Pocahontas Memorial Hospital Ready To Sell Off Home Health Division
Marlinton, WV – After nearly 25 years in the home health business, Pocahontas Memorial Hospital is making plans to sell off that portion of its operations. PMH Director Don Muhlenthaler laid out the plans for the sale at the Pocahontas County Commission’s regular meeting Tuesday.
The county’s home health practice started out as a private enterprise in 1978. Eight years later, the successful business was purchased by PMH. According to Terry Wagner, who has spent her career with the home health practice was a profitable venture for the county-run hospital. That changed, however, with the passage of the Balanced Budget Act of 1996. When the act went into effect, reimbursements to the practice began to take a hit. The once-profitable venture has cost PMH upwards of $400,000 annually since 2004.
Amedisys Makes Attractive Offer
Today, a handful of firms are buying up home health practices across the state of West Virginia, according to Muhlenthaler. One of these firms, Amedisys, of Baton Rouge, Louisianna, has made an attractive offer on PMH Home Health. While Amedisys expects that it will lose money on the home health practice in the first few years, Muhlenthaler says, the company sees the potential for growth and profits in the coming years.
Current Home Health employees would notice little change, says Muhlenthaler. Amedisys would offer current PMH Home Health employees positions, honor their current levels of seniority within the company, and offer private benefit and retirement plans that are competitive with their current benefits as public employees. Because Amedisys specializes in home health practices, Muhlenthaler and Wagner say patients may actually see an improvement in the level of service provided over coming years.
Commission President Martin Saffer asked why the county couldn’t operate its home health practice at a profit. Muhlenthaler noted that federal reimbursements to the critical-access hospital only cover what are called “cost-based” programs. The home health program does not fall under this definition. Because of this, Muhtlenthaler says, many hospitals around the state that were once in the home health business, are now getting out of it.
One item that sweetens the deal for Amedisys is PMH Home Health’s certificate of Need, which authorizes it to operate not only in Pocahontas County, but in each of the neighboring West Virginia counties. While there are concerns that Amedisys might move the home health practice to Lewisburg or Elkins, Muhlenthaler said the firm has made clear that it has no desire to do so.
A couple hurdles to the sale of PMH Home Health to Amedisys remain. Muhlenthaler says there is a lengthy sales contract that the county should review prior to signing. And there’s also the matter of just how the practice will be sold. As of Tuesday commissioners were unclear whether the practice and its assets could be sold outright, or as with other county property it would have to be sold at auction on the courthouse steps.
Even at auction however, not just anybody could buy the practice, says Muhlenthaler. The West Virginia Health Care Authority has final approval of the transaction and the transfer of the Certificate of Need. Commissioners planned to hold a conference call with Muhlenthaler and legal counsel to clarify the legal aspects of the sale.