County Tentatively Agrees To Negotiate Hospital Deal With Mississippi Company

Huntsville, TN (2011-07-18) The Scott County Commission has tentatively agreed to enter into a Letter of Intent with Pioneer Health Systems, a Mississippi health care company that has expressed an interest in operating the Scott County Hospital. The Commission’s action followed a verbal affirmation from a representative from Health Management Associates (HMA), the health care giant that is assuming all of Mercy Health Partners’ Tennessee assets, was not interested in operating the facility past the expiration of the current lease in May of 2012.

Community Development Chairman Paul Strunk informed fellow Commissioners Monday night that recent rumors that HMA might be interested in continuing to operate the local facility were unfounded. On Monday afternoon, County Mayor Jeff Tibbals reportedly spoke to Pete Lawson, Executive Vice President of Development at HMA, who again stated that HMA had no interest in continuing their involvement with the Scott County Hospital beyond their assumed obligation.

For the last three weeks, County officials had repeatedly attempted to have a meeting with representatives of HMA. Tentatively, a meeting was scheduled for Tuesday; however, due to unforeseen circumstances that meeting was cancelled. With the Commission set to meet Monday evening, Tibbals and Lawson spoke briefly late Monday afternoon. Last week, local rumors began to surface that HMA might be reconsidering it decision, a change that would have added a new wrinkle to hospital negotiations.

With HMA’s affirmation, County leaders were again faced with three options; enter into negotiations with either Downey Enterprises, LLC or Pioneer Health Services, Inc., the two companies that returned proposals to operate the facility, or reject both offers and put the facility back on the open market. During a Community Development Committee meeting held prior to the Commission meeting, the Committee voted 6-0 with member Gerry Garrett absent to enter into a Letter of Intent with Pioneer Health, pending negotiation of final terms between the two parties.

In light of his conversation with Mr. Lawson and the committee’s action, Mayor Tibbals brought the subject of the Letter of Intent to the Commission. “I did not feel ready to bring the letter if intent up tonight, but in light of the conversation we had, I felt compelled to bring it up,” Tibbals said. The document would, which would not be a binding agreement to make Pioneer the next operator of the Hospital, called for exclusive negotiating rights with the County for a period of nine months, or until June 1, 2012. Many Commissioners, however, felt that was too long a period. County Attorney John Beaty stated that he would be more comfortable with a 90-day negotiation period, which would allow the County some limited time to continue the search should negotiations with Pioneer fall through.

“If we can’t reach an agreement with them in sixty days, we’re likely not going to,” said Commissioner Ron Blevins.

While many Commissioners expressed their desire to continue to move forward with the process, there was also an atmosphere of caution amongst the body.

Adding to the body’s hesitation was a number of employees of the Hospital who spoke out Monday night, expressing their concern over loss of accrued benefits earned with Mercy and previous operators. A number of employees who have hundreds of hours of accrued sick leave hours may lose those benefits in the transition between Mercy and HMA. After meeting with HMA human resource representatives, many local employees learned that the healthcare giant would not honor those accrued benefits. Apparently, local employees were not wholly integrated into the Mercy benefits plan; leaving them venerable to loss of sick leave hours. In the remainder of the Mercy system, employees are part of an extended illness bank (EIB). Mercy, in its transition to HMA, has agreed to purchase the retirement component of the EIB plan from each employee. Furthermore, Pioneer, in its proposal, has indicted tenure would be honored for accrual purposes, but all employees would be considered new hires.

“I hope that you, as a body, would work diligently to protect our people,” stated Anna Stephens, a 27-year employee of the Hospital.

While Strunk emphasized the County had little control over the transition between Mercy and HMA, at his urging, the Commission passed a resolution imploring Mercy to treat local employee equally to others in its healthcare system.

After polling all the Commissioners in attendance, it was decided that more negotiation on the Letter of Intent was needed before the Commission could make a decision. On a motion by Commissioner Brian Armstrong, seconded by Commissioner David (Blue) Day, the Commission granted authority to Tibbals, Strunk, and Beaty to pursue changes to the document, which would be presented again to the Commission in a special meeting during the regularly scheduled work session on August 1, 2011.