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Jellico City Council votes to kick out hospital provider Rennova

Once the city attorney sends notice, the mayor said the company will have 30 days to vacate the premises.

JELLICO, Tenn. — The Jellico City Council voted Thursday to order Rennova Health to vacate the Jellico Medical Center within 30 days, leaving the city without a hospital provider, the mayor said.

The city's attorney said the long-troubled hospital company had breached the terms of its contract at the city-owned site by not fulfilling its obligation to operate as a general acute care hospital. 

Elizabeth Burrell said the facility has not admitted a patient since late November and often does not have adequate staff to provide patient care. 

“I kind of tend to agree with the mayor," Burrell said. "It is kind of a fancy urgent care.”

"The city [council] doesn’t feel like the current operator is offering the services they are required to under the contract," she said. "They believe they want a hospital in Jellico that can help its citizens.”

Jellico mayor Dwight Osborn said "We are doing everything we can to improve the healthcare situation in Jellico."

Burrell said she has not yet written the letter notifying Rennova of the city's plans to terminate the contract.

In a lengthy statement to 10News, Rennova CEO Seamus Lagan said he learned about the city's intent to terminate in the press and on social media. 

"The hospital needs a significant capital investment to upgrade heating and cooling systems to make it fit for purpose as a fully functioning hospital," he said. 

He said Rennova is willing to share its plans with the city and that the city council is aware of issues with the hospital building, which he said restricts the ability to do surgery. 

"They are aware of the deficiencies in their building and must realize that either they or someone else will have to make the required investment of probably $500,000 or more if the facility is to continue in use as a hospital," Lagan said.

"We are not aware of anyone other than us committed to making this investment at present, so I fail to see how such a decision by the [city council] benefits the community or the current employees at any point in the future."

Lagan acknowledged it has been months since the Jellico facility admitted a patient. He said staff members left for better paying facilities, which also impacted the company's ability to accept inpatients. 

During its time in Tennessee, Rennova has faced enormous financial difficulty. In a June financial filing with the Securities and Exchange Commission, it said owed $49 million and spent $2 for every $1 the company took in.

In the past two years, hospital employees said the company was routinely late making payroll, allowed hospital supplies to dwindle to dangerous levels and eventually closed the Jamestown hospital after federal regulators pulled insurance funding over compliance issues.