Wellmont, Mountain States File Letters of Intent to Begin Regulatory Approval Process in Tennessee and Virginia

Actions mark next steps in the process to pursue state approval for the proposed merger

KINGSPORT and JOHNSON CITY, Tenn. (September 16, 2015) – Wellmont Health System and Mountain States Health Alliance have filed a letter of intent (LOI) with the Tennessee Department of Health, indicating the organizations will submit an application for a Certificate of Public Advantage (COPA)  this fall. The two organizations have submitted a similar letter of intent with the Southwest Virginia Health Authority, signaling their intent to request approval by the commonwealth of the anticipated cooperative agreement between the two systems.

These actions mark the next steps in the regulatory processes the organizations are following as they explore the creation of a new, integrated and locally governed health system designed to be among the best in the nation and address the serious health issues that affect our region.

“The underlying purpose for the proposed merger is to reduce the growth in health care costs, improve the health of our region and invest in the growth of our economy,” said Alan Levine, president and CEO of Mountain States. “The job creators and employers in our region support this model because they know, as we do, that a locally governed system, under the enforceable agreement of a COPA, will be the best alternative to the widespread consolidation wave happening to hospitals and insurance companies.”

Next, the two organizations will finalize a definitive agreement, which is another formal step in the process to solidify the proposed partnership. The date for expected completion of the merger has not been set but will not occur before state approval has been granted.

A COPA in Tennessee and the cooperative agreement approval process in Virginia will allow Wellmont and Mountain States to merge, with the states actively supervising the proposed new health system to ensure it complies with the provisions of the COPA intended to contain costs and sustain high quality, affordable care.

“COPA regulation with active supervision by the states is a proven and effective tool to protect consumers, as opposed to traditional hospital mergers occurring all across the country that do not include state involvement and ongoing oversight,” said Bart Hove, president and CEO of Wellmont. “With this proposed merger, our patients and our region will have access to more choices and health care options than they do today – and more than with any other solution.”

“In fact, other paths we explored could have led to loss of local control and jobs to new owners outside the region, as well as increased costs. We believe the proposed merger is the best approach for our community, and we greatly appreciate the hard work of officials in both states to provide a path for our vision to become a reality.”

Tennessee’s Department of Health recently released interim regulations governing COPAs in Tennessee, and Virginia’s Department of Health is finalizing rules to oversee similar cooperative agreements in that state. The rules provide a process and framework for state officials to follow in receiving and reviewing applications for a COPA/cooperative agreement and then actively supervising these agreements if approved.

In Virginia, a group of 25 physicians, community members and business leaders recently attended a meeting hosted by the Virginia Department of Health to express their opinions on the proposed regulations as well as their support for the proposed merger.

“We’ve been truly humbled by the outpouring of support we’ve received from business leaders, physicians and the community over the past few months,” Hove said. “It’s great to see that so many people in our region share our excitement about what we’re creating.”

“As we’ve said from the beginning, we are committed to being transparent about the efforts underway to pursue approval for our proposed merger,” Levine said. “While filing the letters of intent with Tennessee and Virginia are important next steps, they are simply two of many that will occur in the next few months. There is still a lot of work ahead. But, we grow more confident every day in our ability to work together to create a bright future for health care in our region.”

View copies of the Tennessee and Virginia letters of intent.

About Wellmont Health System

Wellmont Health System is a leading provider of health care services for Northeast Tennessee and Southwest Virginia, delivering top-quality, comprehensive health care, wellness, and long-term care services across the region. Wellmont facilities include Holston Valley Medical Center in Kingsport, Tenn.; Bristol Regional Medical Center in Bristol, Tenn.; Mountain View Regional Medical Center in Norton, Va.; Lonesome Pine Hospital in Big Stone Gap, Va.; Hawkins County Memorial Hospital in Rogersville, Tenn.; and Hancock County Hospital in Sneedville, Tenn. For more information about Wellmont, please visit www.wellmont.org.

About Mountain States Health Alliance

Since 1998, Mountain States Health Alliance has been bringing the nation’s best health care close to home to serve the residents of Northeast Tennessee, Southwest Virginia, Southeastern Kentucky and Western North Carolina. This not-for-profit health care organization based in Johnson City, Tenn., operates family of 13 hospitals serving a 29-county region. Mountain States offers a large tertiary hospital with level 1 trauma center, a dedicated children’s hospital, several community hospitals, two critical access hospitals, a behavioral health hospital, two long-term care facilities, home care and hospice services, retail pharmacies, a comprehensive medical management corporation, and the region’s only provider-owned health insurance company. The team members, physicians and volunteers who make up Mountain States Health Alliance are committed to caring for you and earning your trust. For more information, visit www.mountainstateshealth.com.