When HCA Healthcare acquired Asheville’s Mission Hospital in 2019, it agreed that for 10 years post-closing it would “not discontinue the provision of”

  • “emergency and trauma services generally consistent with the current Level II Trauma Program with emergency services for pediatrics and adults . . . and
  • oncology services – inpatient and outpatient cancer services, radiation therapy, surgery, chemotherapy, and infusion services.”

For the last several years, North Carolina’s Attorney General and an HCA subsidiary have been fighting over the degree to which the hospital’s offerings in these categories can decline or degrade but still fall short of being “discontinued,” and what it means to actually “provide” the services. In Jackson v. MH Master Holdings LLLP, 2026 NCBC 69, the Business Court undertook an archeological dig through extrinsic evidence to determine the intent of parties on key terms about which ambiguity may well have been a feature of the deal rather than a bug.

The Attorney General sued HCA on behalf of the Dogwood Health Trust, a non-profit with the right to enforce HCA’s emergency and oncology obligations. The suit’s principal thrusts were that (i) Mission’s emergency department is “significantly degraded and unable to meet patients’ needs” due in part to inadequate staffing and failure to offer specified surgical procedures; and (ii) its oncology services also were degraded by a lack of oncologists “to monitor initial chemotherapy treatments” and elimination of hematology services for adult patients with blood cancers. Id. ¶¶ 14-16.

In assessing dueling summary judgment motions, the Business Court found little basis in the record to grant game-changing relief to either side.

What does it mean to discontinue healthcare services?

The State argued that the term meant HCA had “to continuously provide, at least at pre-acquisition levels” the same emergency and oncology services offered at the point of closing. It focused on contemporaneous evidence that the parties extolled HCA’s obligation “to safeguard (and improve) the current operations and services” of Mission. Id. ¶ 34-35. As Judge Earp noted, HCA proposed a narrower, literal reading of “discontinue” (Id. ¶ 40):

“HCA responds that nothing in the APA requires it to provide the same quality or quantity of services that Mission Hospital provided at the time of the acquisition. Instead, HCA contends that the phrase ‘shall not discontinue’ requires only that it refrain from completely eliminating [an identified emergency or oncology service].”

The ambiguity stand-off was highlighted by each side’s reliance on the same set of emails sent during negotiations between Mission’s then-CEO and an HCA negotiator in which they jousted about the longevity and scope of the emergency and oncology services being preserved by the APA. The court found plausible, countering interpretations for a jury to sort out about what the parties intended in listing and describing emergency and oncology services as they did, and whether something short of eliminating those services was compliant with an agreement not to discontinue them.

What does it mean to provide healthcare services?

HCA argued that “provision” only required it to furnish the appropriate “infrastructure” required for physicians to be able to provide emergency and oncology services. As HCA put it (Id. ¶ 56):

“[A] hospital is not a physician – it is not a person at all. As a result, a hospital provides services by making space, equipment, staff, and other resources available so that a credentialed provider can care for willing patients.”

The AG argued for a more inclusive reading of “provision” that was consistent with the rest of the APA. After all, the State argued, HCA agreed it would not “sell or close” Mission for ten years after the closing. If HCA was only required to provide the facilities for offering services, and not the services themselves, the State contended that a decade of being open under the same ownership could be illusory at best. Id. ¶¶ 57-58.

The Business Court held that “provision” of emergency and oncology services had to mean something more than simply furnishing the infrastructure in which they could be provided. Because HCA agreed not to “discontinue” the services – even if that turned out to mean they could be notably reduced – “[i]t is unreasonable, then, to interpret the APA as merely requiring HCA to provide the infrastructure for [emergency and oncology] services and to leave a determination regarding whether the services are actually provided to third-party physicians.” Id. ¶ 60.

Worth Noting

  • HCA contended the AG should be equitably estopped from arguing that “shall not discontinue” meant preservation of pre-acquisition levels of emergency and oncology services because an attorney in his office purported to draw a contrary conclusion in an internal email produced in discovery. The court noted the ill fit of estoppel in light of the plausible readings of the phrase, explaining that estoppel’s use at summary judgment is only appropriate “where there is but one inference that can be drawn from the undisputed facts of a case.” Id. ¶¶ 50-52. Moreover, it found the record was unclear on whether the AG agreed with his staff attorney’s purported views, whether HCA even knew about it, or whether HCA had relied upon a purported misrepresentation by the AG in entering the APA. Id. ¶ 54.
  • As you can probably guess, here at the blog we’re big fans of The Princess Bride. And as longtime Mandy Patinkin fans, we love that he still loves Inigo Montoya.

Brad Risinger is a partner in the Raleigh office of Fox Rothschild LLP.