BLOUNT COUNTY, Tenn. — Editor's Note: This story was corrected to reflect that the "joint venture" would only create a new company that owns and operates a medical group, but not involve the two health systems' hospitals.
Blount Memorial Hospital Inc. announced Friday that they were considering a "joint venture" with Covenant Health to effectively create a new company that would "own and operate a medical group, but not involve the two health systems' hospitals."
They said BMH and Covenant Health would jointly own the new company, which would have its own board of directors. They said the venture could also result in Covenant Health buying some non-hospital real estate and buildings.
Should the new company be formed, they said physicians, employees and leadership of Blount Memorial Physicians Group would transition to the new company. They said patients would not see any interruption to their care. They also said services provided in Blount County would continue to be provided at the same locations.
BMH said they and Covenant Health intend to ask the Blount County Commission to endorse the "potential joint venture."
They sent out a press release on Friday after the commission previously approved discussions between the University of Tennessee Medical Center and Mayor Ed Mitchell about the future of the hospital.
In March 2023, BMH sent a cease and desist letter to the UT Medical Center asking them immediately cut off negotiations and discussions with Blount County leadership.
Disagreements between the BMH 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.
Blount County leaders also asked Tennessee leaders to pass a law that would allow them to change the hospital's management. It passed the Senate and the House concurred with an amendment to it on April 19.
It allows the county to operate and manage the hospital or maintain a nonprofit organization to manage it. It also explicitly says any nonprofit organization that may manage the hospital would not be deemed the owner of the hospital's assets.