State cuts imperil nursing home

Enjoying a game of ''Chip In'' on a recent day at Charles A. Dean Memorial Hospital and Nursing Home were from left: Ellen Davis, Lucy Rodrigue and Annie MacFadzen. (Bangor Daily News Photo by Diana Bowley)
Enjoying a game of ''Chip In'' on a recent day at Charles A. Dean Memorial Hospital and Nursing Home were from left: Ellen Davis, Lucy Rodrigue and Annie MacFadzen. (Bangor Daily News Photo by Diana Bowley)
Posted Feb. 23, 2010, at 9:43 p.m.
Last modified Jan. 30, 2011, at 12:05 p.m.

GREENVILLE, Maine — The Charles A. Dean nursing home has been managed so well it has been named by U.S. News & World Report as one of the best nursing homes in the nation for two consecutive years, but that news has been overshadowed by financial woes.

Despite the honor by the magazine — which also was bestowed this year on Sunrise Care Facility in Jonesport and Piper Shores in Scarborough — late state and federal reimbursements, proposed state cuts in MaineCare — as Medicaid is called in Maine — and an operating loss are threatening to cripple the 24-bed nursing home and adjacent hospital, which are part of Eastern Maine Healthcare Systems.

“These state cuts can significantly paralyze us,” Geno Murray, president and chief executive officer of the nursing home and hospital, said this week. C.A. Dean, the region’s largest employer, has 172 employees and pumps about $10 million into the local economy, he said.

While the nursing home, part of the Charles A. Dean Memorial Hospital, is providing top-notch care, it is not sustainable because of the dwindling finances, Murray said. The nursing home has been operating on a loss of $600,000 per year, which has been absorbed by the hospital. “The sad part of that is we are rated nationally as the best nursing home in the state of Maine.”

For its best nursing homes designation, U.S. World & News Report relies on the federal Centers for Medicare and Medicaid Services to analyze reports from more than 15,000 nursing homes in the nation in the areas of health inspections, nursing staff and measure of care, according to its Web site.

While the C.A. Dean complex, which operates on a $13.9 million budget — $1.66 million of which is for the nursing home’s operation — makes the grade for care, it’s soundly lacking in finances. That has caused officials to dip into its credit line.

The state owes the complex about $700,000 for MaineCare services going as far back as 2005, and because of a state computer problem, the federal government is unable to process another $325,000 in reimbursements that are owed the facility, according to Ed Olivier, C.A. Dean’s chief financial officer. In addition, the complex had nearly a $500,000 operating loss last year, some of which was attributed to an increase in charity care.

That loss is on top of last year’s state reimbursement cut of $236,000 and a potential reimbursement cut of about $348,000 this year.

“How do you take something that’s done very well and how do you keep it going with funding like this?” Murray asked. “That’s the real challenge. We are going to have to redesign our business.”

Everything is on the table for discussion, including jobs and a reduction in services, he said.

Dennis Welsh, C.A. Dean’s vice president of operations, said the hospital and nursing home have tried to reduce costs over the years to level things out, but those efforts are being outpaced by dwindling reimbursements.

Brenda Harvey, commissioner of the Maine Department of Health and Human Services, said the state owes C.A. Dean only about $116,000 for MaineCare services through 2007.

“From our view, we are not as far behind in our payments as [they are] making it seem,” she said this week.

Moreover, the federal and state reimbursements represent 12 percent to 14 percent of C.A. Dean’s total revenue, so there is more to the local financial problem than just the reimbursement issue, Harvey noted. She did confirm that the department’s computer program back in 2005 did not process crossover claims, which involve people served by both Medicare and Medicaid in a hospital setting. She said C.A. Dean has been reimbursed for those crossover claims through 2007.

Mary Mayhew, vice president of the Maine Hospital Association, said C.A. Dean has reason to be concerned about the cuts the Legislature is contemplating making in MaineCare reimbursements this year.

The magnitude of the cuts will jeopardize not only access to care but also the ability of hospitals such as C.A. Dean to continue to invest in quality initiatives such as information systems and recruitment in rural areas, Mayhew said.

The C.A. Dean complex could be affected by several additional significant cuts, she said. These include proposals to trim reimbursements to critical access hospitals such as C.A. Dean and to reduce nursing home reimbursements by 10 percent.

Mayhew said C.A. Dean is already supporting a number of services that lose money, such as primary care practices it subsidizes in order to preserve access to health care for area residents.

That worries town officials.

“The continuum of care offered to the Moosehead Lake region — from doctor’s visits to emergency services to day surgery to inpatient care to nursing home care — makes it possible for certain members of our community to continue to live here,” Greenville Town Manager John Simko said this week. The Board of Selectmen voted last week to send a letter to legislators to let them know the effect of the delinquent payments and the proposed state cuts to the region.

“Things in Greenville are so interrelated,” Tom Murray, C.A. Dean’s nursing home administrator and Geno Murray’s brother, said recently. “If something happens to the town budget, it affects not only the school and town, but the hospital as well. We are a real piece of that cog in the wheel.”

Simko said the main problem, as he sees it, is that the state has purchased services and has been delinquent in paying for them over the years. It has now placed the fiscal well-being of the hospital in jeopardy, he said. If an industry or factory that employs virtually everyone in an entire town — such as C.A. Dean does — were about to go under because the state wasn’t paying for services rendered, people would be up in arms, he said.

Welsh said the hospital and nursing home are all about people. The complex is being operated as economically as possible yet with the best care in mind, he noted. He said it is not overstaffed and doesn’t offer a lot of luxuries.

“What we have, again, is quality care, and it’s comfortable — nothing exotic — and that’s where the people make a difference,” he said. The national recognition by U.S. News & World Report affirms that, according to Welsh.

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