Dollars and cents are a central part of the debate over whether to sell the county-owned nursing and assisted living centers.
However, those involved in the argument have yet to agree on exactly what those numbers are.
Frederick County’s financial analysis predicts that taxpayers would see a net benefit of more than $12.3 million over the next four years if officials privatize Citizens Care and Rehabilitation Center and Montevue Assisted Living. Opponents of privatization have challenged this summary, saying the figures are skewed to make a $30 million sale to Aurora Health Management look more attractive.
Sale opponents also say the facilities could turn a profit if properly managed, an effort to debunk the notion that the centers are bound to keep losing money if they remain under county ownership. These optimistic projections have been challenged by county staff, who say the numbers are flawed because they are based on only one month of data.
Commissioners President Blaine Young said he is confident that the figures turned out by county staff are accurate. Young, who has supported exploring a sale, said he had nothing to do with producing the numbers.
Though some totals are in dispute, sale opponents must face the fact that the county has spent more than $53 million to subsidize Citizens and Montevue from fiscal 2000 through 2013, he added.
However, one local certified public accountant said the county’s two-page financial analysis of a sale is confusing and difficult for the public to evaluate. Donald Linton, a vocal sale opponent and ex-officio member of the Citizens board of trustees, also noted that the analysis hasn’t been audited.
“The numbers are massaged for the benefit of the interpreter,” said Linton, principal for the accounting firm Linton Shafer Warfield & Garrett.
Erin White, the county’s acting finance director, said her office’s staff was under no pressure to slant the analysis in favor of a sale.
County estimates have varied, though, depending on which factors are included in the forecast. The county’s financial analysis indicates retaining Citizens and Montevue would cost the county more than $6.6 million over the next four years. But a newspaper advertisement published by the county reported the county would be “losing over $10 million if it (the facility) is retained.”
Lori Depies, county manager, explained that unlike the financial analysis, the advertisement took into account the $3.3 million Citizens owes to the county’s general fund on top of its budgeted subsidy. This money functions like a line of credit to support ongoing operations at Citizens and is an “additional cost to the taxpayers,” she wrote in an email. It wasn’t possible to reflect this liability in the financial analysis, but it was included in the advertisement and raised the estimated four-year loss to about $10 million, she indicated.
At the same time, opponents of the sale have generated figures that are also up for debate.
Melanie Cox, who spent several decades in the health industry and worked as a nursing home officer, argues that Citizens is under-billing for Medicaid reimbursement. If Citizens began billing at the rate of comparable facilities, it could end up with a roughly $2.8 million surplus by the second year, more than enough to cover Montevue’s roughly $1.8 million shortfall, she calculated.
However, county staff took issue with Cox’s findings, which they noted were based only on financial results from the month of April.
“One month doesn’t make a trend. She took one month that was good and painted a good picture,” White said.
Commissioner Paul Smith said Cox’s analysis caught his attention and could have changed his vote on the overall sale. But after hearing the county’s perspective on the analysis, he said he believes her review contained substantial flaws.
Cox, a Frederick resident, asserts that the balance sheets prove her point. The May numbers for Citizens are even better than April’s financial indicators and show the facility with a net gain of more than $225,000, she said.
“I have a comfort level that this is the type of thing the center can do and can do consistently,” Cox said.
White acknowledged that the center might look good on paper. However, because of ongoing struggles with medical billing, the center isn’t collecting the money it is owed, a problem that actually worsened in May, she said.
Follow Bethany Rodgers on Twitter: @BethRodgersFNP.