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Blount Co. Commission approves talks between mayor and UT Medical Center over future of hospital

The talks follow months of controversy surrounding Blount Memorial Hospital.

BLOUNT COUNTY, Tenn. — Blount County Commissioners voted to approve a resolution that effectively gave their blessing for Blount County Mayor Ed Mitchell to enter talks with the University of Tennessee Medical Center about the future of the county's only hospital.

The resolution passed 11-5, with two commissioners abstaining. 

The resolution says a contract with UT Medical Center would need to be brought before the commission. It also allows the mayor to enter into a written agreement with Blount Memorial Hospital that clearly defines the "rights and obligations of the parties," and allows him to negotiate with the BMH board for their approval of a management agreement with UT Medical Center.

It also says that BMH and the Mayor enter a written agreement, it would need to be brought before the commission for approval. If they cannot agree though, the matter would need to be brought back to the commission to consider ending their relationship with BMH.

"Last Tuesday, the hospital and the mayor's office got together to try and do some negotiations and some work. They signed non-disclosure contracts, and myself, I'm not sure why it's non-disclosure," said Commissioner Tom Stinnett. "They met most all day long, so I'd like what was spoken about."

Disagreements between the board of directors and Blount County leaders have led to months of controversy.

In June 2022, Blount County leaders wrote a letter to the hospital's board of directors explaining their concerns over how the board was choosing its CEO. Mayor Ed Mitchell was one of the leaders who signed the letter. It said that the mayors felt the process to find a new CEO did not strictly follow state law and hospital policies.

Then in November 2022, Mitchell sent another letter to the hospital saying he had "grave concerns" about how BMH is operated. In it, he said that BMH was appointed to operate the hospital on behalf of the county, but it never became the owner of any hospital assets.

Later in December 2022, BMH filed a lawsuit that asked for a ruling to allow BMH to proceed with plans to sell a facility in the Springbrook area for around $22.2 million. It was opened in 1996 and provided outpatient care, as well as other healthcare services, according to a press release from the hospital. 

Blount County Mayor Ed Mitchell had previously alleged that the facility was purchased with county revenues, making it county property. The hospital said that it was built without county funds, and said it was not licensed as a hospital, and so argued they were allowed to sell it.

"In general, we need to work through strategies that help address our operational needs and one of those are cash, so we need to continue to identify strategies to bring cash to Blount Memorial," said Dr. Harold Naramore, the CEO.

In 2019, the hospital refinanced its revenue bonds, meaning the bonds were backed by the revenue of Blount Memorial Hospital, Inc. 

The hospital said it lost around $40 million due to the pandemic.

However, Commissioner Mike Akard said he doubted that was the cause of the hospital's losses.

"An example of what we're told not making a whole lot of sense, is we're told that we need to have $9 million in June. But according to what we've been told already today, we should have $17.4 million more than we had last year because of all these increases in revenue that the hospital has this year," he said. "It's time to put emotions aside and do the fiscally responsible thing and get this hospital squared away."

He also said Tuesday's resolution would not violate state code, since it did not affect either the county's or the hospital's budget.

Mitchell later suggested that the University of Tennessee Medical Center take over the hospital, asking commissioners to negotiate a management agreement between it and BMH.

In this agreement, UTMC would manage and operate Blount Memorial to "better serve" Blount County citizens, while keeping county ownership and local board oversight on the hospital, the release said. 

"Us taking the right action for the citizens of Blount County is crucial to try and save our community hospital. There are only two of them left in the state of Tennessee. There are people running it, who probably aren't even from Blount County, but don't have any strong roots to want to keep our community hospital a non-profit community hospital," said Akard. "Last time we met, we were told that there isn't a golden parachute, but, 'We get two-years salary if the hospital has to be sold or goes broke.' That's called a 'golden parachute' in most of the world."

Attorneys for Blount Memorial Hospital, Inc. sent a cease and desist letter to UT Medical Center in February over talks with Blount County to take over management of the hospital.

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