he applicant, H&S Rogers, LLC, is seeking a Permit of Approval (POA) for the purpose of

Size: px

Start display at page:

Download "he applicant, H&S Rogers, LLC, is seeking a Permit of Approval (POA) for the purpose of"

Barnard Shon Willis
8 years ago
Views:

1 In the Matter of: Saline Nursing and Rehab, LLC File # HSPA (1321)-12 BEFORE THE ARKANSAS HEALTH SERVICES PERMIT AGENCY FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER Findings of Fact he applicant, H&S Rogers, LLC, is seeking a Permit of Approval (POA) for the purpose of constructing a new seventy (70) bed nursing home using fifty four (54) beds from the population based need and moving sixteen (16) beds from the 140 bed Kenwood Nursing and Rehab which is also owned by the applicant and is in the same county. The facility will be called Saline Nursing and Rehab, LLC and will be located at 809 Kenwood Drive, Benton AR (Saline County). Projected capital expenditure is $4,745,000. The Agency makes the following findings of fact: NEED: The net need in Saline County is fifty-four (54) beds. The county has 648 nursing home beds; of these 648 beds, 630 are licensed beds and of eighteen (18) beds are in transition. County occupancy as reported by the Department of Human Services is 86.95%. HSC Regulation 100M Nursing Home Methodology Section I. B. states that In order to qualify for issuance of a Permit of Approval for additional beds in the county under the Population Based Need Methodology, counties which have a projected net need under this section must have had an average overall occupancy of at least 80% for the most recently available occupancy as reported by DHS. Regulation I.B. of the Population Methodology is met. The county bed need is fifty-four (54). HSC Regulation 100M Nursing Home Methodology Section V.A.5.states that: An application for a Permit of Approval under the HSC Regulation 100M Nursing Home Methodology will be denied if it: will create a facility with fewer than 70 beds. The applicant

(16) beds from the 140 bed Kenwood Nursing and Rehab which is also owned by the applicant and is in the same county.

2 plans to transfer sixteen (16) beds from its Kenwood Nursing and Rehab facility located in the same county. STAFFING: The Agency has no objective reason to believe the proposed facility could not be adequately staffed. The applicant cites success in recruitment and hiring in Benton in its former nursing home and expects to attract former employees as well as new employees as a result of recruitment during the construction phase of the project. The applicant plans to use long standing relationships within the community and with local nursing schools to recruit qualified personnel. A staffing plan is included in the application and projected staff exceeds staff required by Dept. of Human Services, Office of Long Term Care. ECONOMIC FEASIBILITY: The projected cost for this project is $4,745,000 with 32,000 square feet to be constructed at a cost of $120 /square foot which is reasonable for the area. The project is 100% financed with retained earnings. The application includes a letter from the Vice President of Corporate Banking from the Bank Of Arkansas in Bentonville which confirms that H&S Rogers, LLC and / or its owners have amounts in excess of $4,275,000 that is estimated to be required for the construction and financing of their planned Saline County Health and Rehab project. The project will be located on property that is owned by the applicant and is zoned for a nursing home. The applicant submitted a detailed three (3) year proforma budget for 2015, 2016 and The first year shows a net loss of ($385,849.64) but the second and third year indicate a projected net profit of $482, and $538, COST CONTAINMENT: The applicant plans a facility that is more efficient, aesthetic and practical in use thereby improving operational cost. This new facility plans to incorporate many of the Green House concepts in a state of the art building with a home like atmosphere that provides skilled nursing 2

The applicant cites success in recruitment and hiring in Benton in its former nursing home and expects to attract former employees as well as new employees as a result of recruitment during the

