The Alliance for Health has advised the Michigan Department of Community Health it should not allow a Southfield nursing home management company to build a 62-bed facility in Grand Haven because it does not own the property.
“It was an interesting thing. And it’s not over yet,” said Alliance for Health president Lody Zwarensteyn, regarding the Certificate of Need application filed by Ciena Healthcare Management.
Marx Layne & Co., a Farmington Hills public relations firm that speaks to the news media on behalf of Ciena Healthcare, was asked last week if Ciena would appeal.
“As policy, Ciena Healthcare does not comment on pending Certificate of Need applications,” replied Glenn Oswald of Marx Layne.
“We have made it very clear to the Department (of Community Health) that it has come to our attention that Ciena apparently does not own the property they said they did, to build a nursing home in Grand Haven,” said Zwarensteyn.
He added that a CON issued by the state government in Michigan is site specific. “It has an address, and if you do not own the address, the CON cannot be effective for that.”
The Alliance issued a project evaluation that states the property at 14841 168th Ave. is controlled by the Cherette Group LLC of Grand Haven, led by Denny Cherette. The Cherette Group has a “fully executed purchase agreement with the owner and intends to develop an apartment complex.”
The project evaluation says the Alliance for Health, which held a hearing on Ciena’s proposal in October, previously had asked Ciena to comment on the property ownership issue and “to date, no response has been received.”
The CON process is intended to prevent the construction of hospitals and skilled nursing care facilities that are not genuinely needed, which would add to inefficiencies and higher costs in that local health care system. The Alliance for Health is a nonprofit community coalition authorized by state law to make recommendations to the MDCH on CON applications in 13 West Michigan counties.
In early 2013, Ciena was given approval by the MDCH for a 47-bed skilled nursing home facility in Grand Haven, but it later amended its proposal to increase that by an additional 15 beds.
The MDCH has determined an additional 15 skilled nursing home beds are needed in Ottawa County. The Alliance for Health disputes that determination, noting in its report to the state that “the operators of skilled nursing homes in the area indicate their beds are not full, that demand is lacking for the current number of beds, let alone the added beds being proposed.”
In addition to declining to recommend the Ciena proposal in Grand Haven, the Alliance for Health also is advising the state of Michigan to “take a look at the original approval of the first unit” in early 2013 because the CON “can’t be sustained if they don’t have the property,” said Zwarensteyn.
Ciena has indicated its proposed Grand Haven facility would be a separate incorporated entity leased by Ciena for 15 years.
In the report to the state, the Alliance said that “although legal, the practice of leasing beds from a related party can have the net effect of causing the reimbursable capital value of the beds over the lifetime of the facility to be far greater than would be the case if the facility was the responsibility of an owner-operator. The taxpayers of the state of Michigan would be expected to pay increased capital amounts due to such practices. The state could save by changing its payment methodology.”
According to a Dec. 5 document posted on the Ciena Healthcare Management website, it is the largest manager and operator of skilled nursing and rehabilitation centers in Michigan. It just broke ground for a new center in Shelby Township, an investment of $9.5 million creating 120 jobs.
Ciena, led by its president, Mohammad Qazi, has 4,000 licensed beds at 36 sites it manages in Michigan, plus another five in Connecticut. The company was founded in 1998.
Most of the cost of living in a nursing home in the U.S. is covered by public sources, mainly Medicaid and Medicare.