MANCHESTER — VNA & Hospice of the Southwest Region is applying for an emergency state certificate of need to merge with the financially ailing Manchester Health Services Inc. and expand its coverage area into Manchester, Arlington, Sandgate and Sunderland.
According to a letter to the Green Mountain Care Board from VNA’s CEO Ronald Cioffi, the governing boards of his organization and Manchester Health Services have been negotiating for some time a memorandum of understanding on the merger proposal, which was signed by both parties in March.
The VNA organization “is requesting an Emergency CON [certificate of need] review due to the financial position of MHS,” Cioffi stated.
He said that in fiscal years 2015 and 2016, Manchester Health Services “incurred total losses of $432,645 and $246,499 respectively. In January 2017, MHS financial statements report a loss of $32,095, which indicates a loss of over $1,000 a day.”
In addition, Cioffi said in the letter, “they are in a negative cash position without any reserves to draw upon. With this financial position, MHS is unable to secure a line of credit.”
VNA & Hospice of the Southwest Region currently provides home health and other services in the Rutland, Dorset and Bennington areas. Under terms of the memorandum of agreement, the merged service would operate out of the 5468 Main St. offices of MHS.
Services to be provided from that office for residents of Manchester, Arlington, Sandgate and Sunderland would include those of nurses, licensed nursing aides, physical, speech, pathology and occupational therapists; medical social workers and certified hospice caregivers.
Cioffi said in his March 28 letter that the MHS financial losses “are the result of regulatory and reimbursement changes that have impacted home health agencies since 2006.”
He said that over the past 10 years, Medicare cut reimbursements to home health agencies 2.3 percent on average each year, while increasing administrative burdens through additional documentation requirements. Vermont home health agencies also continue to lose money on Medicaid programs, Cioffi said.
Capital costs associated with the proposed merger would include transferring the MHS electronic medical records system to the VNAHSR system, he said, at a cost not to exceed $175,000. Legal and consulting fees during the certificate of need application process are not expected to exceed $25,000.
The Green Mountain Care Board reviews health care certificate of need requests. In a response to Cioffi’s request, Donna Jerry, senior health policy analyst for the board, responded in a March 31 letter, “Based on the facts outlined in the request, the board has not granted emergency review at this time. However, the application can be subject to expedited review, which obviates the need for a hearing, if no competing applications are filed or interested parties seek [to intervene in the process].”
Jerry went on to say the board will require a detailed description of the proposed project and details of the merger, and how the plan meets requirements under the state’s certificate of need statute and regulation. A description of staffing and financial details of the operation and projections after the merger also were requested.
