Vermilion to vote on sale of nursing home

Vermilion to vote on sale of nursing home

DANVILLE -- What a difference a year, or less, can make in the county nursing home business.

In early 2011, the county-owned Vermilion Manor Nursing Home had been operating in the black for at least two years and had just paid back to the county, with 3.5 percent interest, a $600,000 loan that had helped the 200-bed facility climb out of the red.

By late 2011, the nursing home was on the brink of missing its next $200,000 payroll to employees.

A flurry of phone calls and pleas from local and state elected officials resulted in an infusion of some of the money the nursing home was owed by the state, which reimburses the facility for Medicaid costs. The money allowed Vermilion Manor?s 250 employees to be paid and care to continue to its residents, whose numbers fluctuate between 150 and 160.

By this spring, county officials were discussing whether to ask voters for the authority to sell Vermilion Manor, and in June, the 27-member board overwhelmingly voted to put the question on the ballot Nov. 5.

Vermilion County Board Chairman Jim McMahon has told county board members and constituents that there are buyers interested in taking over the nursing home, but he will not disclose any additional information. Although the county is not required to operate a nursing home, by law, it cannot sell the nursing home without voter approval.

McMahon said it?s important for county voters to know that if they grant the county board the authority to sell, it doesn?t mean the nursing home will be sold, or will be sold immediately, or even soon.

"It means we are saying, 'We want to keep our nursing home a nursing home,'" he said, "and without the state paying or being current with its obligations, it may come down to the fact that we have no money and the nursing home would have to close. As ironic as it sounds, a yes vote could save the nursing home and a no vote could actually close the nursing home in a worst-case scenario."

McMahon said the bottom line is the state is behind in its reimbursements to the nursing home, hovering around $1.5 million to $1.6 million consistently. That wasn?t always the case, he said. The federal Medicaid and Medicare checks used to be electronically deposited directly with the nursing home a few years ago, and the nursing home would then forward the state?s share.

But that changed. Now, the money goes to the state first, and it forwards the local share to the nursing home, but not in a timely manner.
"When the state decided to become the banker, that's when everything went backwards,? McMahon said. "Three years ago, we were bragging about making a profit."

An outside consultant determined that the nursing home would need a constant $2 million line of credit it could draw on when necessary to deal with the cash-flow crunch. But McMahon said counties by law cannot, and should not, have a line of credit.

And county officials don't want to commit money from its general fund as it has at various times in the past.

"If the $2 million had to be borrowed from the general fund, it would run out of money to pay other things the state statutes say we must have," McMahon said, referring to services the county must provide, by law, including a sheriff's department, animal regulation, a courthouse, public defender's office and state's attorney's office.

The nursing home is partially supported by taxpayer dollars; just under $700,000 a year is generated by a nursing home property-tax levy.

Earlier this year, county officials were considering a two-fold question for voters -- increases taxes for the nursing home or give the county the authority to sell it.

But then county officials realized state law limits the nursing home levy, and if it were at its maximum, it would generate only $130,000 more each year. That's not nearly what it would take to keep the nursing home financially stable.

McMahon said there are two objectives: to keep from raising property taxes in the county and not have to eliminate any county services state law requires the county to provide.

That's why the question regarding the nursing home is on the ballot, he said.

Private health care entities, McMahon said, usually own groups of facilities and can buy goods and services -- such as medicine and therapy services -- in bulk and get cheaper rates than a stand-alone facility. Also, he said, a private entity can deal better with the cash flow problems created by the state's late payments.

And McMahon said the county wants the option of selling, because it doesn't believe the situation with the state will improve soon.
"I pray that the state will get its financial house in order, but I have to manage in the real world where 167 (nursing home residents) are counting on what we do every day, and 200-plus employees," said McMahon, adding that vendors also want to get paid in a timely manner by the nursing home.

He said there's definitely a need in the community for this nursing home.

"That's why the question is on the ballot," he said.

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parkmymeterelsewhere wrote on October 15, 2012 at 1:10 pm

 

I would think the Champaign County board should consider this option; instead of telling the public the ccnh breaks even.  Maybe it does-- but that is not what is happening. The state money it is losing every day is being covered by the taxpayer to keep the ccnh budget even.  The currenrt trend for many years is for governing bodies to sell these holdings and get out of the business.