published Saturday, June 28th, 2014

Hutcheson Medical Center: We don't owe Erlanger a dime

Hutcheson Medical Center in Fort Oglethorpe, Ga.
Hutcheson Medical Center in Fort Oglethorpe, Ga.
Photo by Doug Strickland /Chattanooga Times Free Press.

The legal briefs keep piling up in the battle over millions of dollars exchanged between two area public hospitals.

Chattanooga-based Erlanger Health System filed suit early this year in U.S. District Court in Rome, Ga., to be repaid more than $22 million, including interest, it lent to Hutcheson Medical Center during the two years it managed the financially struggling hospital based in Fort Oglethorpe.

Hutcheson filed the 25th document in the case Wednesday, a 41-page counterclaim in which it argued, once again, that it doesn't owe Erlanger any money because Erlanger didn't live up to the terms of its management agreement.

"The damages resulting from Erlanger's mismanagement of Hutcheson should offset any indebtedness," reads a claim submitted by the law firm of former Georgia Gov. Roy Barnes.

Erlanger spokeswoman Pat Charles couldn't immediately be reached for comment.

Barnes wrote that Erlanger's mismanagement included neglecting to pay employees' IRS withholding taxes, overbilling Medicaid and Medicare and failing to hire a qualified CEO until nine months after taking over Hutcheson.

"It is clear that Erlanger's strategic plan for Hutcheson was totally and exclusively for the benefit of Erlanger -- and at the expense of Hutcheson," Barnes' claim states.

Instead of owing Erlanger money, Hutcheson is entitled to damages "in an amount to be proven at the time of trial," Barnes wrote.

According to a Hutcheson news release, Wednesday's procedural motion seeks to protect the public purse of Walker and Catoosa counties, which ultimately may be responsible for the debts. The loans were backed by hospital property as collateral, the release states, and a $10 million guarantee from each county.

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

about Tim Omarzu...

Tim Omarzu covers Catoosa and Walker counties 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. Stories he's covered include crime in blighted parts of metro Detroit and Reno, Nev.; environmental activists tree-sitting in California's Sierra Nevada foothills; attempts by the Michigan Militia to take over a township¹s government in northern Michigan. A native of Michigan, ...

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