The organizations had requested an emergency review for the permit, called a certificate of need, in March, citing significant annual and continuing budget deficits for the Manchester-based home health service.
In issuing the CON on April 21, the board said the speeded-up review was based in part “on the gravity of MHS’s financial situation. Though the board initially denied emergency review, we recognize that this CON must issue quickly and on … an expedited basis, as MHS’s solvency continues to deteriorate.”
In a March letter to the board requesting an emergency review, VNA’s CEO Ronald Cioffi 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.”
Cioffi stated that MHS was “in a negative cash position without any reserves to draw upon. With this financial position, MHS is unable to secure a line of credit.”
He added that the governing boards of his organization and Manchester Health Services had been negotiating for some time a memorandum of understanding on the merger proposal, and that both parties had signed it in March.
As part of its CON approval, the board also wrote: “The applicant shall file two implementation reports with the board at three-month intervals, the first of which shall be filed three months after the date of this Certificate of Need. The implementation reports shall include information and analysis demonstrating that the project is in conformance with the scope as described in the application, and must identify any changes to the financing of the project.”
The board noted that the merger was supported in a letter from the commissioner of the Department of Disabilities, Aging and Independent Living, and that “DAIL characterizes the VNA as a well-run organization that consistently meets the needs of its clients.”
MHS serves residents in Manchester, Arlington, Sunderland and Sandgate. VNA & Hospice of the Southwest Region provides home health and other services in the Rutland, Dorset and Bennington areas.
Under the agreement between the organizations, the merged service will continue to operate out of the 5468 Main St. offices of MHS.
Services 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 to the board 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.
