If all goes as planned, patients of Kosciusko Community Hospital will get medical care from a new group of managers/owners come Feb. 1.

And if history holds true to form, they'll never notice.

"Normally, we don't comment on pending negotiations, but I can say we're very hopeful that the negotiations on the acquisition will be concluded on schedule," said Quorum spokesman Shea Davis. "We're looking forward to working with the staff and serving the community of Warsaw and Kosciusko County area."

Quorum Health Group Inc., based in Brentwood, Tenn., is currently negotiating for the purchase of KCH, having been selected by the KCH board of directors as the most attractive and compatible suitor for the 74-bed hospital and surrounding health-related facilities, such as Medstat Clinic and the Wellness Center.

Quorum currently owns 20 hospitals and manages another 238 throughout the United States. Founded in 1977 as HCA Management Co., Quorum surpassed $1 billion in annual revenue in 1996. It is the largest management corporation of not-for-profit health facilities in the country. It is also the third largest health care provider, with net operating revenues of $1.5 billion in fiscal year 1998, which ended June 30.

All is not rosy on the financial front, however. The firm is being investigated by the federal government for overbilling for Medicare and Medicaid services. Because of the allegations, the New York law firms of Pomerantz Haudek Block Grossman & Fross, LLP, and Stull Stull & Brody have filed a class-action lawsuit in federal court against Quorum on behalf of Quorum shareholders. The suit claims the false insurance claims, made between 1996 and 1998, have resulted in overstatements of Quorum's net accounts receivables, net operating revenues, net patient services revenue, net income and net income per common share.

"We expected this (the lawsuit)," Davis said. "There are lawyers out there who take these type of allegations and try to cash in. We will defend ourselves vigorously. We have brought value to our stockholders and will continue to do so."

Davis said the allegations of overbilling are just that, the government has not filed any charges against Quorum and she doesn't expect them to.

"We haven't been served (court papers) in the (overbilling) matter," she said. "From the information we've received, the government has decided themselves if the information in these allegations is accurate."

In terms of the KCH negotiations, the lawsuit and billing allegations were not seen as a major impediment to consummating the deal, according to KCH board member John Davis.

"We were fully aware of this situation and we made our decision and we made own decision in that light," he said. "We decided this will not be a problem and we're convinced this won't be a problem."

KCH board president Willis Alt concurred, saying the class-action suit is nothing more than a nuisance lawsuit and he is confident Quorum will prevail.

"We've been given the legal opinion that this is essentially legal extortion and that there is really no merit to the case," he said.

Shea Davis said Quorum expects any changes at KCH, assuming the sale is completed, will be incremental and not made without much study and consultation.

"Our philosophy of health care is an evolution, not a revolution. When we come in, we take an evolutionary approach to build a health care system," she said. "When we acquire a hospital, we hope that any changes made will be transparent."

KCH will be the fourth Hoosier hospital acquired by Quorum. [[In-content Ad]]