NC Attorney General says HCA lawsuit counterclaims 'flatly contradicted' by patients

ASHEVILLE – In a new legal filing, North Carolina Attorney General Josh Stein moved to dismiss counterclaims brought by HCA Healthcare regarding the health care conglomerate’s alleged breach of contract at Mission Hospital.

Stein, who is the Democratic nominee for governor, sued HCA Dec. 14, alleging that the Nashville-based company did not provide the level of emergency and cancer care at Mission it agreed to when it bought the hospital system in 2019. The case is being heard in North Carolina Business Court in front of Judge Julianna Theall Earp.

HCA responded Feb. 13, arguing that the company adhered to the agreement and the contract did not require the hospital to comply with any quality or quantity of care standards. The company filed two counterclaims, asking the court to declare that HCA did not breach the 2019 contract and that the agreement does not require HCA to “meet subjective healthcare standards.”

In the filing, HCA touted its efforts to deliver high-quality care in Western North Carolina, pointing to capital investments in Mission facilities, which are partially mandated by the 2019 contract. It noted increases for nursing wages and education, despite the hospital’s nurse’s union consistently criticizing Mission leadership over inadequate staffing. The union also took credit for wage increases in 2022.

The filing mentioned Mission’s stellar performance on Leapfrog and Healthgrades, ratings systems which have been called into question for their integrity and reflection on overall quality of care in a preliminary report from Wake Forest Professor of Law and Public Health Mark A. Hall, and a 2019 report published in the New England Journal of Medicine Catalyst.

"Current hospital quality rating systems often offer conflicting results ― a hospital might rate best on one rating system and worst on another," lead author of “Rating the Raters: An Evaluation of Publicly Reported Hospital Quality Rating Systems” Dr. Karl Bilimoria said in a 2019 statement. Bilimoria then was director of the Northwestern Medicine Surgical Outcomes and Quality Improvement Center.

Stein’s motion to dismiss the counterclaims, filed March 14, took aim at the argument made by HCA’s attorneys.

“HCA’s counterclaims suffer several flaws, including that they rest on a misreading of the (2019 contract) and present a factual narrative that has been flatly contradicted by patient experience, news reports, and an investigation by a federal agency,” the lawsuit reads.

The attorney general pointed to the recent immediate jeopardy finding from the federal government, which meant that conditions at Mission Hospital placed patients at risk of serious injury, harm or death. Immediate jeopardy conditions at the hospital have been removed, according to the Centers for Medicare and Medicaid Services, but Mission remains noncompliant with federal Medicare conditions for participation. The hospital become substantially compliant with the regulations by June 5, or risk losing its Medicare and Medicaid reimbursements.

Stein’s filing asks the court to dismiss HCA’s counterclaims, saying that the attorney general is protected by sovereign immunity. This dictates that a party can sue the state of North Carolina only after the state gives its consent, or after waiving the protection. Stein did not waive his immunity, and HCA did not allege that he did, the filing argues. His filing also argued that HCA's claims were redundant because the court will settle those questions over Stein's breach of contract claims.

"As we noted in our filing, although it is enough for now that HCA’s counterclaims are procedurally flawed, they are also factually inaccurate," attorney general's office spokesperson Nazneen Ahmed told the Citizen Times in a March 18 email.

A meeting to discuss case governance will be 11 a.m. March 20 through video conference.

In a report filed to the court, the two sides disagreed over the pacing of the case. Stein’s office requested more time for discovery, for HCA to serve expert reports, to prepare for deposition and trial. HCA gave a schedule that would begin the trial in late October. If attorneys file at Stein’s requested deadlines, the trial would begin April 2025 at the earliest, after he leaves office.

"We are confident that Mission has fulfilled its obligations under the Asset Purchase Agreement, and we intend to defend the lawsuit filed by the Attorney General aggressively," Mission Health spokesperson Nancy Lindell told the Citizen Times in a March 18 statement.

More: Proposed schedule for HCA, Stein case released: Sides disagree over pacing, trial start

More: NC Attorney General Josh Stein sues HCA Healthcare and Mission Hospital

More: HCA and Mission respond to lawsuit, denying breach of contract allegations; ask to dismiss

Mitchell Black covers Buncombe County and health care for the Citizen Times. Email him at mblack@citizentimes.com or follow him on Twitter @MitchABlack. Please help support local journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: Lawsuit: Josh Stein asks court to dismiss HCA Healthcare counterclaims