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The process of getting out of the nursing home business expensive and complicated for the county

By Howard B. Owens
Sep 8, 2016, 2:54pm

The sale of the Genesee County Nursing home to Premier Healthcare won't exactly lead to the county government pocketing a cool $15.2 million and walking away from the deal scot-free.

Getting disentangled from the white elephant of a facility will take months and cost millions of dollars.

"The costs don't stop on the day of the sale," said County Manager Jay Gsell.

The revenue to the county, as insufficient as it's been for the past decade, stops the day Premier takes over, but some of the costs will drag out, such as final payments to employees' retirement accounts, paying out unclaimed vacations and leaves, paying ongoing workers comp claims, closing out obligations for patient care, among other expenses.

It could be at least a year before the county knows how much of that $15.2 million is left over after all of the expenses are covered.

Right now, best guess, those expenses will eat up at least 75 percent of the sale price, Gsell said.

It will be up to the county legislature to decide what to do with the balance, whether put it back into the general fund, put it into roads and bridges or toward building a new jail.

There are also unpaid bills from patients to be collected. The floating balance of unpaid bills, called accounts receivable, is about $1.3 million.

The county will need to make a decision on how to handle those accounts, whether sell them to Premier at a discount or assign staff -- perhaps more than one staff member, plus attorney time -- to try and collect those payments, or the accounts could be turned over to a contractor for collection. An accountant with Freed Maxick  is working to determine which option might be best for the county.

The county is also owed money from the federal government, which passes through the state, called IGT funds. This money is designed to help county governments fill the gap between revenue and expenses on facilities such as the nursing home. That is money owed the county for expenses already incurred, but by law, the money must be paid to the nursing home, so Premier will need to transfer the money to the county, once the funds are received.

Whatever the final "net proceeds" from the sale might be, the county will never be able to claim it made a "profit" on the sale, Gsell said.  

The sale will close after Premier receives its second regulatory approval, called a certificate of need, from the state's Health Department. One has been approved, for the skilled nursing home, but the other, for the adult home, is still pending.

Gsell expects the deal to close in the fall, meaning between Oct. 1 and the first day of winter.

The nursing home has been bleeding money from the county's general fund for the last 10 years, and to a tune of more than $2.5 million a year for the past five. Those are deficits on operations that will never be recovered.

"We will never be able to use the word 'profit' when it comes to the Genesee County Nursing Home," Gsell said. "That equation has left the building."

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