Hospital Talks Stall; Interest Shown From Alternate Sources

Huntsville, TN (2012-01-17) Despite having almost all issues pertaining to the lease on the Scott County Hospital worked out, negotiations have stalled between the County and Pioneer Health Services to sign a lease deal.

On January 6, 2012, County Mayor Jeff Tibbals, County Attorney John Beaty, Community Development Chairman Paul Strunk, and Hospital Committee member Gary Stein held a conference call with Morgan Dunn, VP of Business Development at Pioneer Health Services, Inc. and Pioneer’s in-house legal counsel to hammer out the final details of a new lease agreement for the Scott County Hospital. “We were able to iron out 99.9% of the issues; however, the one we could not was the issue of indemnification,” Strunk said. Pioneer is seeking to be indemnified against any potential liability for any claims erroneously paid to the Hospital while it was operated by Mercy Health Partners (MHP) and Health Management Associates (HMA), a potential exposure of millions of dollars.

As a result of the impasse, Pioneer has once again changed course. After being unable to negotiate an indemnification agreement with HMA, Pioneer, in late November, decided to seek its own National Provider Number (NPN) for the Hospital. By doing so, Pioneer could isolate itself from any liability associated with prior operations of the facility. At the conclusion of the conference call in early January, Pioneer announced it would not be actively seeking the new number, and wanted the County to either accept liability itself, or to co-sign a multi-million dollar loan to cover its operational expenses while obtaining a new number. “They told us we’re (Pioneer) taking all the risk, and you’re (the County) taking none,” Tibbals said. Since that call, county officials have adamantly been trying to expedite the closure of open Medicaid and Medicare cost reports at the local facility. Once those reports are closed, any liability would be fully disclosed and would be the responsibility of the current operator.

With no lease deal on the table, it leaves the Commission a mere four months away from the May 24, 2012 deadline, when HMA will cease operation of the Hospital. “This is a dire situation we find ourselves in. I’m not going to lie,” Tibbals declared. Some sunshine could be on the horizon, however, as Tibbals noted another potential suitor had been in contact with his office. “We have met, but we have not heard back from them,” Tibbals noted. Tibbals didn’t disclose the name of the company.

In other news Tuesday night, the Commission:

· Honored both the Scott County and Oneida Special School District Boards of Education in recognition of School Board Appreciation Week, January 22-28, 2012;

· Authorized Mayor Tibbals to apply for a Community Development Block Grant (CDBG) in the amount of $300,000 for the purchase of a new ambulance and medical supplies for the Scott County Ambulance Service and a HOME Grant of up to $500,000 for the rehabilitation of dilapidated housing; and,

· Tabled a motion to appoint members to the Scott County Municipal Solid Waste Planning Board to their next workshop on February 6, 2012.