Erlanger Health System will pay Knoxville-based Cherokee Health Systems $222,738 to manage Chattanooga's two community health centers for six months, according to a contract starting Dec. 7.
Bill Hicks, who served as executive director for the Southside and Dodson Avenue community health centers for six years, resigned effective Dec. 9.
Hicks tendered his resignation in an email sent to Erlanger officials Nov. 21 but did not give a reason. He earned $112,000 a year.
Hicks declined to comment, referring questions to Erlanger officials.
The community health centers are part of Erlanger Health System but have a separate board of directors. The centers provide medical and dental care, disease management and wellness promotion for the medically needy.
In a joint statement emailed last week, Cy Huffman, Erlanger's chief medical officer, and Joanie Gammell, chairwoman of the community health centers board, said Cherokee has a track record of partnering with patients to improve their health and reduce health care costs.
"They are ideal partners to help the Southside and Dodson Avenue community health centers deliver on our mission of 'providing access to affordable health care performed in a considerate manner,'" according to the statement.
According to their website, the centers employ about 30 physicians, nurse practitioners, nurses and other staff.
Cherokee Health Systems is a 50-year-old nonprofit system with 43 clinical sites in 12 Tennessee counties, according to its website. The sites offer primary care, behavioral health and prevention programs and services.
The contract with Erlanger gives Cherokee the authority to "provide executive leadership and management to the Health Centers."
Cherokee will form a leadership team and assume the roles of executive director, chief operating officer and chief financial officer, according to the contract, and it will assign an on-site administrator to lead and manage the health centers, at its discretion.
Erlanger will pay Cherokee $37,123 a month during the six-month interim agreement. Cherokee also will be reimbursed for staff travel outside the East Tennessee area.
If the agreement continues for more than six months, a pay rate based on performance criteria will be developed, the contract states.
Dennis Freeman, CEO for Cherokee, said the health system has provided management for community health centers in the past. Its focus, he said, is blending behavioral health into primary care.
Each of Cherokee's primary care clinics also has behavioral health staff to work with patients to address issues such as diet, exercise and weight.
"It requires a collaborative effort with the patients, he said.
State Rep. JoAnne Favors, D-Chattanooga, who served as executive director for the health center before Hicks' tenure, questioned why hiring Cherokee is necessary.
"I have nothing against Cherokee. I know them, and they are good people, but the health centers had a capable administrative staff," Favors said. "They could have done anything that needs to be done."
Favors said the Southside Community Health Center should have been moved years ago, but the relocation has been delayed repeatedly because of a lack of money.
Hicks told the Chattanooga Times Free Press earlier this year that the center would begin moving from the old John P. Franklin Middle School building this year to a more accessible site on 38th Street and Ohls Avenue to provide a wider variety of services and programs in 2012.
"The land is available," Favors said. "It really needs to be constructed and relocated."
Erlanger spokeswoman Pat Charles said a grant to replace the Southside facility is pending.