County commissioners call for investigation of Hutcheson hospital management administration
Catoosa County commissioners, after having agreed in June to pay Erlanger hospital $6.25 million to settle a lawsuit related to management of bankrupt Hutcheson hospital, have now requested a grand jury investigation of Hutcheson’s operations.
Chattanoogabased Erlanger had assumed management of Hutcheson — and provided $20 million of cash — to shore up the insolvent North Georgia medical center in the spring of 2011.
Losses at Hutcheson continued over the next couple of years and Hutcheson’s board of trustees terminated the management agreement in the fall of 2013. At that point, Erlanger filed suit and demanded repayment of its loan that had been backed equally by Catoosa and Walker counties.
After being credited for the sale of some Hutcheson assets, the $10 million claim against Catoosa was reduced to about $8.5 million. While Walker County has filed an appeal after federal Judge Harold Murphy ruled in Erlanger’s favor, Catoosa’s commissioners agreed to a negotiated out-of-court settlement of $6.2 million.
That settlement included a stipulation that Erlanger repay the full amount should Walker County win its appeal. The settlement also requires that if before July 1, 2017, Walker County ends up paying Erlanger less than $6.2 million the difference will be rebated to Catoosa.
Catoosa commissioners, by a 4-0 vote on Sept. 6, adopted a resolution asking Lookout Mountain Judicial Circuit District Attorney Herbert “Buzz” Franklin to impanel a grand jury to investigate “the operations and activities of Hutcheson Medical Center.” Commissioner Jeff Long did not attend the meeting.
The resolution, as adopted, also asked that the Georgia Bureau of Investigation’s resources be utilized if deemed appropriate.
No specifics were given. No insinuations of criminal activity were made. No particular individuals — administrators, trustees, staff or consultants — or alleged violations a grand jury might question were named.
What did happen was the commissioners OK’d the county attorney approach the district attorney about forming a grand jury to inquire into the activities of the Fort Oglethorpe-based hospital and involving the Georgia Bureau of Investigation in the process.
The GBI could only become involved if asked by a constitutional officer, which Franklin is, or other law enforcement agency — not by the elected commissioners.
It is possible that a grand jury might find fault with how Hutcheson was run — before, during or after Erlanger oversaw both day-to-day and longrange management.
There is also the possibility that an investigation would find actions by members of the Hutcheson hospital board and the Hospital Authority of Walker, Dade and Catoosa Counties warranted criminal charges being filed.
A grand jury might also find hospital administrators or other officials were major contributors to Hutcheson’s financial collapse.
Or, a grand jury might not issue a true bill, meaning there is no evidence that would justify a criminal indictment.
Until a formal request has been prepared and delivered, comment from the district attorney’s office is not expected.
County Attorney Chad Young said such a letter to District Attorney Franklin will be drafted after he completes legal work necessary for the county’s securing a short-term $3.5 million loan — a tax anticipation note — that was also approved by the commissioners during their Sept. 6 meeting. The letter to Franklin will be posted online. INSIDE: Commissioners welcome judge, borrow $3.5 million. Page A3.