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End of nursing home moratorium sparks big interest, money and possible legal challenges

After a moratorium that lasted more than a decade, it appears that there is a rush in Florida to open new nursing homes.

State health care regulators this week received 137 letters from companies that are vying to operate new nursing homes that offer 3,115 beds for patients beginning in 2017 as well as  a handful of hospice programs.

The nursing homes are the first new beds the state has authorized since barring any new ones from opening in 2001. Nearly two thirds of the new beds are slated for Northeast and Central Florida.

Florida Health Care Association Senior Director of Reimbursement Tony Marshall said construction could bring upward of $470 million in capital investment into the state.

The new nursing homes are made possible under a tandem of bills passed during the 2014 session, Marshall said. SB 670 protected investors from nursing home liability lawsuits and was filed by Sen. John Thrasher, R-St. Augustine. HB 287 directed the Agency for Health Care Administration to approve new nursing homes in areas of the state where the average nursing home occupancy rates are 92 percent, among other things. It was filed by Rep. Frank Artiles, R-Miami.

The “bills did exactly what the Legislature hoped they would do — encourage people to build new properties in the state of Florida,” Marshall said of the response from nursing home providers willing to expand in Florida.

PruittHealth operates in Florida, Georgia North Carolina and South Carolina and has submitted letters of intent for nursing homes in nine counties: Baker, Clay, Duval, St.Johns, Union, Bradford, Bay, Alachua, Leon and Escambia counties.

Florida banned new nursing home beds in 2001 as part of a package of lawsuit limitations against nursing home providers. The moratorium was extended in 2006 but it expired last year when Florida fully implemented its Medicaid long term care managed care program.

The letters of intent are the first step in the state’s regulatory process, called certificate of need. The second step is for providers to submit an application; those are due November 19. The state will announce which providers it approves in February 20, 2015.

CON is the process the state uses to help determine where health care entities and services are needed. The Agency for Health Care Administration publishes what it determines is a need and health care providers compete against each other to provide the care.

It generally is a litigious process and Florida has moved to deregulate certain services—such as open heart and new hospital beds– from the CON process.

Marshall predicted that the nursing home beds would be litigated.

Sonya Penley, a shareholder with Greenberg Traurig who has practiced health care law for 18 years, agreed.

“We expect that it will be very similar to certificate of need litigation that transpired during the ’80s and ’90s when most programs and services were still regulated. In light of more than a decade of pent up demand for community nursing home beds, the litigation could even be more intense,” said Penley.

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