State attorney general continues to review pending sale of UCMH

Brad Hicks • Oct 14, 2013 at 9:13 PM

ERWIN — As the target closing date for Mountain States Health Alliance’s acquisition of Unicoi County Memorial Hospital approaches, the state attorney general’s office is continuing its review of the pending transaction.

Sharon Curtis-Flair, spokeswoman for the state attorney general’s office, said in a Thursday email that the office is continuing its review of the proposed transaction and will issue its Notice of Enforcement Intent to the parties involved closer to the proposed closing date of Nov. 1. Through the notice, the attorney general’s office may take no action regarding the sale, at which point closing can occur, decline the sale or request more information regarding the proposed transaction.

“We do not issue notices sooner because these deals are often changing right up until closing and we want to opine with the most current information,” Curtis-Flair said in her email.

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. The board voted to accept MSHA’s asset purchase agreement in March, and the sale application was submitted in May for review by the attorney general’s office, which must review the sale process.

On June 25, the UCMH board announced UCMH’s pending sale to MSHA had been delayed due to a trio of concerns the attorney general’s office had regarding the process. A letter from the attorney general’s office sent to attorneys representing the UCMH board said 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 sale approval from the town of Erwin and Unicoi County per the UCMH charter.

In an effort to address the Open Meetings Act concern, the UCMH Board of Control held a public meeting July 18 in which it voted again to accept MSHA’s acquisition proposal. The following week, the Erwin Board of Mayor and Aldermen approved a resolution to approve the sale of UCMH to MSHA per the UCMH board July vote and, in August, the Unicoi County Commission approved a similar resolution.

Contributions of $750,000 each are to be provided to the town of Erwin and Unicoi County when the hospital sale closes, and these monetary contributions are to be used toward public health care needs. Officials have also stated that a $1 million contribution that MSHA will provide at the time of closing will be used to establish a new health care services foundation in Unicoi County.

MSHA Vice President of Marketing and Communication Tony Benton said Friday that the attorney general has not been in contact with the parties involved in the sale since it notified the UCMH Board of its concerns, but those involved have sent documentation to the attorney general’s office that demonstrate the concerns have been addressed.

“We think we’ve more than met any additional information or requirements that they’ve had in their previous release of information and notifications they’ve provided,” Benton said. “We feel we’re fully compliant with what they’ve requested there and are optimistic that we’ll be able to get a favorable outcome from the attorney general.”

MSHA officials have previously said they hope the sale’s closing occurs by Nov. 1. Benton said officials still have this date in mind and are awaiting word from the attorney general before moving forward. Benton also said MSHA is optimistic that it will be given the OK to proceed once the attorney general’s office completes its review.

“It’s been a very extensive, long, drawn-out process, so we are prepared to move forward as soon as we get the green light from the attorney general,” he said. “Most things are in line so we can be prepared to close Nov. 1 and that’s what we, hopefully, can do.”

Certain commitments outlined in the proposal, such as the purchase of land for a new acute care facility and the strategic planning work that will determine the scope of Unicoi County’s new MSHA hospital, cannot be carried out, as the health care organization is not yet the legal owner of UCMH, Benton said.

“We’ve probably done the most that we can do, and we’re going to continue to be in contact with Unicoi County Memorial Hospital and supporting them every way we can without having that relationship,” he said. “We are just being patient and hoping we can get everything moving forward as soon as possible.”

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