Questions raised over proposed rehab facility

July 27--BEVERLY -- A proposed $23 million short-term rehabilitation facility planned for Sohier Road is coming under increased scrutiny from the public and state regulators.

At least three groups have registered with the state in order to raise questions about the proposal and its impact on existing nursing facilities on the North Shore.

The "Ten Taxpayer Groups," as they are called, have asked the Massachusetts Department of Public Health to hold a public hearing to discuss whether the facility is needed.

Raymond Cryan, a volunteer patient advocate for North Shore Elder Services and a member of one of the taxpayer groups, said a new short-term center could affect current facilities that are already having trouble filling beds.

Cryan said nursing homes rely on the revenue from more profitable short-term care to subsidize the cost of long-term stays for lower-income residents.

"If one goes out of business, you've disrupted all the people who live there," Cryan said. "That's their home."

The proposed facility, called Transitional Care of Beverly, would have 90 beds and would provide rehabilitation services for conditions such as major joint replacement, stroke and heart attack, with an average stay of 20 to 30 days. It would be built on Sohier Road at the current site of the Roller Palace and Soccer Etc., which would be demolished.

Transitional Care of Beverly is proposing to build the facility despite the state's longstanding moratorium on new nursing facility licenses. The moratorium was imposed due to an oversupply of beds that was driving up costs for taxpayers through Medicare and Medicaid payments and forcing existing nursing homes out of business.

'Loophole'

But the company is describing its facility as a "replacement project" for the former Radius Healthcare Center, a nursing home on Heather Street that closed in 2005 and was turned into condominiums. In its filing with the state, Transitional Care said it has an agreement to buy the license for those out-of-service beds for an undisclosed price.

North Shore Elder Services Executive Director Paul Lanzikos has called the use of a decade-old license a "loophole" in the system.

The company said the facility will be "high end," with private rooms and baths, a modern therapy center, a cafe/bistro and media/game rooms. It will not accept patients on Medicaid, the government program that serves lower-income people and pays health care facilities less than Medicare or private insurance.

Story continues below video

Transitional Care of Beverly is being proposed by a newly formed company called OPMABev LLC, which is owned by a New Mexico-based company called Encantado Investments. Encantado Investments is owned by Jerry Williamson and Horace Winchester, who live in Texas.

Williamson and Winchester are the principals of OnPointe Health, a company that operates 19 health care facilities in Texas and New Mexico and has plans for nine others.

In its application to the state, the company said the new facility is needed because patients in the area are now being served by "older, inferior facilities, many of which are becoming functionally obsolete."

'Below-average care'

Chris Chancellor, a representative of OPMABev LLC, said the eight facilities in the Beverly area had "well below average" ratings in their most recent health surveys. He said those facilities have a combined occupancy rate of more than 90 percent, indicating a need for more beds and services.

"One can easily conclude that residents in the Beverly area are regularly being provided below-average care," Chancellor said in an email. "Given the high occupancy rates and lack of new competition, there is little incentive for existing operators to make appropriate improvements to their facilities, which benefit residents being served now and into the future."

But Lanzikos said six facilities within 7 miles of the Beverly proposal have either been significantly upgraded or completely replaced over the last six years, at a total cost of $80.4 million.

The Jewish Rehabilitation Center in Swampscott was replaced by the $39.4 million Brudnick Center for Living in Peabody, while Cedar Glen Nursing Home in Danvers was replaced by the $23.7 million Hathorne Hill.

Four other facilities -- Essex Park Rehabilitation and Nursing in Beverly, Peabody Glen Health Care, Pilgrim Rehabilitation in Peabody, and Brentwood Rehabilitation in Danvers -- have all had multimillion-dollar renovations.

State law allows 10 or more taxpayers to request recognition as a "Ten Taxpayer Group," which gives them the right to participate in the review of a determination of need application and to request a public hearing. Residents have until Aug. 5 to register as a group.

A spokesman for the Department of Public Health said three taxpayer groups have registered so far. He declined to release the identities of the groups.

Staff writer Paul Leighton can be reached at 978-338-2675 or pleighton@salemnews.com.

___

(c)2016 The Salem News (Beverly, Mass.)

Visit The Salem News (Beverly, Mass.) at www.salemnews.com

Distributed by Tribune Content Agency, LLC.