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Wellmont supporters anticipate Attorney General’s review

After about two months of deliberation on proposals from two regional health systems, the Unicoi County Memorial Hospital Board of Control will now move forward with an acquisition process initiated in October.
Mountain States Health Alliance has secured the bid to acquire UCMH over Wellmont Health System after the UCMH Board of Control met in open session on Nov. 28 at Erwin Town Hall.
In a roll call vote, five board members — Secretary and Treasurer Russell Brackins, Chairman Glenn Tilson, Todd Love, Dr. Frank Wegman and Vice Chairman Roland Bailey — voted to approve the MSHA proposal. Board members Sue Jean Wilson and Jimmy Erwin voted against the MSHA proposal. The motion was made by Brackins and seconded by Bailey.
Comments from MSHA
MSHA President and CEO Dennis Vonderfecht said he understands the importance of the board’s decision.
“This is obviously a very important decision for the residents of Unicoi County,” Vonderfecht said. “What this does is continue on a relationship that we’ve had for decades here between residents of Unicoi County and the services that we’ve been able to provide jointly with Unicoi County Memorial Hospital.”
The MSHA proposal approved by the Board of Control included commitments such as a $2 million line of credit to assist the hospital through the transition period, a voluntary donation of $750,000 to each the town of Erwin and Unicoi County municipalities and an additional $1 million to fund a new or existing health care foundation.
Design plans for a new facility have also been initiated, Vonderfecht said.
“We will make this community proud with what we are going to build here,” Vonderfecht said.
Vonderfecht said MSHA’s next step is to assume management of the current UCMH facility.
“We’ll be working very closely with the board in managing the facility between now and when the final agreements are signed,” Vonderfecht said. “Between now and then, it’s [about] working out the details of the agreements.”
Many of the details in the contract have already been discussed, Vonderfecht said. “We’re optimistic that we can get those details worked out,” he said.
Comments about
After the board adjourned the meeting, Wellmont CEO and President Denny DeNarvaez said she was not surprised by the board’s decision to go with MSHA.
“We are not surprised,” DeNarvaez said. “I think Sue Wilson said everything we wanted to say. This isn’t over. We will continue to fight on behalf of the Unicoi County citizenry. We’re excited to do so because, quite frankly, this is a tremendous amount of support and we love it.”
During the discussion portion of the meeting, Wilson urged board members to keep in mind the importance of this decision regarding the county’s future in health care. Wilson said MSHA would have total control over health care in the immediate area if they approve the MSHA proposal.
“How you can sit here knowing how the people of this county feel,” Wilson said before the vote. “It’s obvious that some of you don’t ever intend to run for office again.”
After the meeting, Wilson said the MSHA proposal, in her opinion, was not the best choice for the future of Unicoi County health care.
“I felt that it was going to go pretty much that way,” Wilson said after the meeting. “I’m extremely disappointed.”
Wilson said she believes Wellmont would have brought more services to Unicoi County.
“It’s not the best for the citizens of this county,” Wilson said. “Wellmont was going to bring more and they may still because this is going to continue for quite some time.”
Wilson said she is interested in the next step of the process because the new town of Erwin Mayor Doris Hensley will select a new Board of Control member.
The result of the November election means Board of Control Chairman Glenn Tilson is no longer able to serve on the board as of Nov. 30.
During the Meeting
Before the board’s vote, Tilson addressed all parties impacted by the board’s decision and made comments regarding the overall acquisition process.
“Your attendance here today demonstrates the interest, passion and commitment residents have for their hospital,” Tilson said. “Throughout the process of studying the strategic plans and options for the hospital, the Board of Control has been ever mindful of the purpose of the hospital as set forth in its charter – to take care of the mental and physical needs of the citizens of Unicoi County, Tenn., and the surrounding areas. On behalf of the board, thank you. Thank you for the responsiveness and interest you have shown in these last few months.”
Tilson said the board needed to secure a bid so the hospital could continue to serve the citizens of Unicoi County.
“We are in a crossroads here at Unicoi County Memorial Hospital,” Tilson said. “After a thorough, diligent, thoughtful process, we’ve come together this afternoon to make an important decision regarding the future of the hospital. It is time to look forward to a new future with new opportunities and new possibilities and to new challenges.”
The Attorney
General Review
According to Sharon Curtis-Flair, the state Attorney General’s media contact, via email on Oct. 11, “Pursuant to the Public Benefit Hospital Sales and Conveyance Act of 2006, T.C.A. Section 48-68-201, nonprofit and government-owned hospitals must notify the Attorney General in advance of any ownership transfer and fully respond to the Attorney General’s request for information in connection with the ownership transfer.”
