For the second year in a row, the independent monitor of HCA Healthcare’s $1.5 billion purchase of Mission Health has found the Nashville-based company potentially not in compliance with the purchase agreement it entered into in 2019, according to its annual report released Tuesday by Dogwood Health Trust.

The 40-page report from Boston-based Affiliated Monitors Inc. detailed three areas where in 2024 HCA potentially did not honor commitments it made six years ago as part of the Asset Purchase Agreement: continuation of services, specifically related to emergency care and oncology; remaining in “good standing” in Medicare and Medicaid because of a federal immediate jeopardy finding in February 2024; and uninsured and charity care policies, including the potential use of liens to collect unpaid medical bills. 

While HCA has addressed the first two areas, according to the report, Affiliated Monitors found HCA was potentially non-compliant for much of last year and questions remain about whether the company is continuing emergency and oncology services at the level it promised in the agreement.

Those questions are the subject of then-Attorney General Josh Stein’s lawsuit against HCA on behalf of Dogwood, which was created from the proceeds of the 2019 sale. That case is working its way through North Carolina Business Court, so HCA remains in potential non-compliance with the purchase agreement, the report noted.

“While Mission Health values the work of Dogwood Health Trust, we remain confident in our compliance with the terms of the Asset Purchase Agreement,” said Mission Health spokesperson Nancy Lindell in a statement.

“As noted in the report, (U.S. Centers for Medicare & Medicaid Services) accepted our corrective action plan more than a year ago and we were found to have zero deficiencies at the conclusion of another survey in June. The report mentions again our improvements to Mission Health’s charity care policy. Since joining HCA Healthcare, Mission Health has not engaged in litigation against patients over unpaid medical bills, including filing liens.”

Dogwood sent a letter to Attorney General Jeff Jackson’s office about the report Tuesday, stating it would notify HCA of the areas of potential non-compliance.

The Asset Purchase Agreement, or APA, is a binding document outlining in part how HCA and Mission would maintain and grow services for 10 years after the sale. 

“This review process can be confusing at times,” Dogwood general counsel Rachel Ryan said in a Tuesday news release. “The Asset Purchase Agreement guides our monitoring and assessment process, directing us to conduct an annual review of HCA’s compliance with the APA for the previous year. At the same time, we know the community is interested in sharing their experiences that happen in real time, and that is why engaging with the Independent Monitor is so very important.”

Dogwood employed Affiliated Monitors in April 2024, replacing Gibbins Advisors, its previous independent monitor. Affiliated Monitors found HCA in non-compliance in the same three areas in last year’s report.

When referring to non-compliance, Dogwood and the independent monitor used the word “potential” because of the timeline dictating the monitoring process. In any given year, HCA can work internally and with Dogwood to remove itself from non-compliance. 

Dogwood is responsible for seeking consequences through the courts if HCA ever refused to come into compliance. Dogwood has never used that power and HCA’s “potential non-compliance” cases have always turned into compliance.

The 2023 and 2024 reporting years aren’t the first time Dogwood has flagged issues of potential non-compliance to the attorney general’s office. In 2021, Gibbins Advisors found two areas of potential non-compliance. By 2022, they were resolved, according to a statement released that year.

HCA said in its own report on compliance this year that it had not violated any part of the purchase agreement in 2024.

“During the Reporting Period, the Material Facilities and the Local Hospital Facilities remained enrolled and in good standing in the Medicare and Medicaid programs,” HCA said in its report of the 2024 calendar year.

But the report did not acknowledge that on Feb. 1, 2024, Mission announced it had been placed into immediate jeopardy after state and federal investigators found 18 incidents in 2023 of patient harm or endangerment, including four deaths. Mission submitted a plan of correction shortly after and the immediate jeopardy was removed less than a month after it was announced.

[Editor’s note: This story has been updated to include additional context and a statement from Mission Health spoksperson Nancy Lindell.]

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