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What PAHCS hopes to do in the coming years is change the way it offers its long-term care services. This exception will allow PAHCS to complete its plan to build a new wing to the Koronis Manor in Paynesville and add more private rooms, more private bathrooms, more lounges, and more luxuries like an ice cream parlor and computer access in every room.

"To transform it from an institutional setting to a more home-like environment," explained PAHCS CEO Willie LaCroix, who made a presentation for PAHCS' exception application before the Department of Health and Human Services in December.

This new wing - which would go on the east side of the Manor - was discussed during the planning stages of the current remodeling and expansion project. But PAHCS could not go forward with it because of the state moratorium, which is in place because the state has an excess of nursing home beds and the last thing that is needed is to build room for more beds.

The looming merger of two Good Samaritan Society homes into PAHCS makes this planned transformation possible. PAHCS is negotiating to purchase the Good Samaritan Care Center in Paynesville and the Hilltop Good Samaritan Center in Watkins.

On Thursday, the Paynesville Area Hospital District's Board of Directors will meet in a special noon meeting at the hospital to review, and consider approval, of a final purchase agreement.

Both Good Samaritan Society homes and the Koronis Manor have suffered from the same problem: empty beds. In December, for example, the Koronis Manor averaged 15 empty beds per day. With a basic charge of $100 a day, each bed is worth $3,000 per month. Having 15 empty beds is a $45,000 revenue loss for the month.

Exceptions to the moratorium are competitive and to get theirs, PAHCS would decertify up to a quarter of its nursing home beds. PAHCS finished fourth out of 30 applications for exceptions to the moratorium, according to LaCroix. The Manor is currently licensed for 64 beds, Hilltop for 65, and the Good Samaritan for 48. (Altogether PAHCS will have 175 beds once the sale is completed, but both Good Samaritan Society homes have beds on layaway status.)

PAHCS also received a $13,000 grant to study the needs of long-term care in the area. At one time, PAHCS hoped to get $30,000 for the study, and then - due to the projected state budget deficit - any money seemed doubtful for a time, so PAHCS was happy to get $13,000, said LaCroix.

The lower amount, though, means PAHCS will have to do a scaled-down study, he added, looking at potential new services like assisted living or a dementia unit. Neither is presently offered in the immediate area.

What does not need to be studied, according to LaCroix, is the obvious problem of having too many nursing home beds. "We know that. We don't need to show that," he said.

One strength of the Koronis Manor is that it offers rehab services twice a day, seven days a week. That makes it very desirable for a new type of nursing home client, people temporarily admitted to rehab a broken bone or after a knee or hip replacement.

LaCroix said PAHCS plans to have twice a day, seven days a week rehabilitation services at Hilltop as well.

Short-term admissions like these have helped drop the average length of stays in nursing homes, said LaCroix. And they make the long-term care market more competitive, because people going for elective procedures like knee and hip replacements can choose a facility.

"Where you're going to see length of stays in years is in assisted living and places like 700 Stearns Place," predicted LaCroix. "The length of stay in nursing homes is going to be in days and months."

PAHCS has included infrastructure improvements for the new wing, including water lines, electrical supply, etc., in the current construction project. Construction documents would need to be prepared, and the hospital board has yet to approve this project, though the board already discussed this part of the project during the planning stages of the current project, but was unable to do it because of the moratorium.

The moratorium is effective because state and federal dollars are keys to long-term care reimbursement. PAHCS could build anything it likes, but without the exception PAHCS would not be paid for the improvements. With the exception, PAHCS could expect an increase in $165,500 in state, federal, and private payments per year after the improvements to the facility.

According to the exception, PAHCS has two years to complete construction.