HealthSouth wants judge to decide Jefferson County nursing home challenge

Gavel-Stock.jpgHealthSouth wants an administrative judge to decide if a company’s plan to replace Jefferson County’s nursing home with two new ones is in keeping with the state health plan.

BIRMINGHAM, Alabama — HealthSouth Corp. is wanting a judge to hear arguments in its challenge to a company’s plans to replace Jefferson County’s nursing home with two new ones in Vestavia and Hoover, further delaying the county’s planned $8.3 million sale of its nursing home beds.

Less than an hour ago, HealthSouth filed its request for a contested case proceeding over Northport Holding LLC‘s certificate of need (CON) applications late this afternoon with the Alabama State Health Planning and Development Agency in Montgomery. The filing comes 10 days after HealthSouth filed its “notice of opposition and intervention” one hour before the deadline to block the deal out of concerns the move is not in keeping with the Alabama State Health Plan.

In the filing, HealthSouth said Jefferson County already has too many skilled nursing beds under the state plan and half of the ones in the county’s nursing home have been unstaffed in recent years.

Casey Lassiter told The Birmingham News today the inconsistencies with the health plan are significant enough to warrant a full review before an administrative judge.

“The underlying facts of Northport’s CON applications need to be examined carefully and measured against the current CON requirements,” she said. “One of the main purposes of the CON law is to prevent the unnecessary duplication of services, and the two applications duplicate existing services. That is the primary basis for our opposition, and a hearing before an administrative judge is the best forum for reviewing this issue of unnecessary duplication of services.”

Northport Holding wants to invest $24 million to build two new nursing homes to replace the 238 nursing home beds that now belong to the Jefferson Rehabilitation and Health Center, also known as the Ketona Nursing Home in Tarrant. Northport Holding has already purchased a site near Cahaba River and Caldwell Mill roads in Vestavia and a site at U.S. 31 and Interstate 65 in Hoover to construct the two new nursing homes and split the beds from Ketona.

John Burchfield, vice president of operations for Northport Holding LLC, said in an interview today HealthSouth is delaying needed development in the county.

“HealthSouth’s initial challenge to this plan to transfer those existing nursing home beds to two new facilities has really threatened the creation of hundreds of new jobs,” he said. “The new challenge they have filed has escalated this threat and started down a path that could lead to years of litigation and incredible loss to the county.”

Lassiter said a hearing would also help clear up confusion between the kind of services HealthSouth offers at its Lakeshore Rehabilitation Hospital and those offered by nursing home facilities like Northport Holding has planned.

“There are significant and meaningful differences between inpatient rehabilitative care and the convalescent care provided by a nursing home,” she said. “HealthSouth offers a hospital level of care, Northport does not. Consequently, we have a fiduciary responsibility to the shareholders of HealthSouth, to its patients and to the families that trust HealthSouth with their loved ones that patients receive the appropriate level of post-acute care.”

Officials with cash-strapped Jefferson County had hoped the deal would close in August and give the county $8.3 million to work with. County officials have been downsizing the Ketona nursing home for more than a year in anticipation of selling beds to Northport Holding. The home has 38 residents, down from 131 a year ago. The county also has a deal in the works to sell the Ketona property to another buyer.

Both deals will be on hold until the regulatory process is complete.

Northport Holding officials have said moving licensed beds around within Jefferson County is not a major departure from the state health plan. They pointed to the fact that no other nursing home company challenged the move but HealthSouth did.

“HealthSouth’s actions were unjustified, unnecessary and, I think, unwarranted,” Burchfield said. “Our company will take every action available and necessary to protect and preserve the agreement reached between Jefferson County and Northport Holding. I think it’s sad and I regret they have taken this action.”

Lassiter said HealthSouth is unlike some other health care companies that routinely challenge any move made in the CON process.

“Unlike some companies, HealthSouth very seldom challenges the applications others make for additional beds,” Lassiter said. “But everyone is responsible to follow the CON laws of the state of Alabama.”

She said it is also not about trying to stop a rival health care company.

“This is not about competition,” she said. “We compete all over the country. But we compete with health care companies that provide similar levels of rehabilitative care. We believe that any applicant that purports to provide rehabilitative services must do so on a level playing field and meet required levels of care. It is our position that Northport applications are inconsistent with the CON requirements in Alabama and fail to meet the health care standards for inpatient rehabilitative services.”

HealthSouth is the nation’s largest owner and operator of inpatient rehabilitation hospitals in terms of revenues, number of hospitals, and patients treated and discharged with operations in 27 U.S. states and in Puerto Rico.

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