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Attorney General halts Unicoi hospital sale

By Preston Ayres, payres@wcyb.com
Published On: Jun 26 2013 01:21:35 PM CDT
Updated On: Jun 26 2013 12:57:47 PM CDT

The Tennessee Attorney General put a hold on a proposed hospital sale to Mountain States Health Alliance by sending the issue back to the hospital board for more public input.

ERWIN, Tenn. -

It's back to square one for the cash-strapped Unicoi County Memorial Hospital.

The Tennessee Attorney General put a hold on a proposed sale to Mountain States Health Alliance by sending the issue back to the hospital board for more public input.   

Unicoi County Memorial Hospital's longtime financial problems are far from over.

The hospital board's decision earlier this year to accept a purchase offer from Mountain States Health Alliance instead of Wellmont Health System has been riddled with controversy.

And now the Tennessee Attorney General won't approve the deal until several of his concerns are settled. "I was surprised with some of the points he stipulated," says board of control member Sue Jean Wilson.

In Tuesday's notice to the board the attorney general called for more public input on the sale.

Many in this community feel they never had the chance offer their insight. "It's about having a choice, the people want a choice, this is America, we are a democracy and we should have a choice," says resident Sue Huskins.

The attorney general wants a guarantee that the county and town of Erwin will spend the $1.5 million they will receive from the sale on healthcare and asks for the deal to be voted on by both Erwin aldermen and the county commission.

Commissioners voted on the sale once before, but ended up split. "They chose four in favor, four against, and one abstained," says county mayor Greg Lynch.

Lynch says he’s been concerned with how the sale was handled from the beginning.

The mayor says he feels the price was too low.

As the hospital board continues to work through the attorney general's opinion, there's concern if the hospital has the money to stay open.

Hospital officials say the line of credit extended by Mountain States is about to run out. "At first it was fine,” says Wilson. “Now it's getting down to where some of the vendors are starting to send letters."    

The question is what happens next.

Mountain States Health Alliance CEO Dennis Vonderfecht issued a statement, saying "We believe the hospital board followed the proper procedures in evaluating which proposal was in the best interest of the residents of Unicoi County," and that Mountain States remains committed to the deal.

Meanwhile, a Wellmont spokesman says they are pleased with the decision by the attorney general and are waiting on more decisions from the hospital board before preparing for their next move.

The hospital board of control is set meet about the attorney generals requirements at a meeting Thursday night. The county commission could take up the issue at its next meeting.

Dennis Vonderfecht's full statement

“We believe the hospital board followed the proper procedures in evaluating which proposal was in the best interest of the residents of Unicoi County, and we are disappointed that the state attorney general does not feel the same way about the process. MSHA remains committed to meeting the needs of Unicoi County residents, however, and we are eager to work with the UCMH Board of Control to address all of the outstanding issues.

“The residents of Unicoi County deserve nothing less than the best in their health care, and MSHA has done much over the past eight months to support the hospital’s operations and make improvements during this interim period. There is a great deal of assistance that the hospital still requires, however, that we cannot legally do until the sale is final. MSHA stands ready to make every necessary resource available to the hospital upon receiving permission from the State of Tennessee.”

Dennis Vonderfecht, MSHA President and CEO