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NC Justice Department Scolds HCA-Mission For High Prices, Declining Quality of Care

Greg Lowe

The North Carolina Department of Justice notified the Mission Health System last week that it was “extremely concerned” about ongoing citizen complaints over high prices, lack of transparency, anti-competitive behavior, chronic under-staffing, and declining quality of care at HCA-managed medical facilities in western North Carolina.  

In a letter to Greg Lowe, president of HCA Healthcare’s North Carolina division, Assistant Attorney General Llogan R. Walters wrote that his office was still receiving “troubling allegations regarding patients not receiving proper care, core functions being reduced and not replaced, and subpar conditions regarding basic sanitation and cleanliness” at Mission Hospital and other HCA facilities. The letter was provided to Asheville Watchdog this week by Attorney General Joshua H. Stein’s office.

Lowe responded to Walters in a letter dated March 30, writing that “MHS remains invested in having an ongoing dialogue with the North Carolina Department of Justice regarding any concerns it has related to MHS.”

Also this week, Stein, acting on behalf of the State of North Carolina, filed a legal brief in Buncombe County Superior Court urging the court to reject Mission Health’s request to dismiss a class-action lawsuit brought against it by local residents. Dismissal of the lawsuit would prevent an outside investigation into HCA-Mission’s business practices.

The lawsuit alleges anti-competitive behavior by Mission Health that results in higher prices for all healthcare consumers in western North Carolina, where HCA and Mission have an effective monopoly.

The plaintiffs in the class-action suit include Katherine Button, Faith Cook, and Will Overfelt of Asheville, Richard Nash of Candler, William Davis of Clyde, and Jonathan Powell of Morganton. The complaint was prepared by the law firms Wallace & Graham of Salisbury, N.C., and Fairmark Partners of Washington, D.C.

The “friend of the court” brief filed by Stein on Wednesday follows a similar amicus brief filed in support of the plaintiffs by Dale Folwell, North Carolina’s state treasurer, in December 2021. Stein, a Democrat who allowed the sale of nonprofit Mission Health to HCA Healthcare in 2019, and Folwell, a Republican, are widely regarded as potential rivals for future elected office.

“For many services, Mission Health charges insurers prices far higher than the state-wide average price for the same service,” Walters’ letter said. “Unsurprisingly, these costs are passed onto consumers.”

Walters continued, “Complaints note that, at the same time Mission Health charges high prices, Mission Health is enjoying significant profits while the quality of care at Mission Health facilities declines.”

Walters’ letter indicated it was in response to a letter Lowe wrote to the attorney general’s office in July 2021, in which Lowe argued that Mission Health’s chronic understaffing was the result of a “challenging labor market” and the ongoing COVID-19 pandemic.

“However,” Walters wrote, “health care systems across the state face these same issues without resulting in the same high number of complaints to this office.”

Lowe’s March 30 letter to the assistant attorney general promised “a more fulsome response on certain topics will follow,” but noted that “the amount a patient pays for the care she receives is impacted by a variety of factors” including insurance coverage, out of pocket costs, “and other factors not set by the prices negotiated between MHS and the insurer.”

Lowe noted that “MHS is compliant with all federal regulations regarding price transparency,” and that commercial insurance contracts contain terms negotiated at length between “highly sophisticated parties.”

As for chronic under-staffing, cleanliness, and long wait times at Mission hospitals, Lowe wrote that Mission Health “is taking a number of concerted steps to address staffing challenges.”

“Further, MHS has received high marks on recent surveys and inspections related to patient safety and quality,” Lowe wrote. — Peter H. Lewis

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Quality of Care Concerns Rise at Mission Hospital

Patients, Staff Challenge HCA Management

Mission Hospital Emergency Department in Asheville // Peter H. Lewis photo

[Editor’s Note: This story has been modified since its original publication. A correction and clarification was added at the bottom to explain the changes.]

Forrest Johnson fell in her garden on April 22 and broke her leg in two places. Her husband and stepdaughter rushed the 68-year-old former nurse to the Mission Hospital emergency room in Asheville from their home near Burnsville, about an hour’s drive. They arrived around 8 p.m.

Having spent 20 years in nursing, Johnson said, “I sort of knew what to expect.” But what she did not expect was that she would lie for nearly six hours in the emergency room without water, ice, a blanket, a pillow to elevate her leg, food, or pain medication. 

Forrest Johnson

“I just had a very busy nurse,” Johnson said.

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Angered and Dissatisfied, Some Mission Patients Seek Healthcare Elsewhere

Hospital's formerly stellar reputation attracted people to region

They chose Asheville to live out their retirement years, drawn to the area not just for the mountains, the food, and the culture, but also for the safety net of a healthcare system considered one of the best in the country.

The flagship Mission Hospital provided a level of care that helped put Asheville on national lists as one of the top places to retire. One in five Buncombe County residents is now 65 or older. As recently as 2018, for the sixth time in the previous seven years, Mission Health was named one of the nation’s Top 15 Health Systems by IBM Watson Health.

