ROCKLAND COUNTY PBC EVALUATION

AND

PRIVATIZATION ALTERNATIVES
REPORT TO THE COUNTY
May 14, 2012

TABLE OF CONTENTS CHAPTER 1: INTRODUCTION AND CONTEXT Preface Methodology Demographics Current Governance CHAPTER 2: PHYSICAL PLANT Overview General Description of Facilities Architectural Mechanical Electrical Plumbing/Fire Protection CHAPTER 3: SUMMIT PARK NURSING CARE CENTER Regional Competitive Market Quality Reimbursement and Legal Public Benefit Corporation Overarching Factors Influencing Summit Park Potential Options Summit Park Nursing Care Center Options CHAPTER 4: SUMMIT PARK HOSPITAL Regional Demographics Regional Competitive Market Summit Park Hospital Reimbursement Environment Summit Park Hospital Options CHAPTER 5: ROCKLAND COUNTY DEPARTMENT OF MENTAL HEALTH Overview Inpatient Psychiatric Unit Outpatient Services Provided by the Department Local Government Unit (LGU) and Other Departmental Services Other Considerations Mental Health Finances Mental Health Options CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS APPENDIX A ARCHITECTURAL AND ENGINEERING APPENDIX B BASELINE FINANCIAL PROJECTIONS 3

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CHAPTER 1: INTRODUCTION AND CONTEXT

PREFACE
This report presents findings, conclusions and preliminary recommendations reflecting work on the County of Rockland PBC Consulting Services engagement to assess the feasibility of the Countys continued provision of the Summit Park Hospital and Nursing Care Center, along with the Department of Mental Healths inpatient and outpatient services. To carry out this process, the County hired a team led by Toski & Co., a CPA firm with statewide healthcare and long-term-care experience, to assess the current operations of Summit Park and the Department of Mental Health, and to provide an analysis of the strengths, limitations, feasibility and likely impacts of current and possible future options. The research and policy analysis team also includes CGR (Center for Governmental Research), a non-profit research and consulting firm with extensive experience in analyzing public nursing home and mental health operations; WASA/Studio A, an architecture and engineering firm with extensive healthcare and educational experience throughout New York and the northeast region of the country; and Hiscock & Barclay, LLC, a nationallyrecognized legal firm with extensive knowledge of long-term care regulations and the reimbursement environment. As is discussed throughout the report, the healthcare industry struggles and is in a state of uncertainty as the result of continuing changes in healthcare regulation, programmatic reimbursement issues and industry trends and best practices. The external Federal and State regulatory environments that directly affect Rockland Countys Summit Park and Department of Mental Health operations are complex, dynamic and subject to change on relatively short noticewhich can impact the entities with respect to regulations, reimbursement and ultimately operations. At the time of this report the financial and legislative environments at the Federal, State and local levels have seen tumultuous changes as these government bodies struggle with complex public policy, political and financial issues and as a result, these factors have the potential to not only impact current operations, but also mid- to long-range strategic plans as well. Every effort has been taken to insure the most current regulatory and industry data available was used in evaluating current operations of Summit Park Hospital and Nursing Care Center programs and those of the Countys Department of Mental Health.

METHODOLOGY
The Toski teams goal in this project is to create an objective foundation for Rockland County to strategically position itself to respond most appropriately to current and future conditions affecting the Countys Summit Park Hospital and Nursing Care Center and the County Department of Mental Health (DMH). This report is designed to describe the current realities of Summit Park and the DMH, and to put current circumstances in the context of historic trends and the political, fiscal and regulatory environment in which they exist. As part of the assessment project, we have gathered and analyzed information regarding the current status of Summit Park and DMH; the changing role of public facilities and services; the need for and availability of long-term care and mental health services; and policy changes at the local, state and federal levels. The report also outlines options for County consideration, along with implications for the community of various decisions the County might make

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with regard to the future of Summit Park and mental health services in Rockland County. The final chapter develops specific recommendations to guide the Countys ultimate decisions, given the complex realities facing County decision-makers. Our project team seeks to provide an objective third-party perspective to assist the County in assessing its options. We entered the project with no preconceived predisposition or bias as to the ultimate outcome of this process, and had as our primary concern simply using objective information and understanding of relevant issues to facilitate a process that would result in informed decisions that are ultimately in the best future interest of the County. We have used a number of approaches in conducting this study to date, including:

Interviews
The project team has conducted confidential interviews with more than 65 individuals in one-on-one or small group discussions. At least half a dozen of these stakeholders were interviewed more than once. Interviews were conducted with the County Executive and a number of key County Administration officials; several County Legislators; administrators and staff of Summit Park and the Department of Mental Health; union representatives; private service contractors; representatives of selected non-profit agencies and stakeholders representing various community perspectives; attorneys and others knowledgeable about Public Benefit Corporations; and representatives of other counties involved in making decisions about the future of their public facilities and programs. We have also discussed a wide range of issues nearly every other week in meetings or conference calls with a high-level project steering committee established by Rockland County to oversee the project. In addition, project staff held three town meetings with any interested staff from Summit Park and DMH around the transition periods between each of the three shifts. All interested staff were invited to attend to learn about the study and to provide feedback to the consultants about issues of concern to them. We estimate that between 100 and 125 employees attended these meetings. These interviews and group discussions gave the consultant team insights into the operations of Summit Park and its components, and the operations of DMH; their interrelationships with each other and with other key aspects of County government; and the strengths and limitations of current operations. The discussions also provided many helpful suggestions for operational and structural improvements with the potential to help make existing operations more efficient and financially feasible. Many of these discussions were also helpful in framing alternative future options and their potential implications if implemented. Without exception, each of these conversations yielded helpful insights, and helped shape issues addressed throughout this report. Although we promised that each interview would be confidential, and therefore cannot attribute specific comments or suggestions to individuals, we are grateful for the helpful observations and ideas that surfaced in these discussions.

Review of Data
The consultant team has also reviewed and analyzed extensive background materials including annual reports, budgets, audited financial statements, internal financial documents and breakdowns, cost reports, consolidated fiscal reports, organizational charts, staffing needs and patterns, occupancy data, data on payer sources, case mix data, demographic projections, contracts, facility plans, comparisons

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with other facilities and programs, and numerous other types of information compiled for the purpose of this study. In addition, we received extensive guided tours of the facilities, and obtained and analyzed detailed drawings and renderings of the existing Summit Park physical plant. Our financial and analysis was limited to data available as of December 31, 2010. As a result, some estimates may be subject to change if more current information becomes available.

DEMOGRAPHICS Rockland County Description

Rockland County is a suburban county about 15 miles northwest of Manhattan. Just north of the New York/New Jersey border, it is across the Hudson River from Westchester County to the east, and is south of Orange County. It is the southernmost county in New York west of the Hudson River, and the smallest county geographically in the state outside New York City. Rocklands population, 311,687 in 2010, has grown rapidlya 17.4% increase since 1990, when the county contained just over 265,000 residents. Its median income places it among the highest-income counties in the state and nationally. The county is made up of five towns and 19 incorporated villages. It is governed by a County Executive form of government, with a 17-member Legislature. The County has the second highest population density per square mile in the Hudson Valley Region, as depicted in the following chart.
Hudson Valley Region Geographic Characterics (2010 Actual, 2040 Projected) - Table 1 Population 2010 Dutchess County Orange County Putnam County Rockland County Sullivan County Ulster County Westchester County 297,488 372,813 99,710 311,687 77,547 182,493 949,113 2,290,851 Perctentage Change 2040 326,402 444,322 104,816 355,824 77,165 170,141 967,355 2,446,025 6.8% Square Miles 825 839 246 199 997 1,161 500 4,767 Population Per Sq Mi 2010 360.6 444.4 405.3 1,566.3 77.8 157.2 1,898.2 480.6 2040 395.6 529.6 426.1 1,788.1 77.4 146.5 1,934.7 513.1

Demographics and the Changing Needs of the Countys Seniors

The Countys demographic trends suggest that the aging of the baby boom generation and increases in life expectancy will lead to growing numbers, and higher proportions, of elderly in the Rockland County population over the next 20 years. Based on population projections developed at the Cornell Program on Applied Demographics, the total numbers of people 65 and older, 75 and older, and 85 and

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older will almost certainly increase significantly, and these numbers will represent increasingly larger proportions of the total Rockland County population. Projections for Rockland show a substantial overall population growth of 17.4% between 1990 and 2010 was significantly outpaced by the disproportionate growth in the elderly population during that period. As shown in Table 3, during those 20 years the number of residents 65-74 grew by more than 7,000 (an increase of 47%); those 75-84 grew by more than 5,200 (a 61% increase); and those 85 and older increased by more than 2,500 (a 20-year growth rate of 81%). As reflected in Tables 2 through 4, over the next 30 years, through 2040, the projected growth rate of those 65 and older will continue to outpace, by substantial margins, the countys projected growth rate for the entire population (14%) and will represent greater proportions of the total population in 2040 than in earlier years. More specifically, between 1990 and 2030, the number of county residents 65 and older is projected to more than double (from almost 27,000 to almost 59,000). In 1990, that age group represented 10% of the countys total population. By 2010, it accounted for 13% of the total population, and by 2030, it is projected to account for 17% of all county residents. The Cornell projections suggest that the 65+ population will grow steadily over the next 20 years, and that by 2030, it will have expanded by an additional 40% compared to 2010, from just under 42,000 to just under 58,800 residentsalmost 17,000 more residents 65 and older in the county than today. With the highest proportion of over 65 year old residents in the state, Rocklands population is expected to grow from approximately 41,841 in 2010 to 60,439 in 2040a 44% increase.
Table 2 - REGIONAL POPULATION PROJECTIONS BY COUNTY, AGE AND GENDER: 1990 - 2040 1990 ROCKLAND Total 0-4 5-14 15-24 25-44 45-64 65plus 85plus Males Females 2000 2010 2015 2020 2025 2030 2035 2040 % Chg 2010 - 40

265,475 19,048 37,883 38,980 81,775 60,918 26,871 3,144 128,906 136,569

286,753 21,807 45,605 35,550 80,227 69,711 33,853 4,177 139,901 146,852

311,687 23,801 48,749 42,557 73,429 81,310 41,841 5,696 152,879 158,808

320,536 22,718 51,206 42,720 76,018 81,244 46,630 6,611 157,218 163,318

329,246 23,569 51,830 43,326 80,289 79,808 50,424 7,226 161,640 167,606

337,392 23,972 52,043 45,319 82,936 78,174 54,948 7,653 165,890 171,502

344,540 24,193 53,304 45,746 83,347 79,171 58,779 8,560 169,757 174,783

350,572 24,397 53,970 46,097 84,200 81,571 60,337 10,092 173,203 177,369

355,824 24,654 54,498 46,774 84,689 84,770 60,439 11,332 176,356 179,468

14.2% 3.6% 11.8% 9.9% 15.3% 4.3% 44.4% 98.9% 15.4% 13.0%

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Among those 75 and older (the most significant subgroup in projecting the need for various levels of long-term care), demographers project an additional increase of 44% (an increase of about 8,600 additional persons, to a total of more than 28,000 75+ residents) from 2010 to 2030, when they would represent 8% of the expected overall county population (compared to about 6% of the current population). This is on top of a 67% increase projected from 1990 to 2010. The baby boomer generation will begin to reach the age of 75 in the year 2021, following which most of the 75+ growth will occur. In addition, the 85 and older population (those most likely to need institutional care at that stage of their lives) is projected to be almost 2.75 times larger in 2030 than it was 20 years ago in 1990. Having grown by 81% in the past 20 years, it is projected to increase by another 50% during the next 20 (an increase of more than 2,800 from 2010 to a total of more than 8,500 by 2030, when those 85 and older will represent 2.5% of the countys total population).

Table 3: Historical and Projected Growth of Population 65 and Older, Rockland County 1990 Total Total Pop 65-74 75-84 85+ 65+ 75+ 85+ 265,475 15,127 8,600 3,144 26,871 11,744 3,144 % of Total 6% 3% 1% 10% 4% 1% 2000 Total 286,753 19,292 10,384 4,177 33,853 14,561 4,177 % of Total 7% 4% 1% 12% 5% 1% 2010 Total 311,687 22,266 13,879 5,696 41,841 19,575 5,696 % of Total 7% 4% 2% 13% 6% 2% 2015 Total 320,536 25,948 14,071 6,611 46,630 20,682 6,611 % of Total 8% 4% 2% 15% 6% 2% 2020 Total 329,246 27,921 15,277 7,226 50,424 22,503 7,226 % of Total 8% 5% 2% 15% 7% 2% 2030 Total 344,540 30,581 19,638 8,560 58,779 28,198 8,560 % of Total 9% 6% 2% 17% 8% 2%

Source: US Census Bureau (1990, 2000, and 2010 population) Cornell Program on Applied Demographics (Projected 2015, 2020 and 2030 population; produced September 8, 2011) http://pad.human.cornell.edu/counties/projections.cfm

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Table 4: Projected Growth of Population 65 and Older, Rockland County: 2010-2030 2010 Total Total Pop. 65-74 75-84 85+ 311,687 22,266 13,879 5,696 Total 320,536 25,948 14,071 6,611 2015 Change from 2010 3% 17% 1% 16% 11% 6% 16% Total 329,246 27,921 15,277 7,226 50,424 22,503 7,226 2020 Change from 2010 6% 25% 10% 27% 21% 15% 27% Total 344,540 30,581 19,638 8,560 58,779 28,198 8,560 2030 Change from 2010 11% 37% 41% 50% 40% 44% 50%

65+ 41,841 46,630 75+ 19,575 20,682 85+ 5,696 6,611 Source: US Census Bureau (2010 population)

Cornell Program on Applied Demographics (Projected 2015, 2020 and 2030 population; produced September 8, 2011) http://pad.human.cornell.edu/counties/projections.cfm

Projections are naturally subject to change due to a variety of socio-economic factors, technology and preference. As a result, these projections can change dramatically as unforeseen events and realities occur. Notwithstanding such caveats, the number of elderly residents of Rockland County will almost certainly be significantly higher over the next two decades than it is now, and these increasing numbers will have significant implications on the array of long-term-care services needed for older citizens in the future. It is worth noting that not only will there likely be a larger proportion of older people in the population, but they will also live longer and in many cases healthier lives. Research and federal and state policies (although not yet always funding to support the policies) suggest that there will be increasing demands for various community-based services to support the concept of residents wishing to age in place, delaying institutional care as long as possible. This suggests that there will be a growing need for expanding such community resources as assisted living, home care, and adult day care programs. In assessing future options for the delivery of long-term care to its growing numbers of older residents, Rockland County officials will need to balance the continuing need for sufficient institutional residential health care facility (nursing home) beds with the need to grow and strengthen community-based services and levels of care. Despite the projected future growth in the elderly population, the State Department of Healths March 2010 update of nursing home bed needs by county reflects an estimated excess of 48 nursing home beds throughout Rockland County by 2016. On the other hand, it should be noted that those forecasts presumably do not adequately factor in post-2016 projections, which as reflected in the tables above indicate that by 2030, there may be about 7,500 additional county residents 75 and older, including almost 1,950 additional residents 85 and older. Such projections may suggest that the 2016 nursing home excess estimates may need to be reconsidered in terms of their applicability to future years.

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State need methodologies are based on NYS Public Health Law and relate to specific services and programs that are institutional in nature, such as hospitals and nursing homes, and those which are non-institutional or community based, such as home health care, adult day care and adult homes. Various policy decisions, such as the Medicaid waiver programs, laws and regulations such as the Americans with Disabilities Act, reimbursement policies at the Federal and State levels and court decisions, such as the 1999 Olmstead decision, all factor into the development of need methodology. As can be seen by the distinction between nursing homes being regarded as institutional and adult care facilities being deemed community based, the distinction between the types of services offered and community need becomes increasingly gray. Currently, the main thrust of policy is toward fully integrated community based programs which allow for autonomy in the least restrictive environment. This thinking, which is similar to the deinstitutionalization movement of mental health in the 1960s and 70s, is largely attributable to the factors noted above and also includes advances in medicine and technology and efforts to reduce higher healthcare costs associated with institutional care.

Estimates of Mental Health Needs in the County

Estimates and projections of Rockland County residents suffering from some type of mental illness are much harder to come by than overall population estimates and age projections. In the absence of a reliable way of estimating the prevalence of mental illness at a county-specific level, national estimates are typically used as the best proxies for county estimates. The National Institute on Disability and Rehabilitation Research of the U.S. Department of Education provides the following proportions as estimates of the prevalence of mental illness nationallyestimates which we then apply to Rockland County population totals: 20% of the population suffers from some type of a mental illness. 2.8% of the population has a serious mental illness.

Applying those proportions to the 2010 Rockland County population, an estimated 44,821 adults 18 and older suffer from a mental illness. Of those, 6,275 are estimated to have a serious mental illness. If the same proportions can be applied to those under the age of 18, an additional 17,517 children and adolescents under the age of 18 would be estimated to have a mental illness. Thus, if these proportions are reasonably applicable to Rockland County, 62,338 county residents of all ages currently are estimated to suffer from some type of mental illness. Applying the same proportions to the 2030 projected total population of 344,540, an estimated 68,908 county residents at that time would have a mental illness of some type.

CURRENT SUMMIT PARK AND MENTAL HEALTH STRUCTURE AND GOVERNANCE

The Summit Park Hospital and Nursing Care Center programs and services, and those of the Countys Department of Mental Health, report to the County Executive through two Commissioners: the Commissioner of Hospitalsresponsible for Summit Park Hospital and the Nursing Care Center (nursing home)and a Commissioner of Mental Healthresponsible for the mental health services

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provided at the hospital, and in various clinics andprograms operated both by the County and by various not-for-profit community-based agencies throughout the community, and for the Local Governmental Unit (LGU) function responsible for oversight of all mental health services provided countywide. Additionally, the County Legislature and Hospital Board of Governors provide input into the operations of Summit Parks programs and services. The Commissioner of Hospitals oversees the operation of the Summit Park Hospital, a 100-bed Long Term Care Hospital (LTCH), and Summit Park Nursing Care Center, a 320-bed New York State licensed skilled nursing facility. Both the hospital and nursing home provide a variety of inpatient and outpatient hospital and nursing home programs and services under statutory Federal and State regulatory guidelines. The Commissioner is directly responsible to the County Executive for the operations of the hospital and nursing home. The Commissioner also has reporting responsibility to the County Legislature and the Rockland County Hospital Board of Governors. Additionally, 43 of the Hospitals 100 licensed beds are currently certified for use for inpatient psychiatric services, and the Hospital facility also provides the location and support for much of the Countys outpatient mental health services. Both the inpatient and outpatient mental health services administration fall under the direction of the Commissioner of Mental Health. Both Commissioners report directly to the County Executive and have lateral reporting responsibilities to each other for their respective operations at the physical facility. Additional information regarding the relationships appears throughout the report. These relationships are depicted in the following illustrations.

