Encompass Health and Covenant Health announce joint venture in Knoxville, Tennessee

Press release Sustainability
Last updated: 
Plans for rehabilitation hospital in Tennessee
New rehabilitation hospitals will serve the greater Knoxville metropolitan area.

Encompass Health and Covenant Health are entering into a joint venture to own and operate Covenant Health’s Patricia Neal Rehabilitation Center. Serving the area since 1978, Patricia Neal Rehabilitation Center is located inside the Fort Sanders Regional Medical Center in Knoxville, Tennessee.

Encompass Health and Covenant Health plan to jointly file two certificate of need applications. The first application will be to build a new 51-bed, freestanding inpatient rehabilitation hospital on Covenant Health’s Fort Sanders West campus in Knoxville. A second application will be filed to renovate and convert the existing Patricia Neal Rehabilitation Center to a 22-bed hospital-in-hospital structure, where the hospital’s semi-private rooms will be converted to all private rooms with private bathrooms.

The Patricia Neal Rehabilitation Center will remain open during the renovation. Both the construction of the new hospital and the renovation of the current facility are expected to be completed in 2022.

“Over the past 42 years, Patricia Neal Rehabilitation Center has built an incredible reputation for providing life‑changing rehabilitative services, and we are honored to help continue building that legacy through this joint venture,” said Ed Mowen, president of Encompass Health’s MidAtlantic region. “We are extremely proud to be partnering with a preeminent healthcare system like Covenant Health and appreciate their trust in us to help serve the greater Knoxville metropolitan area through these hospitals.”

“Covenant Health has long been committed to expanding our programs and services in order to best meet the needs of the communities we serve across our region,” said Jim VanderSteeg, Covenant Health president and CEO. “As the region’s most celebrated name in rehabilitation care, the Patricia Neal Rehabilitation Center is nationally known for excellence and innovation. Part of our long-term strategic plan for enhancing the Fort Sanders Regional Medical Center campus includes a $15 million investment in modernization to the existing Patricia Neal Center, as well as building an additional new rehabilitative hospital to serve the west Knoxville and surrounding areas. These investments total in excess of $50 million and are in addition to more than $200 million that we invested recently in the expansion of Parkwest and Fort Sanders Regional. Not only is this significant in terms of the economic well-being of Knoxville, but very importantly, in terms of increased access for patients and additional jobs in Knoxville.”

“The opportunity to partner with Encompass Health makes perfect sense. Our philosophies are aligned in that we both deeply value and pledge our commitment to excellence in patient care,” he said. “This partnership enables us to continually share best practices for the benefit of our community and our patients, which are the cornerstones of Covenant Health’s mission.”

“We are very pleased to partner with Encompass Health,” said Keith Altshuler, president and chief administrative officer of Fort Sanders Regional Medical Center. “Combining the legacy of the Patricia Neal Rehabilitation Center with Encompass Health’s national prominence and excellent reputation is an incredible opportunity for our patients and our community.” 

Complementing local acute care services like those provided by Covenant Health, the inpatient rehabilitation hospitals will serve patients recovering from debilitating illnesses and injuries including strokes and other neurological disorders, brain injuries, spinal cord injuries, amputations and complex orthopedic conditions.

They will offer physical, occupational and speech therapies as well as 24-hour nursing care that aim to restore functional ability and quality of life.

The formation of the joint venture is subject to customary closing conditions, and the joint venture’s operation of both hospitals is subject to regulatory approvals.

The new hospitals will become part of Encompass Health’s national network of inpatient rehabilitation hospitals and home health and hospice agencies. Encompass Health currently operates nine rehabilitation hospitals in Tennessee; markets include Chattanooga, Franklin, Jackson, Johnson City, Kingsport, Martin, Memphis, Nashville and North Memphis.

The Company’s development pipeline includes previously announced future openings of inpatient rehabilitation hospitals in markets across the country.

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