2014 In Review: New nursing home beds have investors competing for businesss

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When Florida announced it needed 3,115 nursing home beds in the summer of 2014, investors jumped at the opportunity to offer new services to the Baby Boomer population that’s aging in Florida.

Six months later staff at the Agency for Health Care Administration in Tallahassee are spending the last weeks of the year poring through applications that have been submitted for those beds as well as hospices. December 24 was the “omissions deadline”–or  the date that the complete applications–along with supporting documents–are required to be submitted to the agency. AHCA spokesperson Jamie Sowers said on Monday there were 102 responses to the omissions deadline, 84 from those pursuing new nursing  home beds.

Ultimately, the agency will announce the list of investors who were approved for nursing homes and hospices on February 20, 2015.

AHCA Secretary Elizabeth “Liz” Dudek started her health-care career in “certificate of need” —  a regulatory program the state uses for certain health-care facilities and programs, such as nursing home beds and new hospitals.

Few people know the CON program better than Dudek, who predicted there will be litigation for the nursing home beds. “It’s just part of the process,” she said, adding that it cannot be avoided.

Some of the areas that have drawn the most interest among investors include:

  • Alachua or Dixie County, five applications
  • Marion County, five applications
  • Duval or St Johns County, six applications
  • Polk County, nine applications
  • Hillsborough County, five applications
  • Orange County, 10 applications
  • Seminole County, seven applications
  • Osceola County, five applications
  • Miami-Dade County, five applications

Hospice is another coveted program in Hillsborough County, where nine applications have been filed.

The more interest in the area, the more competition. The more competition, the more likely the agency’s decision could be challenged in court.

The agency announced a need for the new nursing home beds after a change in the law that allowed for 3,750 new beds to be built through 2017. Dudek said the change–a careful compromise between the nursing home industry, AARP Florida and legislators–is good for the state.

“It will bring jobs. It will bring in more work, not only for the people planning all this, but the people who build the facilities, the people who staff the facilities. And it’s good for the people who will be needing nursing home care in the future,” she said.

Dudek predicted that the state will reach the 3,750 cap well before the June 30, 2017, time frame allowed in the statute.  “It will be reached quickly,” she said, adding that she expects the state to reach that number by the end of next year, as 83 percent of the allowable beds were announced in October.

Florida Health Care Association Director of Reimbursement Tony Marshall said his group was a little surprised that the agency announced the need for 3,115 beds; the association expected the number to be a little lower initially and that the cap would be reached perhaps in 2016.

Nevertheless, the market is reacting as expected. Marshall said the 2017 deadline was put into law because that’s when the first round of new beds will be built and available to the public. It will give the Florida Legislature time to review how the process worked.

“This was not unanticipated,” Marshall said. “We expected the beds to be done quickly.”