The Missouri Court of Appeals reduced a judgment against Nashville, Tenn.-based Hospital Corporation of America by more than half in a breach of contract suit brought by the Health Care Foundation of Greater Kansas City, according to the Kansas City Business Journal.
HCA acquired Health Midwest, a 12-hospital system based in Kansas City, Mo., in 2003. The hospitals became part of HCA's Midwest Division. As part of the deal, HCA agreed to spend at least $450 million in capital improvements over the first five years it owned the hospitals.
The Health Care Foundation of Greater Kansas City, which was formed with proceeds from the HCA-Health Midwest transaction, sued HCA in 2009, claiming HCA had reneged on its commitments regarding the capital improvements.
In December 2015, HCA was ordered to pay nearly $434 million to the Health Care Foundation of Greater Kansas City for allegedly failing to fulfill pledges it made when it bought Health Midwest's hospitals.
HCA appealed the judge's order in January 2016. In its appeal, HCA argued it fulfilled its agreement to make $450 million in capital improvements by building new hospitals in Independence, Mo., and Lee's Summit, Mo.
On Tuesday, a three-judge panel of the Missouri Court of Appeals reversed part of the lower court's ruling, reducing the judgment against HCA from $434 million to $188 million. The court disagreed with the healthcare foundation's argument that the capital expenditure agreement applied only to improvement on existing Health Midwest facilities, according to The Kansas City Star.
"We are pleased the Missouri Court of Appeals held 'it is uncontested' that we 'spent in excess of $450 million during the five-year term following closing…,' living up to our agreement to do so," Christine Hamele, an HCA Midwest spokeswoman, said in an email to the Kansas City Business Journal.
Health Care Foundation of Greater Kansas City Chairman Wayne Powell told the Kansas City Business Journal "…HCF remains committed to our mission of eliminating barriers and promoting quality health for the underserved and uninsured in our region."
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