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Overview of Department of Hospitals Organizational Structure

Department of Hospitals and Mental Health
Organizational Structure

County Executive

County Legislature

Board of Governors

Commissioner of Hospitals

Commissioner Mental Health

Summit Park Nursing Care Center

Summit Park Hospital Acute Inpatient Outpatient Mental Health Inpatient Outpatient

Illustration 1- Organizational/Governance Structure

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CHAPTER 2: PHYSICAL PLANT

OVERVIEW
The Dr. Robert L. Yeager Health Center, located in Pomona, New York, is a 206 acre campus consisting of 17buildings on the east and west side of Sanatorium Road. WASA/Studio A in conjunction with the partnership team of Toski& Co. PC (TSC), The Center for Governmental Research, Inc. (CGR) and Hiscock & Barclay (H&B) were retained by the County of Rockland in the fall of 2011 to undertake a Public Benefit Corporation Feasibility analysis. Buildings A, B, C, D, E, F, and P consisting of approximately 572,000 square feetwere included as part of the study. The buildings house a variety of County government departments and a 100-bed acute care hospital and a 320-bed hospital. A team of professional architects, mechanical, electrical, plumbing, and life safety engineers from WASA/Studio A performed a visual survey on December 15th, 2011 and on January 5th, 2012. The survey included accessible areas of the exterior such as roofs, facades, windows and accessible interior spaces. An assessment of vertical transportation systems, a survey of hazardous materials, and survey of landscape elements were excluded from the scope of this project. Additionally, no destructive probes were performed as part of this project. This report describes the existing building systems, documents our findings, and provides general recommendations for the Countys consideration. The report is organized by building and details general construction, mechanical, electrical, plumbing, and fire protection systems. Photographs of existing conditions and floor plans of the existing facility are provided at the end of the report. No photographs were allowed in areas occupied by patients or residents, specifically floors 3 to 9 in Building A and the second floor in Building D. Overall, the facility was observed to be in fair condition. A summary of the findings for all buildings follows; a detailed description for each building can be found in our full analysis, which is attached as an appendix to this report. The preliminary estimated construction cost using 2012 second quarter pricing and a 20% contingency is $19,233,338. This does not include soft costs such as architectural and engineering fees.

GENERAL DESCRIPTION OF THE FACILITIES Architectural

The roofs are a combination of EPDM and modified bitumen. The facades are primarily masonry with brick cladding. The windows are a combination of metal and wood in various configurations. The interior finishes typically consist of acoustic ceilings in a metal grid, gypsum or concrete masonry unit walls, and vinyl or carpet flooring. All show signs of normal wear and tear. The windows at buildings

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A, B, and D appear to have reached the end of their services life and should be replaced. The immediate repairs should be performed at the masonry chimney located at building E.

Mechanical
The Yeager Health Center has a central chilled water plant and heating hot water plant which are located in Building E. The chilled water plant consists of two (2) 1200-ton absorption chillers fed by low-pressure steam; three (3) condenser water pumps, three (3) chilled water pumps and two (2) twocells cooling towers located on the roof. The hot water system consists of two (2) 200 HP high-pressure Cleaver Brooks boilers and three (3) 700 HP low-pressure Cleaver Brooks boilers. The boilers are duel fuel; gas and fuel oil # 2. Lowpressure steam is distributed to the absorption chillers and converted to hot water for heating. Highpressure steam is being used in the kitchen and domestic hot water heating.Chilled water is distributed to buildings A, C, D, E, F and P. Heating hot water is distributed to buildings A, E and D. Existing mechanical equipment was installed at the time of construction. One of the chillers was retubed in 1992 and the other chiller was replaced in 1992. The cooling towers were installed in the 1970s and have not been replaced. The boilers and heat exchanger are also original and have not been replaced. All mechanical equipment is beyond or near its useful life and should be replaced. Building controls are pneumatic and should be upgraded. A 4000 gallon underground fuel oil tank located outside Building A serves the emergency power generator. Exposed pipes show a lot of deterioration and should also be replaced. Leaks in the ceiling from pipes with deteriorated insulation can be seen on dropped ceiling at various locations in various buildings. All buildings have numerous exhaust fans on roofs; only fans no longer operating properly should be replaced. Some rooftop equipment is rusted and some have damaged insulation; some air-handling units are also damaged.

Electrical
The Yeager Health Center includes of Buildings A, B, C, D, E, F, and P which are served by three (3) incoming utility electrical services. Service #1 feeds Building A which in turn serves Building C. Service #2 serves Building E which in turn serves Building D and P. Service #3 rated at 200A, 208/120V, 3Phase, 4Wire serves Building B via underground feeders. The emergency generators of 1000 KW, 500KW, 480/277V, 3 Phase, 4 Wire are provided for the Buildings A, C and Buildings E, D respectively to take care of emergency load of the buildings. Generator for Buildings A, C is located outside building A in weather proof enclosure along with utility transformer and primary load break switch. Generator for Buildings E, D are located indoor, in a generator room at Building E. Power to selected lighting in corridor, exit lights, all loads in kitchen areas in Building A, selected HVAC equipment, elevators and all equipment in boiler room, nurse call system, Fire alarm system, telephone equipment etc. are provided from emergency distribution panel and emergency panels throughout Buildings A, C, E, and D. The emergency

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service equipment in Building A is dated from 2009 and is relatively new and in good condition. The emergency generator in Building E is in fair condition. Interior lighting fixtures used in the entire facility buildings comprise of recessed and surface mounted fluorescent fixtures with T-8 lamp throughout and recessed down lights in corridors with PL lamp. Lighting fixtures in the basement of Building B are provided with T12 lamps in older fixtures which seem to be original to the building, consume more energy than available current T-8 lamps and are in need of replacement. Exit lighting fixtures are of mostly a combination of incandescent type lamps. Emergency lighting in corridors, stairs and exit doors are provided by emergency lighting circuits wired to available emergency panels in Buildings A, C, E, and D. Building B, F, and P utilize emergency battery heads with built-in exit signs. Lighting fixtures are controlled generally by wall toggle switches and/or keyed switches. At the time of the survey, toggle switches in Building C were not operational and are in need of replacement. The buildings are provided with convenience receptacles and special receptacles throughout as per program requirements. However toilet areas in Building C are not provided with GFI receptacles. The buildings are provided Telephone/Data system with all telephone and data outlets provided throughout as per program requirements. Generally, data closets are located throughout and telephone demarcation points in main telephone rooms in each buildings. The buildings are provided with dedicated fire alarm systems except buildings A and C which are connected to a central Control Panel located at building A. Fire alarm control panels are manufactured by (4) different vendors. Buildings A and C are provided with wall/ceiling mounted speakers including control panel provided as part of Public Address system. Nurse call system is provided at Buildings A and C with associated call stations, dome lights and respective control panel in nurses station location. The entire facility buildings are provided with telephone/data devices.

Plumbing/Fire Protection
Existing domestic water, sanitary, gas and fire protection piping systems have been installed at the time of construction and are exceeded its statistical service life. Domestic water pumps, fire protection pumps and local electric domestic hot water heaters have been replaced with new equipment and are in good working condition. Plumbing fixtures have been replaced with new and are in good working condition. Duplex sewage ejectors have been installed at the time of construction and have exceeded their statistical service life. A domestic hot water storage tank has been installed at the time of construction and has exceeded its statistical service life. All plumbing and fire protection equipment in Yeager Health Center complex is maintained in good operating condition by qualified personnel. Below is summary of projected capital improvements necessary to the Yeager Campus. A detailed summary appears in Appendix A to the Report.

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Rockland County Dr. Yeager Campus Estimated Continued Maintenance Costs Planning Horison Immediate 1+ 5 Years 6 to 10 Years Architecture Building A $1,725,000 Building B $12,500 $45,000 Building C $15,000 $557,000 Building D $315,000 Building E $75,000 $10,000 Building F $250,000 Building P $11,000 $10,000 HVAC Building E/ Utility Plant Chiller $1,994,800 Remaining plant $2,622,688 Building A $2,421,518 Building B $18,840 Building C $426,220 Building D $324,850 Building F $232,950 Building P $44,325 ELECTRICAL Building E/ Utility Plant $25,000 $140,000 $100,000 Building A $45,000 $180,000 Building B $50,000 $100,000 Building C $410,000 $75,000 Building D $50,000 $85,000 Building F $50,000 $85,000 Building P $30,000 $75,000 PLUMBING Building E/ Utility Plant Piping/fitting replacement $10,000 $32,500 $32,500 Domestic hw storage $16,000 Building A piping/fitting replacement $20,000 $477,500 $477,500 new fire suppress. system $10,000 Building B piping/fitting replacement $15,000 $15,000 hw heater $10,000 Building C $232,950 piping/fitting replacement $10,000 $130,000 $130,000 hw heater $10,000 Building D piping/fitting replacement $10,000 $63,000 $62,000 hw heater $10,000 Sewage Ejector $20,000 Building F piping/fitting replacement $20,000 $110,000 $110,000 Sewage Ejector $20,000 Building P piping/fitting replacement $20,000 $13,000 $12,000 TOTAL ALL BUILDINGS $1,329,720 $8,171,221 $3,484,700 NOTE: Excludes Contractors' OHP, Contingency, and Difficulty Factor

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CHAPTER 3: SUMMIT PARK NURSING CARE CENTER

Summit Park Nursing Care Center is a New York State licensed nursing home under Article 28-A of the NYS Public Health Law and federally under section 1888 of the Social Security Act. The facility is licensed for the following certified bed capacity and services:

Services Medicaid and Medicare Certified Nursing Home Beds Adult Day Health Care Dialysis Clinical Laboratory Service Radiology - Diagnostic

Beds 320

REGIONAL COMPETITIVE MARKET Nursing Homes

There are 36 Nursing Homes within a 20-mile radius of Summit Park comprising 5,240 licensed nursing home beds (exclusive of Summit Park). Based on data from NYSDOH there are approximately 1,587 unoccupied beds on average in the region on a given day, including those unoccupied at Summit Park. Summit Parks occupancy is approximately 10.3% below the regional occupancy rate and 9.1% below other nursing homes in Rockland County as depicted in the following table.

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The locations of competing facilities within the Summit Park market area can be seen in the following map.
Figure 1- Nursing Homes Within a 20 Mile Radius

Summit Parks low utilization resulted in approximately 21,650 lost days of revenue annually on average, based on the facilitys 2010 cost report data and certified capacity of 341 beds as reported in the facilitys cost reports, the 2010 Nursing Home NYS RHCF-2 and the Hospital Institutional Cost Report (ICR). According to preliminary 2011 data from the facility, the facilitys occupancy rate was 81.73% for the year ended 12/31/11, which resulted in the facility providing 95,456 days of resident care and a licensed capacity of 116,800 days. This resulted in 21,344 lost days of care for the year through 12/31/11, despite the facility de-certifying 21 nursing home beds in exchange for additional Adult Day Health Care capacity under a Certificate of Need filed with New York State in 2007.

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The decrease in resident days from 101,818 days in 2010 to 95,456 days in 2011 resulted in an estimated loss of approximately $ 1.7 million in revenue to the facility based on the facilitys Medicaid per diem rate.
Utilization: Summit Park Nursing and Care Facility, 2002, 2008 - 2010
2002 # Available Beds Total Days of Care % Occupancy for the Year Average Beds Filled per Day Discharges per Year Average Length of Stay per Episode 341 116,769 93.82% 319.9 255 457.9 2008 341 110,405 88.46% 302.5 281 392.9 2009 341 104,825 84.22% 287.2 307 341.4 2010 341 101,818 81.80% 279.0 243 419.0 2011 320 95,456 81.73% 261.5 -

Source: NYS Department of Health Hospit ICR & RHCF-2; percentages calculated by T oski & Co., CPA's

At its current capacity of 320 beds and assuming the facility could achieve 95% occupancy, we estimate the facility had an additional 15,500 lost days of revenue which would have contributed an additional $ 2.4 million in revenue to the facility, in addition to the $ 1.7 million identified in the previous paragraph.

Home and Community Based Services Adult Care Facilities, Assisted Living Programs and ALRs
There are currently 14 Adult Homes and 2 Assisted Living Program providers with 1,300 ACF and 146 ALP beds, respectively. The complement of ACFs and ALPs are expected to grow to 20 facilities with approximately 1,772 licensed beds based on active certificates of need filed with NYS. These changes will include the redesignation and expansion of licensed beds to include Assisted Living Residences (ALR), Enhanced Assisted Living Residences (EALR) and Special Needs Assisted Living Residences (SNALR) The additional 277 beds will accommodate residents previously receiving services in the regions nursing homes and will absorb a portion of the expected increase in the over 65 year old population in the region. The addition of Enhanced and Special Needs Population ALRs will address persons needing assistance due to dementia and Alzheimers, assistance with ADLs including walking, transferring, nursing, medication and durable medical equipment through the availability of specialized physical environments and 24 hour skilled nursing care which has traditionally only been available in nursing homes.

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Adult Care Facilities and Assisted Living Residences in Rockland County

Assisted Assisted Special Certificate Number Living Living Enhanced Facility Needs ALR Number of beds Program Residence ALR Beds Type Beds beds (ALR) beds Chestnut Operating Company, LLC 620-F-081 150 0 0 0 0 AH Bagsiyao, Corazon 620-F-069 39 0 0 0 0 AH Assisted Living at Northern Riverview, Inc. 620-E-019 105 100 0 0 0 AH/ALP Sanchez, Anita 620-F-036 164 0 0 0 0 AH Orzel, Israel 620-F-052 263 0 0 0 0 AH St. Zita's Villa 620-E-017 35 0 0 0 0 AH Russian Orthodox Convent 620-E-010 76 0 0 0 0 AH Daos, Myrna A. 620-F-071 32 0 0 0 0 AH Markowitz, Elliot 620-F-076 44 0 0 0 0 AH TZ Manor, LLC 620-F-087 100 0 0 0 0 AH Promenade Blue Hill LLC 620-F-085 52 0 0 0 0 AH Rockland County 620-N-040 41 0 0 0 0 AH St. Joseph's Adult Care, Inc. 620-E-016 31 0 0 0 0 AH G & J New Bader Enterprises, LLC 620-F-077 200 0 0 0 0 AH The New Golden Acres LLC 620-F-083 80 46 0 0 0 AH/ALP Rudolph Steiner Fellowship Foundation, Inc. 620-E-013 33 0 0 0 0 AH 1,445 146 0 0 0 Operator 16 2 0 0 0 Operator Type PPHA PPHA NFP PPHA PPHA NFP NFP PPHA PPHA PPHA PPHA PUBL NFP PPHA PPHA NFP

Facility Esplanade at Chestnut Ridge Garnerville Home for Adults Assisted Living at Northern Riverview Green Hills Estate New Monsey Park Home St. Zita's Villa Old Peoples Russian Orthodox Convent Spring Valley Rest Home L'Dor Tappan Zee Manor Promenade at Blue Hill Rockland County Public Home St. Joseph's Home Evergreen Court Home for Adults Golden Acres Home for Adults Rudolph Steiner Fellowship Foundation Total Existing Capacity Total Existing Facilities Proposed Facilities New Expansion Total Proposed Total Estimated Future Capacity Total Estimated Future Facilities
Source: Toski & Co. CPA's, NYS Department of Health

City/Town Chestnut Ridge Garnerville Haverstraw Haverstraw Monsey Monsey Nanuet Nanuet New City Nyack Pearl River Pomona Sloatsburg Spring Valley Spring Valley Spring Valley

Zip 10977 10923 10927 10927 10952 10952 10954 10954 10956 10960 10965 10970 10974 10977 10977 10977

Facility ID AF0394B AF0252A AF0198A AF0257A AF0330A AF0406A AF0344A AF0400A AF0290B AF0413B AF0225B AF0372A AF0402A AF0201B AF0253B AF0376A

236 41 277 1,722 20

56 128 184 330 3

180 455 635 635 3

148 90 238 238 3

42 58 100 100 2

Home Care and Hospice

There are currently 114 home healthcare agencies licensed to service Rockland County of which 36 are within the Countys borders. As depicted in the table below, there are 8 Certified Home Healthcare Agencies (CHHA), 4 Long Term Home Health Care Programs (LTHHCP), 2 Hospice Agencies and 100 Licensed Home Care Service Agencies (LHCSA)

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The County, which was once a provider of CHHA and LTHHCP through its Department of Public Health, sold its interest in CHHA and currently operates a LHCSA. In February, 2012 The NYS Department of Health published a Request For Application to expand the number of Certified Home Health Agencies (Medicare and Medicaid participating) as part of its commitment to de-institutionalizing Long Term Care, which is consistent with the U. S. Supreme Court decision in the landmark Olmstead case which places the focus on health care delivery in a Home and Community Based Services (HCBS) setting. This is a national trend in the provision of long term care services. The expansion is also part of the States Medicaid Re-Design Team (MRT) efforts to reduce Medicaid spending in the state through reducing hospital re-admissions within 30 60 days of hospital discharge and reducing higher costs associated with providing care in an institutionalized setting As discussed in the previous sections, movement to the HCBS setting for providing long-term care through the use of Adult Homes, Assisted Living Programs, Assisted Living Residences, as well as through expansion of home care services is seen as a way of reducing Medicaid spending, providing higher quality of life for persons needing this level of care and improving clinical outcomes while reducing the need for building additional nursing facilities to absorb the expected increase in the aging population as previously discussed. We believe these alternative care programs will dampen the demand curve for nursing home services, despite projected sharp rises in the age demographic requiring long-term care services as persons are transitioned to community based alternate levels of care. However, given the Countys age demographics and population density, sufficient demand for nursing home services should continue and it is ultimately up to the facility to aggressively pursue admissions in the increasingly competitive market.

QUALITY
Nursing Homes and long term care providers must comply with various regulations related to resident safety and quality of care. The regulations are promulgated by various regulatory bodies at the federal and state levels. It is often said that nursing homes are among the most regulated industries.

New York State Surveys

Due to federal regulations, nursing homes are required to be surveyed on an annual basis by the licensing agency of the state in which they operate, or a Medicare deemed accrediting organization such as the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or AHCA in order to be in compliance with the federal Medicare rules of participation. The federal government through the Centers for Medicare and Medicaid Services (CMS), defer to the state licensing agency in which the nursing home is licensed to determine whether surveys will be conducted by the State or a deemed accrediting organization. In New York State, the New York State Department of Health performs the annual survey of nursing homes through its regional offices. Results of the survey process with respect to the provision of care and compliance with state and federal regulations are reported to

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CMS and posted for the public on both the New York State Department of Health website and on CMSs website. As noted in the table below, the facility ranked higher (worse) than the Statewide Average in Standard Health Deficiencies and Life Safety Code Deficiencies. Total deficiencies for the facility were 44 as compared to the statewide average of 24. Only 1 deficiency was related to actual harm which was slightly below (better than) the statewide average.

Facility Comparison to Statewide Average

This Statewide Measure Facility Average Standard Health Deficiencies 35 17 Life Safety Code Deficiencies 9 7 Total Deficiencies 44 24 Deficiencies Related to Actual Harm or Immediate Jeopardy 1 1 % of Deficiencies Related to Actual Harm or Immediate Jeopardy 2% 4% Source: NYS DOH. April, 2012. http://nursinghomes.nyhealth.gov/nursing_homes/inspection/253

Summit Park received 12 deficiencies in its October 7, 2011 Certification Survey as compared to 11 in the prior year. Life Safety Code violations decreased from 4 in 2010 to 2 in 2011. However, Standard Health Deficiencies increased to 10 in 2011 as compared to 7 in the prior year. The results of the surveys are depicted in the table below.
Last Two Survey Results
Survey and Measures October 7, 2011 Certification Survey Standard Health Deficiencies Standard Life Safety Code Inspection Total Isolated Patterned Widespread 6 1 7 3 3 1 1 2 Total 10 2 12

October 6, 2010 Certification Survey Standard Health Deficiencies 5 1 1 Standard Life Safety Code Inspection 1 3 Total 5 2 4 Source: NYS DOH. April, 2012. http://nursinghomes.nyhealth.gov/nursing_homes/inspection/253

7 4 11

A citing of Immediate Jeopardy to the health and welfare of nursing home residents and Stipulations and Orders result in potential fines and sanctions, such as the potential loss of federal and state reimbursement for the period of time until which the facility returns to compliance or placement on the Federal Watch List. In these instances, facilities are more closely surveyed on both routine and unannounced intervals by the State surveillance agency until the agency determines the facility has improved performance and returned to compliance with respect to federal and state regulations.

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In December, 2009 and September, 2008 Summit Park entered into Stipulation Orders and was fined $10,000 and $12,000, respectively, for the incidents which were related to quality of resident care. .

