Community Health Systems Inc., the new owner of Deaconess Medical Center and Valley Hospital & Medical Center, says it has entered into discussions with Providence Health Care, of Spokane, to clarify the transfer of assets and future operation of jointly owned Inland Northwest Health Services.

Providence, a nonprofit entity, operates Sacred Heart Medical Center & Children's Hospital, Holy Family Hospital, and a number of other Inland Northwest hospitals and health-care facilities, and is part of the Seattle-based Providence Health & Services network.

"We look forward to a long working relationship (with Providence) through INHS," says Christine Varela, a local spokeswoman for Community Health Systems (CHS), the large for-profit hospital chain based in Franklin, Tenn. "We do not think there are significant differences between the parties, so we are confident we'll be able to work through these."

Founded 14 years ago, the nonprofit INHS operates an electronic medical-records network, now serving 38 hospitals in the western U.S., that has gained national prominence. It also operates St. Luke's Rehabilitation Institute, the Northwest MedStar air ambulance service, Northwest TeleHealth videoconferencing network, and provides other services. It employs more than 1,000 people, making it one of Spokane County's largest employers, and has a budget this year of $145 million.

CHS representatives met with Providence executives on Oct. 1, the day their company formally acquired the assets of nonprofit Empire Health Services, to talk about INHS, and Varela says the two parties "now are in ongoing discussions on how to best enhance their working relationship."

Finalizing the details of that relationship will ease anxieties at Providence, which six weeks ago filed a lawsuit that sought to force Empire to negotiate the details of the INHS transition before the sale of its assets was finalized.

Providence said it wanted to ensure its investments would be protected following the conversion of Deaconess and Valley Hospital to for-profit ownership, and claimed in the lawsuit that Empire had not obtained from it the contractually required approval of a change in INHS "membership control."

It dropped the lawsuit about a week later, though, after concerns arose that it would cause CHS to cancel its purchase of Empire's assets.

Earlier in the year, Providence Health & Services had sent Empire a letter offering to buy its stake in INHS for $25 million and threatening legal action if Empire didn't agree to meet within the next 10 days to discuss its concerns about INHS' future. It later backed away from that ultimatum as well.