In the face of major regulatory hurdles, subacute providers in several states are siding with opposing camps-either with hospitals or nursing homes-in certificate-of-need battles.
These turf wars vary widely from state to state. However, two situations illustrate the debate:
A bill that just died in the New Jersey Senate would have allowed each hospital a CON exemption to open a subacute unit with 24 beds or 15% of its licensed bed capacity, whichever is greater. Providers expect the legislation to reappear during the next session.
The New Jersey Association of Health Care Facilities opposes the measure, claiming it gives an unfair competitive advantage to hospitals and prevents potential savings of $510 million annually from caring for subacute patients in nursing homes vs. hospitals. The association plans to propose an alternate bill, according to Jim Cunningham, president of the NJAHCF.
In Florida, hospitals are asking the state Legislature to allow a onetime conversion of empty acute beds to skilled-nursing beds. The Florida Hospital Association recently took a shot at nursing homes by citing a study that said patients with stays of fewer than 41 days in nursing homes have mortality rates nearly three times higher than patients in hospital-based skilled-nursing units. In response, the Florida Health Care Association asked the state to commission a similar but more objective study (Dec. 18-25, 1995, p. 33).
In states with the CON requirement, hospitals must win approval to convert acute-care beds into skilled-nursing beds. Leaping through these regulatory hoops hinders the creation of in-house subacute-care programs, hospital groups argue.
At the same time, other legislatures are paving the way for hospital-based subacute units by waiving CON requirements, amid objections by nursing home groups. Long-term-care providers say hospitals will siphon patients directly into their own subacute units, killing off nursing homes that offer subacute care.
In addition, several states have put a freeze on all new Medicare and Medicaid certification.
As many as 46 states have some sort of regulatory hurdle in place when it comes to switching acute-care beds to skilled-nursing beds, according to Frances Fowler, president of Fowler Healthcare Affiliates, an Atlanta-based post-acute consulting firm.
"Some don't have the CON process," Fowler said. "Instead, they have a different application process for skilled beds." She identified Texas and California as the states with the most wide-open potential for subacute development because neither state has a CON process.
California is trying out a subacute program that has nursing home representatives cheering and hospitals up in arms. Through the Medi-Cal Transitional Care Program, hospitals will receive lower reimbursements, currently estimated at $333 daily, for patients receiving a transitional level of care under the state's Medicaid program (Aug. 14, 1995, p. 14).
In some states, regulatory hoops require providers to just hold their noses and jump into innovative alliances.
In Wisconsin, for example, there is a moratorium on new Medicare-certified skilled-nursing beds in most counties. To create a subacute unit, a hospital must partner with a nursing home. The nursing home then transfers skilled-nursing beds into the acute-care facility and manages the subacute unit.
"Technically, the rule is, `Thou shalt not traffic nursing home beds in this state,' " unless the transaction involves selling the entire nursing facility, said John Sauer, executive director of the Wisconsin Association of Homes and Services for the Aging in Madison. "There is this long, complex process, and when you add subacute ventures, it gets even more complicated."
"I think (providers) have to use more creative approaches," Fowler said, which may include entering joint ventures, relocating nursing home beds into an acute-care hospital, or buying a nursing home and then moving the beds.
The National Subacute Care Association supports CON programs if they encourage efficient utilization of services, serve to scrutinize quality and costs, and improve access to appropriate care, according to Phyllis A. Madigan, co-chair of the NSCA and senior vice president for business development at New London, Conn.-based Mariner Health.
Madigan acknowledges criticism that the CON process restricts free trade. "However, if a hospital fails, it has more of an impact on the community than if a grocery store or hotel fails," she said.