New York State Fines & Enforcement

Deficiency Survey Date 4-Dec-09 5-Sep-08 Category of Quality of Care Quality of Care Stipulation and Stipulation and Fine Assessed $10,000 $12,000

Order Number Order Date NH-10-045 NH-09-002 19-Oct-10 5-Jan-09

From a practical standpoint, in addition to potential liability issues resulting from substandard care, public perception can become tainted and result in a facility having more difficulty attracting patients for admission to the facility, leading to low facility utilization or the inability to develop referral relationships with hospitals, health systems and third party payors who would prefer to be associated with high quality providers that are effective in achieving the highest clinical outcomes.

CMS and National Rankings

Based on the CMS Quality Indicator Rankings, Summit Park has seen a slight decrease in its rank against other providers nationally. The facility which was in the 79th percentile (better than 79% of the facilities nationally) dropped to the 66th percentile in the third quarter of 2010.

Nursing Home Quarterly Quality Indicators National Ranking

Facility 2007 2008 Q4 Summit Park Helen Hayes Valley View Golden Hill Sullivan County Albany County Northern Riverview Pine Valley 79 * 79 71 89 82 17 58 2009 2010 2012-APR CMS 3 5 3 3 3 3 1 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 79 77 75 74 75 76 78 75 72 68 66 * * * * * * * * * * * 78 77 81 76 71 71 64 60 58 58 53 63 65 62 52 39 31 27 32 45 38 53 86 86 86 91 88 89 90 90 90 90 87 84 81 76 63 55 48 47 52 48 42 39 23 29 36 33 24 16 15 34 56 77 72 51 53 48 27 23 18 24 26 24 29 25

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A comparison of the facilitys ranking with other public nursing homes in the region and for-profit and not-for-profit competitors locally appears in the next table and is also represented graphically below.

Another ranking used by CMS is the 5 Star Quality ranking system. Summit Park received 3 stars which appears to be the mean among public facilities in the sample. The NYS Operated nursing facility at Helen Hayes Hospital was the only 5 star facility in the group. The not-for-profit comparable in the sample ranked lowest with 1 star and the for-profit which ranked poorly in the quality indicators had a 4 star ranking.This information is updated at regular intervals and is available to the public on the CMS website at http://www.medicare.gov/NHCompare.

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REIMBURSEMENT AND LEGAL

For the County operated Summit Park Nursing Care Center, Medicaid is the principal payer for care and services. The reimbursement environment for operation of the Rockland County nursing home and long-term care hospital are for continued shortfalls in nursing home Medicaid reimbursement and an uncertain future for long-term care hospital Medicare reimbursement. The Governor also issued an Executive Order requiring State agencies to develop salary caps and administrative expense ceilings for all providers that receive State financial support, including Medicaid. The regulations are being developed and will have to be evaluated for application to the nursing home industry.

Nursing Home
The Medicaid reimbursement methodology as applied to County nursing homes in general disadvantages such facilities and produces continued annual operating deficits. For Rockland County, nursing home operating deficits are the cumulative result of the facility exceeding peer group cost ceilings established by the methodology, a statewide limit on nursing home reimbursement in general,

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the state providing no trend factor increases over historic operating costs in establishing the Medicaid payment rate despite actual cost inflation, and the proposed commencement January 2012, subject to federal approval which is still pending, of a new statewide reimbursement methodology. New York has reimbursed nursing homes under the Medicaid program a set amount for each day of care determined under a complex reimbursement formula, calculated for rate periods from 2009 through 2011 based on 2002 reported costs for each facility, and beginning in 2012 based on 2007 reported costs. A unique Medicaid rate is established for each facility on a per-patient per-day basis. There are four components of the Medicaid rate: direct, indirect, and non-comparable costs (collectively referred to as the operating costs component), and capital costs.

Medicaid Reimbursement Methodology 2009 through 2011

Each nursing home resident was assessed and assigned to one of 53 Resource Utilization Groups (RUGs) that reflects the severity of the residents illness and level of care required. For the direct component of the rate, a statewide price is established for each RUG for three facility peer groups, adjusted for regional variations in nursing home wage and fringe benefit levels. The peer groups are free-standing facilities with less than 300 beds, free-standing facilities with 300 or more beds, and hospital-based facilities. Summit Park Nursing Care Center is grouped as a hospital-based facility. A ceiling price is established for each RUG group within the peer groups, calculated as a percentage of the statewide mean price. Thus, the more complex the care required for a resident, the higher the direct component of the Medicaid reimbursement rate will be. Any direct costs in excess of the ceiling would contribute to the nursing homes operating cost deficit. However, there is an adjustment in the methodology for publicly operated facilities that mitigates the deficit by adding 50% of the deficit into the rate calculation. The average of 2006 patient RUG scores determines the facility case mix index used in establishing the 2009 direct component of the rate. The reimbursement methodology provides for no further case mix measures to adjust the rate for the period 2009 through 2011, unless a facility specifically appealed for a higher case mix based on significant changed resident case mix. Summit Park Nursing Care Center did not apply as there was not a significant increase in facility case mix. The indirect cost component of the rate was similarly calculated for the three facility peer groups based on a statewide average, adjusted for regional variations in wage and fringe benefits. A ceiling indirect price is established and any costs in excess of the ceiling would contribute to the nursing homes operating cost and continuing deficits. Non-comparable costs are added per-patient per-day on a facility-specific basis, without calculating any peer group ceilings, to determine the operating cost component of the Medicaid rates. Under the methodology as originally enacted, operating costs would be increased by a trend factor each year to reflect inflation. However, by legislation, the trend factors for 2010, 2011, 2012 and through March 2013 are established as zero. Any actual cost increases experienced by the nursing home would contribute to the operating deficit. For certain hard-to-care-for patients, impaired cognition, bariatric, traumatic brain injury, additional factors are added to the rate. For certain specialty facilities and units, e.g., childrens nursing homes, AIDS facilities, a different methodology applies. Summit Park does not qualify as a specialty nursing home.

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The operating cost component of the 2009 through 2011 rate is calculated based on 2002 cost reports submitted by nursing homes. This approach replaces the historical use of facility 1983 cost reports, trended for inflation, in calculating reimbursement rates. However, the change to full application of the 2002 cost report would have resulted in higher expenditures, approximately $450 million per year, than the State was prepared to make. Legislation was enacted that limited the aggregate increase in Medicaid expenditures for nursing home care to $210 million. Medicaid rates were adjusted to comply with the aggregate statewide expenditure cap. This aggregate Medicaid expenditure cap was continued for 2010, 2011 and 2012. This statewide reduction in Medicaid reimbursement also would contribute to the facility operating deficit. Capital costs for building and equipment are reimbursed on a per-patient per-day basis based on each facilitys actual rate period data, based on the historical capital costs approved for the facility. Capital costs include interest and depreciation or amortization. Under the methodology, high cost facilities such as public nursing homes with high salary and fringe benefit costs and administrative costs that exceed peer group ceilings on direct and indirect costs do not receive adequate reimbursement to cover all their costs. County-operated nursing homes therefore experience an operating deficit that must be made up by the sponsoring County.

Proposed 2012 Medicaid Reimbursement Methodology

As a further complication of this highly complex Medicaid reimbursement methodology for nursing homes, the State is proposing to implement by regulation a new pricing methodology in 2012. A case mix adjusted direct costs component will be composed 50% of statewide data and 50% of peer group data, adjusted for differences in wages and fringe benefits related to direct costs by a factor calculated 50% on provider-specific data and 50% on regional data. An indirect costs component will be composed 50% of statewide data and 50% of peer group data, adjusted for differences in wages and fringe benefits related to indirect costs by a factor calculated 50% on provider-specific data and 50% on regional data. The two peer groups are: all non-specialty hospital-based facilities and freestanding facilities with certified capacities of 300 beds or more; and all non-specialty freestanding facilities with certified capacities of under 300 beds. A non-comparable costs component and a capital costs component will continue to be calculated on a facility-specific basis. This will require federal approval of the State Medicaid Plan Amendment, which has been submitted to CMS. The State has continued the 2011 nursing home rates on an interim basis pending federal approval of the new methodology. Medicaid reimbursement for Summit Park Nursing Care Center would be affected by the new methodology as it phases in. The facility would benefit from this methodology, but would continue to experience operating deficits unless operating costs could be curtailed.

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Transition Period to Full Statewide Pricing

2012 Direct Indirect NonComp Add-On's Capital (1) (2) (3) (4) (5) 2013 2014 2015 2016 2017 Per CON $ 118.07 72.95 13.25 204.27 57.56 $ 261.83

$ 113.88 $ 120.36 $ 125.49 $ 126.96 $ 127.54 $ 128.12 64.08 67.73 70.61 71.44 71.77 72.09 28.78 28.78 28.78 28.78 28.78 28.78 2.06 2.06 2.06 2.06 2.06 2.06 208.80 218.93 226.94 229.24 230.15 231.05 57.02 56.47 55.89 55.29 54.66 54.02 $ 265.82 $ 275.40 $ 282.83 $ 284.53 $ 284.81 $ 285.07

(1) Direct component calculated by NYSDOH using statewide pricing, "300HB" peer group and 1/2011 case mix of .78 Medicaid Only using new weights. (2) Indirect component calculated by NYSDOH using statewide pricing and "300HB" peer group. (3) Noncomparable component calculated by NYSDOH using facility specific 2007 data. (4) Add-on's for BMI, Dementia & TBI calculated by NYSDOH from 1/2011 case mix submission. (5) Capital component was estimated based on a total project cost of $101,392,934, 100% financing and 90% reimbursement of interest. Source: Toski & Co./EFP Rotenber CPA's

Upper Payment Limits - Intergovernmental Transfers

Medicaid reimbursement for nursing home services is calculated under the States Medicaid reimbursement formula methodology. Federal law and regulations limit the payments a state can make under its Medicaid program to an upper payment limit calculated as an estimate of the amount that would be paid for Medicaid services by applying Medicare payment principles. The federal government would not provide federal financial participation, in New York the 50% share, for the amount of any Medicaid payments that exceed this upper payment limit. The upper payment limit is calculated on an annual basis as an aggregate dollar limit for various categories of providers in the aggregate. County operated nursing homes, including public benefit corporation operated facilities, constitute a category of providers for which an aggregate annual upper payment limit is calculated. New Yorks Medicaid program reimburses nursing homes less than the upper payment limit. The dollar value of the difference between the upper payment limit and the amount actually paid to County and public benefit corporation operated nursing homes is the basis for additional Medicaid payments to such providers. The aggregate amount is agreed to by New York and CMS in the Medicaid State Plan Amendment process. For April 2009 through March 2012, this amount is $300 million annually, to be allocated among the eligible nursing homes based on Medicaid utilization data. An extension through

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March 2014 is pending federal approval.The additional Medicaid payments are funded through what is known as an IGT, an intergovernmental transfer. The County for each County operated nursing home and public benefit corporation operated nursing home located in its jurisdiction transfers to the State an amount equal to 50% of the amount of the calculated difference as allocated to their specific facilities. The State uses such County funds as the basis to draw down the federal Medicaid matching 50%. The total of the County and federal amounts are then paid to the nursing homes as additional Medicaid payments. CMS has approved use of such intergovernmental transfers from counties as the source of State Medicaid expenditures eligible for federal financial participation. This program has been in effect for over 20 years and has been renewed periodically. Any remaining operating deficit of a County operated facility is made up wholly with County funds, with no further federal or State Medicaid contributions.

Certified Public Expenditures

There is an alternate method available to the states for drawing down the federal Medicaid share. This does not involve calculation of an upper payment limit. It is called the Certified Public Expenditures, or CPE, model. New York historically has not used the CPE model to claim federal funds. CPEs are a complex calculation to determine the amount of actual expenditures properly allocated to Medicaid program services for a reimbursement period. However, in 2010, legislation was enacted (Laws of 2010, Chapter 58, Part B, Section 3-C) that authorizes the state to seek federal approval to use CPEs with regard to Medicaid payments made to general hospitals . . . for the purpose of recognizing otherwise un-reimbursed allowable medical assistance costs expended by government for public benefit corporations, with particular reference to the New York City Health & Hospitals Corporation. The State has submitted a proposed Medicaid State Plan Amendment to CMS. However, CMS has not as yet either approved or disapproved of the use of CPEs in such circumstances by New York State. Further, legislation in 2011 (Social Services Law Sections 368-d(4), (5), (6) and 368-e(3), (4), (5)) authorized the State to study whether the CPE approach would be appropriate for use by School Districts and Counties to claim the 50% federal share for Medicaid school and pre-school supportive health services for students. The State now proposes to use a CPE methodology for school and preschool supportive health services. Effective October 2011, fee-for-service Medicaid payments are interim payments, to be reconciled to actual direct and indirect governmental expenditures for Medicaid services. A proposed Medicaid State Plan Amendment was submitted to CMS and is pending. The CPE model for claiming the 50% federal share, if extended for use by New York for county funding of public nursing homes and approved by CMS, has the potential to convert the County operating subsidies for public nursing homes into federally matched Medicaid expenditures. This would require State legislation, submission of a proposed Medicaid State Plan Amendment and approval by CMS. Although New York State is moving in this direction, the timing of such approval cannot be predicted.

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HEAL Grant Medicaid Re-Design Team

The County is pursuing a Department of Health HEAL grant related to decertifying up to 100 nursing home beds in the existing facility. This would provide immediate funds to the County. The impact of reducing the number of licensed beds in the nursing home must be evaluated with the Department of Health to determine how the reduction would impact the current Certificate of Need approval to construct a replacement facility. Awards are expected to be announced by the Department of Health this spring.

Managed Long Term Care

The Department of Health is required by law enacted in 2011 to begin enrollment of dual eligible individuals over 21 who require more than 120 days of Medicaid community-based long term care services into the Medicaid Managed Long Term Care Program. This does not apply to nursing home residents. Dual eligibles are individuals eligible for both Medicare and Medicaid. Enrollment is beginning in 2012, contingent upon receipt of federal approval, in New York City with expansion to other geographic areas of the State to follow over the next years as program capacity is developed. New York also is developing a dual eligible initiative to integrated Medicare and Medicaid services into consolidated capitated managed care programs, with a goal of coordinating services for this population. An application to CMS for approval of a Dual Demonstration Project is being developed by the Department of Health. If approved, implementation would begin in 2014 in New York City and Nassau, Suffolk and Westchester counties. While the Demonstration Project is limited to those counties, if the program is successful, it would in later years be extended to the other geographic areas. It is the apparent intention of the State that over the next 5 years long term care services, including nursing home services in the metropolitan New York area, will be migrating to managed care models of service delivery. Services would be reimbursed to providers by managed care entities under contract arrangements rather than by the State under Medicaid rate and fee methodologies. How successful the State will be in fostering this transition and when services in Rockland County would be impacted is speculative. Legislation passed in conjunction with the 2012-2013 budget (Laws of 2012, Chapter 59, Part D, section 34-a), requires the Department of Health to consult with stakeholders about effectively extending managed long term care to the nursing home population in a manner that reasonably addresses concerns regarding capital financing and its impact on payment rates. Although the reimbursement issues are still being evaluated by the State, the potential long term effect on Medicaid reimbursement for the Summit Park Nursing Care Center of the transition from a State-set Medicaid fee-for-service rate to negotiated rates with managed care entities should be factored into the evaluation of future nursing home operations. This potentially could result in public nursing homes receiving lower revenue for Medicaid patients than under the States Medicaid reimbursement methodology.

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Local Development Corporation

Local development corporations are not-for-profit corporations, incorporated pursuant to section 1411 of the Not-For-Profit Corporation Law, operated for the exclusively charitable and public purposes enumerated in the statute. The corporation could be formed by public officers or private individuals. A local development corporation could own the land and/or building occupied by the County nursing home and LTCH under a sale and leaseback arrangement with the County. The County would continue to be the licensed operator of the facilities. The benefit to the County is the immediate realization of the current remaining un-depreciated value of the property. The purchase by the local development corporation would be financed through the issuance of bonds through the local IDA. The County would continue to operate the facilities under a lease arrangement, with the lease payments used to defray the annual bond costs. Under Federal and State law, there would be no change in Medicare or Medicaid reimbursement for capital costs resulting from the sale and leaseback of the property. Approval of the Department of Health would not be required for this transaction. This type of arrangement would be more beneficial to a County with a newer health care facility capital plant than Rockland County, and therefore a higher un-depreciated value. It could be combined with a plan by a County for the future sale of the entire operation, thus relieving the County of the lease payments over the long term.

Public Benefit Corporation

The Rockland County Summit Park Hospital & Nursing Care Center have served as providers of high quality services for the aged and disabled. The mission and services of public facilities complement the services offered by the proprietary and not-for-profit segments of the health care delivery system. Many county operated facilities have historically operated at annual budget deficits requiring the sponsoring county to provide operating support. Medicaid reimbursement provides the principal source of third-party reimbursement for nursing facilities, but the established rates do not fully reimburse for all operating costs of county-operated facilities, including unique labor costs of pensions and employee benefits. Rockland County, in the face of fiscal constraints, is considering the potential alternative to continued direct operation of its LTCH and/or its nursing facility of sale to a public benefit corporation, which would maintain the public mission of the facility. This approach could gain increased legal, financial and managerial flexibility for the facilities to address the needs of their communities and take full advantage of opportunities and challenges presented by the evolving health care continuum for long term care services. As a public benefit corporation, the corporation would have flexibility in such areas as contracting for services, negotiating with unions, participating in managed care networks, joint and cooperative arrangements with health and other providers of long term care services, raising funds for capital requirements through bond issues, and forming subsidiaries and joint ventures. Establishment of a public benefit corporation requires an act of the New York State Legislature to define the scope of the authority and responsibilities of the corporation. Appointment of a Board of Directors and negotiation of the specific terms of the sale arrangement would then occur between the County and the public benefit corporation.

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PBC Governance
The Public Benefit Corporation would be governed by a Board of Directors that was independent of the County. A methodology for appointment to the Board would be established in the authorizing legislation, with members appointed by the Rockland County Executive and Legislature and by the State. The Board would be accountable for the organizations ongoing operations.

PBC Medicare and Medicaid Capital Cost Reimbursement

Under Federal and State law and regulations, capital cost reimbursement by Medicare and by Medicaid would not increase as a result of a sale of the hospital or nursing home to a public benefit corporation. This factor would constrain the value of the facility and sale price of the facility for a new operator.

PBC Upper Payment Limits and Intergovernmental Transfers

The calculation of the Medicaid upper payment limit and supplemental Medicaid payments would continue for the public benefit corporation under the same methodology as applies to the nursing home as operated by the County. Rockland County would continue to be responsible through the intergovernmental transfer methodology for the non-federal share of the Medicaid upper payment limit supplemental payment to the public benefit corporation by the State. Funding participation by a county is mandatory under this program.

PBC Facility Employees

Current county employees would be transferred to the public benefit corporation without interruption in employment. Employees of the corporation would continue to be categorized as members of the public civil service and members of the public retirement system. Current union representation would be continued, although a new bargaining unit could be established. The public benefit corporation authorizing legislation could provide that the PBC would thereafter be responsible for labor relations and negotiation of labor agreements.

PBC Operating Deficits

Currently, the County is responsible for any facility operating costs incurred in excess of reimbursement received. As a public benefit corporation, this would no longer be a legal responsibility of the County. The County may contract to provide a subsidy to the public benefit corporation during a transition period to foster the financial viability of the new entity and for care for various categories of hard-to-serve patients. A subsidy from the County also could be used to support an employee no-layoff agreement with the public benefit corporation for a specified period of time as a transition period for County employees. The Corporation would be responsible to achieve operational efficiencies to eliminate any ongoing operating deficits in excess of such subsidies.

Funding the Purchase by the PBC

The public benefit corporation would have the authority under the legislation through the Dormitory Authority to issue bonds to finance the purchase of County assets to be transferred to the Corporation.

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The terms of the transfer would be determined in negotiations with the County regarding the scope and value of assets to be transferred. The sale could provide a cash infusion benefiting the County. The County likely would have to guarantee the bond debt as the new public benefit corporation has no operating history and no credit history. Any current outstanding bond indebtedness applicable to the Summit Park Nursing Care Center would be reviewed and financial options evaluated. An alternative to sale of the building to the PBC would be to lease to the PBC portions of the County building necessary to the operation of the facilities.

