Unicoi County hospital to seek $1.5M line of credit

Brad Hicks • Nov 19, 2012 at 9:20 PM

ERWIN — As the Unicoi County Memorial Hospital Board of Control continues to work toward accepting an acquisition proposal from either Mountain States Health Alliance or Wellmont Health System, the board took action Monday that will result in payment to those owed for providing products and services to the hospital.

At Monday’s board meeting, UCMH Interim CEO Jete Edmisson requested that the board authorize its chairman to seek a $1.5 million line of credit to pay vendors that have provided services at UCMH.

“I would request that the board consider letting the chair seek a line of credit to be able to hold some of these vendors that we’ve been holding off since I’ve been here,” Edmisson said. “It’s getting to a point where I’m not going to be able to keep them at bay without having legal fees associated with this. I don’t want to be in a position where the board has to push through a decision on working with either of the two hospitals that want to partner with us ... but I’m really in a situation where I just don’t feel like we can keep these creditors at bay.”

Following the meeting, Edmisson said the vendors owed the most are two that offered “pain pump” services, or implants that alleviate patient pain. He said many insurance companies will not pay for the service, which was discontinued at UCMH before Edmisson was hired in July. Edmisson said what UCMH was making from the service did not cover vendor costs. Edmisson said these vendors have engaged legal counsel.

“It’s a great service, but you have to have many other things that are funding it and making profitability to be able to support that,” Edmisson said.

Edmisson said that two options for the line of credit have presented themselves — one being a shared risk with the town of Erwin, which loaned the hospital $800,000 for operational expenses in May, and the other that would take the city out of the equation by taking care of its note. Edmisson said the line of credit could also be used to pay other vendors that have worked with the hospital.

“That way, we could take out the city note and then pay these vendors that are threatening the lawsuit, and that would buy us some time until you all have the opportunity to make a decision on what you want to do with the Wellmont and Mountain States opportunities,” Edmisson said to the board.

UCMH Board of Control Secretary/Treasurer Russell Brackins made the motion to allow the board’s chair to seek the line of credit, and the motion was unanimously approved by the board.

“I don’t think there’s any doubt about the need ... we have no choice,” Brackins said.

The board is scheduled to meet in a called session at 4 p.m. today at the hospital for the purpose of working with attorneys from McGuire, Wood and Bissette, the Asheville, N.C.-based firm recently hired by the board, on the proposed hospital transaction. According to a notice of the meeting, the board will immediately move into a strategic planning session after calling the meeting to order at 4 p.m. to speak with attorneys.

The board was scheduled this past Thursday to meet in strategic planning sessions with officials from Wellmont and MSHA to discuss the entities’ proposals’ to acquire UCMH, but announced early Thursday afternoon the meeting had been canceled. UCMH Board of Control Chairman Glenn Tilson said there are no current plans to reschedule these meetings.

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