Former State of Franklin Healthcare Associates physician James Joslyn, MD, must repay $145,110.10 to the Johnson City, Tenn.-based group under an arbitration award, according to court documents reviewed by Becker’s.
The amount is a clawback of the payout Dr. Joslyn and other SOFHA physicians received when the group converted to an employee stock ownership plan, according to the documents, which were filed Sept. 28 in the Chancery Court for Washington County, Tenn. Dr. Joslyn officially resigned in July 2025.
SOFHA also claimed Dr. Joslyn overpaid himself about $220,000 in compensation draws under the group’s income distribution plan. The arbitrator dismissed that claim with prejudice, assigned arbitration costs to SOFHA and ordered each side to pay its own attorneys’ fees.
SOFHA moved to vacate the award and to file supporting documents under seal. On Sept. 28, the court denied both motions and confirmed the award. SOFHA filed a notice of appeal with the Tennessee Court of Appeals Oct. 5.
SOFHA physicians do not receive guaranteed salaries; they cover their own overhead and draw on revenue above it, current and former physicians told NBC affiliate WCYB in an Oct. 5 report. Those physicians said the ESOP conversion added significant fees on top of that overhead.
Dr. Joslyn was the first former SOFHA physician to speak on the record with the station about the group’s finances. He previously said SOFHA sent him a letter stating he owed more than $356,000 and that he increased his workload for months before deciding to leave.
“I could’ve paid myself nothing and I still would’ve fallen further into debt,” Dr. Joslyn told WCYB at the time.
The arbitration is one of two legal proceedings between the parties. SOFHA also sued Dr. Joslyn in Chancery Court in February to enforce a noncompete in his employment agreement.
SOFHA media representatives said they are “unable to comment” on ongoing legal matters.
Jesse Campbell, an attorney representing Dr. Joslyn, said his client resigned after SOFHA announced a reduction in physician compensation draws, though the parties dispute the contractual significance of that. “Because the appeal and Dr. Joslyn’s counterclaims remain pending, I am limiting my comments to the public record,” Mr. Campbell said in a statement to Becker’s.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