Funding of Construction of a New Facility by the PBC

The public benefit corporation also would have the authority under the legislation to issue bonds through the Dormitory Authority to finance the construction of replacement facilities under the certificate of need approvals issued to the County by the Department of Health. With no operating and credit history of its own, County backing of the public benefit corporation bonds may be required by the marketplace to sell the bonds, if the public benefit corporation determines to replace the facilities rather than continue in their current location.

OVERARCHING FACTORS INFLUENCING SUMMIT PARK POTENTIAL OPTIONS

In considering the options for the healthcare component of the countys operation at Summit Park, both the Nursing Care Center and Long-Term Care Hospital, there are certain broad, pervasive factors which we consider overarching considerations that have the potential to affect or influence the success of all segments of the operation. These overarching factors are considered here so as not to add additional confusion to individual options or alternatives and rather allow us to focus on specific differences in the individual options themselves. However, the success or failure of each option is extremely dependent on addressing these considerations appropriately. Governance For the countys endeavors in the health care marketplace to be successful, the governance of the organization must be capable of developing strong organizational mission and vision, as well as set goals to accomplish the organizations mission. The governance must also be able to link the organization to the community as well as to other providers. To this extent, the governance must hold the organization accountable for achieving performance goals and cost savings. Streamlining of the Business Model The emerging organization must reduce the layers of organizational structure and hierarchy and reduce bureaucracy. In an environment where low profit margins drive the business model and where changes in regulation and reimbursement are frequent and unpredictable, the organization must be flexible enough to adapt to changing conditions and trends at both the local and national levels. Affiliation and Collaboration To achieve success, most healthcare providers and especially those in long-term care must find ways to affiliate and collaborate with other providers in the market to streamline processes, and increase access, effectiveness of clinical outcomes and quality of care. This must occur on all levels including working with other sole providers, networking with health systems and networks, managed care organizations,

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Accountable Care Organizations, medical home models and suppliers of both human resources (unions/labor) and medical resources (providers, vendors, etc.). Information Technology The role of information technology in patient and clinical management, claims processing, electronic health records, information sharing and point of service processing, as well as backend and real-time reporting is imperative to success in the industry today. Due to divergence in the workforce due to changes in job competency and skill levels and the aging workforce, jobs will need to be evaluated and re-designed to insure direct care givers have adequate time to provide care and achieve desired outcomes while minimizing the cost of providing higher quality of care. Labor and Unions The role of labor and unions will need to be redefined into collaborative working relationships that will allow the re-design of processes and job tasks with the emphasis on the provision of consumer oriented care which improves quality and achieves successful clinical outcomes efficiently at the lowest cost attainable. Entitlement benefits and performance appraisals will need to change with a focus on feedback and performance oriented appraisal based on team performance rather than solely on individual achievements. Adaptability to a Changing Reimbursement Environment The emerging organization will need to adapt to continued reductions in reimbursement due third party payment reductions, pay-for-performance initiatives, rate reductions and emphasis on managed Medicare and Medicaid programs rather than traditional reimbursement programs. As recently seen by the cumulative reductions in Medicare payments, such as the 11.1% 2011 Prospective Payment System reductions, Medicare bad debt reduction planned for 2012, 3.3% 2010 final rule impacts and the 2012 reduction in the market basket productivity adjustment. Additionally, changes in the State reimbursement methodology for nursing homes to a regional case-mix adjusted rate and various initiatives of the Medicaid Re-design Team including linkages to Medicaid Managed Long Term Care programs will have an additional downward impact on reimbursement to nursing homes in the months and years to come. Additionally, pay-for-performance at the hospital level, increased quality and admission guidelines and flat reimbursement trends will impact LTCHs. Marketing In order for the organization to raise its occupancy rates in light of increased competition between existing providers and new competition from Home and Community Based providers, the organization will need to make a strong effort to re-brand its services and the demographics it serves. Changing the organizations current image will require a strong strategic marketing plan that addresses the organizations business and market position strategies. It is our opinion that to be successful, the organization will need to be more visible in the community in a positive fashion and will more than likely need to replace its current structure and location to be consistent with national industry trends.

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Summit Park Hospital and Nursing Home

2010 Total Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue 52,607,201 LTACH 20,071,443 NH 32,535,758

3,074,763 537,812 56,219,776

3,074,763 537,812 23,684,018

32,535,758

Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense

29,419,878 13,378,183 6,643,565 1,990,342 9,545,320 60,977,288 (4,757,512)

6,809,155 5,180,787 6,643,565 1,062,971 3,641,865 23,338,343 345,675 (2,816,591) (64,693) -

22,610,723 8,197,396 927,371 5,903,455 37,638,945 (5,103,187) (9,352,870) (56,441)

Other OPEB Interest Expense County Transfers Net Deficit

(12,169,461) (121,134) (17,048,107)

(2,535,609) (14,512,498)

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

2,677,677 355,604 6,512,039 9,545,320

1,021,625 135,675 2,484,565 3,641,865

1,656,052 219,929 4,027,474 5,903,455

The Current Marketability of Health Care Facilities During the period 2005 2010 the merger and acquisition market saw relatively limited activity in both the nursing home and hospital segments. Since 2011 activity has increased, although it is predominantly related to multi-facility chains which are either acquiring other chains or single facilities. Based on recent market activity we would expect nursing home prices per bed to range from $20,000 per bed to approximately $45,000 per bed. In some instances where the acquiring entity wishes to enter a viable market, we would anticipate a small premium above this range to be possible.

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Hospital M&A activity has also shown increased activity as chains look to position themselves and develop referral networks within existing and new markets. Due to the unique nature of LTCHs, only about 13 acquisitions have taken place since 2002, although some acquisitions included more than one facility. LTCHs price per bed have ranged from $60,000 per bed to $750,000 per bed depending on market position and strength of earnings. The majority of sales have occurred in the $130,000 to $330,000 price range, again based on market strength and earnings.

SUMMIT PARK NURSING CARE CENTER OPTIONS OPTION 1: CONTINUE CURRENT CONFIGURATION
Under this approach, the Summit Park Nursing Care Center would continue to be operated under County auspices as an Enterprise Fund. The decision to continue operation under this option would require the mid to long term commitment of the County to subsidize deficits of the facility until such time as significant changes in the organizations cost structure could be realized through a combination of increased utilization and revenues and significant reductions in labor and non-labor operating costs. It is uncertain given the performance of the organization since 2002 whether this option is viable. Timeline Implementation of cost savings measures under the current structure would take several months, and discussions with unions could be protracted. Financial Implications This approach would require additional capital funding for renovations of approximately $19.2 million over the next ten plus years (see Chapter 2 of this Report), deficit financing of the operation by the Countyin the neighborhood of $14.5 million annually at 2010 levels of spending, and continued growth of OPEB liabilities. As identified in the preceding summary of 2010 financial performance, the OPEB expense was approximately $9.4 million. In addition, approximately $5.9 million of allocated costs from services provided to the facility by Rockland County make up a predominant amount of the nursing homes 2010 deficit. The deficit would be mitigated if use of CPEs were authorized for claiming federal financial participation in County Medicaid service related expenditures that exceeded Medicaid revenue under the States formula reimbursement methodology, to the extent of approximately 50% of the subsidies provided by the County to the nursing home. Operational cost savings could be achieved through re-alignment at the administrative and middle management levels, but perhaps not at a significant enough level to eliminate the operating deficit, especially given likely declines in reimbursement levels in subsequent years. HEAL funding under the proposal for a reduction in beds could potentially offset some of the historical legacy costs of the organization. Improvements in the Information Technology infrastructure could reduce county allocations for these services and reduce overall technology costs in the future. Additional savings potentially could be reached through positive collaboration with RAM and CSEA unions. Amounts associated with these potential savings will require additional input from both the County and Union.

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Conclusion Given the Countys financial concerns with continuing subsidies of the nursing home, continuing the current configuration of services may not be feasible, even if CPEs were to be authorized which would offset up to 50% of such subsidies.

OPTION 1A IMPLEMENT VENDOR CONTRACTS FOR SERVICES

Under this approach, the Summit Park Nursing Care Center also would continue to be operated under County auspices as an Enterprise Fund, but with the implementation of various outside vendor services in lieu of County employee services. Department of Health regulatory requirements, sections 400.4 and 415.6(e), specify it is the continuing responsibility of the facility operator to establish policies and for supervision of services provided by outside resources. There are no regulatory provisions authorizing or prohibiting management contracts for the overall day-to-day management of a nursing home. Timeline At least six months would be required to develop Requests for Proposals, evaluate responses, interview potential service vendors, and implement vendor service programs. Financial Implications Cost savings could accrue to the County by use of outside vendors for specific services, e.g., food services, laundry, housekeeping, electronic medical records, computer services, etc. Cost savings also potentially could be achieved through use of vendor arrangements for clinical services. Savings would only be realized to the extent that County employees that would otherwise be performing the functions are subject to layoff. Conclusion Use of outside vendors for non-clinical services could reduce the annual operating deficits, depending on the bids received by the County. Use of outside vendors for clinical services would likely cause friction with County employees that could negatively affect resident quality of care. Current union contracts may constrain this option.The potential financial impact of such contract arrangements would need to be determined through implementation of an RFP process.

OPTION 2 PUBLIC BENEFIT CORPORATION

This approach would allow the County to maintain quasi sponsorship of the enterprise as the County would nominate a number of the members of the Board of Directors. The ongoing mission of the PBC could be specified in the contract of sale from the County to the PBC. Timeline Establishment of a new PBC to operate the County nursing home would require up to one year to implement - obtain legislation, appoint the PBC Board of Directors, reach agreement on a contract of sale, and proceed to market bonds. The timeline would be extended if the Legislature did not return in the fall or deferred action on the PBC legislation until the 2013 legislative session.

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Financial Implications This option would allow for sale of nursing home assets to the PBC. Proceeds from the sale could be used to fund legacy costs of the County. There could be potential advantages for labor restructuring by the PBC, depending upon whether there is a no-layoff period. The disadvantage is that the PBC approach may not be approved by the State Legislature, but that is not likely. Unless addressed in the legislation, Department of Health approval would be required to transfer and extend the Countys approval to construct a new nursing home to the PBC. Guarantees by the County may be necessary to assure that bonds issued for the PBC, which has no credit history, are marketable. Any subsidies provided to the PBC by the County would be mitigated if use of CPEs were authorized for claiming federal financial participation in County Medicaid service related expenditures that exceeded Medicaid revenue under the States formula reimbursement methodology. Conclusion Forming a Public Benefit Corporation for operation of the nursing home and potentially the LTCH would continue the public mission of the facilities, preserve the current public workforce, and limit the future obligations of the County. If use of Certified Public Expenditures for claiming Medicaid federal financial participation were authorized, County subsidies would be further ameliorated.

OPTION 3 LOCAL DEVELOPMENT CORPORATION

A local development corporation could be formed to purchase the County assets with funds from IDA bonds. The County would continue as the facility operator under a leaseback arrangement. Timeline Up to six months may be required to pursue the IDA process for approval to issue and market bonds for the purchase of the facility. Financial Implications There would be no change in capital cost reimbursement under Medicare or Medicaid in sale of realty to a local development corporation. There is little remaining un-depreciated value in current capital assets that could be realized in a sale. The County would be obligated under a leaseback arrangement for lease of the facility and continued operation of the facility. There would be no change in the facility operating deficit. Conclusion This Option would not be of much benefit to Rockland County. Any short-term gain from the sale would be offset by long-term liabilities on the leaseback arrangement.

OPTION4 COUNTY TO BUILD NEW NURSING HOME

The County has approval from the Department of Health to construct a new facility to replace the current nursing home. Because of its grandfather status, this approval has value. Proceeding with construction would provide the County with a valuable asset for future sale.

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Timeline Development of plans for construction of a new facility consistent with the HEAL application to decertify a number of beds at the facility could begin this summer. Approval of the plans by the Commissioner of Health would be required. Actual construction would likely not begin until next year. Financial Implications Significant investment by the County in capital assets would be required. However, under the current reimbursement models approximately 90% of the capital cost would be recovered through the reimbursement system. There is always a potential for diminishing revenue in the future given the recent experience with limitations, changes in reimbursement methodologies and reductions in nursing home Medicaid reimbursement, and the trend to managed care. Some capital costs would be offset by savings from the existing buildings inefficiency, e.g. energy costs and maintenance costs, and savings in future investment in the existing buildings infrastructure if it were to continue as a nursing home. There would be a definite marketing advantage to potential residents in having a new building, but there would be a need to identify new uses for the existing building. A new building also would provide marketability in the event the County determines to sell the operation in the future. Conclusion The CON approval by the Department of Health to replace the nursing home should not be allowed to expire. The County could proceed to construction or seek a further extension by the Department of Health of the project approval for transfer of the operation to a PBC and assumption of the construction project by the PBC.

OPTION 5 SALE OF THE NURSING HOME

The County would have to consider the social/ethical mission of the facility in selecting a purchaser, as well as the potential purchasers operational and quality of care experience. Timeline Advertising, selection of a purchaser and obtaining Department of Health approval of a change in ownership, required by Public Health Law section 2801-a, would be a long process 9 to 18 months. Financial Implications Sale may be difficult given the facility location with respect to County property, and shared space and services. The County may not receive the expected value on a sale, given current market conditions. The benefit of sale is that there would be no further losses from the operation and the County receives the sale price for the facility. The current facility employees may be offered employment by the new operator, although probably not at the same salary and benefits. Current allocations of County costs to the nursing home would have to be reevaluated and either assigned to other County departments or employees providing those services terminated. We estimate the County would continue to incur legacy costs of between $ 17.2 and $ 22.5 million post-sale as identified in Appendix B to this report. Conclusion Sale of the facility would provide both revenue to the County from the sale proceeds and savings to the County to the extent that County employees were subject to layoff, while providing the potential for the employees to find employment with the new operator.

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OPTION 6 CLOSURE OF THE NURSING HOME

Closure could take the form of a complete closure or partial closure of the facility. At least 90 days advance notice of intent to close must be provided to the Commissioner of Health and approval of a Plan of Closure obtained under NYSCRR 401.3(g, (h). The safe and appropriate transfer of residents is the primary concern of the Commissioner. The social/ethical considerations of closing this community resource would have to be considered along with the financial considerations. Timeline At least 90 days advance notice must be provided to the Commissioner of Health of an intent to close. Financial Implications The County must continue to operate the facility during the closure process, which could take several months as residents are placed. The County could cut costs as patients are transferred to the extent staff are subject to layoff, but also would experience reductions in revenue. There would be costs to maintain a closed building or to find a new use. Current allocations of County costs to the nursing home would have to be reevaluated and either assigned to other County departments or employees providing those services terminated. We estimate the County would continue to incur legacy costs of between $ 18.0 and $ 22.6 million post-closure as identified in Appendix B to this report under this option. Conclusion Closure of the facility would provide immediate savings to the County to the extent County employees were subject to layoff. The community would lose these beds as a resource for nursing home services. The County could sell the building although its location on the County campus might limit its value. The County could renovate the building for alternative County uses. In assessing this option, the County must consider its mission and responsibility to the residents of the County. Additionally, based on studies developed by the American Hospital Association in its Chart Book Series, the economic impact of hospitals and health care organizations have an economic multiplier impact to the state and local economies in New York of approximately 2.0272. This implies that the nursing homes total expenditures of approximately $47.0 million translated into a state and local economic impact of $95.4 million. Whether the nursing is closed, sold or continues operation, we would anticipate the County to continue between $9.0 million and $16.0 million in legacy costs each year.

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CHAPTER 4: SUMMIT PARK HOSPITAL

Summit Park Hospital is a 100-bed Long Term Care Hospital (LTCH), which is licensed under Article 28 of the NYS Public Health Law and federally under section 1886(d)(1)(B)(iv) of the Social Security Act. The LTCH regulations are the same as those for general acute care hospitals with the additional requirement that patients have an average length of stay greater than 25 days. The federal designation was applied to facilities for exclusion from the Medicare Inpatient PPS beginning in1986 if eligibility requirements were met; otherwise hospitals meeting the criteria could apply for the designation. In 2008 CMS implemented a 3 year moratorium on the approval of new LTCHs and expansion or movement of existing LTCH beds to other locations. The moratorium has been extended through 2012. The State of New York does not have an LTCH designation in its regulations. Rather, it generally designates such beds as Physical Medicine and Rehabilitation. The Hospital is currently licensed for the following services:

Services Physical Medicine and Rehabilitation Psychiatric Total Certified Inpatient Beds Medical Social Services Physical Medical Rehabilitation Pharmaceutical Service Renal Dialysis - Acute Radiology - Diagnostic Respiratory Care Audiology O/P Physical Medicine and Rehabilitation O/P Primary Medical Care O/P Therapy - Occupational O/P Therapy - Physical O/P Clinical Laboratory Service Dental O/P Therapy - Speech Language Pathology Psychiatric Certified Mental Health Services O/P Chemical Dependence - Detoxification Chemical Dependence - Rehabilitation O/P Chemical Dependence - Withdrawal O/P Methadone Maintenance O/P

Beds 57 43 100

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The Rockland County Department of Hospitals states its mission as: To be the county leader in medical treatment and long-term care and provide centers of excellence in the areas of geriatrics, rehabilitation and care of residents with Alzheimers disease. To provide services for the unique physical, social and emotional needs of each resident and patient within a therapeutic and home-like atmosphere. To render care with dignity and respect for the individual regardless of race, beliefs, national origin, sex, age or financial status. Additionally, the Hospital also provides separate mission statements for three of its service areas: Outpatient Services: "To bridge the gap between symptoms and medical treatment" Rehabilitation Services: "To restore and/or maintain a person at their maximum level of function for Optimum Quality of Life" Adult Day Care: To provide services to the physically disabled adults residing in Rockland County that will stave off premature institutionalization regardless of financial status.

The Hospital, not including the psychiatric unit (addressed in more detail in Chapter 5) had the following trends in occupancy, discharges and average length of stay:
Utilization: Summit Park Hospital, 2002, 2008 - 2010 2002
# Available Beds Total Days of Occupied Beds % Occupancy for the Year Average Beds Filled per Day Discharges per Year Average Length of Stay per Episode 57 17,002 81.72% 46.6 411 41.4

2008
57 18,845 90.33% 51.5 540 34.9

2009
57 17,402 83.64% 47.7 624 27.9

2010
57 17,070 82.05% 46.8 568 30.1

2011
57 17,501 84.12% 47.9 496 35.3

Source: NYS Department of Health ICR; percentages calculated by T oski & Co., CPA's

REGIONAL DEMOGRAPHICS
Demographics are the same as those for the nursing home.

REGIONAL COMPETITIVE MARKET

There are 18 hospitals within a 20-mile radius of Summit Park which can act as feeders and to some extent compete for the same patient populations. The closest competitors are Nyack Hospital, Good Samaritan and Helen Hayes Hospitals. At the time of our report, Summit Park was working closely

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with Nyack in the transfer of 26 inpatient psychiatric beds to Nyack under a HEAL grant and Certificate of Need application to New York State. At this time the outcome of the application and related grant are unknown. There are no LTCHs within the 20-mile radius; similar patients are treated in acute, post-acute, subacute and transitional care units of hospitals and some nursing facilities offering sub-acute and postacute specialties. This is true locally and nationally as there are only approximately 405 LTCHs nationally. The closest LTCHs in New York are located in New York City, two of which are run by the NYC Health Care Corporation and another whose license is owned Terrence Cardinal Cooke nursing home. Due to the distinct nature of the LTCH, it can service people regionally depending on the publics perception of its services and level of clinical outcomes. Therefore it is possible for an LTCH to have a regional as opposed to local market. LTCHs have been under scrutiny by CMS and MedPAC since 2004 with respect to their place within the continuum of care, given their higher reimbursement rates under DRGs. As a result there is a moratorium on new certifications, expansions, transfers and establishment of satellites through the end of 2012, which may be further extended. In addition, regulations with respect to reimbursement, admission criteria and quality reporting are scheduled to be implemented beginning in 2012 as a result of the continued analysis by CMS and refinement to the regulations and reimbursement policies. Over 50% of all LTCHs are owned by national chains; these facilities see the highest profit margins due to economies of scale. Solely owned LTCHs have the lowest profitability of the LTCH group nationally according to MedPACs March, 2012 report to Congress. A map of regionally located acute care hospitals which can be used as a source of admissions follows.

