Stovall wants to oust Health Midwest board

? Atty. Gen. Carla Stovall asked a court Wednesday to delay Health Midwest’s proposed sale of Kansas City area hospitals and oust its board of directors.

Health Midwest, a not-for-profit, wants to sell its 14 hospitals in the Kansas City area to Nashville-based HCA Inc. for $1.3 billion.

Stovall wants that sale blocked until she and the courts can review the deal. She wants Health Midwest’s assets in Kansas to be placed in trust and the proceeds of any sale to be turned over to a new, nonprofit organization with directors appointed by the attorney general.

Stovall argues that Kansas law won’t allow HCA to take over Kansas assets because Health Midwest’s operations in the state will lose their not-for-profit status. Under Kansas law, charitable assets belong to the people, and the attorney general has the authority to protect them, she said.

She made her requests in an answer to a lawsuit Health Midwest filed last month in Johnson County District Court. Health Midwest filed its action to clarify Kansas law.

The company is reviewing the documents Stovall filed, said Health Midwest spokesman Chris Whitley.

Health Midwest also filed a lawsuit in Cole County Circuit Court in Missouri, seeking to clarify that state’s laws. Missouri Atty. Gen. Jay Nixon has asked to have Health Midwest dissolved and its board of directors ousted.

“I am asserting my statutory authority to review this proposed sale of a nonprofit organization to a for-profit corporation and to ensure that charitable assets located in Kansas stay in Kansas,” Stovall said.

Stovall’s answer deals with four institutions operated by Health Midwest: Allen County Hospital, in Iola; the Menorah Medical Center, in Overland Park; the Overland Park Regional Medical Center; and Trinity Lutheran Manor, a Merriam nursing home.

She argued that those institutions and Health Midwest officials, by pursuing the HCA sale, are using charitable donations in ways that are inconsistent with the institutions’ charitable purposes. That is illegal under Kansas law, she said.

Stovall also argued that a $7 million package of compensation promised to President Richard Brown when the sale closes is so excessive that Health Midwest directors have ignored oversight responsibilities.