UCMH and MSHA hoping to clear last hurdle in hospital acquisition

Brad Hicks • Aug 27, 2013 at 1:08 PM

ERWIN — Members of the Unicoi County Memorial Hospital Board of Control and Mountain States Health Alliance hope that what is perhaps the final hurdle in MSHA’s acquisition of the county’s financially struggling community hospital has been cleared.

The Unicoi County Commission unanimously approved a resolution to approve the sale of UCMH to Mountain States Health Alliance per the UCMH Board of Control’s July vote during the commission’s regular meeting Monday.

Prior to the vote, UCMH Board of Control Chairman Roland Bailey urged commissioners to support the community hospital’s sale to MSHA, referring to UCMH as the “crown jewel” of Unicoi County. Bailey said the commission’s failure to vote in favor of the sale would greatly endanger future operations of UCMH. He said the hospital is now utilizing a second line of credit that was extended to UCMH by MSHA in July in the amount of $1 million.

“That would put us behind the eight ball and put us in an extremely dangerous situation as far as continuation of the hospital,” Bailey said.

Aside from the need for quick action, Bailey also implored the commissioners for their support due to what MSHA has committed to bring to the table in its acquisition of UCMH. MSHA has committed to the construction of a new acute care facility within the limits of Erwin within five years, and Bailey said the acquisition will also provide new UCMH office space and a new long-term care facility.

“It’s a wonderful, wonderful offer,” Bailey said.

In November, the UCMH Board of Control voted to accept a revised proposal from MSHA to acquire UCMH over a proposal submitted by Wellmont Health System. In March, the UCMH Board voted to accept MSHA’s asset purchase agreement to acquire UCMH’s health-care assets. The sale application was submitted to the state attorney general’s office in May for its review. However, on June 25, the UCMH Board of Control announced UCMH’s pending sale to MSHA had been delayed due to three concerns the attorney general’s office had regarding the sale process.

According to a letter from the attorney general’s office sent to attorneys representing the UCMH Board, the office’s concerns were the UCMH board’s failure to comply with the state’s Open Meetings Act during the sale process, questions over how monetary contributions outlined in the MSHA proposal would be spent and the UCMH board’s failure to obtain the approvals of the sale from the town of Erwin and Unicoi County per the UCMH charter.

On July 18, the UCMH Board of Control held a public meeting at Unicoi County High School at which it voted to again accept MSHA’s acquisition proposal in an effort to address the attorney general’s concern regarding the Open Meetings Act. Four days later, the Erwin Board of Mayor and Aldermen approved a resolution like the one approved Monday by the commission.

After their vote, several commissioners voiced their thoughts on the need to move the sale process forward.

“In my opinion, I think the decision’s been made and we have to move forward,” commission Chairman Mickey Hatcher said.

“It’s been a long, hard road and I’m glad we’re coming, finally, to fruition here and getting this over with so we can get this on the road and get that hospital built,” commission Vice-Chairman Bill Hensley said. “It will be a real asset to this county.”

In a related matter, the commission also unanimously approved an acknowledgement of contribution agreement between MSHA, UCMH and the county. This relates to the $750,000 contribution MSHA is set to provide to the county when closing on its acquisition of UCMH occurs.

County Attorney Doug Shults said he was involved in a conference call with several attorneys last week to discuss what this contribution could be used for. Shults said it is possible that the funding, which is to be used for public health care needs, may be used to pay toward the county’s annual ambulance-service subsidy.

Now that the county has lent its approval of the sale of UCMH to MSHA, UCMH board attorney Lou Bissette said documentation would be resubmitted to the attorney general’s office, which he hopes will offer its guidance on how the contribution can be used.

Hatcher said he would like to see the county hold a meeting in the future to discuss possible uses of the $750,000.

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