By the end of this month, Clippership Landing Development LLC will submit a certificate of need (CON) application to Maine Department of Health and Human Services (DHHS) for a 102-bed skilled nursing facility in Damariscotta, seeking to transition current licenses from LincolnHealth’s Cove Edge, Zimmerli Pavilion and Gregory Wing to a development jointly owned by Sandy River Company and North Country Associates, according to Daniel Maguire, managing partner of Sandy River. Approval of the CON is needed before construction can begin on the 19.98-acre site on Piper Mill Road.
The project received Damariscotta planning board approval in January. “DEP (Department of Environmental Protection) approval of the site is still in review,” Maguire said. He estimated CON approval will take up to six months and, “We’ll be well into the fall before we break ground. Construction will take about 18 months,” which could mean a completed building in the spring of 2025.
Maguire, Cynthia Wade, president, and John Martins, communications and public affairs director for LincolnHealth, participated in a Zoom interview with the Boothbay Register on Wednesday, Feb. 8 to provide updates on the project.
Transitioning bed licenses is a complex landscape to navigate and Maguire explained that these rights, one per bed, will be bought from LincolnHealth once the CON is approved at a price set by DHHS after it conducts a financial analysis. “The value of the bed rights is the ... income stream and that is determined by the state and not yet known,” he said.
In a separate phone interview, Brooks Betts, Lincoln Health’s senior director of operations, said the total current number of licenses for the three units is 118, with 76 at Cove’s Edge, 12 at Zimmerli Pavilion and 30 at Gregory Wing, 16 more than requested by the developers.
“LincolnHealth wants to retain some of the rights,” Wade said, adding that while all of the Cove’s Edge bed rights would transfer to the new owner, not all of the Gregory Wing and Zimmerli Pavilion licenses will.
According to the DHHS Division of Licensing and Certification website, “In Maine, Certificate of Need (CON) is a regulatory program ... requiring certain types of healthcare providers to obtain state approval prior to making major changes in the healthcare landscape.” These changes include mergers and acquisitions, new facilities or services and substantial capital investments in new equipment or facilities.
What about St. Andrews?
“We are retaining some of the bed rights and looking at where the gaps are for care,” Wade said. “Assisted living is one of those areas and there are concerns that we don’t have enough facilities in the county for assisted living.” Wade added, “We might possibly increase the number of beds for cognitive impairment. We haven’t made a final decision yet.”
Betts said only the skilled nursing facilities/rehab will transfer to Clippership Landing from St. Andrews. “Not independent living, assisted living or memory care,” further clarifying in an email: “What remains at the Village is the assisted living, memory care (cognitive impairment), independent living cottages and apartments.”
“In Boothbay we currently have 13 assisted living bed licenses (and) 11 cognitive impairment bed licenses ... All of these beds are technically Assisted Living Level so a total of 24 in Boothbay,” Betts said.
Asked why there is the need to transition the three skilled nursing units to Clippership Landing, Wade said costs and government regulations drove the decision. Having three smaller skilled nursing units did not create efficiencies that would reduce costs.
Maguire explained, the “sweet spot” for operating a facility profitably is around 100 beds. He added, “Since COVID, we learned facilities with shared rooms were not good for managing disease.” Because of this, there is now a higher rate of reimbursement from the state and federal government for private rooms.”
Wade explained reimbursement from MaineCare and Medicare is lower for older facilities without private rooms. Wade said Lincoln Health looked at the St. Andrews campus to see if a new facility could be developed with private rooms, but there was not enough space on the property.
In a statement to the Joint Standing Committee on Health and Human Services in February 2022, Wade said “... long-term care providers are not at fault – they have reached a breaking point due to chronic underpayment, an exacerbated workforce crisis, decreased capacity, and the clinical challenges related to providing care to a vulnerable population during a pandemic...In Fiscal Year 2021, (LincolnHealth) operated with a $4 million shortfall, nearly $2.7 million more than was budgeted.”
In the Zoom interview, Wade also explained that government regulations set minimum staffing requirements based on size which make economies of scale even more difficult for smaller skilled nursing and rehab units.
As for the “exacerbated workforce crisis,” mentioned in her 2022 testimony, the Indeed.com jobs website recently showed 13 openings for CNAs, RNs and LPNs at St. Andrews Village.
“Ten years ago,” she said, “hip and knee replacements were our bread and butter. Today, however, patients prefer to go directly home after surgery. The patients that are coming to skilled nursing units now are more seriously ill and need more care which is more costly,” she said.
What about employees?
Betts estimates the three skilled nursing units and support staff to be around 150 employees.
“Our goal is that any employee in good standing will have the opportunity to transition to Clippership Landing,” Wade said. “If they don’t want to we will work with them to look for opportunities at LincolnHealth. And we’ll also work with North Country Associates operations to find employment for them as well.” Wade expects to begin this process at least one year out from the new facility opening and said it has already started for some employees.
When it opens in 2025, the new skilled nursing facility with private rooms will be a one-story structure designed “to bring the outdoors in through the use of extensive landscaping,” Maguire said. The building can be programmed differently with three sections: one for long term care, one for skilled nursing/medical care and one for memory care.
Per Maguire, Clippership Landing LLC will own the real estate. A separate entity called Clippership Landing Operations LLC will receive the CON and licenses from Lincoln Health, and the facility will be operated by North Country Associates. LincolnHealth will provide medical leadership and a medical director. Sandy River and North Country Associates are Maine-based companies.
Wade encouraged anyone interested in the transition’s progress to visit the Sandy River or LincolnHealth websites for updates.
“We want to be transparent in this process,” she said.
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