Bill to change Erlanger governance introduced in Tennessee House, not Senate

Staff Photo by Matt Hamilton / Erlanger Medical Center is shown on Tuesday, Feb. 8, 2022.
Staff Photo by Matt Hamilton / Erlanger Medical Center is shown on Tuesday, Feb. 8, 2022.

A bill that would allow Erlanger Health System to become a non-governmental entity was filed Wednesday in the Tennessee House of Representatives, but as of Thursday afternoon, no companion bill had been introduced in the Senate.

House Bill 2915 was filed by Rep. Patsy Hazlewood, R-Signal Mountain, with co-sponsor Esther Helton, R-East Ridge.

The bill proposes changes to the private act that created the Chattanooga-Hamilton County Hospital Authority, better known as Erlanger, so that the Erlanger Board of Trustees along with Hamilton County government can consider whether the public hospital system should transition to a private nonprofit governance model.

(READ MORE: Hamilton County delegation reviewing plans to make Erlanger private)

The amendment would enable the Erlanger board by a two-thirds vote to transfer Erlanger's assets or liabilities for "no or nominal monetary consideration" to a nonprofit corporation that agrees to "covenants" for continuing Erlanger's safety-net mission related to charity care, emergency and trauma services, major clinical service lines, the children's hospital, federally qualified health centers, population health and participation in the federal Medicare and Medicaid programs.

The bill states that the new nonprofit would have to commit to protect employees by providing positions, salaries and benefits at least equivalent to current levels. It also includes provisions that would require Erlanger under a new structure to remain responsible for the pension plan and take additional steps to ensure its stability.

The new nonprofit would report to an oversight body established to monitor its adherence to the covenants and commitments and would be prohibited from the sale, lease or transfer of "substantially all of its assets or operations" without approval of the Hamilton County Commission, Tennessee attorney general and the oversight body.

State Sen. Todd Gardenhire, R-Chattanooga, and Sen. Bo Watson, R-Hixson, said via text messages Thursday afternoon they were tied up in a budget meeting and unable to comment on their future legislative plans for Erlanger.

With the Tennessee General Assembly's current session winding down, time is running out for the senators to bring forward a companion bill, which would be required for the House bill to move forward.

Both Hamilton County Mayor Jim Coppinger and Erlanger's Board of Trustees have said they believe transitioning the health system - which is the Chattanooga region's only safety-net hospital and the county's largest employer - to an independent nonprofit model would help Erlanger compete against the area's private hospitals.

One benefit cited by those favoring the transition is that it would allow Erlanger to do more of its business in private, as its competitors do.

Erlanger is the largest area provider for low-income and uninsured patients. Last year, Erlanger provided around $150 million worth of uncompensated care - a figure that has grown 36% in four years.

The hospital is home to the region's only Level 1 trauma center and only children's hospital within 100 miles.

Contact Elizabeth Fite at or 423-757-6673. Follow her on Twitter @ecfite.

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