Bill To Revamp Erlanger Board Scheduled This Week

Monday, February 11, 2013

Rep. Gerald McCormick, Majority Leader of the Tennessee House of Representatives, has introduced the bill revising the governance structure of Erlanger Health System and the
Chattanooga-Hamilton County Hospital Authority.

He said continued discussions among all parties involved have resulted in an improved version of the legislation which will be considered this week in the House State Government Committee.

The Authority was originally established by an Act of the General Assembly and adopted by Hamilton County in 1976.

This bill amends the original Act and subsequent legislation relative to Erlanger Health System.

Rep. McCormick said, “The intent of this legislation is to provide Erlanger Health System with a governance structure more in keeping with the $500,000,000 enterprise that it has grown to become. A new entity is not being created to oversee the hospital. Reforming the board structure is another step in the ongoing process of improving Erlanger’s competitive position, and providing the best possible service throughout our community.”

Key provisions of the bill are:

The current board of trustees will be reconstituted to consist of nine members reflective of our community and including at least one member experienced in corporate compliance, a representative of academia, and Erlanger’s chief of medical staff The board will be self-perpetuating similar to most corporations and non-profit organizations. Upon the vacancy of any seat for any reason, the remaining board members will fill the vacancy by majority vote
The Tennessee General Assembly will make the initial appointments to the board, upon
recommendations of the Hamilton County Legislative Delegation in consultation with the Hamilton County Mayor. Thereafter, political entities will not be responsible for appointing members of the board
Trustees will serve a three-year term, and no member may serve a total of more than three terms. Initial trustees shall serve staggered terms

While the board may create other committees it deems necessary, audit and finance
committees must be established Removes provisions which are either unnecessary or addressed in other statutes under state law
The board is specifically directed to adopt policies and procedures to ensure the Authority purchases goods and services at competitive prices, and avoid conflicts of interests among the Board, management, and current or potential vendors

An independent external audit committee will be appointed to assist the board and management in preparing financial reports, budgets, and issuance of bonds

The House bill number is HB0107. The companion bill in the Senate, sponsored by Senator Todd
Gardenhire, is SB0139.


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