Wellmont refuses to lose hope for new hospital

By Thomas Wilson

After more than three years of legal wrangling, Wellmont Health System and Mountain States Health Alliance are still engaged in a legal stare down over Wellmont's plan to build an acute care hospital in Washington County less than one mile from MSHA's flagship hospital.
   And despite losing three consecutive legal battles over its Certificate of Need (CON) application, Wellmont officials remain committed to building their new facility.
   "The need for it and the desire by the community is greater than it was three years ago," said Tim Baylor, senior vice president for Marketing and Communications with Wellmont. "Our commitment has not waned one bit at all."
   On July 13, 2000, Wellmont applied for a certificate of need to the Health Facilities Commission to build a new hospital in Washington County. The health care system purchased property on State of Franklin Road in Johnson City less than one mile from the Johnson City Medical Center Hospital.
   The proposed facility would be an acute care facility providing emergency care. In its application, Wellmont asserted that additional hospital capacity is needed in Washington County based on reports showing emergency room waits, delays in scheduling surgical and diagnostic procedures and the unavailability of hospital beds.
   MSHA owns four health care facilities in Washington County including Johnson City Medical Center Hospital, North Side Hospital and Johnson City Specialty Hospital.
   In January, the Tennessee Court of Appeals upheld the findings of both an Administrative Law Judge and Chancellor Carol L. McCoy of Davidson County to vacate the CON. The previous courts ruled a conflict-of-interest situation existed on the part of one member of the Health Facilities Commission, which approved the CON application submitted by Wellmont.
   Baylor said Wellmont officials were still crafting the CON for submission to the Tennessee Health Services and Development Agency. The new agency now performs the function of the former Health Facilities Commission granting certificates of need. The timetable of when Wellmont's new CON would be submitted had not been determined, Baylor said.
   "The positive side is first you have a different group on the commission than before," said Baylor. "It should move along more quickly."
   After taking evidence and hearing arguments of counsel, the Commission voted 5-4 in November of 2000 granting Wellmont's application for the CON. The Commission's chairperson abstained from the vote while then Commissioner Charles Mann voted with the majority to grant the CON.
   MSHA took Wellmont to court alleging a conflict of interest involving one member of the HFC board. During the legal process, MSHA presented evidence that established Mann as the principal owner, officer and director of Specialty Surgical Instruments (SSI) and that SSI sells surgical instruments to hospitals and other health care providers in Tennessee. More specific to this case, MSHA presented evidence that SSI sold over $450,000 to Wellmont from fiscal year 1997 through June 6, 2001, and alleged that Mann would likely sell even more equipment to Wellmont if another hospital were opened. MSHA also acknowledged that SSI sold $158,000 to Mountain States in the year 2000.
   The Court of Appeals ruled that Mann had an affirmative duty to inform the Commission of his conflict of interest and to recuse himself and his vote to approve the CON was void. Based on the ruling that Mann's vote was void, the Court ruled that the vote of the eligible commissioners voting was four to four, being a tie vote, which constitutes a decision by the Commission denying Wellmont's CON application.
   "Mostly what has delayed it for two years has not been the basis of need as the legal process," said Baylor.
   MSHA formed after Johnson City Medical Center Hospital, Inc. acquired six facilities owned by the Hospital Corporation of America in Northeast Tennessee on Sept. 1, 1998. Mountain States Health Alliance took its official name in January 1999. The MSHA network includes Indian Path Medical Center and Indian Path Pavilion in Kingsport and Sycamore Shoals Hospital in Elizabethton. MSHA also operates the Johnson County Health Center in Mountain City.
   The integrated health care delivery system is comprised of Wellmont Bristol Regional Medical Center in Bristol, Tenn.; Holston Valley Medical Center in Kingsport; Hawkins County Memorial Hospital in Rogersville; Lonesome Pine Hospital in Big Stone Gap, Va.; and Buchanan General Hospital in Grundy, Va.
   Baylor said despite the legal waiting game and court decisions, the health care organization never considered abandoning the new hospital plan. "We threw our hands up in frustration and disbelief," he said, "but never in giving up."