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Figure 2 - Hospitals Within 20 Mile Radius

Similar to the Nursing Care Center, Summit Park Hospital is under-utilized and has low occupancy. Utilization trends by payor and category of service for the LTCH follow:

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Summit Park Hospital Utilization by Payor 2010 and 2011

2011 Psych Pt Days
Medicare Medicaid Non Profit Indemnity Commercial Indemnity Hmo - Medicare HMO/PHSP - Medicaid HMO/PHSP - Other Self Insured Workers Compensation No Fault Uninsured/Self-Pay Government Charity Care Courtesy Total 3,461 2,723

ALC

Total
3,461 2,723 36 610 874 1,062 8,766

Dischs
206 180

Physical Medicine/Rehab Pt Days ALC Total Dischs

13,178 3,118 28 372 117 79 450 13,628 121 3,239 28 372 117 79 38 571 17,501 406 65 5 11 4 4

Referred Ambulatory
492 125 86

36 610 874

4 82 109

1,062

101

38

7 1

8,766

682

16,930

496

710

2010

Psych Pt Days
Medicare Medicaid Non Profit Indemnity Commercial Indemnity Hmo - Medicare HMO/PHSP - Medicaid HMO/PHSP - Other Self Insured Workers Compensation No Fault Uninsured/Self-Pay Government Charity Care Courtesy Total
Source: Summit Park Hospital

ALC

Total
4,358 2,938 41 548 708 951 9,544

Dischs
226 140

Physical Medicine/Rehab Pt Days ALC Total Dischs

12,566 2,961 158 454 235 62 280 12,846 178 3,139 158 1 455 235 62 131 44 459 17,070 445 70 22 17 9 4

Referred Ambulatory
784 168 145

4,358 2,938

41 548 708 951

5 70 91 100

131 44

14

9,544

632

16,611

568

1,111

Despite low occupancy, the hospital approaches or exceeds break-even with the exception of OPEB and County cost allocations as indicated from the financial breakout that follows. This is primarily due to the higher rates of reimbursement paid to LTCHs by Medicare. Since the Nursing Home and LTCH are housed in one location and share services, the nursing home is classified as hospital based. As a result, the cost structure and savings described for the nursing home also apply to the hospital. Additionally, as the result of hospital based classification, the nursing home receives higher reimbursement due to higher peer group ceilings as compared to free standing nursing homes.

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There continues to be significant debate whether LTCHs will survive continued scrutiny by CMS given their high reimbursement in an environment that stresses reimbursement containment by federal and state agencies.

Summit Park
2010 Hospital & Nursing Home Total Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue 52,607,201 LTACH 20,071,443 NH 32,535,758

3,074,763 537,812 56,219,776

3,074,763 537,812 23,684,018

32,535,758

Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense

29,419,878 13,378,183 6,643,565 1,990,342 9,545,320 60,977,288 (4,757,512)

6,809,155 5,180,787 3,193,001 1,062,971 3,641,865 19,887,779 3,796,239 (2,816,591) (64,693) 914,955

22,610,723 8,197,396 3,450,564 927,371 5,903,455 41,089,509 (8,553,751) (9,352,870) (56,441)

Other OPEB Interest Expense County Transfers Net Deficit

(12,169,461) (121,134) (17,048,107)

(17,963,062)

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

2,677,677 355,604 6,512,039 9,545,320

1,021,625 135,675 2,484,565 3,641,865

1,656,052 219,929 4,027,474 5,903,455

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SUMMIT PARK HOSPITAL REIMBURSEMENT ENVIRONMENT

For the County-operated Summit Park LTCH, Medicare is the principal payer. The reimbursement environment for operation of the Rockland County nursing home and long-term care hospital are for continued shortfalls in nursing home Medicaid reimbursement and an uncertain future for long-term care hospital Medicare reimbursement. The Governor also issued an Executive Order requiring State agencies to develop salary caps and administrative expense ceilings for all providers that receive State financial support, including Medicaid. The regulations are being developed and will have to be evaluated for application to the nursing home and hospital industries. Facing growth nationally in the number of long-term care hospitals and escalating Medicare expenditures, Congress enacted a moratorium on additional long-term care hospital beds while studies of the system are conducted by CMS. The moratorium has been extended twice and now runs through 2012. If LTCH program reforms are not adopted this year, Congress may further extend the moratorium. Potential Medicare program changes that may be considered by CMS upon expiration of the moratorium include: adapting more restrictive eligibility criteria for admission of patients to and continued stay in long-term care hospital beds, reducing Medicare reimbursement and requiring additional quality of care reporting by facilities. In 2011, the General Accounting Office issued a Report critical of the lack of oversight exercised by CMS over long-term care hospitals. Medicare reimburses LTCHs in the same manner as general acute care hospitals. Each patient is assigned to a Diagnosis-Related Group (DRG) based on the patient diagnosis and medically complicating conditions in the medical record. Each DRG is assigned a weight reflecting the relative costs of care of patients within that DRG. The weight is multiplied by a standardized reimbursement amount to calculate the operating component of the per-case payment for that patient. A per-discharge capital cost amount is added to the payment. Medicare has established distinct DRGs for LTCHs. The New York Medicaid program which also reimburses acute care hospitals on a DRG basis has not established distinct DRGs for LTCHs. In New York, Medicaid pays LTCHs a per diem rate based on 2005 hospital inpatient operating costs trended to the rate period to reflect inflation, although through Medicaid cost containment legislation recent trend factors have been zero, plus an amount for capital costs. Of the 100 beds classified by the federal government as LTCH, 43 beds are actually inpatient hospital mental health beds. The County has been attempting to transfer the physical location of the mental health beds to be located in Nyack Hospital, not in the LTCH. The transfer has been placed on hold by the Department of Health because of the impact of the federal moratorium on the transfer of LTCH beds. The County is proposing, therefore, to transfer mental health beds to Nyack Hospital as new beds without changing the LTCH licensed bed complement. The County should continue to pursue this transfer, as upon expiration of the moratorium that transfer of mental health beds to the Nyack Hospital site would facilitate maintenance of the federal designation of the remaining beds as a long-term care hospital. Forecasting potential Medicare reimbursement methodology changes would be speculative but of continued concern to LTCH providers. The County should also consider the efficacy of investment in development of a modern electronic medical records system for the hospital and updated hospital computer systems. That would facilitate

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establishing patient eligibility for and continued stay in beds designated as LTCH beds and in establishing that the facility meets quality of care reporting criteria.

SUMMIT PARK HOSPITAL OPTIONS OPTION 1 CONTINUE CURRENT CONFIGURATION

Under this approach, similar to the same option for the nursing home, Summit Park Hospital would continue to be operated under County auspices as an Enterprise Fund. The decision to continue operation under this option would require the mid to long term commitment of the County to subsidize deficits of the facilities until such time as significant changes in the organizations cost structure could be realized through a combination of increased utilization and revenues and significant reductions in labor and non-labor operating costs. Notwithstanding the preceding, potential short to mid-term (1 to 5 years) changes in regulations and continued pressure for reduction in reimbursement at the federal and state levels coupled with continually higher than average increases in health care costs could result in greater operating deficits if significant operational efficiencies and cost containment measures are not implemented. It is uncertain given the performance of the organization since 2002 whether this option is viable. Ultimately it becomes a question of the Countys mission as previously described. Timeline Implementation of cost savings measures under the current structure would take several months, and discussions with unions could be protracted. Financial Implications This approach would require additional capital funding for renovations of approximately $19.2 million in facility replacement, and renovation would be required over the next 10 plus years due to the aging plant (see Chapter 2 of this Report). Additionally, continued deficit financing of the operation by the County in the neighborhood of $2.8 million annually at 2010 levels of spending, and continued growth of OPEB liabilities would be necessary. OPEB of $2.8 million and County allocations of $3.6 million contribute a large portion of the operating deficit. In fact, without these included, the LTCH would have reflected a net profit for 2010 of approximately $2.9 million. The use of CPEs for Medicaid claiming would not be a material benefit as services to hospital patients are reimbursed principally by Medicare. Operational cost savings could be achieved through re-alignment at the administrative and middle management levels, but perhaps not at a significant enough level to eliminate the operating deficit. HEAL funding under the proposal for a transfer of mental health beds to Nyack Hospital, discussed in Chapter 5 of this Report, could potentially offset some of the historical legacy costs of the organization. Improvements in the Information Technology infrastructure could reduce county allocations for these services and reduce overall technology costs in the future. Additional savings potentially could be reached through positive collaboration with RAM and CSEA unions.

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Conclusion Given the Countys financial concerns with continuing subsidies of both the nursing home and hospital, continuing the current configuration of services may not be feasible.

OPTION 1A IMPLEMENT VENDOR CONTRACTS CONTRACT

FOR

SERVICES

OR A

MANAGEMENT

Under this approach, the Summit Park Hospital also would continue to be operated under County auspices as an Enterprise Fund, but with the implementation of various outside vendor services in lieu of County employee services. Department of Health regulatory requirements, sections 400.4 and 405.2(h), specify the continuing responsibility of the facility operator to establish policies and for supervision of services provided by outside resources. There also is a regulatory process for Commissioner of Health approval of a management contract for operation of the hospital, section 405.3(f). Timeline At least six months would be required to develop Requests for Proposals, evaluate responses, interview potential service vendors, and implement vendor service programs. Any proposed management contract must be submitted to the Commissioner of Health for approval at least 60 days prior to its intended effective date. Financial Implications Cost savings could accrue to the County by use of outside vendors for specific services, e.g., food services, laundry, housekeeping, electronic medical records, computer services, etc. Cost savings also potentially could be achieved through use of vendor arrangements for clinical services. Savings would only be realized to the extent that County employees that would otherwise be performing the functions are subject to layoff. Conclusion Use of outside vendors for non-clinical services could reduce the annual operating deficits, depending on the bids received by the County. Use of outside vendors for clinical services would likely cause friction with County employees that could negatively affect resident quality of care. Current union contracts may constrain this option.

OPTION 2 PUBLIC BENEFIT CORPORATION

This approach would allow the County to maintain quasi sponsorship of the enterprise as the County would nominate a number of the members of the Board of Directors. The ongoing mission of the PBC could be specified in the contract of sale from the County to the PBC. Transfer of the LTCH beds from the County to a PBC may be allowed even during the federal moratorium as facility sponsorship remains as Public. This would require discussion with CMS if the County were to pursue this option and the moratorium remained in effect.

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Timeline Establishment of a new PBC to operate the County nursing home and hospital would require up to one year to implement - obtain legislation, appoint the PBC Board of Directors, reach agreement on a contract of sale, and proceed to market bonds. The timeline would be extended if the Legislature did not return in the fall or deferred action on the PBC legislation until the 2013 legislative session. Financial Implications Would allow for sale of hospital assets to the PBC. Proceeds from the sale could be used to fund legacy costs of the County. Potential advantages for labor restructuring by the PBC, depending upon whether there is a no-layoff period. Disadvantage is that the PBC approach may not be approved by the State Legislature, but that is not likely. Unless addressed in the legislation, Department of Health approval would be required to transfer and extend the Countys approval to construct a new hospital to the PBC. Guarantees by the County may be necessary to assure that bonds issued for the PBC, which has no credit history, are marketable. Any subsidies provided to the PBC by the County for hospital services would not be significantly reduced if use of CPEs were authorized for claiming federal financial participation, as Medicare is the principal payor for hospital services. Conclusion Forming a Public Benefit Corporation for operation of the nursing home and potentially the LTCH would continue the public mission of the facilities, preserve the current public workforce, and limit the future obligations of the County. Sale of the LTCH beds to a new operator is not permitted during the federal moratorium as the future role and reimbursement of LTCH is examined. However, as a government owned and operated hospital, CMS may authorize, as not contrary to the moratorium, a transfer of LTCH beds from the County to a PBC as public ownership and operation would continue. The moratorium is scheduled to expire at the end of this year, but could be extended by Congress.

OPTION 3 LOCAL DEVELOPMENT CORPORATION

A local development corporation could be formed to purchase the County assets with funds from IDA bonds. The County would continue as the facility operator under a leaseback arrangement. Timeline Up to six months may be required to pursue the IDA process for approval to issue and market bonds for the purchase of the facility. Financial Implications There would be no change in capital cost reimbursement under Medicare or Medicaid in sale of realty to a local development corporation. There is little remaining undepreciated value in current capital assets that could be realized in a sale. The County would be obligated under a leaseback arrangement for lease of the facility and continued operation of the facility. There would be no change in the facility operating deficit.

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Conclusion This Option would not be of much benefit to Rockland County. Any short-term gain from the sale would be offset by long-term liabilities on the leaseback arrangement.

OPTION4 COUNTY TO BUILD NEW HOSPITAL

The County has approval from the Department of Health to construct a new facility to replace the current hospital. Proceeding with construction could provide the County with a valuable asset for future sale. The value would be affected by federal changes in the patient admission criteria, scope of services, and Medicare reimbursement for LTCHs, which are being evaluated by CMS under the moratorium on new LTCH beds which is scheduled to expire at the end of this year. Timeline Proceeding with plans for construction of a new hospital facility could begin this summer. This should be coordinated with decisions on replacement of the nursing home. Financial Implications Significant investment by the County in capital assets would be required. There is the potential for diminishing revenue in the future given the recent experience with federal limitations on the growth of Medicare reimbursement. Some capital costs would be offset by savings from the existing buildings inefficiency, e.g. energy costs and maintenance costs, and savings in future investment in the existing buildings infrastructure if it were to continue to be operated as an LTCH. There would be a definite marketing advantage to potential patients as a new regional resource in having a new building, but there would be a need to identify new uses for the existing building. A new building also could enhance marketability in the event the County determines to sell the operation in the future. Conclusion Given the uncertainties of the future role and Medicare reimbursement of LTCHs, exploring Option 4A, below, with the Department of Health would be preferable to a long term investment in the LTCH at this time.

OPTION4A EXTEND CON APPROVAL FOR CONSTRUCTION OF A NEW HOSPITAL

See discussion of Option 4 above. Based on uncertainties resulting from federal moratorium and federal evaluation of the future role of LTCHs, the Department of Health could be requested to extend the time for construction of new LTCH beds.

OPTION 5 SALE OF THE LTCH

Sale of the LTCH beds to a new operator is not permitted during the federal moratorium as the future role and reimbursement of LTCH is examined. However, as a government owned and operated hospital, CMS may authorize, as not contrary to the moratorium, a transfer of LTCH beds from the

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County to either a PBC or Helen Hayes Hospital as public ownership and operation would continue. If the moratorium expires, transfer of LTCH beds to other community hospitals could be explored by the County as an alternative to Helen Hayes Hospital. We estimate the County would continue to incur legacy costs of between $ 5.3 and $ 6.8 million post-closure as identified in Appendix B to this report under this option.

OPTION 6 CLOSURE OF THE HOSPITAL

Closure could take the form of a complete closure or partial closure of the facility, which has LTCH beds and mental health beds. At least 90 days advance notice of intent to close must be provided to the Commissioner of Health and approval of a Plan of Closure obtained. Regulations 401.3(g, (h). The safe and appropriate transfer of patients is the primary concern of the Commissioner. However, closure of the LTCH beds could be effected by eliminating new admissions, reducing the number of any patient transfers that might be necessary. The social/ethical considerations of closing this community resource would have to considered along with the financial considerations. Timeline At least 90 days advance notice must be provided to the Commissioner of Health of an intent to close. Financial Implications The County must continue to operate the facility during the closure process, which could take several months as the census is reduced. The County could cut costs if admissions are curtailed to the extent staff are not necessary to provide services to remaining patients and are subject to layoff, but also would experience reductions in revenue. There would be costs to maintain a closed building or to find a new use. Current allocations of County costs to the LTCH would have to be reevaluated and either assigned to other County departments or employees providing those services terminated. We estimate the County would continue to incur legacy costs of between $ 5.2 and $ 7.1 million post-closure as identified in Appendix B to this report under this option.

Conclusion Closure of the facility would provide immediate savings to the County to the extent County employees were subject to layoff. The community would lose these beds as a resource for LTCH services and potentially mental health inpatient services if the mental health beds were not transferred to Nyack Hospital. The County could sell the building although its location on the County campus might limit its value. The County could renovate the building for alternative County uses.

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CHAPTER 5: ROCKLAND COUNTY DEPARTMENT OF MENTAL HEALTH

OVERVIEW
The Rockland County Department of Mental Health oversees a comprehensive and integrated system of mental health, developmental disability and chemical dependency/alcohol-substance abuse services available to county residents. Many of those services are provided by County employees in programs and services operated directly by the Department. Others have historically been provided by the state. But increasing numbers and varieties of the services are provided by a substantial network of voluntary/not-for-profit agencies. The Department of Mental Health (DMH) is responsible for the planning, coordination, administration, evaluation and fiscal oversight of the overall system, including both the programs it offers directly and those provided by others. The DMH mission statement promises: The Department of Mental Health, a component of Rockland County Government, shall provide and oversee comprehensive, high quality mental health, mental retardation and chemical dependency services to the residents of Rockland County in an ethical, courteous, timely, safe and cost effective manner. The Department operates as a full-fledged independent department of Rockland County government, headed by a Commissioner of Mental Health. But because as one of the Departments services it operates a 26-bed Psychiatric Inpatient Unit (17 of 43 licensed beds are no longer used) as part of Summit Park Hospital, the Departments finances are also considered part of the Summit Park Hospital and Nursing Care Center Enterprise Fund, under the Summit Park Board of Governors and the Commissioner of Hospitals. The DMHs roughly $30 million operating expenses represented approximately one-third of the total annual Summit Park operating expenses in 2010. In addition, the Department is responsible for oversight and monitoring of service contracts worth more than $8 million annuallyprograms and services provided by more than 20 not-for-profit agencies. The following organization chart reflects the comprehensive range of inpatient, outpatient, residential and community support services provided and/or overseen by the Department. Most of the boxes on the chart reflect administrative services and programs provided directly by Rockland County DMH employees. Other boxes contain an LGU notation following the service reference (e.g., Adult and Child and Adolescent SPOAs, Office for Persons with Developmental Disabilities Liaison, Chemical Dependency Services). Such services are typically provided, in whole or at least in part, by various community-based not-for-profit providers, which are overseen and monitored by Department staff as part of their LGULocal Government Unitrole. Each county mental health department in New York is required to operate as an LGU, regardless of whether it provides services directly or not. Thus a county could provide no direct mental health services with county employees, but would still be required to maintain sufficient staffing to provide core LGU functions such as program and fiscal monitoring and oversight of all services, regardless of who provides them; evaluation; planning and needs assessment; and overall system administration. The various services, programs and roles of the Department, and of other community agencies, are discussed in more detail below.

