Altamonte Springs, Fla.-based Adventist Health System filed a breach of contract lawsuit against Kingsport, Tenn.-based Wellmont Health System alleging Wellmont is refusing to close on a transaction, according to The Greenville Sun.
Wellmont and Adventist jointly owned Tacoma Regional Medical Center in Greenville, Tenn., from 2007 until 2014, when officials decided the hospital should have one owner — Adventist. However, after a comprehensive evaluation, Adventist and Wellmont decided in August 2015 that Tacoma Regional would become a sole member of the Wellmont system.
Although the change of ownership was initially expected to be complete by Nov. 1, 2015, the deal still hasn't closed. In its complaint, Adventist alleges Wellmont is the cause for the delay. Adventist claims Wellmont hasn't provided any evidence that it intends to close on the deal since the transaction was announced last August, according to The Greenville Sun.
Wellmont officials claim they were acting in good faith to close the deal in 2015, but delayed closing after learning of a False Claims Act case pending against Adventist. Last September, Adventist agreed to pay $118.7 million to the federal government and to the sates of Florida, North Carolina, Tennessee and Texas to resolve allegations it violated the False Claims Act by maintaining improper compensation arrangements with referring physicians.
Wellmont has not formally responded to the Adventist complaint.