This temple is in Maharashtra on Sahyadri Parvat; Bhima river also originates from here. How was it named Bhimashankar? It has interesting story behind it.
Lord Shiva is kind of God that feels happy even if you worship other God or Goddess; even if you just worship your guru, He will feel happy. It is something like, in anyway, directly or indirectly, knowingly or unknowingly, you just worship lord Shiva.
What happened with a king named Bhimak, of Aavadh; he was just doing his Tapasya. Lord Shiva knew this, who was taking rest nearby after killing demon, Tripurasur. So He gave darshan to Bhimak and fulfilled his wishes. Since that time, this temple is known as Bhimashankar Jyotirling. The word “Bhimashankar” has two names in it — Bhima for king Bhimak, and Shankar for lord Shiva.