North Ottawa Nursing Home Effort Survives

June 16, 2008
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GRAND HAVEN — A Southfield firm's proposal has been derailed by a bureaucratic glitch, leaving the North Ottawa Community Health System as the sole survivor in what was expected to be a competitive process to build a new nursing home in Ottawa County.

Ciena Healthcare Management, a nursing home operator from Southfield, in February filed a letter of intent to build a 167-bed facility south of Grand Haven. But when it came time to file a detailed application by June 2, the company filed it directly with the Michigan Department of Community Health instead of with the local review agency, Alliance for Health.

That means Ciena's application won't be reviewed under the Certificate of Need process until October at the earliest, said Alliance for Health President Lody Zwarensteyn and CON Manager Larry Horvath. By then, NOCHS's bid for the beds may already be approved.

Ciena Healthcare Management CEO Mohammad Qazi was unavailable for comment last week.

NOCHS is proposing a 150-bed, $16.8 million nursing home for 20 acres on Buchanan Street near U.S. 31 in Grand Haven Township.

The health system this month filed an application with the MDCH that outlines a building estimated at 90,000 square feet, with 150 private rooms, most with shared bathrooms. It would feature five separate units of 30 rooms. Each unit would have a day room, lounge, shower room, plus storage, utility and janitor's rooms. Residents would be served by three nursing stations and three dining rooms.

NOCHS Marketing Director Emily Stearley said it would operate under the more home-like Eden philosophy, as does the system's new Heartwood Lodge in Spring Lake.

While most of the financing would come through a bond sale, the filing also indicates that $1 million in donations would be raised to cover the cost.

"With the new CON standards for long-term care, the state re-evaluated the need in each county, and it was determined that Ottawa County would increase in licensed beds as part of their proposed standards," said Susan Pawlak, administrator of Heartwood Lodge, NOCHS' new 84-bed nursing home in Spring Lake that opened in April to replace the Despelder Street location.

"We've provided a reputable service for our community. We felt like we would be good candidates to grow," Pawlak said.

The state increased the number of nursing home beds allocated to Ottawa County to 1,060. Horvath said 175 new beds became available.

Zwarensteyn said he notified Ciena by mail that the firm needed to submit an application to the Alliance for Health, but it failed to do so. West Michigan is the only region in the state that has a local level of CON review.

"I hate to see someone blow it that way," Zwarensteyn said. "On the other hand, we can't do their homework for them."

Horvath said Ciena submitted its application in Lansing well before the June 2 deadline, but never submitted it to the Alliance for Health. CON rules require the local agency's involvement, he said.

"They can resubmit in October," Horvath said. "It's a significant problem, because now there is somebody ahead of them for those beds."

The nonprofit NOCHS is a member of the Alliance for Health.

Zwarensteyn said he expects the Alliance for Health review to be complete in August, with the state review coming in the fall. NOCHS then would have as long as 18 months to prove it has started work on the project.

Grand Haven Township Community Development Director Patrick Waterman said no nursing home plans have been filed, although a rehabilitation center is under construction nearby.

Ciena's letter of intent revealed plans to build a 50,000-square-foot, $8.98 million building on 168th Avenue. According to its Web site, the firm manages 27 nursing homes with 2,900 beds in Michigan, 13 of them outstate.

Last year, Ciena settled Medicare and Medicaid fraud allegations made by the state Attorney General and the U.S. District Attorney for the Eastern District of Michigan with a $1.25 million reimbursement and a comprehensive chain-wide corporate integrity agreement. The investigation centered on three Ciena nursing homes in Detroit and one in Whitmore Lake. The five-year agreement is intended to improve care in all Ciena homes, and is expected to cost the company $500,000 per year. In the settlement, Qazi and two other executives denied the allegations but agreed to settle to avoid litigation.

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