HCA lawyer blasts North Carolina Attorney General’s investigative demand as ‘legally improper’

by Andrew R. Jones, avlwatchdog.org

An attorney for HCA Healthcare, owner of Mission Hospital, sent a six-page letter to North Carolina Attorney General Josh Stein’s office this week, condemning his recent demand for 41 sets of documents related to hospital practices and procedures as “legally improper and unenforceable.”

The letter, obtained Friday afternoon by Asheville Watchdog, was written by Alice Fisher of Latham & Watkins LLP, the second highest grossing law firm in the world, and calls for Stein’s investigative demand, or ID, to be withdrawn.

“Mission has not breached the APA [asset purchase agreement],” the letter said, referring to the contract governing HCA’s 2019 purchase of then nonprofit Mission Health for $1.5 billion. “Mission is now, and always has been, in full compliance with that contract and often exceeds its obligations under the APA.”

The letter characterized the demand by Stein, who is running for governor as a Democrat, as “an improper use of the investigative authority of the Attorney General, since it seeks information relating to compliance with a contract — specifically, the Asset Purchase Agreement (“APA”) governing the acquisition of Mission by HCA Healthcare (“HCA”) in 2019.”

Stein oversaw the sale and while he did not object to it, he did demand greater consumer protections than were included in the asset purchase agreement unanimously approved by Mission’s board of directors.

Stein’s conditions included the hiring of an independent monitor to oversee HCA’s compliance with the agreement and commitments to maintain current levels of service for 10 years. At the time, HCA and Mission agreed that the attorney general could enforce the terms of the contract.

The letter said, “Even if the Attorney General now believes that the APA has been breached, a potential breach of contract simply is not a valid basis for an investigation by the AGO [Attorney General’s Office] pursuant to North Carolina’s consumer protection statute.”

Nazneed Ahmed, the attorney general office’s spokesperson, said in a statement to The Watchdog, “Our office strongly disagrees with the assertions HCA has made in its letter, and we will be responding appropriately.”

The letter included a footnote that called into question Stein’s motives for his investigative demand.

“[I]t appears that the AGO is not actually attempting to ‘ascertain’ anything. Instead, the Attorney General has clearly already reached his own conclusion,” the footnote said. “Thus, the [investigative demand for documents] is a bald attempt to obtain pre-litigation discovery, masquerading as a consumer protection ‘investigation.’ Mission cannot countenance such an end-run around the North Carolina Rules of Civil Procedure.”

Fisher’s letter further criticized Stein for requesting information about emergency room services given his public opposition to an expansion of acute care beds at Mission. In 2022, the hospital tried to win a certificate of need from the state to add 67 acute care beds to its facilities, but Stein’s office penned a letter saying Mission shouldn’t get them, noting the lack of health care competition in Western North Carolina.

The Department of Health and Human Services awarded the certificate of need to AdventHealth. Mission is appealing the decision.

More beds, according to Fisher’s letter, would help reduce increased wait times in the hospital’s emergency department.

Mission was “deeply concerned” about the investigative demand’s release to the media, which it said will confuse people about “the scope and extent” of the hospital’s emergency and oncology services, according to the letter.

The letter notes that a representative from the attorney general’s office toured Mission’s SECU Cancer Center on Oct. 19.

“We believe that any objective observer participating in that tour would have walked away confident that Mission is providing unparalleled cancer care in western North Carolina and that world-class healthcare providers are choosing Mission as their home for providing excellent care to cancer patients,” the letter stated.

Mission spokesperson Nancy Lindell declined to comment, saying, “We won’t have anything beyond the letter.”

Stein told The Watchdog last month that he has been investigating Mission since the start of the year. At the time, he expressed frustration with HCA’s and Mission’s slow pace in providing requested information and said that his office could make a formal investigative demand.

He requested information from HCA and Mission between Jan. 31, 2019 – the closing date of the hospital’s sale – through the present day. Most of the 41 requested sets of documents he requested involved oncology-related information.

The remainder pertained to patients who came to Mission but did not receive care, emergency services, canceled surgical procedures, complaints about sterilization of surgical equipment and other issues.

Concerns from Stein’s office have grown this year, especially after the hospital’s cancer center closed its pharmacy and began to run thin on medical oncologists, which The Watchdog first reported in May. The last remaining medical oncologist will leave the hospital Nov. 26.

Stein’s office has sent six letters to HCA leadership and the independent monitor of the Mission sale this year, then took more formal legal action sending the investigative demand for documents Oct. 27, giving HCA until Nov. 9 to provide the requested information.

Days later, he notified Dogwood Health Trust — the entity in charge of keeping HCA in compliance with the asset purchase agreement — that HCA had violated some of the 15 commitments it made and threatened litigation against the company unless the violations were corrected by Dec. 10.

Fisher said these actions from the attorney general office were supportive of a “one-sided narrative advanced by some healthcare providers who simply are unhappy about HCA’s acquisition of Mission and others whose personal financial interests were impacted by that acquisition —even though those providers made plans to leave Mission more than a year before the acquisition.”

The letter does not identify those health care providers.

Recently 123 physicians signed a letter condemning Mission and HCA for changes that “have gutted the heart and soul of our community healthcare system.” Days later, more than 80 Mission physicians and healthcare workers signed a letter rebutting those assertions.

That rebuttal is noted in Fisher’s letter, which says “dozens of Mission healthcare providers wrote to the Independent Monitor to rebut the consistently false narrative promulgated by the ‘loud’ healthcare providers.”

It goes on to list some of the hospital’s recent successes and several recent hires Mission has made, including two head and neck surgeons, a breast medical oncologist and a surgical oncologist.

Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Andrew R. Jones is a Watchdog investigative reporter. Email arjones@avlwatchdog.org. To show your support for this vital public service please visit avlwatchdog.org/donate.