3 and rehab services that are less expensive than hospital care. Increasing census at this facility will work to enhance facility and staff efficiency and productivity, allowing the general overhead expenses to be distributed over more residents, thus resulting in a lower projected per-resident cost to the state. OPPOSITION There are two applications for the available beds in Saline County. The other applicant is Terrace Oaks Health and Rehab and a letter of opposition was submitted by Terrance Oaks against this application. Comments from the letter of opposition are below. Opposition: The other applicant (Terrace Oaks Health & Rehab) site is superior to the Saline Health & Rehab site. The Terrace Oaks site is located in close proximity to the Mt. Carmel ALF. Response: H&S application for Saline Nursing & Rehab is, in fact, a better site because it is closer to Saline Memorial Hospital than the Terrace Oaks site. The closer proximity allows more convenient rehab and nursing services and physician appointments. The H&S site is also the site of the former Kenwood Health & Rehab from , therefore, it is a familiar site to the community and unlike the Terrace Oaks site, it is already zoned for a nursing home. Opposition: Terrace Oaks owner is deeply involved in long-term care operations in Central Arkansas. The H&S applicant operates only one other facility which is not in Central Arkansas and would not have the pool of staff that is available to the Terrace Oaks applicant. The Terrace Oaks applicant operates a facility in Saline County and others in adjacent counties. Response: The number of nursing homes owned in Central Arkansas should not be a compelling reason to grant this POA. However, the principles of H&S have owned or operated two nursing homes in Saline County until Currently, H&S has another nursing home under construction in the county. Contrary to the statement in the letter of opposition, the Terrace Oaks applicant does not operate or manage a facility in Saline County. Opposition: Terrace Oaks applicant has a long enduring commitment to quality nursing facilities in Arkansas and has successfully implemented POAs. This applicant, H&S, has never constructed a facility for which a POA was granted. H&S applicant has numerous extensions on existing POA. Response: This statement is false. The principles of H&S are owners of other nursing homes for which a POA was issued and the project was completed and licensed. 3

a lower projected per-resident cost to the state. OPPOSITION There are two applications for the available beds in Saline County.

4 Regarding the multiple extension requests for the other H&S owned POA, the previous extensions on the H&S Permit Of Approval in Saline County are linked to a partnership in which the other partner (the Terrace Oaks applicant) could not secure financing. Once these financing arrangements failed after several extensions to the Commission, H&S sold other assets and proceeded to implement the POA. It was the inadequate financials of the Terrace Oaks applicant that contributed to the extensions. Opposition: Terrace Oaks is most likely applicant to be successful in implementing the POA if granted and is in a better position to address the state s objective for cost containment through improved efficiency and productivity. Response: The principles of H&S have owned and operated nursing homes in Saline County for over thirty (30) years. Conclusions of Law The application DOES MEET the statutory requirements for the Population based Methodology for issuance of a Permit of Approval to construct a new seventy (70) bed nursing home in Saline County by adding fifty-four (54) beds from the population based need, contingent upon the Commission approval to transfer 16 beds from the applicant s 140 bed Kenwood Nursing Home and Rehab facility to the Saline County Nursing and Rehab facility for a total of seventy (70) beds. The application is referred to the Commission for a decision on the transfer of the sixteen beds from Kenwood Nursing and Rehab Center. The county bed need is fifty-four (54). HSC Regulation 100M Nursing Home Methodology Section V.A.5.states that: An application for a Permit of Approval under the HSC Regulation 100M Nursing Home Methodology will be denied if it: will create a facility with fewer than 70 beds. The applicant has requested that sixteen beds from its Kenwood Nursing and Rehab Center are transferred to this project so that this is a seventy bed nursing home. The Commission Rule Book Section III. Scope of Review B.1 states that Any movement of LTC beds from one site to another site within the service area must be approved by the Commission. 4

It was the inadequate financials of the Terrace Oaks applicant that contributed to the extensions.

5 ORDER Arkansas Code Ann (c) provides that the agency must approve or deny applications. Based on the above Findings of Fact and Conclusions of Law, the Agency hereby orders that the Applicant be DENIED a Permit of Approval (POA) to construct a new seventy (70) bed nursing home using fiftyfour (54) beds from the population based need and moving sixteen (16) beds from its Kenwood Nursing and Rehab facility. Although the applicant met all statutory regulations, the Agency is not authorized to grant a POA for less than seventy beds and the Agency is not authorized to approve movement of beds. Therefore, the Agency must deny the application and refer it to the Commission for a decision. Appeals before the Health Services Commission are provided for under Section V.B. 15, Policies and Procedures for Permit of Approval Review, and will be conducted in accordance with the State Administrative Procedure Act, Act 434 of 1967, as amended. Appeals will be heard on March 22, 2012 at 10 AM at the Arkansas Dept. of Environmental Quality located at 5301 Northshore Drive, North Little Rock. IT IS SO ORDERED THIS 30th DAY OF JANUARY 2012 DIRECTOR, HEALTH SERVICES PERMIT AGENCY 5

fiftyfour (54) beds from the population based need and moving sixteen (16) beds from its Kenwood Nursing and Rehab facility.

BEFORE THE ARKANSAS HEALTH SERVICES AGENCY FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER

BEFORE THE ARKANSAS HEALTH SERVICES AGENCY In the Matter of: Cornerstone Treatment Center File #HSPA (1113)-07 FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER Findings of Fact The applicant, Cornerstone