published Friday, July 4th, 2014

Hutcheson Medical Center sells Battlefield Imaging for $5.2 million

MRI Technologist Theresa Fanning performs a brain scan on a patient at the Hutcheson Battlefield Imaging Center, which is also used for patients at the adjoining breast center.
MRI Technologist Theresa Fanning performs a brain scan on a patient at the Hutcheson Battlefield Imaging Center, which is also used for patients at the adjoining breast center.
Photo by John Rawlston.

Hutcheson Medical Center got a much-needed infusion of cash this week by selling its majority interest in Battlefield Imaging for $5.2 million.

The deeply indebted Fort Oglethorpe hospital on Wednesday announced it sold its 51 percent interest to Digital Imaging of North Georgia, the doctors group that co-owned -- and now completely owns -- the digital imaging facility at Hutcheson's campus on Battlefield Parkway near Interstate 75.

Hutcheson could buy back its controlling interest in Battlefield Imaging within two years, under a provision in the sale agreement.

The hospital used the proceeds to repay Walker County $650,000 plus $2,805 in interest from a temporary line of credit that county Sole Commissioner Bebe Heiskell granted earlier this year, a Hutcheson news release said.

"The remainder will be invested to accelerate the hospital's ongoing turnaround and pave the way for a comprehensive refinancing of the North Georgia regional hospital's debt," the news release said.

Since May, Hutcheson Medical Center has been managed by a Chattanooga-based health care company founded by Dr. Mike Aiken, an entrepreneur who previously owned and operated North Park Hospital in Hixson.

Aiken's company and Hutcheson CEO Farrell Hayes are implementing a strategic plan, the news release said, that "will define and grow the services that are most beneficial to the community and allow the hospital to thrive, including cardiology, pulmonology, gastroenterology, orthopedics, oncology and general surgery."

Hutcheson's more than $60 million in debt includes some $22 million plus interest loaned by Erlanger Health System during the more than two years that Erlanger managed Hutcheson. Erlanger has sued for repayment in U.S. District Court and on Thursday announced it filed paperwork to foreclose and have the hospital sold to the highest bidder in August.

But Hutcheson officials and former Georgia Gov. Roy Barnes, whose law firm is in Hutcheson's corner, have said Hutcheson doesn't owe Erlanger anything, because Erlanger mismanaged Hutcheson.

Erlanger can't lay claim to any of the $5.2 million until the federal court case is resolved, Walker County attorney Don Oliver said.

"That's way down the road," Oliver said.

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or twitter.com/TimOmarzu or 423-757-6651.

about Tim Omarzu...

Tim Omarzu covers education for the Times Free Press. Omarzu is a longtime journalist who has worked as a reporter and editor at daily and weekly newspapers in Michigan, Nevada and California.

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