Virginia OKs Wellmont-Mountain States merger

Hank Hayes • Updated Oct 30, 2017 at 3:36 PM

The Virginia Department of Health (VDH) on Monday conditionally approved a Cooperative Agreement that would seal the merger of Wellmont Health System and Mountain States Health Alliance in Southwest Virginia.

The two hospital systems plan to unite under the new name Ballad Health.

The Tennessee Department of Health in September approved a Certificate of Public Advantage (COPA) approving the Tennessee portion of the merger.

Under the leadership of an Integration Council, formulated at the beginning of the merger-planning process, 17 functional teams consisting of representatives from both organizations have been meeting to help prepare the systems for integration, which would take place in early 2018.

A summary of an August meeting between VDH Commissioner Dr. Marissa Levine, Wellmont/Mountain States’ leaders and other state officials indicated the Cooperative Agreement was getting a lot of scrutiny.

Allyson Tysinger, senior assistant attorney general in the Virginia Office of the Attorney General, explained that under Virginia law, the health commissioner may “reasonably condition” the approval of the Cooperative Agreement upon the parties’ commitments. She explained if the commissioner approved the Cooperative Agreement, it would be done in an order with conditions imposed within the order.

Dr. Levine, meanwhile, told the Wellmont/Mountain States contingent that several members of Virginia’s application review team recently traveled to the Remote Area Medical Clinic (RAM) in Wise County in order to solicit additional public comment concerning the proposed merger. This was done in lieu of holding an additional public hearing. Dr. Levine told the applicants the RAM participants were eager to provide feedback.

VDH received comments from 189 individuals. Among the 189 comments, 70 expressed support for the merger and 95 expressed opposition — with the remainder providing other types of comments.

Marissa Levine also said her advisers told her that there was “not enough meat on the bone” concerning Ballad’s planned population health improvement plans.

The Southwest Virginia Health Authority also reviewed the Tennessee COPA and found it more “restrictive and bureaucratic,” but also determined it gives Virginia more protection. 

The Federal Trade Commission opposes the merger and could choose to file a lawsuit against it.

In the initial Tennessee application, both Wellmont and Mountain States admitted the merger would eliminate competition in certain areas, but contended the benefits would “far outweigh” the loss of competition due to cost savings, quality enhancement and improved access.

The Wellmont and Mountain States boards of directors in 2015 signed a “term sheet” outlining moves toward a merger agreement. They committed to creating a new integrated delivery system designed to significantly enhance community health through the investment of not less than $75 million over 10 years in population health improvement.

Alan Levine, Mountain States’ president and CEO, would lead Ballad Health.

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