BOARD MEETING: December 1-2, Original: $0 FACILITY NAME: OSF Holy Family Medical Center TYPE OF PROJECT: Non-Substantive

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1 DOCKET NO: A-8 BOARD MEETING: December 1-2, 2009 PROJECT NO: PROJECT COST: Original: $0 FACILITY NAME: TYPE OF PROJECT: Non-Substantive CITY: Monmouth Current: HSA: II PROJECT DESCRIPTION: The State Board is asked to consider the applicants proposal to discontinue its 45-bed Long Term Care (LTC) category of service. Project cost: $0. Revised Edition

2 STATE AGENCY REPORT PROJECT # APPLICATION SUMMARY Applicants(s) OSF Healthcare System Facility Name Location Monmouth Application Received September 15, 2009 Application Deemed Complete September 15, 2009 Review Period Ended November 14, 2009 Public Hearing Held No Can Applicants Request Deferral? Yes Review Period Extended by the State Agency? No Applicants Modified the project? No I. The Proposed Project The applicants propose to discontinue its 45-bed long term care category of service at ( the hospital ). This application is being reviewed under Board Rules approved on February 6, 2009, and per the Discontinuation Review Criteria outlined in 77 IAC There is no cost associated with this project. The project is non-substantive and subject to Part 1110 review. An opportunity for a public hearing was offered on this project; however, no hearing was requested. The State Agency has received no public comments on the proposed project. The hospital is located in the C-03 hospital planning area and in the Henderson/Warren County Long Term Care Planning Area. In the LTC planning area, there is 1 hospital-based unit (the applicant), and 3 free-standing Long Term Care (LTC) facilities. The March 2008 inventory for General Long Term Care services shows an excess of 409 LTC beds in HSA-02, and an excess of 3 LTC beds in the bi-county planning area. Table One displays the hospital s authorized beds, average length of stay ( ALOS ), average daily census ( ADC ) and utilization for the calendar year, while Table Two identifies the applicant s payment source for the same calendar year. The State Agency notes this data was obtained from the Illinois Department of Public Health s ( IDPH ) 2008 hospital profile.

3 Page 2 of 8 Service Authorized Beds TABLE ONE Utilization Data Calendar Year 2008 Admissions Patient Days ALOS ADC Occupancy Target Occupancy Target Occupancy Met? Med/Surg , % 60% No Long Term Care , % 90% No TOTALS , % Source: IDPH 2008 Annual Hospital Questionnaire. TABLE TWO Applicant s Payment Source Payment Source Inpatient Outpatient Total Number of Percentage Number of Percentage Number of Percentage Patients Patients Patients Medicare % 9, % 9, % Medicaid % 4, % 4,449 17% Other Public 0 0.0% 0 0.0% 0 0.0% Private Insurance % 9, % 9, % Private Pay % 1, % 1, % Charity Care Expense % % % TOTALS % 25, % 26, % Source: IDPH 2007 Annual Hospital Questionnaire. TABLE TWO contd. LTC-Net Revenue by Payor Source Payment Source Amount Percentage Medicare $1,933, % Medicaid $3,347, % Other Public $109, % Private Pay $2,501, % Private Insurance $74, % Totals $7,966, % Source: Illinois LTC Data Summary 2008 The October 2009 update to the Inventory of Long-Term Care General Nursing Bed Need ( Inventory ) shows a computed excess of 3 LTC beds in the Henderson/Warren County Planning Area, and a 409 LTC bed surplus in HSA 02. Since the project is for the discontinuation of a category of service with no associated costs, project obligation will occur at permit issuance (per 77 IAC and (b)). The anticipated project completion date is December 31, II. Summary of Findings A. The State Agency finds the proposed project appears to be in conformance with the provisions of Part 1110.

4 Page 3 of 8 B. The provisions of Part 1120 are not applicable. III. General Information The applicants are OSF Healthcare System d/b/a Holy Family Medical Center. The applicants have petitioned the Board to discontinue their 45-bed LTC unit, citing financial considerations and a decreased patient population. Table Three displays information pertaining to other LTC providers within a 30- minute travel radius. Data includes authorized beds, distance and travel times from the applicants facility and respective occupancy rates. Data on authorized beds and occupancy rates were obtained from IDPH s 2008 LTC profiles, distance and travel times were obtained from Map Quest, and the star designation was obtained from the U.S. Department of Health and Human Services Medicare website. The data in the table is sorted by travel time. As Table Three shows, there are 11 other providers of LTC service in a 30-minute drive radius. Of the providers identified in Table Three, none achieved the State Board s target utilization (90%) for The applicants provided 3 letters of acceptance from LTC provider in the HSA. TABLE THREE Long-term Care Providers within 30-minutes of, Monmouth Facility City Medicare Star Rating Authorized Beds Travel Time (minutes) Distance (miles) Occupancy 90% Target Met Monmouth Nursing Home Monmouth % No Lamoine Christian Nursing Home Roseville % No Rosewood Care Center-Galesburg Galesburg % No Marigold Healthcare Center Galesburg % No Galesburg Terrace Galesburg % No Seminary Manor* Galesburg % No Heartland Healthcare Center* Galesburg % No Galesburg Cottage Hospital Galesburg % No Care Center of Abingdon* Abingdon % No Good Samaritan Knoxville Knoxville % No Knox County Nursing Home Knoxville % No Source: IDPH 2008 Long Term Care (LTC) profile. Distances calculated using MapQuest. *Facilities that sent letters of acceptance.

