The planned Erlanger Behavioral Health Center is seen is this rendering.

NASHVILLE — A state board has approved a request by Erlanger hospital to build a new $25 million, 88-bed mental health hospital at the corner of Holtzclaw and Citico avenues in Chattanooga.

By a 9-0 vote, members of the state Health Service and Development Agency approved the project after two hours of argument and discussion.

The state must approve any significant new medical facility and evaluates each proposal based on its need, its financial prospects, the quality of care provided by the proposal, and whether it contributes to the development of an orderly health care system.

Erlanger's proposal, a joint venture with Nashville-based Acadia Healthcare, was opposed by representatives of Parkridge hospital, which operates two of the largest mental health facilities in the area, and from CADAS, the Council on Alcohol and Drug Abuse Services.

They argued the real need is not new beds but rather more staffing for existing beds.

Parkridge CEO Darrell Moore said a significant number of the beds at the Parkridge Valley Child and Adolescent Services and Parkridge Valley Adult and Senior Services hospitals can't be filled because the hospital can't find enough qualified psychiatrists and nurses to staff them.

"This is not an issue of licensed beds," Moore said. "It is about a shortage of behavioral health professionals — nurses, social workers and physicians."

Erlanger countered by emphasizing how many patients needing mental health care end up in its emergency room and stay there for extended periods of time because there are no beds available elsewhere.

"They stay in the emergency department for days," Erlanger Senior Vice President Joe Winick said. "We pay to house the patients and keep them safe, but they are not getting the health care they need."

The board also heard from Hamilton County Sessions Court Judge Gary Starnes, who backed the project, saying too many of the people he sees in his courtroom have significant mental health issues but no place to go for treatment.

'This week, I have seen 12 individuals who needed care at Moccasin Bend [the state mental health facility], but they can't get in," he said. "So we try to keep them in a jail cell. Some are dangerous, some have committed stabbings or robberies, but most often they have mental health issues entwined with drugs and alcohol."

The lack of facilities to treat those needing mental health care is also costly to other Hamilton County agencies.

Wanda Mays, manager of the sheriff's department's Crisis Intervention Team, told the board the sheriff's department spends a lot of manpower getting residents with mental problems into a hospital. Last year, the department spent 4,500 staff hours transporting 1,680 people who needed mental care.

These were not people who had committed a crime, but they often spent hours handcuffed in the back of a patrol car while sheriff's deputies drove them to the nearest facility with an open bed. She added that 40 percent of the inmates at the county jail are receiving psychotropic medication for mental issues.

But Parkridge lawyer Jerry Taylor countered that the reason those inmates couldn't find a bed was not that there was no space at Parkridge, but rather that those patients were often the most difficult, requiring special care at a facility such as Moccasin Bend. Unfortunately, the state has not been adding beds for the most violent patients. It's been shutting them down, he said.

The argument at times turned sarcastic, with both Erlanger and Parkridge executives questioning their rivals' claims. Parkridge, for example, claimed it was the "safety net provider" for mental health patients because it spent more than $10 million to take over the Cumberland Hall adolescent mental heath facility after it closed in 2010.

Erlanger countered by noting Parkridge had reported only about $25,000 in free charity care for 2014, in contrast to the $85 million reported by Erlanger.

"They're a good hospital and they did a good thing when they took over Cumberland Hall. But you'd think their report would show more if they were really in charity care," attorney Bill West of Nashville's Baker, Donelson, Bearman, Caldwell & Berkowitz said on behalf of Erlanger.

But Taylor then noted that almost all mental health patients are covered by TennCare, the state's Medicaid program, so few patients need free care.

In response to a question about whether he foresees difficulty staffing the new facility, Winick said his staff was already sending him a steady supply of quality resumés, adding "I don't know what is going on over there at Parkridge."

For his part, Taylor told the board the only way Erlanger managed to justify the need for new beds was to fudge the numbers by claiming patients would come from 30 surrounding counties. He said Parkridge mental health patients come primarily from nine counties and said he thought Erlanger's claim was inaccurate.

Acadia's role in managing the new facility also was questioned. Acadia owns the largest network of behavioral health hospitals in the U.S., with more than 17,000 beds, and several board members noted the for-profit company will end up with a majority interest in the new joint venture. Steve Davidson, Acadia's chief development officer, assured the board the facility will adhere to Erlanger's policies in providing charity care and noted that while his firm will own a majority interest in the hospital, the board of directors will be split 50-50.

Erlanger's proposal allocates 24 beds for geriatric patients, 24 for adults, 18 for children and adolescents, and 22 for adult substance abuse patients.

Erlanger plans to move its current 12-bed geriatric behavioral health unit from Erlanger North to the new hospital.

The two-story, 69,000-square-foot hospital would employ about 100 staffers, according to Erlanger's projections, and would open in 2018.

Contact staff writer Steve Johnson at 423-757-6673,, on Twitter @stevejohnsonTFP or on Facebook,