Lenexa ? Kansas Atty. Gen. Carla Stovall said she would not approve the sale of Health Midwest to a for-profit group if proceeds from Kansas hospitals do not stay in the state.

Stovall’s announcement during a public hearing Wednesday means proceeds from the $1.13 billion sale of Health Midwest’s 14 hospitals to HCA of Nashville, Tenn., would result in at least two foundations, instead of the one Health Midwest had proposed.

Health Midwest owns three Kansas hospitals: Menorah Medical Center and Overland Park Regional Medical Center, both in Overland Park, and Allen County Hospital in Iola.

Before several hundred spectators at the hearing, Stovall also scolded Health Midwest executives for not providing her office with documents detailing the deal. She wanted to know, among other things, how each Health Midwest hospital was evaluated and what kind of severance packages the executives might receive.

Health Midwest’s board last week said it would create a board to oversee the creation of an $800 million charitable foundation funded from the sale. But Stovall rejected the idea of only one foundation.

“I’m just going to be clear. That’s not going to fly,” she told Health Midwest board Chair Bernard Erdman.

She said a single foundation would not allow Kansas any control over the spending of proceeds from the sale of Kansas hospitals.

Erdman and other Health Midwest executives said they would consider creating a foundation to cover Kansas assets. Health Midwest president and chief executive officer Richard Brown apologized to Stovall for not getting documents to her earlier. Brown said officials hoped to have a signed agreement by today.

Although some witnesses expressed concerns, doctors at the hearing generally were impressed by HCA and said they looked forward to the promised upgrades in technology and facilities.

Sukamar Ethirajian, a representative of the Metropolitan Medical Society of Greater Kansas City, said the entrance of HCA into the Kansas City health market was expected to bring many capital improvements.

“We are glad to see Santa Claus come to town,” he said.