Unicoi County Memorial Hospital sale efforts back in state’s hands

Brad Hicks • Aug 28, 2013 at 7:13 AM

ERWIN — Now that the sale of Unicoi County Memorial Hospital to Mountain States Health Alliance has the backing of the governing bodies of both the town of Erwin and Unicoi County, officials involved say the next step in the process is to get the proposed sale back over to the state attorney general’s office for a second look.

On Monday, the Unicoi County Commission approved UCMH’s sale to MSHA per the UCMH Board of Control’s July 18 vote to accept MSHA’s acquisition proposal. This vote came a little more than a month after the Erwin Board of Mayor and Aldermen lent its approval to UCMH’s sale to MSHA.

Board of Control Chairman Roland Bailey said Tuesday afternoon with these approvals now in place, the board will begin work to assemble a documentation package that will be submitted to the state attorney general’s office for its review.

The aim of this package will be to respond to the trio of concerns the attorney general had regarding UCMH’s sale to MSHA — concerns that delayed the sale process. Bailey said officials are looking to expedite the submission of the package, and Board of Control attorneys will likely send the information to the attorney general’s office this week.

Sharon Curtis-Flair, spokeswoman for the attorney general’s office, said in a Tuesday email that attorneys with the attorney general’s office have spoken to UCMH board attorneys and have reached an oral agreement that UCMH counsel will give the attorney general’s office a new notice which will start the 45-day review period over again. After this 45-day period expires, the attorney general’s office will deliver correspondence to UCMH counsel indicatting its intent with regard to the sale. Attempts to close on the transaction may be made if the attorney general’s office opts to take no action on UCMH’s proposed sale.

In November, the UCMH board voted to accept MSHA’s proposal of acquire the hospital over a proposal submitted by Wellmont Health System and, in March, approved MSHA’s asset purchase agreement to acquire UCMH’s healthcare assets.

The sale agreement was subsequently sent to the state attorney general’s office which, under state law, must review the sale process before closing of the transaction can take place. But, on June 25, the UCMH board announced the sale had hit a snag due to three concerns the attorney general’s office had regarding the sale process.

According to a letter from the attorney general’s office, these 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 board’s failure to obtain the approvals of the sale from the town of Erwin and Unicoi County per the UCMH charter.

Board of Control attorney Lou Bissette previously said the July 18 public meeting at which the board again approved MSHA’s proposal was held to address the attorney general’s concern regarding the Open Meetings Act. Bailey said Tuesday that officials hope the charter concern has been addressed now that Erwin and Unicoi County’s governments have approved the sale.

In an effort to address the contribution concern, Bailey said the town and county governments also approved an acknowledgment agreement of the $750,000 contribution each municipality is set to receive from MSHA after the transaction closes. MSHA has also committed to contributing $1 million to establish or fund a foundation to serve unmet health care needs in Erwin and Unicoi County. Bailey said this $1 million will be placed in an escrow until a new foundation can be established.

Like Bailey, MSHA President/CEO Dennis Vonderfecht is pleased with the commission’s recent vote, along with the UCMH board and town of Erwin’s prior votes.

“We’re very pleased with the unanimous vote,” Vonderfecht said in a Tuesday statement. “I think support has increased for us as we’ve moved forward, and I think the three unanimous votes demonstrate that support — first by the Board of Control, then from the town of Erwin and now from the county. ”

“We hope the attorney general will approve the sale fairly quickly,” Vonderfecht stated. “We’re excited about helping the hospital right now and about getting started with the planning process for a new hospital.”

Wellmont spokesman Jim Wozniak said Tuesday that Wellmont officials wished to reiterate their appreciation for the support the organization received from many in the community throughout the sale process. He did not comment on whether Wellmont would remain involved in the process.

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