Mission Hospital is trying to keep acute care beds it gave up when it closed Asheville Specialty Hospital late last year, but a 22-year-old legal document prohibits it from doing so.

A Nov. 29 letter from Nashville law firm Holland & Knight to the North Carolina Department of Health and Human Services, obtained by Asheville Watchdog, states that Mission Health wants to find a way to preserve the beds for Mission Hospital.

Before its closing, ASH was the only long-term acute care hospital (LTACH) in western North Carolina. The hospital was licensed for 34 acute care beds — nine high-observation ones and 25 progressive care ones — at the time of closure.

Four days after The Watchdog revealed that Mission planned to close ASH, Holland & Knight’s letter, signed by Hannah Ketring Brown, formally notified NCDHHS’ Division of Health Service Regulation (DHSR) that Mission wouldn’t seek to renew the ASH license while stating its intention to keep the beds.

“[T]he Hospital is working with your Department and your Department’s legal counsel to determine whether there is a way to preserve the Hospital’s beds and convert them back to acute care beds at Mission Hospital, even though the Hospital does not plan to see patients at this location [ASH] again (the “Potential Conversion Plan”),” the Holland & Knight letter states.

But Mission’s effort to retain the 34 acute care beds may be futile because the original CON awarded to Mission in 2002 — when there were 38 beds in ASH — mandates that if ASH were closed, the system would lose the beds.

“If the 38-bed long-term care hospital ceases to operate, Memorial Mission Hospital, Inc. d/b/a Mission St. Joseph’s Hospital (lessor) and MSJHS and CCP Joint Development Company, LLC d/b/a Mission CarePartners Specialty Hospital (lessee) shall take the steps necessary to delicense the 38 acute care beds used for the long-term acute care hospital, and shall not add them to the number of licensed acute care beds in Mission St. Joseph’s Hospital,” the CON states.

The Watchdog sent the Holland & Knight letter and the 2002 CON award to Mission Health spokesperson Nancy Lindell along with several questions about the hospital’s intentions.

“I have nothing further on this,” Lindell said.

The Watchdog also sent the documents to NCDHHS, which acknowledged receipt of the letter.

“DHSR is reviewing with NC Department of Justice counsel. A response has not yet been provided to Holland & Knight nor Mission,” spokesperson Hannah Jones said.

Holland & Knight’s Ketring Brown did not respond to calls and an email.

According to emails The Watchdog obtained, another law firm, Baker Donelson, sought and received from NCDHHS a 136-page CON application, created in 2001, for ASH. That request took place between late October and late November, and did not mention Mission’s plans to close ASH, which were not public at the time.

The Baker Donelson lawyer who requested the CON application did not respond to calls and an email.

For years Mission Health has been locked in battle with competing hospital companies for acute care beds, making two unsuccessful attempts through the state’s Certificate of Need (CON) process to boost its count.

The DHSR awarded beds to AdventHealth twice, for a total of 93, over two years. AdventHealth plans to build a hospital in Weaverville, creating the first hospital competition in Buncombe County since Memorial Mission Hospital merged with Asheville’s St. Joseph’s Hospital in 1998. 

Mission has appealed both DHSR decisions, and its latest appeal of the awarding of 26 beds to AdventHealth has stalled the Weaverville hospital’s construction, as the Watchdog previously reported.

State says it learned of ASH closing through the media

There were 15-20 patients at ASH when Tropical Storm Helene hit, according to email exchanges between NCDHHS employees obtained by The Watchdog. All were transferred out of the hospital, and Mission soon decided to close the facility for good. 

Later, as The Watchdog first reported, Mission Hospital CEO Greg Lowe told Mission employees it planned to demolish the building that housed ASH, which was the historic St. Joseph’s Hospital. The building was in poor condition and damage was exacerbated by Helene, Lindell told The Watchdog in December.

Following the news of ASH’s closure and planned demolition, Buncombe residents contacted NCDHHS, frustrated with the decision and wondering whether the shuttering broke the 2019 asset purchase agreement, which included commitments HCA made to keep facilities open for at least 10 years after it bought Mission Health for $1.5 billion.

“From and after such two (2)-year period, buyer shall have the right to discontinue any LTAC (Long-term Acute Care) Service at the St. Joseph campus of Mission Hospital (Asheville, North Carolina),” the APA states, making it clear that the closure did not violate the agreement.

Former NCDHHS Chief Deputy Secretary for Health Mark T. Benton responded to one Buncombe resident in a short email discussing ASH’s closure.

“I’m sorry that you were told that NCDHHS had prior knowledge of and provided its approval to the closure of HCA-Mission’s LTACH,” Benton said. “[T]hat isn’t true. We learned of its permanent closure likely at the same time as you – when it was reported by the media. Even so, their notification did not violate either state or federal law which requires hospitals to notify both levels of government when they close.”

Benton, who retired at the end of 2024, told the resident he wished there had been more conversation before the closure. 

“I’m sorry about the closure of this LTACH and wish that we could have talked with HCA-Mission before a final decision/announcement was made,” Benton wrote.“Perhaps I’m an optimist, but I wonder if we could have – together – identified an option to keep some or all of it open. Even so, my team will stay in contact with our colleagues in Buncombe County and others in western NC to monitor this situation.”

Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Andrew R. Jones is a Watchdog investigative reporter. Email arjones@avlwatchdog.org. The Watchdog’s local reporting is made possible by donations from the community.  To show your support for this vital public service go to avlwatchdog.org/support-our-publication/.

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