After the sale transaction between HCA and Medshares...

http://bankrupt.com/TCR_Public/040922.mbx

How is HCA still allowed to do business in our healthcare system? How could Medshares have utilized their provider number?

This allowance of HCA to use HCA's Medicare/Medicaid provider number questions a sale at all? Why has the Government allowed this? Why was HCA allowed todo business with the US Government? Why do they still own Medicare/Medicaid provider numbers?


"...After the sale transaction between HCA and Medshares,
Medshares continued to receive periodic interim payments
from Medicare under HCA's provider number."

The actual sale of HCA was never recorded properly with the SEC.I wonder why.Alledgedly, thesale was in October 1998. Funny,three months later:
"...On February 2, 1999, HCA made a demand on NCFE for payment under
the Collection Agreement.

"...As part of the Asset Purchase Agreement, Medshares agreed to purchase assets of certain home healthcare agencies owned by HCA and certain subsidiaries and
joint ventures, ..."

"JOINT VENTURES and subsidiaries"....hmmmmm

(c) The post-sale periodic interim payments After the sale transaction between HCA and Medshares,
Medshares continued to receive periodic interim payments
from Medicare under HCA's provider number. The Post-Sale
interim payments were then remitted to NCFE, which in turn
credited Medshares and advanced substantial funds to
Medshares to purchase additional accounts receivable.


HCA sued NCFE in Tennessee state court in a case
styled Columbia Healthcare Corp. v. Medshares Consolidated, Inc.,
et al.

On May 4, 1999, NCFE made a demand on HCA for the return of the
$1,305,137. HCA has never returned the money. NCFE filed
counterclaims in the Tennessee Litigation to recover the
$1,305,137 amount.

NATIONAL CENTURY: Trust Wants HCA Claim Reduced to $1,992,756


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David A. Beck, Esq., at Jones Day, in Chicago, Illinois, relates
that in the Summer of 1998, Medshares Consolidated, Inc., entered
into an agreement to purchase certain home health agencies from
Columbia/HCA, now known as HCA, Inc. As part of the Asset
Purchase Agreement, Medshares agreed to purchase assets of certain
home healthcare agencies owned by HCA and certain subsidiaries and
joint ventures, which assets included accounts receivable
outstanding at the time of closing.

At the time of the sale transaction between Medshares and HCA, the
valuation of the purchase accounts receivable was uncertain.
Under the Medshares Purchase Agreement, Medshares agreed to
purchase the "Threshold Amount" of the accounts receivable. If
more than the Threshold Amount was collected, the excess funds
would be returned to HCA.

To facilitate the collection of the accounts receivable, Debtor
National Century Financial Enterprises, Inc., Medshares and HCA
entered into a Collection Agreement pursuant to which NCFE was to
receive payments on the accounts receivable. The collections were
then remitted to HCA to the extent they exceeded the Threshold
Amount.

The Collection Agreement defines the Threshold Amount as "sixty
percent (60%) of the Value of the Receivables." The Value of the
Receivables is defined as "the amount of the book value of the
Receivables, determined based upon a 150 day bad debt reserve
policy, adjusted by those reserves or assets which have the nature
of being a reserve or asset for a cost report purpose." The
Collection Agreement required NCFE to pay HCA money only if and as
the collections exceeded the Threshold Amount. The Collection
Agreement was to be in effect for a period of six months.

On February 2, 1999, HCA made a demand on NCFE for payment under
the Collection Agreement. Subsequently, Greg Gerkin, Assistant
Vice President of HCA, contacted NCFE to discuss HCA's demand for
payment. Mr. Gerkin asserted that NCFE owed HCA more than
$1 million and that HCA would sue NCFE if NCFE did not pay HCA
approximately $1.3 million.

Because NCFE had not yet received all of the patient-specific data
regarding the accounts receivable, which presumably was in HCA's
possession, NCFE was unable to perform a complete accounting of
the collections in its possession at that time. Nevertheless, on
March 5, 1999, NCFE remitted $1,305,137 to HCA. Notwithstanding
the payment, HCA sued NCFE in Tennessee state court in a case
styled Columbia Healthcare Corp. v. Medshares Consolidated, Inc.,
et al.