But also in 2018, in a surprise decision, Mission’s board of directors voted to sell the successful nonprofit to HCA Healthcare — the largest for-profit hospital chain in the U.S., with a reputation for cost-cutting and skimping on staff.

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Mission Nurses Overburdened, Patients Suffer

‘Oh My God, I Never Expected to Have This Many Patients’

One nurse on a surgical floor at Mission Hospital reported “patients lying in stool for an unknown amount of time,” pain medications and insulin being administered late, and “irate family members.”

A nurse caring for the sickest patients on a surgical floor at Mission documented “delayed and missed medications due to RNs having 7-8 patients … Inadequate staffing led to patient fall.”

Still another nurse on an intensive care and cardiac care unit reported an “inability to care for critically ill patients at appropriate high level,” resulting in an increased risk of possibly serious harm to patients.

The alarming concerns were reported by nurses on forms known as Assignment Despite Objection (ADO), a formal complaint system developed by the labor union representing Mission nurses to document unsafe assignments that, in their professional judgment, put patients at risk. The forms are completed only after the nurses have informed their supervisors with no resolution.

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How Many Doctors Have Left Mission? HCA Won’t Say

Watchdog counts 223 departures since takeover in 2019

Two prominent physician groups quit the Mission Health system in the first two weeks of the year, the latest in an exodus from the hospital since its sale three years ago to for-profit HCA Healthcare.

The seven doctors at Asheville Ear, Nose & Throat “decided to no longer provide medical or surgical care at Mission Hospital or Asheville Surgery Center,” as of Jan. 1, they wrote in a letter to their patients.

Also on Jan. 1, the 10 surgeons at Carolina Spine & Neurosurgery Center parted ways with Mission and joined UNC Health’s Margaret R. Pardee Memorial Hospital in Hendersonville. They retain privileges to practice at Mission.

HCA declined repeated requests for the number of doctors who have left the Mission system since it took over in February 2019 and refuses to say how many doctors are on staff today,

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Attorney General’s Office Had ‘Great Concerns’ Mission-HCA Deal Was Rigged ‘From the Beginning’

2018 Memo Says “Deck Had Been Stacked” by Then-CEO

Then-CEO Ronald A. Paulus of Mission Health

The North Carolina attorney general’s office had “great concerns about how HCA was selected” as the purchaser of the Mission Health System, including that “the deck had been stacked in its favor from the beginning” by then-CEO Ronald A. Paulus and his advisor Philip D. Green, according to a 2018 internal document obtained by Asheville Watchdog.

“[W]ith no outside advice other than Phil Green,” whom the investigators wrote had an undisclosed “prior business relationship with HCA,” Mission Health’s board of directors decided not to issue requests for competitive bids or to hold an auction before agreeing to sell Asheville’s flagship hospital system to HCA Healthcare for $1.5 billion, according to the document, prepared in advance of a meeting between Department of Justice lawyers and HCA representatives on Oct. 30, 2018.

Instead, as Paulus “coached HCA behind the scenes on how to best present its case to the Mission Board,” the board invited only one other healthcare company — identified in other documents as Novant Health of Winston-Salem — to present a formal offer. 

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On Guard in Asheville

Asheville Watchdog is powered by a cadre of accomplished journalists who retired to the North Carolina mountains.

Asheville Watchdogs, from left: Tom Fiedler, Sally Kestin, and Bob Gremillion

[Editor's Note: This article first appeared Nov. 18 in The Assembly, a digital magazine about the people, institutions, and ideas that shape North Carolina. It is reprinted here with permission.]

The view from the deck stretches past a wall of changing trees to the jagged ridge of the Blue Ridge mountains. On a rainy afternoon in October, the sun had just begun teasing its way through the clouds. 

Tucked in the hills of north Asheville, the deck is at the home of Sally Kestin and her husband, Bob Gremillion. They were joined that day by three other retired journalists, transforming the deck into a sort of newsroom for a digital venture that’s not only filling gaps in western North Carolina journalism, but trying to become a model in the state’s rapidly changing media environment.

Kestin and Gremillion started the Asheville Watchdog in early 2020.

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Stein joins effort to halt hospital merger … in New Jersey

NC Attorney General Josh Stein

Nov. 9 — North Carolina Attorney General Joshua H. Stein, who approved the 2019 sale of nonprofit Mission Health System to for-profit HCA Healthcare, giving HCA a virtual monopoly on healthcare in Western North Carolina, today signed a legal brief in support of a district court’s ruling that halted the merger of two hospital systems in New Jersey.

Stein joined 24 other state attorneys general in filing the amicus brief with the United States Court of Appeals for the Third Circuit, arguing that hospitals facing less competition have the ability to charge higher prices without providing improvements to the efficiency or quality of care.

Asked by Asheville Watchdog to comment on why he entered the out-of-state legal fray over the proposed merger of Hackensack Meridian Health and Englewood Healthcare Foundation, his office responded:

“North Carolina, like other states across the country, has seen a wave of hospital consolidations over the past few years. While our office has a limited role in reviewing transactions related to consolidation, we are concerned about what they mean for North Carolinians’ health care.”

