Erlanger Health Systems has sued the Knoxville-based company hired to manage its Dodson Avenue and Southside community health centers, after the hospital claimed the company breached its contract, then opened a competing clinic in Chattanooga this month.
Erlanger is demanding that Cherokee Health Systems pay back the $325,724 the hospital paid for its nine-month contract with the company, plus damages.
Representatives from Cherokee Health Systems in Knoxville did not return requests for comment.
Erlanger officials expected Cherokee's management would bring new vision and efficiency, and help curb the centers' multimillion-dollar losses after contracting with the company in December 2011.
Erlanger operates three community health centers in Hamilton County: Southside Health Center, Dodson Avenue Community Health Center and Children's Hospital Urgent Care Clinic.
The federally qualified centers provide primary medical care, disease management and dental care for families regardless of a patient's ability to pay. They are part of Erlanger Health System but have a separate board of directors.
Read more in tomorrow's Times Free Press.