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State OKs private home-health provider; nonprofits voice concern

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Posted on September 17, 2009 |
By John Flowers



MIDDLEBURY — State officials on Monday gave the green light to a private, New Jersey-based home-health services provider to operate in Vermont, a scenario that some state nonprofits believe could bring more competition in an industry already beset with tight margins.

At issue is a successful effort from Bayada Nurses Inc. of Moorestown, N.J., to buy Professional Nurses Service Inc. (PNS) of Vermont, which in 2005 became the first private firm to be given state permission to compete against nonprofits for clients in the home health services industry.

Soon after receiving that permission PNS soon experienced financial difficulties, to the extent the small company was on the brink of bankruptcy in 2007, according to paperwork filed at the Vermont Department of Banking, Insurance, Securities and Health Care Administration, known as BISHCA. In 2008, Bayada — a private company now offering services in 16 states — announced it wanted to purchase PNS. Several of the state’s nonprofit agencies — including Addison County Home Health & Hospice (ACHHH) — raised concerns about the proposed purchase, fearing Bayada would ramp up services, potentially cherry-pick among the most profitable or desirable clients and compete for the state’s limited number of health care workers.

“(Bayada) is well-funded, well organized and has deep pockets,” said ACHHH Executive Director Larry Gutchius. “For the nonprofit industry, there will be an impact.”

The state’s 11 nonprofit home health care agencies made 866,000 patient visits last year to 21,600 different patients, according to Peter Cobb, executive director of the Vermont Assembly of Home Health Agencies. Together, the agencies underwrote just under $7 million in state and federal programs — such as Medicaid and Medicare — that fell short of reimbursement rates for actual services rendered, according to Cobb.

ACHHH workers conducted 84,378 patient visits last year, according to Gutchius. The agency employs 180 full- and part-time workers.

State rules required that Bayada obtain a certificate of need (CON) through BISHCA before completing the purchase. That CON is needed to make sure Bayada’s plans are consistent with Vermont’s “Health Resources Allocation Plan,” which required Bayada to show, among other things, that the purchase of PNS would not adversely affect Vermont patients’ ability to access services.

In a decision published on Monday, BISCHCA Commissioner Paulette Thabault issued a CON allowing Bayada’s purchase of PNS. The 15-page decision states, among other things, that:

• PNS provides services to almost 1,000 Vermonters. Thabault submitted that the need for home health services is likely to grow, given the state’s ageing population.

• The purchase will have “very minimal, or no impact” on the uninsured as well as those who are insured.

• Bayada has promised to “establish collegial relationships with other Vermont providers and share clients with other agencies where the needs of the clients dictate.”

• Bayada’s entry into the Vermont home health market is through an existing business (PNS) and does not reflect an additional provider entering the market.

“Bayada intends to continue providing the same services to the same clients served currently by PNS,” the decision reads.

Gutchius and Cobb said they were disappointed with the BISHCA decision, but are hopeful it does include some safeguards to protect the ability of nonprofits to function. For example, the decision states that the Vermont Department of Disabilities, Aging and Independent Living could place limits on services Bayada provides if the company appears to be focusing on certain, more profitable regions of the state as opposed to others.

“We are disappointed but not surprised by the decision,” Cobb said.

“We hope the impact will be minimal, but we will have to wait and see.”

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