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ROCKLAND COUNTY DEPARTMENT OF MENTAL HEALTH

Commissioner of Mental Health Mary Ann Walsh-Tozer, LCSW Medical Director Rita Padilla, MD Deputy Commissioner Michael Leitzes, MBA

Assistant Director of Nursing George Bates, RN

Outpatient Medical Staff

Director, Hospital Inpatient Unit Vahan Kouyoumdjian, MD

Quality Assurance Utilization Review Evelyn Herbert, RN

Special Projects Assistant/ Human Resources Luanne Horgan

Transportation Unit

LGU Corporate Compliance Bonnie Halley, MPA

Personnel Unit Susan Piper Administrative Support Staff

Clinical Services/EAP Nancy Panicucci Director of Clinical Services

Adult MH Svcs/SPOA/LGU Community Support Center Jennifer Clark Coordinator of Planning

Child & Adolescent Svcs SPOA/LGU Susan Hoerter, MD, Kim Bacon, Bonnie Halley

OPWDD Liaison/LGU Brigid Pigott, PSW

Chemical Dependency Services/LGU Anne Calajoe, PSW III

Risk Management/ PI/AOT Tami Schonberg Rehab Counselor III

Behavioral Health Services Criminal Justice Mark Farsetta, PSW III

Finance Susan Thomson Fiscal Administrator

Social Work Holly Shiffman, PSW III

Case Management Services Scott Purves

Methadone Treatment Program John Scully

Behavioral Health Services RC Jail Sex Offender Treatment Jim Foley, PSW

Financial Management

Pomona Clinic Christine Verrier-Iametti PSW III

RSSTC Satellite Clinic

Haverstraw Clinic Cheryl Kimler PSW III

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10-11

CHANGING CONFIGURATION OF MENTAL HEALTH SERVICES AND DEPARTMENT

Since the mid-1990s, the Department of Mental Health has been gradually consolidating its own services and shifting other services and programs to community-based non-Department providers. That deliberate and planned process of restructuring has accelerated considerably in the past few years. The implications can be seen from a staffing perspective: in 1993, the Department carried 419 established positions in the budget. By 2011, that number of budgeted positions had shrunk to 180. Of the 239 positions eliminated over that time, 139 occurred between 2007 and 2010 through attrition, early retirement incentives, reorganization of functions, program consolidations and closures, and shifts of services to community-based providers. The following Table 5 indicates changes in the configuration of staffing within the Department in the past four years, using FTEs instead of budgeted positions. The positions noted above refer specifically to positions in the budget, but the higher numbers in the table below (e.g., 205 in 2011 rather than 180 budgeted positions) include time spent by significant numbers of additional staff in relief positions that are not included as specific positions in the budget, and therefore lead to higher numbers of FTEs than the budgeted positions would indicate, according to DMH officials. The impact of these relief positions on staffing is significant, as the amount of expenses attributable to those positions exceeded $1.8 million in 2010.
Table 5: Department of Mental Health FTEs by Function, 2008 - 2011 Program/Function 2011 FTEs 2010 FTEs 2009 FTEs 2008 FTEs

Crisis Crisis Clinic Inpatient Psychiatric Unit Pomona Clinic/RSSTC Haverstraw Clinic Methadone Partial Hospitalization Community Support Center Child Development Center Forensic Services Supportive Case Mgmt. Intensive Case Mgmt. Admin/Monitor & Evaluation Transportation LGU Total

5.03 71 43 9.8 7.9 17.4 8.4 8.3 5.5 13.5 9.2 6.1 205.13

5.871 74.83 41.63 9.01 8.57 5.9 25.72 13.92 8.3 4.9 20.9 10.3 5.9 235.751

3.8 8 72.8 33.9 8.1 9.6 8.4 31.4 9.3 14.2 10.1 5.5 18.8 12.1 4.7 250.7

3.24 8 91 29.88 7 8.73 6.65 43.6 17.87 13.47 11.5 7.15 20.2 13.65 6.18 288.12

Source: Consolidated Fiscal Reports for Summit Park Hospital and Rockland County DMH, 2008-2010; updated and grouped by DMH Fiscal Administrator

Between 2008 and 2011, DMH data indicate that staffing across the Departmentincluding administrative, support service, and direct inpatient, crisis, clinic and other outpatient serviceshas

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declined by 83 full-time equivalent positions. Impacts on specific functions are described in more detail in the context of individual program/function descriptions in the sections that follow. In addition to the reductions through 2011, about 20 additional Department positions are being eliminated in the first quarter of 2012 as a result of the transfer of the Departments Methadone treatment program to a community agency and other planned reductions such as shifts of most Community Support Center participants to PROS community-based programs (see further discussion below). Among the most significant shifts in the configuration of services in recent years are the following: Integration in the late 1990s of adult and child and adolescent clinics. Expansion since the 1990s of mental health services to inmates of the Rockland County Jail. Establishment of procedures within the County to meet state requirements for Assisted Outpatient Treatment (AOT) following the enactment of Kendras Law by the state. The closing in 2000 of an Inpatient Detoxification Unit, with Good Samaritan and Nyack Hospitals agreeing to cover the detox services; DMH staff were reallocated to other functions. The Department assumed operation and oversight in 2005 of the Single Point of Access (SPOA) for adults with a serious mental illness who are in need of case management and housing services. In 2007 it did the same thing for the childrens SPOA. In both cases, it reversed other trends by taking over services previously provided by a community-based agency. The Departments Chemical Dependency Unit was transferred in 2007 to Lexington Center for Recovery Services. In 2008, the Adult Home Supported Case Management program was transferred from the County to Jawonio, a community-based provider, in order to provide the service more cost effectively. DMH redeployed staff to other case management functions. Continuing Day Treatment services were consolidated in 2008, and some consumers were transitioned to a program operated by the Mental Health Association. Some staff were able to be reassigned to other units within the Department to better maximize revenues and reduce overtime costs. The Department considered transitioning its clinic services to community-based agencies in 2008, issuing an RFP to determine the degree of interest. At that time, no viable alternative approaches to current operations surfaced from the process. In 2009 and 2010, the Department, reflecting changing needs and reductions in daily census and average length of stay in the Inpatient Psychiatric Unit, closed an annex, resulting in a reduction from 43 to 26 psychiatric beds in the Unit, and coordinated the closing of a 19-bed

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acute care Psychiatric Inpatient Unit at Good Samaritan Hospitalthereby reducing the number of inpatient beds in the system by 36. In 2009 and 2010 the Department closed the Child Development Center, with significant resulting reductions in staff, and the Partial Hospitalization Program, which had been experiencing reduced census. Although some criticized the Department for this closing, the decision was predicated on the assumption that Rockland Psychiatric Center was able to meet the communitys need through its own PHP. The Departments Community Support Center Clinic was consolidated with the main Pomona clinic in 2010 to improve program efficiency and supervision. The capacity of the Continuing Day Treatment program at the Support Center has been reduced in 2011, with increased referrals expected to go to the Mental Health Association and Jawonio in the future. Discussions began in 2011 to facilitate the shift in 2012 of the Departments Methadone treatment program to Lexington Center. Effective late 2011, the Department consolidated its remaining two clinics into one site (the main Pomona clinic), thereby reducing costs and making more efficient use of staff within the Department.

With this context in mind, the next sections provide further description and historical context of the services and programs currently provided directly by the Department of Mental Health, followed by a section on the contracted services.

INPATIENT PSYCHIATRIC UNIT

Summit Park Hospital contains 100 beds. Historically, 43 of those have been devoted to inpatient psychiatric care. As noted, more recently the number of active beds has been reduced, first to about 32 and currently to 26 inpatient beds, with the capacity to exceed that on an emergency, as-needed basis. The Inpatient Unit provides emergency psychiatric assessment, evaluation and treatment services 24 hours a day, seven days a week for county residents. Psychiatric evaluations are also provided for residents of the Hospital and inmates of the County Jail. The Unit is designed to provide treatment as needed for short-stay crisis interventions and stabilization for adults experiencing a life crisis or in an acute episode of mental illness. The focus of the unit is on returning the patient to his/her family and residential setting as soon as possible under the circumstances. With the closing of the psychiatric inpatient beds at Good Samaritan Hospital, the 26 Summit Park beds constitute the only NYS Mental Hygiene Law Section 9.39 facility legally able to provide emergency admissions for immediate observation, care and treatment on either a voluntary or involuntary basis. Table 6 provides some historical perspective on the use of the Inpatient Psychiatric Unit in recent years:

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Table 6: Use of Department of Mental Health Inpatient Psychiatric Unit, 2002 - 2011 2002 # Available Beds Total Days of Occupied Beds % Occupancy for the Year Average Beds Filled per Day Discharges per Year Average Length of Stay per Episode 43 2006 43 2007 43 2008 43 2009 43 8,884 2010 32 9,544 2011 26 8,766

14,185 13,983 14,175 11,382 90.4% 38.9 754 19 89.1% 38.3 676 21 90.2% 38.8 592 24

72.5% 56.6% 81.7% 92.3% 31.2 570 20 24.3 526 17 26.1 632 15 24.0 682 13

Source: Department of Mental Health, Inpatient Statistics; percentages calculated by CGR

As far back as 2002, and as recently as 2007, an average of about 39 beds were filled per night in the Inpatient Unit, representing about 90% of capacity. Since 2008, occupancy has steadily dwindled, to averages of closer to 24 beds occupied per night. At the original total of 43 staffed beds, this would have represented only about 56% occupancy. With only 26 beds in operation, however, these 24 beds per night represented a 92% occupancy rate in 2011. Following a steady decline in discharges, the number of discharges has increased in the past two years, with a renewed focus on returning residents to their home setting as soon as possible. This focus is dramatically demonstrated by the decline from 2007 to 2011 in the average length of stay per episode: from 24 days per discharge to 13and thus many fewer beds occupied in the Psychiatric Unit per night. This new normal of need and demand for services is reflected in future plans being discussed by County and state officials for the possible relocation of the inpatient psychiatric beds from Summit Park Hospital to Nyack Hospital, in order to optimize patient care and create more efficient, costeffective emergency psychiatric services. Already the number of staff needed to operate the unit has declined, with the closing of an annex and 17 beds: the number of FTEs operating the unit has declined from 91 in 2008 to 71 in 2011, as shown earlier in Table 5. The psychiatric unit typically appears to cost more to operate than it brings in via patient revenues. In some years, with payments to account for Disproportionate Share and Charity Care payments funneled from the state, the unit has been able to reflect a surplus, but such payments are made on an irregular basis and cannot be counted on each year, thereby leaving the unit in deficit territory in most years in which no such payments are made. It seems clear that the existing reduced number of psychiatric beds will reflect the realistic new baseline total for any final plans that are implemented going forward.

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OUTPATIENT SERVICES PROVIDED BY THE DEPARTMENT

Table 7 below includes a list of the various outpatient services directly provided by the Department of Mental Health at some point in 2010 and 2011. The table provides a historical breakdown from 2007 through 2011 of the pattern of usage of those specific programs and services during each of those years. The table indicates the total number of visits or service units for each program/service during each year, broken down by billable versus non-billable visits; the average number of patients is also provided for each program by year. Comparisons are also provided for 2011 of actual numbers served, compared with budgeted expectations. At the bottom of the table, the total number of outpatient visits across all DMH programs and services is indicated for each year. It should be noted that for the years 2007 through 2009, those overall totals also include totals for programs and services that were no longer provided directly by the Department in either 2010 or 2011 (and therefore not listed in the table); for the most part, those services are currently provided by other non-County, community-based agencies, as outlined in the previous section on the changing configuration of services. In reviewing individual services and programs, it is clear that many are serving more patients now, and providing more visits, than in 2007. On the other hand, several programs, including some that have grown overall during that period, experienced reductions in services provided between 2010 and 2011. Others, such as the Young Adult Center and the Partial Hospitalization Program, have now been integrated with another County program (YAC) or ceased to exist as County-provided entities (PHP). And, as noted, several other programs ceased to exist as Department operations between 2007 and 2009. The net effect of all this can be seen in the total figures at the end of the table. With some programs serving fewer people than in earlier years, but mostly as a result of programs and services no longer provided by the Department, programs directly operated by DMH provided 38% fewer total visits in 2011 than just four years earlier in 2007 (a reduction from more than 142,000 in 2007 to less than 89,000 in 2011). The number of billable visits declined at a slightly faster rate: 40% compared to a 33% reduction in non-billable visits overall. During just the last two years, between 2010 and 2011, total outpatient visits declined within the Department by 11.7%, with the number of billable visits falling by just under 14%, versus an 8.6% drop in non-billable visits. A more detailed description of specific programs and service trends follows the table.

Table 7 : Outpatient Service Units by Mental Health Program, 2007-2011

2007 RSSTC Billable Visits Non-billable Visits Total Visits Average # Pts Pomona MH Clinic Billable Visits Non-billable Visits Total Visits 1021 1349 2370 169 13,202 1128 14330 2008 976 1,162 2,138 156 12,657 1,886 14,543 2009 1,989 1,018 3,007 184 14,283 3,075 17,358 2010 2,585 1,408 3,993 206 17,075 4,173 21,248 2011 2,672 3,059 5,731 221 18,543 3,493 22,036 2011 Budgeted 3,500 1,408 4,908 2011 Variance (828) 1,651 823

13,000 4,173 17,173

5,543 (680) 4,863

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Table 7 : Outpatient Service Units by Mental Health Program, 2007-2011

2007 570 2008 570 2009 665 2010 721 2011 2011 Budgeted 2011 Variance

Average # Pts

Sexual Offender Treatment Services Billable Visits 74 Non-billable Visits 265 Total Visits 339 Average # Pts 43 Haverstraw Clinic Billable Visits 2614 3,948 Non-billable Visits 1077 582 Total Visits 3691 4,530 Average # Pts 178 186 Young Adult Center Billable Visits 1734 2,324 Non-billable Visits 76 232 Total Visits 1810 2,556 Average # Pts 45 63 Jail Services Billable Visits 0 0 Non-billable Visits 3429 5,726 Total Visits 3429 5,726 Average # Pts 147 184 Partial Hospital Program Billable Visits 3539 3,046 Non-billable Visits 32 76 Total Visits 3571 3,122 Average # Pts 42 34 Methadone Maintenance Treatment Program Billable Visits 8425 8,025 Non-billable Visits 27272 23,879 Total Visits 35697 31,904 Average # Pts 181 168 Community Support Center Billable Visits 15072 18,295 Non-billable Visits 1977 3,342 Total Visits 17049 21,637 Average # Pts 147 174 Assessment Unit Billable Visits Non-billable Visits Total Visits Average # Pts Intensive Case Management Billable Visits Non-billable Visits Total Visits 338 80 418 33 367 2476 2843 192 57 249 20 417 2,529 2,946

1,612 0 1,612 43 4,075 811 4,886 181 3,074 748 3,822 89 0 5,476 5,476 179 2,170 46 2,216 23 6,970 18,671 25,641 148 26,110 5,875 31,985 237 230 52 282 34 435 2,119 2,554

1,410 0 1,410 38 5,047 1,197 6,244 222 287 93 380 25 0 7,158 7,158 188 1,195 37 1,232 19 7,382 18,787 26,169 154 23,036 2,783 25,819 220 294 150 444 33 462 2,079 2,541

1,365 0 1,365 40 4,526 493 5,019 201 0 0 0 0 0 5,704 5,704 181 0 0 0 0 7,727 17,971 25,698 159 15,320 1,615 16,935 145 0 0 0 0 413 2,120 2,533

0 0 0

1,365 0 1,365

5,100 1,197 6,297

(574) (704) (1,278)

0 0 0

0 0 0

0 0 0

0 5,704 5,704

0 0 0

0 0 0

7,075 18,787 25,862

652 (816) (164)

23,000 2,783 25,783

(7,680) (1,168) (8,848)

400 150 550

(400) (150) (550)

504 2,079 2,583

(91) 41 (50)

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Table 7 : Outpatient Service Units by Mental Health Program, 2007-2011

Average # Pts 2007 50 2008 48 2009 49 2010 46 2011 48 2011 Budgeted 2011 Variance

Supportive Case Management Billable Visits 889 Non-billable Visits 3673 Total Visits 4562 Average # Pts 114 Total Outpatient Visits Billable Visits Non-billable Visits Total Visits

1,339 3,949 5,288 130

1,168 2,539 3,707 117

1,149 2,830 3,979 124

1,035 2,760 3,795 117

1,440 2,830 4,270

(405) (70) (475)

86,543 55,850 142,393

70,821 50,238 121,059

62,116 44,164 106,280

59,922 40,695 100,617

51,601 37,215 88,816

54,019 33,407 87,426

-2,418 3,808 1,390

Source: Department of Mental Health Service Unit Report December 2011

Rapid Stabilization Short-Term Therapy Clinic

This clinic, sometimes described as a satellite of the main Pomona Clinic services described below, specializes in providing treatment and services designed to stabilize persons with a short-term concern that is able to be alleviated without ongoing long-term treatment services. As shown earlier in the table, these time-limited services have more than doubled in their use since 2007, both billable and nonbillable. However, after two years in which about two-thirds of the short-term clinic visits had been billable, in 2011 the pattern shifted back to that of previous years, with only 47% of all visits to the clinic being billable. It is not clear at this point whether this represents the beginning of a new trend, based on shifting reimbursement patterns, or a one-year aberration. In terms of the earlier staffing chart (Table 5), RSSTC staffing patterns were broken out separately in the consolidated fiscal reports through 2009, but were morphed into the Pomona Clinic totals beginning in 2010. Fiscal data for the last year in which RSSTC was broken out separately indicate that this short-term clinic spends more money than it takes in.

Other Clinics
Up until the end of 2011, the Department was operating two other clinics, the main clinic on the Pomona Mental Health campus site and the other in Haverstraw. In 2011 the Department made the decision to close the Haverstraw clinic and consolidate all clinic services under one roof at Pomona. The goal is to reduce program costs and improve the efficiency of clinic management, supervision and service delivery. The consolidation has been fully implemented as of December 2011. As seen in the earlier Table 5 on staffing patterns, both clinics have grown in numbers of FTEs through various consolidationsespecially the Pomona Clinic, which absorbed the RSSTC short-term clinic

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into its staffing totals over the past two years. Beginning in 2012, the Pomona FTE totals will grow even larger, as the Haverstraw Clinic's staff are absorbed into the newly-integrated single clinic site. As indicated in Table 7 above, both clinics have grown steadily since 2007 in numbers served and in numbers of visitsuntil 2011, when Haverstraw declined as the consolidation process began to take place. The Pomona clinic continued to grow, especially in number of billable visits, far outpacing budgeted expectations, in part due to the beginning transition of cases from Haverstraw to the Pomona clinic site. Overall, however, the two clinics combined in 2011 essentially reached a plateau in total visits, compared with 2010at about 27,000 visits combined in each year. Both clinics over the years have consistently been able to bill for 80% or more of their visits. As billing/reimbursement patterns change and are likely to become more restrictive from the providers perspective, maintaining high billable proportions becomes perhaps even more importantand even maintaining historic rates may not be enough to remain economically viable for the County should reimbursement rates continue to be reduced. Consolidated Fiscal Reports from 2008 2010 indicate that the clinics lose money each year, and the 2012 DMH proposed budget anticipates revenue shortfalls for the clinic (see further discussion of financial issues later in this chapter). This in turn serves as further fuel for those pushing the Department to get out of the clinic business and seek to have other providers in the community pick up the future responsibility for operating the clinics.

Sexual Offender Treatment Services

This program provides assessment services and ongoing treatment and case management of sexual offenders including work with the County Probation Department to monitor high-risk individuals with the potential to be serious risks in the community. As indicated above in the service unit table, the numbers in this program have remained relatively consistent over the past few years, and numbers of visits/service units have actually declined over the past three years. The Department receives little or no reimbursement or State aid for visits made related to these services.

Community Support Center/Young Adult Center

The Community Support Center (CSC) is an outpatient program offering day treatment individualized and group supports for adults with serious mental illness or emotional problems. Historically this program was aimed at those 35 and older. Many in this program were at one time institutionalized and need intensive individual and group psychiatric rehabilitation and treatment services to maintain themselves in the community. A separate Young Adult Center provided similar types of services for those 18 to 35. Beginning in 2010, the YAC began to be closed as a separate entity and merged with the CSC. A Continuing Day Treatment (CDT) Program is typically a component of the CSC, although the CDT program is gradually shrinking in size as more and more cases are referred to community-based PROS programs (Personalized Recovery Oriented Services), in order to take advantage of a more aggressive treatment approach designed to move more individuals out of treatment into the workforce, rather than the more maintenance-oriented focus of more traditional CDT programs. The PROS model is also a more propitious funding model for reimbursement for such services, which appear to have consistently lost money as presently constituted.

