Citrus Memorial Health Foundation, Inc., the not-for-profit organization that leases and operates Citrus Memorial Health System, filed suit against the State of Florida and the Citrus County Hospital Board of Trustees today, challenging the constitutionality of a new law passed June 24 by Governor Rick Scott.

The suit asks a Circuit Court judge to issue an injunction preventing House Bill 1043 – which completely changes the governing structure of the hospital – from taking effect July 1. According to the suit HB 1043 violates Article 1, Section 10 of the Florida Constitution, which forbids the Legislature from enacting laws that interfere with existing contracts.

HB 1043 amends the charter of the Citrus County Hospital Board. It allows the Trustees to take complete control of the Foundation. The Foundation provides hospital operations and has a 43-year lease and hospital care agreement with the Board.

“It’s really disheartening that it’s come to this, but we have to do everything we can to protect the hospital and our patients, “ said Ryan Beaty, chief executive officer of Citrus Memorial Health System. “Obviously the Trustees didn’t think they could win in court. Instead they spent taxpayer money on lobbyists to change a management structure that has worked in Citrus County for more than 20 years. Despite the assault on the hospital, we’re going to continue to focus on providing quality healthcare to the community.”

The Board of Trustees is the appointed board that sets property tax rates each year, providing these funds to the Foundation to pay for indigent care and other operational and capital expenses. The tax revenue accounts for a small percentage of the hospital’s overall revenue, which mostly comes from medical care services.

Since 1990, the Trustees have contracted with the Foundation to run the hospital. This allows operations to remain nonprofit, but at the same time help it better compete with private institutions and keep costs down for patients. The new law will remove that competitive advantage by mandating Trustee takeover of the Foundation, despite its long-term agreement with the Trustees.

This suit joins others the Foundation has filed against the Trustees in recent months, including one claiming three Trustees violated Sunshine Law with improperly noticed meetings. Another suit claims the Trustees failed to meet its fiduciary duty by withholding contractually required payments for the operation of the hospital, publicly attacking the Foundation causing a downgrade in the hospital’s bond rating, and creating an unnecessary and ugly divide in the community.

The Foundation is asking the court to first enjoin the state from enforcing HB 1043 and then declare the law unconstitutional.

Citrus Memorial Health Foundation Statement on Passage of H.B. 1043

"We believe that the citizens of Citrus County deserve better and we intend to fight for it.

For years the Board of Trustees has collected and kept the taxpayer dollars meant to support Citrus Memorial Hospital. During this period, their expenditures on everything from staff to gold-embossed stationery has increased.

But their investment in lobbyists has paid off. At significant taxpayer cost, the Board of Trustees decided that letting a court decide the issues was too risky — better to change the law to escape their contract to pay for public healthcare.

Our hospital has already been hurt by unnecessary litigation — as our bonds were downgraded — increasing the cost of preparing for the future. The longer this dispute remains unresolved, the more our hospital – and the community – will suffer.

Throughout this ordeal, the Foundation has focused on its primary mission, providing the best health care to all residents of Citrus County. That is what we will continue to do."