Curtis-Flair said via email that once a notice is completed, the Attorney General has 45 days to review the proposed transaction.
“The Attorney General reviews the submitted information and public comments, if any, concerning the transaction in light of the requirements of the Hospital Act,” Curtis-Flair said. “If necessary, the Attorney General can hire experts to assist him in the review.”
Curtis-Flair also said, “The Attorney General does not, however, approve the sale – rather, the Attorney General must decide whether or not to object to the sale.”
In order for the sale of the hospital to be approved, the board must, “notify the Attorney General concerning the sale, provide a copy of the Hospital Act to each board member, publish information concerning the sale in newspaper of general release in the hospital’s county, and fully respond to the Attorney General’s request for information.”
Wilson said the next stage of the acquisition process will depend solely on the citizens of Unicoi County and their involvement in the review process.
“When the Attorney General publishes that note in the paper, I have a feeling there is going to be quite a deluge of letters submitted,” Wilson said. “A monopoly is not good.”
Wilson said she would like to see everyone in the community stay committed to ensuring the hospital’s future is successful regardless of the final outcome.
Bill Gaines, who spearheaded the countywide “We Want Wellmont” initiative, said he also was not surprised by the board’s decision to approve the Mountain States Health Alliance proposal. “I think their mind has been made up from the get go,” Gaines said. “My observation of the whole process is that the board has been very arrogant. They have excluded the public at every twist and turn of this thing.”
Gaines said he felt the board did not consider Wellmont equally during the initial process and the board violated the Sunshine Law in order to discuss the proposals. Gaines said he is asking all the individuals in the community who are interested in the issue to contact the state Attorney General office in order to make them aware of these concerns.
“When something is held under such tight secrecy from the very people they represent, it makes it look like something might be wrong,” Gaines said. “I think the public pretty well feels that this has not been handled the right way. For that reason, I believe the public welcomes the Attorney General’s review and investigation into this situation.”
Vonderfecht said the main factors to be reviewed by the Attorney General would be the market price paid for the facility and a review of the acquisition process.
“The main thing that the law calls for as far as the Attorney General goes is really two things,” Vonderfecht said. “One is that a fair market price was paid for the hospital, which we feel very comfortable with. Secondly, that there was no unusual events that occurred in making the decision.”
The Attorney General is charged with ensuring the process was fair to all involved, Vonderfecht said. He said he felt like the process was more than fair. “If it wasn’t fair to any party in particular, it would be us because on the first go around on this it was being taken forward for approval,” Vonderfecht said.
The acquisition process began as a result of financial strain on the hospital in areas of operational expenses and debt.
In order to overcome the financial strain, the Board of Control submitted requests for proposals to Mountain States Health Alliance and Wellmont Health System in July.
On Oct. 4 the UCMH Board of Control met to consider the MSHA proposal, but voted to table the decision after Wellmont representatives and county residents expressed concerns about Wellmont’s initial proposal.
A second round of proposals from both health systems were submitted to the board for consideration on Oct. 10.
“The board had the right to do that,” Vonderfecht said. “The process has been open and appropriate and legal; someone wins and someone loses.”
DeNarvaez said the amount of support her organization has gained through the process obligates her to urge state and federal review of the UCMH acquisition process.
“We will try to work with the state Attorney General and the FTC (Federal Trade Commission) as well,” DeNarvaez said. “So we will have a couple of different avenues we will take from here forward.”
Involvement from the FTC, Vonderfecht said, is not likely.
“All of this is really not reviewable by the Federal Trade Commission,” Vonderfecht said. “I find it very hard to believe the Federal Trade Commission would get involved in a situation where you’re bringing on a 48-bed hospital.”
Vonderfecht said the signing of the final documents will not take place until the Attorney General’s review is completed. He expects the final step of the acquisition process to be completed around the end of January.
Also, Vonderfecht said he hopes to see individuals who were not in support of MSHA come to an understanding of his organization’s initiatives and future plans for the county.
“We do know based on the measure of patient satisfaction that there’s a lot of satisfaction among Unicoi County residents with Mountain States Health Alliance and the services that we’ve provided them for many years,” Vonderfecht said. “For us, it’s just a continuing evolution of the development of the very strong relationship that is decades old.”
After the meeting, DeNarvaez said she wanted to thank the citizens of Unicoi County for rallying behind her organization during the initial proposal stage of the process and looks forward to any future support as the process continues.
“I really want to thank the people of Unicoi County,” she said. “It’s been overwhelming the amount of support and they have done a fabulous job and we’re proud of them.”
Contact information for the state Attorney General office can be found at

By Kayla Carter
Staff Writer
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