The Cole County Courthouse in downtown Jefferson City (Annelise Hanshaw/Missouri Independent).
A lawsuit over $15 million in state funds, where a Fortune 500 hospital company is seeking to stop a not-for-profit provider from opening a new cancer service in its backyard, went to trial Monday in Jefferson City.
Since early December, a temporary restraining order has blocked the Missouri Department of Social Services from delivering money from an earmarked appropriation for Hannibal Regional Healthcare System to provide radiation-based treatments in Kirksville.
During the trial Monday, Cole County Circuit Judge Cotton Walker didn’t specifically extend the order, set to expire Tuesday, but testimony showed the state paperwork required to transfer the funds hasn’t been completed and the money cannot be transferred immediately.
If the court case is unresolved by the time the fiscal year ends, Hannibal Regional attorney Matt Turner told Walker, the chance will be lost.
“Time is of the essence for this,” Turner said. “This appropriation goes away on June 30. So if this case isn’t resolved in time for the appropriation to be spent, the money disappears.”
When the trial concluded after about three hours, Walker gave attorneys a deadline in three weeks for final filings before he rules.
The lawsuit challenging the appropriation was filed by Tina Binder of Atlanta, a town of 375 people in Macon County. During testimony Monday, Binder said she became concerned when she was told about the state funds by Aaron Baker, lobbyist for Community Health Systems, during a 4-H event both attended.
Under questioning, Binder admitted she had limited knowledge of how state appropriations work, the regulatory oversight for building new health care facilities or other key issues in the case.
“I don’t understand the legal jargon without having it in front of me,” Binder said. “I am just a regular old taxpayer concerned about taxpayer dollars.”
Hannibal Regional is a not-for-profit that operates a hospital in Marion County and has clinics in surrounding areas. It had $269 million in revenue in 2023, according to the most recent data available.
Community Health Systems operates Northeast Missouri Regional Medical Center in Kirksville. Based in Franklin, Tennessee, it has annual revenue of $12.5 billion and operates in 15 states.
In Missouri, the company also operates the Moberly Regional Medical Center and the Poplar Bluff Regional Medical Center.
Community Health Systems is not a party to the lawsuit but its operations in Kirksville — and Baker’s role in recruiting Binder as the taxpayer plaintiff — were prominent in the debates between attorneys and the testimony presented Monday.
The legal questions Walker must resolve involve the interplay between statutes governing the appropriation process and the laws governing the approval of expensive new medical investments.
In Missouri, anyone proposing to construct or expand a hospital, or purchase new equipment, with a cost exceeding $1 million must obtain a “Certificate of Need” from the Missouri Health Facilities Review Committee.
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The certificate of need program is intended to prevent expensive duplication of services.
Lawmakers didn’t follow the law on providing money for new medical facilities because it approved the appropriation before Hannibal Regional had obtained a certificate of need for the new service, Chuck Hatfield, attorney for Binder, said Monday.
“Hannibal got the cart before the horse,” Hatfield said. “If you want to build a health care facility, you need to first go to the certificate of need committee and explain the project that you’re planning to complete, and explain the need, including the costs of the project. And then and only then can you go to the legislature.”
The appropriation received final approval in May and the spending bill was signed June 28 by then-Gov. Mike Parson. The same day, Hannibal Regional applied for a certificate of need to spend $7 million buying a linear accelerator and construct the vault to contain it. The remainder of the $15 million would be spent constructing a building to house the machine and vault, with patient waiting rooms, business offices, parking and road access.
The money was not appropriated directly to Hannibal Regional. Instead, the money was directed to the Department of Social Services, with language narrowly drawn so only Hannibal Regional would qualify.
The department was in the process of creating a single-source contract when the lawsuit was filed, halting the distribution of the funds, Wade McDonald, procurement officer for the department, testified.
Radiation-based cancer treatments have not been available in Kirksville since 2022, when the linear accelerator at Northeast Regional was retired.
Community Health isn’t just using the courts in an effort to prevent Hannibal Regional from offering services near its hospital. The lawsuit was filed Sept. 24 and the following day, it submitted notice to the Health Facilities Review Committee that it intended to install a replacement linear accelerator.
Because it was listed as a replacement, it moved ahead of Hannibal Regional’s application. But Northeast Regional withdrew the notice, because it found it could move an existing machine from Kirksville for less than the $1 million threshold, court testimony showed.
The committee approved Hannibal Regional’s application on Oct. 1.
Documents provided to the Health Facilities Review Committee indicate Hannibal Regional expects to provide treatments to 3,700 people a year by the third year of operation. Patients needing radiation treatments for cancer generally require several treatments a week for a fixed number of weeks.
People in the area who need those treatments must drive to Columbia or Hannibal, 60 to 90 miles each way, on the day of their appointments.
Community Health Systems is the unnamed party in the lawsuit, Turner told Walker. There are others, he said.
“The unspoken parties are the people living around Kirksville who are suffering from cancer and can’t get any treatment right now locally because Northeast Regional terminated their external beam,” Turner said. “They terminated it in July 2022 and they took no action to try to reinstate it, until they became aware that Hannibal regional was going to provide the service in Kirksville, and now they want to oppose it just so they don’t have to compete with us.”
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