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All of which helps to explain why the YAC numbers, after rapid growth through 2009, dropped precipitously in 2010 and disappeared in 2011. Similarly, the CSC numbers began to decline in 2010, followed by dramatic reductions in 2011 (well below budget expectations for the year), as increasingly many of those who in the past would have been in this program were referred to PROS programs beginning to emerge at the Mental Health Association and Jawonio. More and more cases are being diverted into PROS programs, and this trend is expected to continue in 2012, with the expectation being that only a relatively small Continuing Day Treatment program will remain in the Department in early 2012 (down from a capacity of 229 two years ago to as little as about 60 anticipated in 2012). These reductions in services provided have been reflected in staffing patterns presented earlier in Table 5, showing significant declines in the combined Community Support Center programs from a high of almost 44 FTEs as recently as 2008 to about 17 in 2011. Further reductions in early 2012 are expected to leave this dramatically-scaled-back program with only about five staff to serve its reduced census in the future.

Behavioral Health/Jail Services

The Department provides a variety of behavioral health services in the form of psychiatric assessments and evaluation services for inmates at the Rockland County Jail. Direct mental health treatment and case management services are also provided as needed, as well as support in linking inmates to substance abuse and mental health treatment programs upon release from the jail. As shown in the service unit table above, these services, for which DMH receives limited direct reimbursement from the Sheriffs department, had been growing steadily in numbers of visits until declining in 2011. As indicated in the earlier staffing Table 5, FTE totals also declined for these services in 2011, to about 8 FTEs. Because these services are requested by the Sheriff and are designed to help reduce the rate of recidivism in the jail, the question should at least be raised as to whether at least an increasing portion of the costs of these services should be borne in the future by the Sheriffs office. Although not reflected in the service unit table, within the behavioral health function, the Department also provides psychiatric and psychological evaluations and consultations as needed and requested to the various courts and law enforcement agencies in Rockland Countylargely on a contractual basis. State aid covers a portion of the costs of those services.

Methadone Treatment Program

Having earlier divested itself of the Chemical Dependency Unit, the Departments only remaining direct service chemical dependency-related program has until recently been its Methadone Treatment Program, which has provided medication and treatment to adults addicted to heroin/opiates, and support to their families. The program seeks to wean people off dependence on mood-altering substances and to help them maintain a lifestyle free of substances, with a resumption of family and work life. The number of visits/services provided by the program has gradually declined since 2007, although the numbers served have edged back up slightly in the past two years. As the number of service units has declined, the proportion of billable services has gradually increased, finally reaching 30% in 2011.

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Reimbursements and OASAS state aid have not covered the costs of operating the program, which has consistently shown an excess of expenses over revenues, according to Consolidated Fiscal Report data. The program in April wastransferred to the Lexington Center. The 8 FTEs reflected in earlier staffing Table 5 no longer exist as County DMH positions as of that time.

Supportive and Intensive Case Management

Case managers provide a variety of support services to adults with a functional disability related to a mental illness that limits their ability in various ways to function effectively in society. Case managers offer help in linking and coordinating needed services, helping with service referrals, applying for financial entitlements, providing advocacy on behalf of those they work with, and other supports that help their clients remain in the community and living as independently as possible. Supportive case management services are provided to those individuals with a severe mental illness. Intensive case managers provide services to those deemed to be at higher risk levels, with the most serious functional disabilities due to mental illness. Both supportive and intensive case managers are available as needed on a 24/7 basis. Both programs have maintained relatively consistent numbers of clients in recent years, with relatively little year to year variation. Both visit totals have been a bit lower in the past three years compared to the previous two, but have been fairly consistent over those recent years. During that same period, staff in these programs have been reduced by about 5 FTEs, to a total of about 14 in 2011, as indicated in the earlier Table 5. Between 25% and 30% of supportive visits/service units translate into reimbursable services, compared with typically between 15% and 18% of intensive services. These services appear to have lost money for the Department over the years.

LGU and Other Departmental Services

A variety of other services provided by the Department do not lend themselves to metrics such as numbers served or numbers of visits or service units. As noted earlier, all county Mental Health departments are mandated to provide a level of management, administration, oversight, planning and assessment, and coordination rolea role of ensuring that the overall mental health system, whoever is providing the services, is working well, meeting community needs, and being good stewards of public dollars. This Local Government Unit/LGU role is essentially one of accountability and responsibilitybeing the entity responsible for making sure the system works. These overall departmental administrative/oversight functions on the earlier organization chart include such obvious functions as the Commissioner and Deputy Commissioner, as well as the Fiscal Administrator and financial management function. There is also an explicit LGU/Corporate Compliance function. In addition, the Department is mandated to ensure that Assisted Outpatient Treatment (AOT) Services are in place and functioning in the County in support of Kendras Law legislation. Although no direct programmatic services must be provided, the Department, as part of its LGU responsibilities, must provide oversight over functions on the organizational chart such as OPWDD services for people with developmental disabilities and chemical dependency servicesfor which the

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County provides few direct services, but oversees a wide range of services provided by others. One of the roles played by persons overseeing such service areas is monitoring of contracts by communitybased agencies providing direct services over and above services provided by the DMH. Another LGU function which the Department assumed a few years agopreviously provided by a community-based agencyis the responsibility for coordinating the adult and child and adolescent Single Points of Access (SPOA) committees and processes. This function is not mandated, but can be thought of as a logical role for the Department to play as part of its LGU coordination/oversight role. The persons responsible for coordinating these various types of LGU services and functions often carry out their particular functions on a shared basis along with some other task for which he/she is also responsible. As indicated earlier in staffing Table 5, staff considered responsible for overall administration and monitoring functions (including financial and billing, clerical support, evaluation, senior and midmanagement positions, Personnel/HR, etc.) have been reduced from more than 20 FTEs to about 13.5 in 2011. Positions specifically classified as LGU positions (including the Commissioner and Deputy Commissioner positions) have remained consistently at about 6 FTEs in recent years. One final function should be mentioned. Each county mental hygiene department is mandated to have a Community Services Board, which acts in an advisory capacity to the Commissioner of Mental Health. Not unlike in most other counties, this Board in Rockland County is at best occasionally advisory and largely inconsequential, with some current unfilled vacancies and issues of significance by all accounts rarely discussed by the Board to any substantive extent. Rarely do Board members bring issues, questions or concerns to the Commissioner, and rarely are they asked for substantive advice on matters. Relatively little time is spent in interactions between the Department and the Board. As the Department and the County government make decisions in the future concerning which of the services DMH currently provides it will continue to provide going forward, and at what levels, the issue of the extent of the LGU role will need to be addressed as part of those decisions. For example, which specific functions will need to continue, and at what level of oversight, and with what level of staffing?

Other Considerations
For a variety of reasonsincluding service quality, as well as financial and political considerations proposals are already on the table for consideration related to what services and programs should continue to be provided directly by the County Department of Mental Health in the future, and which should be entrusted to various community-based providers, typically from the not-for-profit service sector. Major shifts in service provision were initially slated as part of the County budget process to occur later in 2012, but most of those initial proposals have now been deferred until at least the 2013 budget year. A number of considerations should enter into those decisions, some independent of other decisions made related to Summit Park Hospital and Nursing Care Center, but others likely to be dependent upon such decisions. As such, options for future provision of mental health services are outlined at the end of this chapter, and recommendations about the future of mental health services within Rockland County are addressed in the reports final chapter as part of the overall configuration of recommendations.

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Mental Health Contract Agency Services

As noted earlier, in addition to the more than $30 million Department of Mental Health operational budget (discussed in more detail below in the financial section), the County also contracts with more than 20 not-for-profit agencies to provide a wide array of mental health, developmental disabilities and chemical dependency services. In the 2012 County budget, the value of these contracted services amounts to more than $8.1 million. Each of these contracts should be monitored closely by DMH staff to track performance outcomes, how well the agency complies with terms of the contract such as meeting stated objectives, and financial monitoring. This represents a critical part of the Departments LGU oversight role. Table 8 indicates the agencies providing contracted services under the broad Mental Health banner, along with the amounts of those contracts adopted as part of the Countys 2012 budget. Most of the costs of these contracted services are covered through state aidabout $4.7 million from Office of Mental Health, about $840,000 from Office for People with Developmental Disabilities, and about $1.9 million from Office of Alcohol and Substance Abuse Services (OASAS). The local County share of the costs of these contracted services is indicated as $974,386roughly 12% of the total value of the contracted costs. Thus for every dollar invested by the County in these services, County residents receive back roughly $7.33 in state aid toward the costs of providing the services.
Table 8: Rockland County Department of Mental Health Human Service Contract Agencies, 2012 2012 Adopted Expense $ 100,000 228,152 212,151 1,454,000 600,500 326,300 1,518,179 78,115 385,660 185,400 67,055 231,000 34,295 621,139 34,000 574,000 118,000 648,000 16,028 42,750 674,120 $ 8,148,844

Name of Agency Clarkstown School Program Community.Awareness Network (CANDLE) Village of Haverstraw (REACHOUT) Jawonio AHRC Camp Venture Mental Health Association * Daytop Village, Inc Rockland Council on Alcoholism Mid Hudson Society for Epilepsy NY Assoc. for Learning Disabled Open Arms * Nami - Familya Loeb House Child Care Resources of Rockland St. Dominic's Home Westchester Consumer EmployeeCenter. Rockland Hospital Guild BikurCholim Partners in Health Jewish Family Services Lexington Center for Recovery, Inc TOTALS

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* Agencies noted above may have contract amount revisions upon confirmation from Legislature of the amount of the direct service enhancement that was restored to their budgets, or confirmation from NYS as to the increase of State Aid.

Source: Department of Mental Health Fiscal Administrator

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Mental Health Finances

Table 9 reports actual DMH expenditures and revenues from 2005 through 2010, as reported in each years County budget.

Table 9: Department of Mental Health Actual Expenses vs. Revenues, 2005 - 2010 2005 Total Expenses Total Revenues Gain/Loss from Operations/Net Local Share Gain/Loss Without OPEB Included $36.0 31.8 (4.2) 2006 $37.7 29.0 (8.7) 2007 $45.1 30.0 (15.1) $(9.4) 2008 $43.8 32.6 (11.2) 2009 $40.1 30.4 (9.7) 2010 $40.0 31.4 (8.6)

$(4.2) $(8.7)

$(5.4) $(4.6) $(2.2)

Note: Figures expressed in millions of dollars. OPEB expenses first recorded in 2007. Source: Rockland County Budgets, 2008 2012.

Total expenses for the Department continued to increase through 2007, including almost $2 million in increases in the total salary line between 2005 and 2007 (including salaries, overtime and relief positions). But the primary spike in 2007 expenses was a function of the inclusion for the first time of Other Post-employment Benefits, other than pension (OPEB). Total DMH expenditures peaked at $45.1 million in 2007; since then, total Department expenses have steadily declined over the next three years, and were $5.1 million lower, at $40 million, in 2010. Of that amount, salaries declined by $3.3 million during that 3-year period. These reductions in DMH expenses are consistent with changes referenced above in terms of transfers and elimination of programs, consolidation of services, and elimination of positions during those years. If OPEB benefits are excluded from these calculations, the total remaining operational expenditures in 2010 for DMH were about $30.5 million, according to the 2010 audited financial statement. During this same period, revenues have remained relatively constant overall. Thus, even with declines in expenditures, there have been substantial annual net losses requiring County subsidies each year. Beginning in 2007, those losses from operations were significantly increased, reflecting the substantial impact of the requirement to include OPEB costs. But even if the OPEB effect is removed from the totals, the annual costs have consistently exceeded revenues, though by declining amounts each year since 2007. Not shown in the table is the decline in patient/service fees over the years. After increasing from $34.3 million to $35.7 million from 2005 to 2007, fees have steadily declined since then to an average of about $25 million a year in 2009 and 2010. These reductions appear to reflect both the predictable loss of fees as programs are closed or spun off to the private/not-for-profit sector, as well as lost revenues as

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a result of changes in reimbursement formulas for various mental health services. The only reason the net overall DMH losses in 2009 and 2010 were not substantially greater was due to the payments in those two years of about $7.8 million each year of disproportionate share/charity payments for previous years (no such payments had been made in any of the four previous years). State aid has been relatively constant over the 6-year period, ranging consistently between about $2.5 million and $3 million a year in combined aid funneled through OMH, OPWDD and OASAS. It should be noted that audited financial statements, reflecting different accounting assumptions than in the County budgets determination of actual expenses and revenues, report different totals and bottom lines from those reflected in the yearly actuals shown in the budget documents (as reflected in the table above). For example, as indicated in Table 10 below, the 2010 audited financial statement reflects a net financial gain/surplus from operations (pre-OPEB) of just under half a million dollars for DMH in 2010, compared to the net loss of $2.2 million reflected in the table above for that same year. Similarly, annual pre-OPEB reported net DMH losses of $2.9 million in 2008 and $2.1 million in 2009, as reported in the audited financial reports, are lower than the $5.4 million and $4.6 million losses, respectively, in the budget-reported actuals in the table above(without OPEB included) for those years.
Summit Park
2010 Hospital & Nursing Home Total Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue 83,138,572 Total 52,607,201 LTACH 20,071,443 NH 32,535,758 Mental Health 30,531,371

420,500 3,074,763 632,972 87,266,807

3,074,763 537,812 56,219,776

3,074,763 537,812 23,684,018

32,535,758

420,500 95,160 31,047,031

Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense

47,403,206 20,086,524 8,402,345 2,358,486 13,276,462 91,527,023 (4,260,216)

29,419,878 13,378,183 6,643,565 1,990,342 9,545,320 60,977,288 (4,757,512)

6,809,155 5,180,787 3,193,001 1,062,971 3,641,865 19,887,779 3,796,239

22,610,723 8,197,396 3,450,564 927,371 5,903,455 41,089,509 (8,553,751) (9,352,870) (56,441)

17,983,328 6,708,341 1,758,780 368,144 3,731,142 30,549,735 497,296 (8,812,369) (76,771)

Other OPEB Interest Expense County Transfers Net Deficit

(20,981,830) (197,905) (25,439,951)

(12,169,461) (2,816,591) (121,134) (64,693) (17,048,107) 914,955

(17,963,062)

(8,391,844)

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

3,779,802 597,759 8,898,901 13,276,462

2,677,677 355,604 6,512,039 9,545,320

1,021,625 135,675 2,484,565 3,641,865

1,656,052 219,929 4,027,474 5,903,455

1,102,125 242,155 2,386,862 3,731,142

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Both sets of data are accurate, given different accounting assumptions underlying each. But regardless of which set of data is used, the pattern over the years has been one of annual losses for DMH, except for the 2010 audited financial finding of a net surplus. What may be a more positive trend suggestive of a stronger fiscal future for the Department, however, is that recent years have been trending in a more positive direction, under both sets of data. Each of the past three or four years has reflected an improved bottom line, compared to the previous yearregardless of whether we look at the audited financial data or the actual annual data as reported in the County budgets. It should be noted that each year, approximately $4 million have been charged against the Department of Mental Health in allocated costs (mostly costs allocated against General Services, Central Services and Hospital Services). Those allocated costs account for significant amounts of the annual losses/deficits experienced by the Department, and in fact without such cost allocations, the 2010 deficit (as reflected in the unaudited actual expenditures shown in Table 9) would have been reflected as a net gain for DMH. These may well reflect legitimate allocations of times and costs from other departments against DMH, but they raise the larger question, also raised elsewhere in this report, of what happens to these costs and staff in the other County government departments if mental health services continue to be spun off to non-County government providers in the future. If portions of the costs of these other governmental departments and functions can no longer be allocated against Mental Health and partially recouped through DMH revenue streams, will those costs continue for the County, without ways of covering portions of their costs, or will some positions in other departments be eliminated to reflect reduced work required as a result of reduced Mental Health demands for service? This issue and its implications for overall County costs and departmental staffing are addressed further as part of our conclusions and recommendations concerning the future delivery of mental health services. If recent financial data are indeed reflective of a positive financial trend in the Department of Mental Health bottom line, and that trend is a function at least in part of reductions in DMH direct service programs and resulting reductions in staff positions and costs, we might expect to see the trend continue as more programs are spun off to other providers, with fewer remaining direct services provided by the County DMH. Consolidated Fiscal Report data, as well as data used by the Department in developing budget assumptions and projections for 2012, suggest that most of the remaining programs appear to cost more to operate than they generate in offsetting revenues.

MENTAL HEALTH OPTIONS OPTION 1: CONTINUE CURRENT CONFIGURATION

This option is listed simply to outline the current status quo scenario, although its continuation as is shouldbe viewed as virtually impossible, given changes and plans already underway. Under this scenario, the Rockland County Department of Mental Health would continue its operations as described above. This would mean not only continuing its mandated LGU oversight, planning and monitoring functions for the entire County mental health, alcohol and substance abuse and people with developmental disabilities services and systems, but also the continuing direct delivery of a range of outpatient clinic and other services provided by County employeesas well as the continuation of the operation of the Countys crisis center and inpatient psychiatric unit within Summit Park Hospital.

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Timeline As noted, continuing this status quo scenario is not realistic, as plans are already under discussion to move the psychiatric unit to Nyack Hospital, and provisional 2013 Mental Health budget plans and discussions underway with non-profit community-based agencies are already pointing toward the likelihood of transferring many of the existing County-operated programs to community agencies by 2013, and in some cases sooner. Financial Implications Historically, as outlined above, the provision of mental health operations has resulted in net annual losses to the County, with the cumulative expenditures of all County-operated mental health programs exceeding cumulative revenues. The trend has become a bit more favorable in recent years, with declining magnitudes of net losses in the most recent years. But with probable unfavorable changes in revenue patterns anticipated over the next year or two, and continuing increases in employee benefit costs, it is likely that continuation of the current configuration of direct service/program provision by the Department of Mental Health would result in continuing significant deficits, particularly with OPEB expenditures factored in, in future years. Conclusion Thus the continuation of this current configuration of services is not considered to be a viable option for consideration in the future.

OPTION 2: TRANSFER OF IN-PATIENT PSYCHIATRIC UNIT TO NYACK HOSPITAL

Discussions have been underway in recent months concerning the transfer of the current 26 in-patient psychiatric/mental health beds, with HEAL grant funds, from Summit Park Hospital to Nyack Hospital, with Nyack taking over the ownership of the mental health beds and assuming responsibility for the operations of the crisis center and in-patient unit. The transfer of ownership should result in significant improvements in the ability to link medical, emergency room access and psychiatric services together in one new, efficient integrated setting. Details and timing of the final arrangements are currently in negotiation between County, State and Nyack Hospital officials. Approval seems likely, based on current information, though there are no certainties at this point. Timeline The timeline for likely implementation of this option is uncertain, depending on approval of the Nyack Board of Directors, Rockland County officials, and NYS officials of the terms of the proposed arrangements. Tentative plans suggested by DMH officials suggest that current psychiatric unit operations at Summit Park may continue to be in place through the first four to six months of 2013, with the transition to Nyack Hospital occurring in perhaps late spring or early summer 2013. Financial Implications As noted earlier, in some years, financial reports suggest that the inpatient psychiatric unit may yield net profits to DMH, but those years have typically been ones in which the Department has received Disproportionate Share and Charity Care payments funneled from the stateand such payments are made on an irregular basis and cannot be counted on each year, thereby leaving the unit in deficit territory in most years in which no such payments are made. In addition, the unit faces the uncertainty of the future of the Summit Park hospital as a County operation, and thus the possible loss of Medicaid revenues resulting from the connection of the inpatient unit to the hospital with its higher

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reimbursement rates. In general, changes in reimbursement patterns at the state level suggest that it may become increasingly more difficult for the unit to cover its operational costs in the future. Furthermore, continuation of the unit in the Summit Park location would entail an investment of an estimated $1.5 million or more to purchase and install a required looping system that would add significant one-time costs to the current facility. Conclusion All things considered, assuming that the financial implications of the proposed move prove to be satisfactory, and that other terms can be satisfactorily negotiated between the parties, the transfer of ownership of the psychiatric unit would appear to be a viable option for the County. Status of current employees is one of the issues that needs to be resolved. The costs of the transfer of operations and implementation of the new unit at Nyack Hospital would be absorbed by the state under terms of the HEAL grant available through the State Department of Health, which at this time continues to seem likely. The transfer would provide inpatient psychiatric services in a newer, more space-efficient setting, and would enable both medical, psychiatric and emergency room services to be more effectively and efficiently integrated in a single settinga reality not possible at Summit Park.

