Public ownership weighed as Atlantic Rehab loses residents

Atlantic Rehabilitation and Nursing Center in Calais has had 14 residents relocate to other facilities since the news broke in late January that its parent company, First Atlantic Healthcare, planned to close the facility within two years. First Atlantic has received a certificate of need (CON) from the state to expand a nursing facility in Ellsworth with an application that is approved and predicated on moving Atlantic Rehab's beds out of Washington County and into Hancock County. However, the company now says that it may have to close the facility much sooner because of loss of revenue brought about by the drop in the number of residents.
According to Administrator John Wood, the facility has not been accepting new clients since January. First Atlantic CEO Kenneth Bowden did not return phone calls to explain the policy shift. Atlantic Rehab is licensed for 52 beds, and in January the facility had about 10 beds available. Since families have relocated their relatives to other facilities, the facility now has about 24 beds available.
In a release issued on February 10, First Atlantic states that, since the news of the company's Ellsworth plans were made public at the end of January through media coverage, Atlantic Rehab's census change has caused financial pressures on the for‑profit company. "When we don't have customers we don't have revenue, and the recent decline in census results in lost funds amounting to $65,000 a month." The company expects those losses to rise to $81,000 a month. The release does not mention that the facility had already chosen not to accept new clients by the time the public was made aware of First Atlantic's plans and the terms of the CON application. However, the release notes that the company has filed with the Department of Health and Human Services (DHHS) a request for "extraordinary circumstances allowance" in an effort "to stem the immediate financial loss" and to allow the facility to run at break‑even while "alternatives to closure are explored."

Going public?
During the same time frame, the City of Calais received a letter from Bowden outlining one possible future for Atlantic Rehab: changing it to a publicly owned facility, which would qualify it for full reimbursement of MaineCare costs. First Atlantic explains that currently Atlantic Rehab is paid 80% of its costs, while the Eastport Memorial Nursing Home and Calais Regional Hospital "receive more favorable reimbursements." Turning Atlantic Rehab into a publicly owned facility would involve the city acquiring the property, writes Bowden. He continues that his company "would also need DHHS to approve other changes to its CON approval for its Ellsworth replacement facility for all the pieces to fit together."
Of First Atlantic's proposal, Calais City Manager Diane Barnes says, "We're keeping the door open. There are options that we are discussing with First Atlantic. We're seeking solutions so that it will work for everyone."
Traci Place, business agent for Teamsters Union Local #340, which represents the Atlantic Rehab employees, says of a meeting held on February 16, "They're working with the city on a plan to keep some beds in Calais." Because of the decline in residents, she says, "we've discussed that we need to 'right‑size' staffing." She adds, "We don't know yet about when we'll make that decision." Wood also confirms that staffing "will most likely be reduced." The facility currently has about 90 employees.

Elderly population growth
Calais Mayor Joseph Cassidy has written to DHHS Commissioner Mary Mayhew disputing the statistics used by First Atlantic in its CON application and asking the commissioner to reconsider her approval of the CON. "Our concern lies with the closure of Atlantic Rehabilitation located in Calais and the loss of beds. We were not afforded an opportunity to present testimony at the original CON hearing because the DHHS notice referred only to the replacement" of First Atlantic's facility in Ellsworth. "There was no reference to the closing of the Atlantic Rehabilitation Center in Calais, which is a major component of the CON."
In his letter to Mayhew, Cassidy notes the demographic statistics used by First Atlantic to justify moving the beds out of Washington County and into Hancock County. "While it is true that Washington County has experienced a population decline among its younger residents in search of employment opportunities, if you look at the population 65 and older, you will see that Washington County is expected to see population growth in its elderly residents at least through the year 2028." The projections from the Maine State Planning Office show increases in the number of elderly in Washington County from 2003 to 2028 in different age brackets. Two examples show those in the age group from 75 to 79 increasing by almost 500 between 2003 and 2028, and those over 85 grow from 787 in 2003 to 1,031 in 2028. Cassidy writes that, given the projections, "There will be a shortage of nursing home beds for a growing elderly population."

Calling on Calais for action
Bowden's remarks to the City of Calais regarding the possibility of Atlantic Rehab becoming publicly owned conclude with the statement: "It is my belief that if the city were to agree to support this proposal in concept and to join FAHC [First Atlantic] in presenting it" to the commissioner, "our prospects for success would increase dramatically." He ends by explaining that the current losses of $81,000 per month born by Atlantic Rehab because of the 80% reimbursement rate and low residential numbers cannot continue and that they "suggest an urgency for action on the part of the City of Calais and DHHS, or closing will be the only option."
The commissioner could not comment "on the letters of reconsideration that have been received because at this point in time, it would not be appropriate," says John Martins, DHHS director of public and employee communications. He adds, "She is in the process of reviewing the letter... and other submissions to determine whether to grant a reconsideration hearing. She will base this decision on the statute that guides this process. If a hearing is held, she has 60 days to render a final ruling."