UCMH board to weigh hospital proposals again

Brad Hicks • Aug 27, 2013 at 7:04 AM

ERWIN — Proposals from two of the region’s largest health care systems to acquire Unicoi County Memorial Hospital will once again be up the UCMH Board of Control’s consideration.

On Thursday, the board will hold a called meeting to consider adoption of a proposal from either Mountain States Health Alliance or Wellmont Health System to acquire UCMH and its health care assets. This public meeting will begin at 5 p.m. in the auditorium of Unicoi County High School.

Late last month, the board announced that UCMH’s pending sale to MSHA had been delayed due to concerns the state attorney general’s office had about the transaction. According to a letter from the attorney general’s office addressed to attorneys representing the board, the office’s concerns include:

— The board’s failure to comply with the provisions of the state’s Open Meetings Act in its acceptance of the MSHA acquisition proposal.

— Its failure to obtain the approval of the town of Erwin and Unicoi County on the sale per the UCMH charter.

— Concerns over how monetary contributions outlined in MSHA’s acquisition proposal would be spent.

Board of Control Chairman Roland Bailey previously said the board’s attorneys were working to review the attorney general’s concerns and how to address them. Bailey could not be reached Friday for comment.

The board has twice approved proposals submitted by MSHA. Most recently, on Nov. 28 the board voted to approve a proposal from MSHA over one submitted by Wellmont. On March 28, the board voted to approve MSHA’s final definitive agreement to acquire UCMH. According to state law, the acquisition process must be reviewed by the attorney general’s office before becoming official.

Since late 2012, MSHA has been working with UCMH through a management agreement that became effective after acceptance of MSHA’s proposal. In its proposal that was previously approved by the UCMH board, MSHA stated it would assume all of UCMH’s debt and financial liabilities, construct a new acute care facility within the town limits of Erwin, would extend a $2 million line of credit to UCMH, much of which has been utilized, and provide voluntary contributions of $750,000 each to the town of Erwin and Unicoi County, and a $1 million contribution to go toward a foundation to enhance health care services in Unicoi County.

“MSHA is committed to meeting the health care needs of Unicoi County residents, and we stand behind all the promises we made in our proposal to the hospital’s board of control,” MSHA spokesman Tony Benton said Friday. “We believe that an objective review of the proposals will show once again that MSHA is the best choice for Unicoi County.”

In its previously submitted acquisition proposal, Wellmont stated it would assume UCMH’s debt, issue an uncapped line of credit for UCMH operations, expand service at the hospital, provide contributions of $600,000 each to Unicoi County and Erwin, and would construct a replacement hospital within the county’s limits within three years of the transaction’s closing. Wellmont officials said Friday that their organization’s interest in acquiring Unicoi County’s community hospital remains high.

“Wellmont Health System remains pleased this process is being revisited, as it is in the best interest of Unicoi County,” Wellmont spokesman Jim Wozniak said. “This public forum appears to be a positive step in moving this process forward in a transparent manner.”

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