Localities are turning down millions from a state financing deal. What does it mean for Richmond's Seven Hills Health Care Center? 

Primary Care

Florence Green is silver-haired and wheelchair-bound. This month she turned 70.

Green moved out of her daughter's house a year and a half ago when she grew too weak and needed extra care. She didn't want to burden her family, she says.

"It is best for me to be here" at Seven Hills Health Care Center, she insists. It's where her aunt came to live before she died.

Seven Hills is Richmond's only public nursing home. Most of the 166 people who live at the home are like Green: black, poor and from nearby East End neighborhoods. Seven Hills is a sanctuary for many of them. Here, bells and tambourines turn noise into gospel music and all the rooms smell like oranges.

Seven Hills is also the reason Gov. Jim Gilmore's administration has asked Richmond to take part in a controversial but General Assembly-approved $259 million financing maneuver to help balance the state budget. If Richmond agrees to the plan, it could gain more than $1 million.

But City Council has followed the course of five other Virginia localities and flatly refused the offer. Now state Secretary of Health and Human Resources Louis F. Rossiter has extended the Nov. 15 deadline through December for localities to rethink their positions and participate.

The financing plan makes use of what the Gilmore administration calls "intergovernmental transfers" that take advantage of a loophole in federal Medicaid law.

Here's the plan the Gilmore administration proposed to the seven localities that have public nursing homes:

Collectively, the localities would borrow up to $500 million from First Union Bank. The localities would then give that money to the state. The state would give that money back to the localities as Medicaid payments. The localities would use that money to pay back their loans to First Union.

Then Virginia would get the federal government involved. Under the plan, Virginia would bill the federal government for its mandated share of Medicaid reimbursements — 51.75 percent of what the state paid the localities. In this case, the state would gain 51.75 percent of $500 million, or $259 million which it could spend as it decides.

As sort of a thank-you, the state would pay a total $6.4 million to the localities that participated. A locality's share would be determined by a formula that would calculate how much it participated.

Ostensibly, the administration said, everybody would win. Everybody except the federal government and the nursing homes, critics say.

To date, 30 states have used the loophole — which is being phased out this year — to help draw down federal money and pay off state debts. But only localities with public nursing homes — in Virginia, that's Richmond, Petersburg, Norfolk, Chesterfield County, Prince William County, Orange County and Bedford County — are eligible.

Rossiter says that although the administration has extended the deadline it will make no new attempt to convince localities to take part in the one-time plan. So far, only Petersburg and Bedford County have agreed to it.

"If a locality does not participate, fine," Rossiter says. "It's unfortunate some cast aspersions on the approach."

It is an approach that critics argue is an abuse of the Medicaid system. And it appears Richmond and other cities and counties that have snubbed the maneuver aren't budging.

"I said it stinks when I first learned about it, and I still think it stinks," says Richmond City Councilman Joseph E. Brooks.

Brooks is backed by other members of City Council who say that Richmond won't take part because there is no safeguard in place to ensure money goes back to the nursing home and Medicaid recipients like Green who live there.

"I don't know that any of those individuals would see an impact," he says. Brooks also questions the timing of the plan.

"If this has been available all these years why is the commonwealth of Virginia applying in the last year? Why have we waited? How much has the state not collected?" Brooks asks. "This throws a light on it."

Rossiter counters that the state had never thought about using the plan until now.

"Frankly, the Gilmore administration felt Medicaid was run like a sleepy 1970s Great Society program," Rossiter says. Virginia taxpayers, he points out, are entitled to their share of whatever federal money is available. "It's about time Virginia woke up and became more aggressive," he adds.

Rossiter also insists that the money localities get for participating "goes directly to the nursing homes" in the area. "It's not even trickle-down," he says, citing Bedford as an example. The county has said it plans to use its share to build a new nursing home.

Rossiter insists the $259 million will be used first to pay down the state's expected $200 million Medicaid debt, then be applied to health and human services programs. "We all know the public nursing homes in Virginia are suffering," he says.

But this is not how Marilyn West would describe Seven Hills Health Care Center, Richmond's public nursing home. West is chairman of the Richmond Hospital Authority, a quasi-governmental board that oversees operations of the nursing home.

"Seven Hills is not doing business based on moneys that may or may not be available," she says.

West thinks City Council has done a good job of making sure Seven Hills gets whatever resources it needs. She says the hospital authority has no official position on whether Richmond should agree to the plan, even though it could mean thousands of dollars for the nursing home. "If money should become available it would be additive," she explains.

Until two years ago Seven Hills was called the Richmond Nursing Home. It is located in the city's East End near such public-housing projects as Mosby Court, Creighton Court and Whitcomb Court. The 166 people who live at Seven Hills range in age from 39 to 106. And the state's Medicaid program covers the $97.50 per-day cost for nearly all of them.

In the last few years, Seven Hills has undergone a kind of transformation, says the nursing home's administrator, Estelle Burfict. "I can't even really say I have a wish list," she says.

Seven Hills has renovated residents' rooms and created a new "diversion" wing for activities. Thanks to a new 14-passenger van there is a transport system in place to take Green and her neighbors on trips to Charlottesville, Wal-Mart or doctors' appointments. Currently the dining room is being expanded. Next there are plans to finish a computer room that will be open to the community.

Still there are the daily realities that come with providing elderly care.

"One thing about a nursing home is you deal with crisis every day," says Burfict, crisis more tangible than loopholes. "It's how you respond that counts," she says.

Today the biggest crisis appears to be a pile of clothes left in a hallway by a staff member. Burfict picks them up and places them in a nearby closet.

"I don't know that there's another nursing home like us," she says. "We're known for taking many people others won't."

She meets Green in the hallway and stops to ask how she's feeling.

Green replies, "I have no complaints."


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