A lawsuit filed by the North Carolina attorney general’s office against HCA Healthcare over conditions at Asheville’s Mission Hospital can proceed to trial, a judge ruled Monday.
In a 55-page ruling, North Carolina Business Court Judge Julianna Theall Earp denied motions by HCA Healthcare and Attorney General Jeff Jackson to decide the case ahead of trial. She also rejected an effort by HCA to exclude the testimony of an expert witness called by Jackson’s office.
Jackson, who took over the case last year after former attorney general Josh Stein was elected governor, celebrated the ruling in a statement Tuesday.
“HCA threw every argument against the wall to try to get this case thrown out, but they didn’t stick,” Jackson said. “I’m grateful the judge saw through them. We’re going to trial, and I will keep fighting to defend emergency and cancer care in western North Carolina.”
Nancy Lindell, a spokesperson for Mission Health, said the hospital system is "confident in our compliance with the terms" of the contract HCA signed when it purchased Mission.
"As always, our foremost focus is providing high-quality care to the Western North Carolina communities we are proud to serve, and we remain committed to meeting the healthcare needs of our region," Lindell said in an email Tuesday.
The case, filed by then-Attorney General Stein in December 2023, alleges that HCA violated the terms of the agreement it signed when it purchased the previously-nonprofit Mission Health System for $1.5 billion in 2019.
The contract, known as the Asset Purchase Agreement, states that HCA Healthcare “shall not discontinue the provision” of certain services for 10 years after the transaction.
The attorney general’s office argues that HCA has decreased the level and quality of some services, including emergency and cancer care, in the years since it purchased Mission, thus breaching the terms of the contract. HCA counters that only the complete elimination of those services would constitute a breach.
Earp said a trial is necessary to decide which side is right.
“Each of the parties posits a reasonable interpretation of the phrase ‘shall not discontinue,’” Earp wrote in Monday’s ruling. “Accordingly, the Court turns to the extrinsic evidence to determine whether it is consistent with respect to the intent of the contracting parties such that summary judgment would be appropriate. It is not.”
On the expert witness issue, HCA sought the exclusion of Dr. Kia Parsi, the executive director of the Texas A&M University Rural and Community Health Institute. But Earp sided with Jackson’s office, ruling that Parsi has “extensive experience relevant to the matters at issue in this case.”
“His experience and opinions reflect familiarity with the standards governing hospital systems and the resources needed to ensure the effective delivery of care,” Earp wrote. “As such, Dr. Parsi may reliably use his personal experience to evaluate Mission Hospital’s performance.”
Earp is retiring from the Business Court on Aug. 1. The new judge assigned to the case is Mark A. Davis.
Monday’s ruling comes as HCA is once again facing scrutiny for its stewardship of Mission Hospital.
Affiliated Monitors Inc., the independent monitor tasked with overseeing HCA’s compliance with the terms of the 2019 purchase agreement, said last week that it found two instances of potential noncompliance during the 2025 calendar year. A webinar is scheduled for 9 a.m. on Monday, Aug. 4, where community members can learn more about the findings.
One area of noncompliance relates to “the cessation of Industrial Rehabilitation services at CarePartners and continued diminishment of access to certain other services at Mission Hospital, Mission Children’s Hospital Reuter Outpatient Center and CarePartners,” the independent monitor said.
The other relates to an “immediate jeopardy” finding for Mission Hospital last year by the Centers for Medicare and Medicaid Services.
The designation, one of several Mission has received from CMS in recent years, is the most serious a hospital can face. Mission received another “immediate jeopardy” finding earlier this year. All were eventually lifted. Still, community members and local elected officials have continued to voice concern over the hospital’s staffing levels and alleged safety issues, some of which have led to patient deaths.
At the same time, Mission is seeking to expand its presence in Asheville. In March, state health authorities granted Mission permission to add 95 acute-care beds to its main facility. Two competitors — AdventHealth and UNC Health West Medical Center — have appealed the decision.
Note: This story has been updated to include comment from Mission Health.
