Nursing home operators in Missouri are contesting proposals by two area health systems to open hospital-based long-term acute-care units, which the nursing homes contend would draw patients away from them.
With the Jan. 1 expiration of the state's moratorium on long-term-care facility expansions, area hospitals have moved quickly to submit proposals to the review board.
The situation in Missouri could foreshadow more spats between nursing homes and acute-care hospitals nationwide, as providers vie for their share of growing Medicare reimbursements for high-acuity services. The long-term acute-care hospital industry has grown rapidly as Medicare expenditures to providers of that type of care have increased. From 1988 to 1996, payments increased from $200 million to $1.7 billion, according to 1999 data from the Medicare Payment Advisory Commission. Under a prospective payment system that began Jan. 1, payment is tied to patient acuity.
"Those facilities that have low overhead costs per discharge and that manage patient costs to patient acuity will be the financial winners," wrote Michael Soisson, a consultant with Norcross, Ga.-based Gill/Balsano Consulting, in a July 2002 report.
Several operators appeared late last month before the Missouri Health Facilities Review Committee to raise objections to expansion proposals from St. John's Health System and CoxHealth, which both have acute-care hospitals in Springfield. With Missouri gradually phasing out certificate-of-need laws, several providers have expressed interest in opening long-term acute-care units in their hospitals.
The St. John's proposal for a 35-bed, $5.8 million unit at 634-bed St. John's Regional Health Center, Springfield, and a $5 million, 31-bed unit in St. Louis County, is scheduled to be heard by the review panel March 31.
"It creates a new bed in an already overbedded situation," said Earl Carlson, executive director of the Missouri Health Care Association, which represents long-term-care providers.
But William Hennessey, senior vice president of planning and marketing at St. John's Health System, said the long-term acute-care units are a "totally different service." Area nursing homes are not prepared to take on the complex cases that the long-term acute-care units would be admitting, he said.