“Filing this brief is part of our continued efforts to do everything in our power to make sure that North Carolinians have access to affordable, quality health care, especially in rural and underserved areas in our state,” Stein’s statement to The Watchdog read.

But in the brief, Stein joined the other attorneys general in writing: “Mergers that substantially increase provider market share in local markets lead to increased healthcare costs in local communities and raise the overall cost of healthcare within the States . . . without any substantial improvements in quality for consumers.”

The $1.5 billion purchase of the six-hospital Mission Health System gave HCA a monopoly on healthcare in Western North Carolina. HCA raised prices by 10 percent six months after the sale, and in 2020 Mission Hospital ranked second among HCA’s 183 hospitals for the highest net patient revenues. The hospital’s safety ratings declined in the most recent ratings period.

Stein’s office has received hundreds of complaints from citizens and health care providers about rising costs and declining quality of care at Mission Hospital since he approved the sale to HCA. Stein has said he is “very concerned” about the reports.

In an interview with Asheville Watchdog in late August, Stein said that state law limited his ability to halt the sale of the Mission system to HCA despite “conflicts” uncovered by his investigation of the proposed transaction. Stein has not responded to The Watchdog’s questions about the nature of the conflicts his investigators reported finding.

Because of the law’s restrictions, Stein said in August, he would have no choice but to make the same ruling today as he did in 2019, when the 20 members of Mission Health’s volunteer board of trustees voted unanimously to sell to HCA, despite considering only one other bid. — Peter Lewis

[This post was updated to include a response from the attorney general’s office.]

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Local Residents Sue HCA, Alleging Overcharging at Mission Hospital

Since being acquired by the giant for-profit hospital chain HCA Healthcare, Mission Health and its Mission Hospital flagship have become the most expensive hospital system in North Carolina for many procedures, with prices often double the state average, according to a class-action lawsuit filed Tuesday against HCA Healthcare and its Mission Health subsidiary in Asheville.

The 87-page lawsuit, filed in Superior Court in Buncombe County by a group of local residents, alleges that Nashville-based HCA illegally used its effective monopoly market power in the region to raise prices while reducing the quality of care at the six hospitals and multiple clinics it operates in Western North Carolina, harming doctors and consumers.

“Once we have been served with the lawsuit, we will respond appropriately through the legal process,” Nancy Lindell, division director for public and media relations for HCA Healthcare North Carolina Division and Mission Health, said in a statement. “Mission Health is committed to the health and well-being of every person who comes to us for care, and we are proud of our dedicated hospital teams that are facing the many challenges of this pandemic and the exceptional care they have provided to our patients.”

Many of the allegations against HCA and Mission Health were first reported by Asheville Watchdog.

The plaintiffs in the class-action suit include Katherine Button, Faith Cook, and Will Overfelt of Asheville, Richard Nash of Candler, William Davis of Clyde, and Jonathan Powell of Morganton. The complaint was prepared by the law firms Wallace & Graham of Salisbury, N.C., and Fairmark Partners of Washington, D.C. — P.L.

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Stein hints at second thoughts about Mission sale to HCA

Although he approved HCA’s purchase of Mission Health in 2018, Attorney General Josh Stein now appears to be having second thoughts about that sale.  In a June 2 statement regarding a different hospital merger, he said he had “real concerns” about hospital consolidations, and specifically named HCA and Mission. “Bigger doesn’t always mean better. In fact, it often means worse and more expensive,” Stein said in the statement.

Stein approved the deal that ended more than 130 years of Mission’s legacy of putting quality of care over profits. But now, he said, his office has had more than 100 complaints from patients about quality of care and billing. “Consolidations drive up already inordinate health care costs,” Stein said. He urged hospital administrators, including those at HCA, to be transparent on their pricing. 

HCA raised prices 10 percent shortly after taking control of Mission in 2019. As reported in The Wall Street Journal in March, a number of HCA hospitals violated federal price transparency rules that required hospitals to post their prices starting in January 2021. HCA embedded coding in its website to hide prices from consumers trying to understand what their costs might be, The Journal found. After The Journal revealed the blocking links, HCA removed them.

State Treasurer Dale R. Folwell, reacting to the Journal article, criticized Stein in March for not taking action “to protect consumers.”

“I am disappointed by hospitals’ pattern of deceit,” Folwell wrote March 31. “Patients and taxpayers deserve to know what they’re paying for care. We must get rid of secret contracts and push the power down to the consumer. The attorney general needs to be involved.”

It is not the first time Stein has warned HCA about transparency. More than a year ago, the attorney general wrote to Greg Lowe, president of the North Carolina division of HCA Healthcare, to raise concerns including “a surge in complaints about quality of care” and about HCA’s transparency in billing patients.

In his latest letter to hospital administrators, Stein said obfuscation on pricing “layers needless anxiety and uncertainty on top of what are already some of the most stressful circumstances a person can face.” — B.D.

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