Advertisement

Archive for Thursday, February 27, 2003

Kline appeals Health Midwest’s sale approval

Attorney general wants thorough review of issues arising from judge’s ruling

February 27, 2003

Advertisement

— Kansas Atty. Gen. Phill Kline has appealed a ruling approving the sale of the nonprofit Health Midwest system to the for-profit HCA Inc.

Attorneys for Kline said the appeal, filed Tuesday with the Kansas Court of Appeals, was not intended to delay the $1.13 billion sale, scheduled to close March 31. Instead, the attorneys said, Kline wants only to ensure that all issues arising from the sale get a thorough review.

"We're working fervently to get this resolved, but not at the expense of the interests of the people of Kansas," said Kline's spokesman, Whitney Watson.

The sale is expected to generate about $700 million in charitable assets.

Johnson County District Judge Thomas Foster ruled in February that at least 20 percent of Health Midwest's proceeds from the sale should stay in Kansas, rather than merging with a corporation in Missouri, where most of the health system's 13 hospitals are located.

Health Midwest had earlier filed its own appeal that challenged that part of Foster's ruling.

Kline's appeal addresses other issues in Foster's order, including a ruling that a Kansas law that would have given Kline and state officials authority over the Kansas foundation was unconstitutional.

"The Kansas attorney general feels since they (Health Midwest) have appealed, the appellate court should review these other issues, too," said Reid Holbrook, an attorney for Kline.

Health Midwest has suggested that Kline could delay or kill the sale by filing further litigation. HCA has said it would consider its options if the deal doesn't close by March 31.

"We are disappointed that he (Kline) has chosen to appeal, but we remain optimistic that we will be able to resolve all of our relevant issues," Health Midwest spokesman Chris Whitley said.

Kline has argued that the purchase agreement does not go far enough to guarantee health care to indigent Kansans, a charge denied by HCA and Health Midwest.

Health Midwest earlier signed an agreement with Missouri Atty. Gen. Jay Nixon to establish a Missouri-based foundation that would provide grants to both sides of the state line based on need, with at least 10 percent going to Kansas.

Kline has said that agreement gave Missouri too much control over the assets and wasn't fair to Kansas residents.

Commenting has been disabled for this item.