5 Page 4 of 8 IV. The Proposed Project - Details The applicants propose to discontinue their 45-bed LTC category of service. There is no cost associated with the project. Since the project proposes discontinuation of a category of service and has no associated cost, obligation will occur at permit issuance. The project completion date is December 31, The applicants supplied a Safety Net Impact Statement (SNIS), which states the proposed project will not have a negative impact on safety net services in the community. Table Four identifies the charity care OSF Holy Family Medical Center provided since acquiring the medical center (year 2008 and the period from April to September, 2007). TABLE FOUR Safety Net Information per PA /2007 to 9/2007 FY2008 Charity $175,015 $2,601,425 Medicaid Inpatient Revenue $103,237 $242,590 Outpatient Revenue $297,302 $277,914 Total $400,539 $520,504 Medicaid Patients Served Inpatient Outpatient 1,914 4,399 Total 1,940 4, Information from Community Benefit Report submitted to the Illinois Attorney General s Office V. Review Criterion Discontinuation The criterion states: a) The applicants must provide the following: 1) the reasons for the discontinuation; 2) the anticipated or actual date of discontinuation or the date the last person was or will be discharged or treated, as applicable;

6 Page 5 of 8 3) the availability of other services or facilities in the planning area that are available and willing to assume the applicants workload without conditions, limitations, or discrimination; 4) a closure plan indicating the process used to provide alternative services or facilities for the patients prior to or upon discontinuation; and 5) the anticipated use of the physical plant and equipment after discontinuation has occurred and the anticipated date of such use. b) Each application for discontinuation will be analyzed to determine: 1. That the stated reasons for the proposed discontinuation are valid and are of such a nature to warrant discontinuation; The applicants state the LTC unit in the hospital had less than optimal occupancy rates for the last several years (60% with 26 residents). This, combined with recent economic downturns having a negative impact on Medicaid/Medicare reimbursement schedules, forces the applicant to discontinue LTC services, and focus on direct inpatient and outpatient care modalities. 2. That the discontinuation project will not adversely affect the services needed by the planning area as calculated in the appropriate Appendix of this Subchapter; According to the July 2008 LTC Bed Inventory, there is a computed excess of 3 LTC beds in Henderson/Warren Long-Term Care Planning Area, and an excess of 409 LTC beds in HSA 2. Should this project be approved and the beds removed from the inventory, an excess of 364 LTC beds will remain the planning area (see Table Five). TABLE FIVE LTC Bed Need Determination for HSA 2 Health Service Area 2 Bed Need Before Approval (409) After Approval (364) (): Denotes an excess amount of LTC beds

7 Page 6 of 8 As noted in Table Three, there are 11 providers of LTC service within a 30-minute radius of the applicant s facility. None of these providers met the State Board s target utilization (90%) for That the discontinuation project will not have an adverse affect on the health delivery system by creating demand for services which cannot be met by existing area facilities; Excluding the applicants service, there are 112 other long-term care facilities in the HSA, and 11 LTCs within a 30-minute radius of the applicant s facility (see Table Three). The State Board s Inventory indicates that none of the facilities in the 30-minute drive radius achieved the State Board s target occupancy (90%) for The availability of LTC beds at the other proximal facilities should allow for a seamless transition for those residents still at the hospital on the proposed date of discontinuation. 4. That the discontinuation project is in the public interest and would not cause planning area residents unnecessary hardship by the limitation of access to needed services including the effect of the proposed discontinuation on the ability of low income persons, racial and ethnic minorities, women, handicapped persons, the elderly and other underserved groups to obtain needed health care; As referenced in Table Three, 11 LTC facilities in the 30-minute drive radius that operated below the State Board s target occupancy (90%) for That (in every project for discontinuation except the discontinuation of a total health care facility) the anticipated use to which the physical plant and equipment will be put once the discontinuation takes place and the date such action will occur is appropriate. Upon permit approval, the applicant plans to use the vacated space (15,058 GSF), for the current sleep lab (1 bed/275 GSF), and storage

8 Page 7 of 8 /administrative support space (14,783 GSF), until plans and approval for renovation are determined. In summary, the applicants provided information and data to document the need to discontinue the LTC service. 11 other LTC providers in the immediate area (30-minute drive radius), did not operate their facilities at the State Board s target occupancy (90%) during These facts, and the four letters of acceptance from area LTC providers, appear to indicate that the discontinuation would not have an adverse impact on residents in the planning area. Based on the supplied information, and IDPH data, a positive finding can be made. THE STATE AGENCY FINDS THE PROPOSED PROJECT APPEARS TO BE IN CONFORMANCE WITH THE DISCONTINUATION REVIEW CRITERION (77 IAC ). G:\FAC\SAR\2009-sar\ doc GR

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