After the remittance of the $1,305,137 payment, NCFE received the
patient-specific data regarding the purchased accounts receivable
and then was in a position to complete a comprehensive accounting
of the collections received. In that accounting, NCFE determined
that the Threshold Amount had not been exceeded at that time and
that the $1,305,137 had been paid to HCA in error.

On May 4, 1999, NCFE made a demand on HCA for the return of the
$1,305,137. HCA has never returned the money. NCFE filed
counterclaims in the Tennessee Litigation to recover the
$1,305,137 amount.

HCA asserted Claim No. 121 for $10,611,222, broken into three
categories:

(a) The deposits that can be definitely linked to pre-
acquisition services

This component of the HCA Claim consists of accounts
receivable with definitive pre-acquisition dates of
service that were deposited into the NCFE lockboxes. HCA
asserts that it has a $2,368,113 claim for Definitive Pre-
Acquisition Receivables. However, NCFE collected only
$206,479, after the $1,305,137 payment is taken into
account, in Definitive Pre-Acquisition Receivables.
Accordingly, the HCA Claim with respect to the category
should be reduced to $206,479.

(b) The deposits for which documentation has not been
produced

HCA asserts that there is insufficient documentation to
identify $5.17 million in NCFE lockbox collections as pre-
or post-acquisition accounts receivable. HCA proposes to
divide the Unidentified Lockbox Collections between pre-
and post-acquisition accounts receivable by a procedure
conducted by Ernst & Young based on an estimation of the
allocation of pre- and post-acquisition accounts
receivable, resulting in an allocation of $2,765,275 to
pre-acquisition accounts receivable payable to HCA. In
addition, HCA asserts a claim for another $1,682,948 of
pre-sale accounts receivable received by NCFE through
"some mechanism other than the lockbox accounts."

Mr. Beck argues that HCA's $2,765,275 claim for
Unidentified Lockbox Collections greatly overstates the
amount that actually represents pre-acquisition
receivables. NCFE's analysis indicates that the actual
amount allocable to pre-acquisition accounts receivable is
$1,786,277. Accordingly, the portion of the HCA Claim
relating to the Unidentified Lockbox Collections should be
reduced to $1,786,277.

With respect to HCA's $1,682,948 claim for Unidentified
Collections, HCA does not provide any evidence that these
funds were received by NCFE. NCFE's books and records
also do not indicate the receipt of any of those funds.
Indeed, these amounts may have been paid directly to
Medshares, in which case HCA may have a claim against
Medshares. Because it did not receive these funds, Mr.
Beck contends that NCFE is under no obligation to pay the
Unidentified Collections to HCA.

(c) The post-sale periodic interim payments

After the sale transaction between HCA and Medshares,
Medshares continued to receive periodic interim payments
from Medicare under HCA's provider number. The Post-Sale
interim payments were then remitted to NCFE, which in turn
credited Medshares and advanced substantial funds to
Medshares to purchase additional accounts receivable.

HCA asserts a claim for $1,913,543 with respect to the
post-Sale interim payments. However, HCA provides no
basis for why the post-Sale interim payments give rise to
a claim against the Debtors' estates. Whether or not HCA
was or may be required to reimburse Medicare for these
funds, NCFE is not liable to HCA under the Collection
Agreement or otherwise with respect to these amounts.

HCA also asserted a claim for $1,881,343 in interest on
the amounts it alleges it is owed from the Debtors. HCA
has not provided any basis for asserting a claim for
interest against the Debtors.

Thus, the only portions of the HCA Claim that should be allowed
are reduced amounts for the Definitive Pre-Acquisition Receivables
for $206,479, and for the Unidentified Lockbox Collection for
$1,786,277.
Accordingly, the Unencumbered Assets Trust, the successor-in-
interest to certain rights and assets of National Century
Financial Enterprises, Inc., and its debtor-affiliates, asks the
U.S. Bankruptcy Court for the Southern District of Ohio to reduce
the HCA Claim from $10,611,222 to $1,992,756.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader
in healthcare finance focused on providing medical accounts
receivable financing to middle market healthcare providers. The
Company filed for Chapter 11 protection on November 18, 2002
(Bankr. S.D. Ohio Case No. 02-65235). The healthcare finance
company prosecuted its Fourth Amended Plan of Liquidation to
confirmation on April 16, 2004. Paul E. Harner, Esq., at Jones
Day represents the Debtors. (National Century Bankruptcy News,
Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000)