Star.
Following the acquisition, HCA closed two existing facilities and built two new hospitals. HCA contends that the $343 million it spent on the two new hospitals should count toward its $450 million commitment, the Kansas City Star reported. However, HCF argued in its lawsuit that capital improvement funds should have been spent on the existing facilities.
A three-judge panel for the Missouri Court of Appeals disagreed with the position held by HCF and with the earlier ruling. The case does not end here. HCF can request that the Missouri Supreme Court review the most recent decision. If legal proceedings continue, it could take more than two years before a final decision is reached.
With hospital consolidation on the rise, the legal battle between HCF and HCA illuminates some of the pitfalls associated with these deals. Hundreds of millions of dollars are at play in this specific disagreement. When the dust settles, it is possible that HCA will have spent a decade in court and still have to pay up.