KENNEWICK — Kennewick General Hospital officials were on tenterhooks Thursday evening when a settlement proposal made to Kadlec Regional Medical Center resulted in more questions from the Richland hospital.
"That's where we are. We're going back and forth," said Vic Johnson, president of the Kennewick Public Hospital District Board.
KGH and Kadlec have been at loggerheads for months over dueling expansion plans that led Kadlec to file two legal actions seeking to revoke state approval of KGH's proposed Southridge hospital.
According to e-mails provided to the Herald by Kadlec, lawyers for both sides have been trading settlement proposals since May. The most recent came from KGH with a request for a response by the time the hospital district's board met at 5 p.m. Thursday.
Johnson said the board learned during a conversation with its attorney during a closed-door portion of the meeting that Kadlec had asked for clarification of some points in KGH's offer.
Kadlec CEO Rand Wortman said via telephone Thursday night that Kadlec had requested more information through its attorney, and that the Kadlec board will consider the proposal at its next meeting on July 7.
Both sides say they're still working toward a resolution of their differences.
The e-mails provided to the Herald show Kadlec offered on May 12 to drop its litigation if KGH would drop its application to add 25 beds to its total.
KGH countered on May 28 that it also wanted Kadlec to withdraw a letter to the Department of Health's certificate of need program asking to overturn approval of the Southridge project, withdraw a public records request to the federal Department of Housing and Urban Development for information about KGH's efforts to obtain HUD financing for Southridge, agree not to interfere in development of Southridge, and pay its costs in fighting the litigation -- up to $500,000.
Kadlec refused KGH's terms, and again offered to drop its two legal actions -- one filed in the health department's adjudicative services unit and the other in Thurston County Superior Court -- if KGH dropped its 25-bed certificate of need application.
No hospital in Washington can expand without first getting a certificate of need from the state Department of Health and going through aprocess of justifying the growth.
KGH made another counteroffer on June 18 with essentially the same terms as before, but dropping the request for legal costs.
The conflict started last fall when Kadlec applied for a certificate of need to add 114 beds to its Richland hospital, and KGH applied for the 25-bed expansion right on Kadlec's heels.
Those 25 beds wouldn't be added until after KGH builds Southridge and moves 74 of its allotted 101 beds there, leaving 27 in service at the current Auburn Street campus.
The additional 25 would bring the bed count to 74 at the new hospital and 52 at Auburn Street, for a total of 126.
At the time KGH got its preliminary certificate of need for Southridge, the hospital only proposed to move 74 beds to the new hospital and no further expansion plans were on the table.
Kadlec is licensed for 188 beds, but hospital officials want to build the remaining four floors of the 10-story River Pavilion tower and add 114 beds there, bringing the Richland hospital's total to 302 beds.
Kadlec cried foul when KGH asked for its additional 25 beds because KGH officials hadn't disclosed expansion plans for Auburn Street when they applied to build Southridge.
Officials with the Richland hospital said it was clear the Southridge project and addition of beds at Auburn Street all were part of one expansion plan and should have been on one application, not two.
So Kadlec protested the final certificate of need for Southridge when it was granted in March, and is arguing the state shouldn't have given final approval to that application in light of the subsequent application for 25 beds at Auburn Street.
KGH countered that it only applied for the 25 Auburn Street beds because Kadlec had proposed to grab all of the beds the community will need for the foreseeable future, thus preventing later expansion by KGH.
Kadlec in its appeal to the state also claimed KGH overstated admissions, occupancy and rates of growth in its certificate of need applications.
KGH denied those allegations, saying Kadlec took the numbers out of context.
The Kennewick hospital has asked the health department to dismiss Kadlec's appeal, and an assistant attorney general filed documents on behalf of the certificate of need program supporting the request for dismissal.
If the appeal is allowed to move forward, a hearing is scheduled in October.