OPTION 3: TRANSFER REMAINING CLINIC, METHADONE TREATMENT, CASE MANAGEMENT AND COMMUNITY SUPPORT CENTER/CONTINUING DAY TREATMENT PROGRAM SERVICES FROM DEPARTMENT TO NON-PROFIT COMMUNITY-BASED AGENCIES
This option would remove all outpatient clinic and program services, currently provided by the Department of Mental Health with County employees, from County direct service operations to community-based non-profit organizations by 2013. Discussions are already underway concerning at least partial transfer of such programs, with some already slated to occur during 2012. These programs are currently adding up to net financial losses (excess of expenditures over revenues) for the Department under the current configuration, so their removal would be likely to result in a net financial benefit for the County. Counties throughout NYS appear to be increasingly moving in the direction of transferring more and more of their direct services to community-based operations, with broad monitoring and oversight by the counties, but less direct service provision. In most if not all of these Department programs, staff currently on the County DMH payroll would presumably be offered comparable jobs with the new non-profit providers, albeit with likely different salary and benefit structures. Timeline Transfer of the Methadone Treatment program has just occurred, with the shift to Lexington Center as of the beginning of the second quarter of 2012. The Community Support Center programs were to be largely shifted during 2012 to community-based programs at Jawonio and the Mental Health Association to take full advantage of the changes in program objectives and services, and related funding shifts, through the Personalized Recovery Oriented Services (PROS) model. If this option were implemented, full transfer of these programs could occur during 2012. Case management programs are currently budgeted as County operations through 2012, but may be transferred to community-based agencies during this year, perhaps linked with emerging health homes in the community.

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Discussions are under way with community-based non-profits to absorb the overall integrated outpatient clinic services, currently consolidated at the Pomona Clinic, during 2013. One scenario would maintain a portion of the clinic services with the County Mental Health Department (see Option 4 below), but under this Option 3 scenario, all clinic services would be transferred to the non-profit community at some point during 2013. Financial Implications This would appear to be the most beneficial option for the County, from a purely financial perspective, as most of these programs appear to consistently outspend their revenues. Changes anticipated on the revenue side suggest that if anything, the net losses associated with the continuation of these programs under County auspicesgiven higher benefits associated with County salaries and the likelihood of declining revenueswould be likely to increase in future years, should the County continue to operate these programs directly. Conclusion The Department appears headed in the right direction in its efforts to work with community-based agencies to develop their capacity to absorb and take over responsibility for the provision of these services heretofore operated by the Mental Health Department. The County may need to work out an agreement with the State to provide some transitional financial support, as well as staff transition support, to ensure that the transfers of ownership and operations occur smoothly and that the capacity is fully developed by the community agencies to ensure the sustainability of the needed services at a highquality, consistent level. At least the majority of the services outlined above should be transferred to non-profits by the end of 2012, or early in 2013, with perhaps a couple exceptions outlined below in Option 4.

OPTION 4: CONSIDER RETAINING PORTIONS COUNTY, AT LEAST ON AN INTERIM BASIS

OF

OUTPATIENT SERVICES

BY THE

Under this option, a portion of the primary clinic services currently provided at the Pomona Clinic would be retained by the County DMH, focusing on especially high-risk, severe-need clients. This scenario would envision that perhaps 75% of those currently treated at the Pomona Clinic would be served by non-profits, as outlined in Option 3, but that as many as approximately 25% or more (as many as 500 clients) would continue to be served by experienced clinic staff on the Department payrollboth to provide continuity and experienced care for those most in need, and to enable the new community-based clinic providers to develop their capacity and skills over time, without having to assume responsibility at the beginning for the full range of clients. Under this scenario, it would be anticipated that a small clinic presence would be maintained by the County DMH at least through 2013, and perhaps beyond, depending on how well and how quickly the new non-profit providers develop their capacity to serve clients with more severe needs. It is also possible that this option could include the continuation of a small Continuing Day Treatment Program under County operation (perhaps 50-60 clients), even as the remainder of the Community Support program transitions to the PROS model, as outlined in Option 3. The likely future existence of a CDT program could potentially occur under either County or non-profit auspices.

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Timeline It seems likely that no clinic shifts would be likely to occur until 2013 anyway, but under this option, a scaled-back clinic to be operated by the County would presumably continue through at least 2013, even as the remaining clinic services transition to non-profit operations during that year. The Department would presumably determine the future operational responsibilities for a CDT program at some point during 2012. Financial Implications Continuation of responsibility for a scaled-back clinic operation for the more severe clients needing clinic services would represent a continuing cost to the Department, over and above any savings associated with full transition of all clinic services as outlined in Option 3. Preliminary estimates provided by the Department suggest that a decision to continue to meet community needs through continuation of County operations of a scaled-back clinic service could result in a deficit operation of about $75,000 of expenditures in excess of anticipated revenues on an annual basis. By contrast, continuation of a County CDT program, operated by the DMH, is estimated by DMH officials to result in a net profit for the Department of about $300,000 annually. Conclusion At least for the short-term, through 2013 and perhaps beyond, it would appear appropriate, in the interest of client and ultimately community well-being, for the County DMH to absorb the costs of continuing to provide clinic services for high-risk clients with the most severe needs for such services, while the new non-profit providers of clinic services develop their skills and capacity. It may be worth discussions with the state to determine if some type of enhanced state aid for such higher-risk clients may be possible as a partial financial incentive for DMH to continue to provide such services, at least in the short run. With the anticipated excess of revenues over costs associated with continuing to provide the Continuing Day Treatment program, it would seem appropriate for the Department to continue to provide this program for the foreseeable future. Case management operations could presumably be provided effectively either by the DMH or by one or more community agencies. But in the long run, there appears to be a greater advantage to having the case management services provided by community-based agencies, linked to newly-emerging health homes, with less cost to the County. Continuation of such services under the DMH would in all probability add significantly to taxpayer costs, given likely reduced reimbursements available should the DMH continue to operate case management services directly.

OPTION 5: CONTINUE SELECTED OTHER SERVICES DEPARTMENT

BY THE

MENTAL HEALTH

In this scenario, two other services may need to continue to be provided directly by the Department. One involves Single Point of Access (SPOA) services, and the other includes a range of jail/corrections/court-related forensic, assessment and evaluation services for those in the County jail and court system. Adult and Child SPOA services provide point-of-entry access to many services within the mental health system. Ideally, although these services can be provided by either County or community-based agencies, there is a logic to having such services be provided by a neutral provider not connected to a provider of other direct services that could potentially profit from an access/referral

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decision. With the County DMH increasingly removed from the direct service business, the desirability of having SPOA services provided directly by the County may increase. The jail/court services are currently being provided by the Department, and the need for consistent services for troubled persons in the justice system may suggest that the County should remain in that business. Timeline Decisions about the future provision of SPOA services should presumably be made in conjunction with the decisions about the timing of the transition of other programs outlined above. Provision of the jail/court forensic and assessment services would continue as is, unless a conscious decision is made to change current operations. Financial Implications It would presumably be less costly for the Department to contract out the provision of SPOA services. Costs of providing the service in-house would need to be assessed against offsetting revenues. At this time, costs of SPOA services are intermingled with the LGU/administrative costs, discussed further in Option 6 below. The jail/court services have historically cost the Department a net loss of more than a million dollars a year. The services are provided primarily to inmates of the County jail, but the Sheriffs office provides little or no revenues to help offset the costs of the services. The County should consider charging the Sheriffs Department for at least a substantial portion of the costs of these important services, which add significant expenses on the debit side of the DMHs budget, with few offsetting revenues. Conclusion There appears to be a logic to having the Department provide SPOA services in-house, but the costbenefit calculation needs to be undertaken and broken out separately from LGU costs and revenues before such a final decision is made. The decision concerning the future provision of behavioral health services in the jail and courts should be made in the context of seeking funding support from at least the Sheriffs Department for the significant services provided in the jail, and also seeking at least some compensation from the court system. Current estimates suggest that these ongoing services can be provided at a net cost to the Department of about $600,000 per year, not including any revenues that may be possible via the Sheriffs office and/or courts.

OPTION 6: CONTINUE MANDATED LOCAL GOVERNMENT UNIT (LGU) FUNCTIONS

As mandated functions, the County has no choice but to continue to provide this oversight, management, planning, and monitoring and evaluation functions of the Department, even if few or even no direct program services continue to be provided by DMH. In some respects, the LGU function becomes even more important with the decline of Department-provided direct services, because there becomes a strong need for careful monitoring and assurance that the overall service system (with its expansion of community-based services) is operating smoothly, with quality, cost effective service provision across providers. The question becomes at what level such LGU functions need to be provided to ensure continuing high quality of services, especially as the transition of service provision occurs, and with what level of Departmental staffing. Current Department administrative, management and fiscal oversight staff would presumably not be needed at the same levels as has been the case with large numbers of direct-service-provision staff in-housewith resulting billing and other tasks that

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would be significantly reduced in scope under the largely-oversight functions that would need to remain, given reduced direct provision of services. Timeline Decisions about the future of the LGU and administrative staff would need to be made in conjunction with other decisions concerning who will be providing what direct services in the future. Presumably reconfigurations of LGU/Administrative staff would need to be made effective in 2013, along with other program/service allocation decisions, with perhaps other adjustments made on an ongoing basis in the future as tasks become clearer under new systemic changes put in place. Financial Implications A preliminary set of assumptions and expense and revenue calculations prepared by DMH officials suggests that in 2013, there would be a reduction of 25% to 30% in combined expenditures for LGU/Administration/HR/Financial responsibilities of the Department. Preliminary calculations by the Department suggested more than $2.7 million in ongoing annual expenditures for these services (including SPOA costs imbedded in these estimates), with offsetting revenues of about $765,000, for a net deficit/ cost to the County of more than $1.9 million. These estimates of remaining LGU oversight staff and costs may be high, given the likely scale of reduction in direct services within the Department, and would need to be more carefully reviewed against job titles, remaining responsibilities and operating assumptions before final determinations are made as to the viability of those numbers going forward. Conclusion There is no question that important LGU/Administrative functions will need to continue within the Department. The specifics of those functions, and how they are best carried out, and by whom, need to be assessed in more detail in the context of decisions made about the other optionsand specifically what functions and services will ultimately continue to be performed directly by the County DMH, and which by other agencies, and what implications those decisions will have on the scope of remaining LGU/Administrative functions within the Department. At the present time there is no completelyfinalized plan for the Local Government Unit which factors in final decisions concerning which programs will continue to be operated by DMH and which by other entities. DMH will need to define a clear vision for the role of the LGU as a safety net. It will require changes in the current mix of skills, leadership, monitoring approaches, strategic planning, technological skills and a revamped relationship with the providers in the county. The future LGU role will require careful, thoughtful planning and coordination with community partners, careful and comprehensive efforts to develop community capacity, and developing new and proven treatment modalities.

OPTION 7: MENTAL HEALTH AS A COMPLETELY INDEPENDENT DEPARTMENT

As indicated previously, the Department of Mental Health operates as a full-fledged independent Department of Rockland County government, with its own Commissioner. But because of the Departments operation of the Psychiatric Inpatient Unit as part of Summit Park Hospital, DMHs finances are also considered part of the Summit Park Enterprise Fund, under the Summit Park Board of Governors and the Commissioner of Hospitals. As such, both Commissioners report directly to the County Executive, and they currently also have lateral reporting relationships to each other for their respective operations within the Summit Park facility. If Option 2 above becomes operational, and the Inpatient unit no longer exists as part of the Summit Park Hospital facility, there would be no

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continuing relationship between the Departments of Mental Health and Hospitals. Thus the DMH would become a totally free-standing Department, totally divorced from future engagement with the Department of Hospitals and the Summit Park Enterprise Fund. Timeline The activation of this formal separation would be determined by the timeline of the implementation of the proposed transfer of the Psychiatric Unit from Summit Park to Nyack Hospital. Financial Implications These would be basically as outlined under the combined financial implications of the various options discussed above, along with the cost allocation implications discussed in the final section below. Conclusion There would be no need for any future connection between the Department of Mental Health and the Department of Hospitals if the transfer of the Psychiatric Unit occurs as proposed. This would presumably also apply to any potential creation of a Public Benefit Corporation. Should such an entity be created, assuming the transfer of the Psychiatric Unit to Nyack Hospital, there would appear to be no reason to have the Department of Mental Health in any way linked to the PBC. Available estimates from DMH suggest that if the psychiatric unit is shifted to Nyack Hospital, clinic and CDT services continue as outlined in Option 4, SPOA and jail services continue as outlined in Option 5, and the LGU operates as outlined in Option 6, the total net costs of future DMH operations would result in an annual cost to the County of about $2.3 million, not including OPEB or cost allocations. It seems probable that once a more comprehensive and carefully-crafted LGU plan is firmed up to cover future needs, the net costs of continuing service and LGU operations will be able to be further reduced. In addition, if agreements can be reached with the Sheriffs office and the court system, it may be possible to further reduce the net costs of DMH operations via additional revenues available to the Department to cover jail and court-related services.

Cost Allocation Implications

As noted above, each year, approximately $4 million have been charged against the Department of Mental Health in allocated costs (mostly costs allocated against DMH from General Services, Central Services and Hospital Services). Those allocated costs account for significant amounts of the annual losses/deficits experienced by the Department. If indeed mental health services continue to be spun off to non-County government providers in the future, decisions will need to be made concerning what happens to these costs and staff in the other County government departments that have significant portions of their costs allocated against DMH. If portions of the costs of these other governmental departments and functions can no longer be allocated against Mental Health and partially recouped through DMH revenue streams, will those costs continue for the County, without ways of covering portions of their costs, or will some of the positions in other County departments need to be eliminated or allocated to different areas to reflect reduced work required as a result of reduced Mental Health demands for service? This could have implications for the remaining Summit Park budget, as well as for other departments throughout the County. Depending on how realistic the cost allocation formulas have been in capturing actual work performed by others for DMH, and the extent to which County officials are willing to

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consider the implications of work that will no longer be required to support a significantly down-sized Department of Mental Health, the restructured DMH could help trigger potentially significant additional cost allocation savings in reduced staff, perhaps through attrition, in several units of County government. Alternatively, if the cost allocation formula has not accurately reflected true support costs from other County units to DMH, i.e., it has overstated the value of supports provided from other units, or the County is not willing to make staffing adjustments to other County departments to reflect reductions in services to DMH, then the County could continue to experience as much as several million dollars of continued staffing and other costs with no ability to offset any of them through DMH revenues. Facility-related utilities and related costs associated with the large footprint of DMH facility use would need to be reallocated to other departments, with presumably less offsetting revenues, or the County would need to consider ways to lease out the space in areas vacated by DMH to other revenuepaying entities to help offset the ongoing facility-related costs.

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CHAPTER 6: CONCLUSIONS AND RECOMMENDATIONS

Our analysis of the operations of Rockland Countys Summit Park Hospital and Nursing Care Center and the Department of Mental Health, and of numerous options concerning their respective futures, has identified a number of scenarios which could be viable under certain assumptions. For example, excluding future OPEB costs for which the County will be liable regardless of which future option(s) it chooses, we believe that it is possible to significantly reduce the historic deficits of Summit Park and DMH through combinations of cost reductions and revenue enhancements, while maintaining the Countys historic commitment to the mission of high quality mental health services and serving the long-term care needs of residents as currently served at Summit Park. But while such reductions in deficits are possibleand could help create an environment in which a nursing home and hospital could continue as a public institution, and the Department of Mental Health could continue to play an integral role in ensuring a strong mental health delivery system in the Countya number of assumptions would need to be embraced and quickly and assertively acted upon by County officials, if the goal is to maintain at least some type of core public role in the provision of future mental health, hospital and nursing home care services in Rockland County. For example, significant expansions of revenue are possible in the hospital and nursing home if occupancy rates can be enhanced beyond recent trends. But that is likely to mean that significant commitments would need to be made to more aggressively market Summit Park throughout the County and region. And even that may be difficult to do with sufficient impact to significantly increase occupancy rates, given the existing older facility in its current location, and the competition that exists within the region. Other increases in revenues could occur as a result of efficiencies and more effective capturing for reimbursement purposes of activities provided for residents of the nursing home, but this may entail commitments to upfront investments in expanded electronic medical records and strengthened information technology. The County would need to determine whether it is willing to make such investments in technology and in marketing if it were to decide to continue its commitment to public operations of the Summit Park facility. Reductions in labor costs, through reconfiguration and more effective right-sizing of staffing and controlling of rising benefit costs, could significantly reduce employee expenditures and therefore help reduce operational deficits within Summit Park and DMH. But that is likely to involve decisions to modify labor agreements to reduce future County health insurance and retirement benefit costs by shifting more of the future burden of such costs to employees. Such decisions, and/or other related costreduction agreements (such as, for example, agreements to contract out selected services) between County and employees as represented by labor union officials, are likely to be needed in order to ensure sufficient reductions in expenditures to be able to significantly reduce or eliminate the historic County deficits associated with Summit Park and DMH. Clearly, we have determined that opportunities for cost savings and revenue enhancements exist, and could be implemented in ways that would enable the County or a Public Benefit Corporation to continue to operate Summit Park (or a modified version of the current facility) and for the County to continue to play an important role in directly providing a comprehensive array of mental health services in the future. But in order for these opportunities to occur and have the best chances for success, a number of changes would need to occur in current operationsand would require more aggressive

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leadership and management decisions, with more effective accountability and adherence to careful management and financial practices from the County Executive and Legislature on down through the Department levels, than has been the case in the past. Changes in long-standing financial, management and accountability practices are difficult to negotiateunder the best of circumstances in the public sector in general, given years of practices and decisions made at state and local levels that have helped shape the existing deficit operations. If this ship can be turned around and the types of changes noted above can be implemented, enforced and maintained going forward, then continuing public ownership and operations of Summit Park may be feasible. But our primary recommendations have assumed that such magnitudes of changes are unlikely in a timely enough fashion to eliminate the historic patterns of deficits. Accordingly,our recommendations are directed at reducing the Countys footprint in the direct operations of both Summit Park and in the direct delivery of mental health services, while, we believe, at the same time helping to best ensure that the County can continue to carry out the missions it has historically carried out in Summit Park and DMH. We have assumed in making our recommendations that the County does not wish to close Summit Park or to sell the facility, and that it wishes in someform to continue a strong public sector presence in the hospital, nursing home and mental health sectors. Our recommendations are designed to help make such assumptions possible, while at the same time reducing the Countys direct level of involvement in these entities in the future. With that context in mind, we offer the following recommendations:

1. THE COUNTY SHOULD SHIFT MOST CURRENT COUNTY-OPERATED MENTAL HEALTH SERVICES TO COMMUNITY-BASED NON-PROFIT PROVIDERS, AND REDUCE THE DEPARTMENT OF MENTAL HEALTH TO A STRONG LOCAL GOVERNMENT UNIT (LGU) FUNCTIONSUPPLEMENTED BY SELECTED CORE FUNCTIONS BEST MAINTAINED BY THE COUNTY.
Counties are mandated to provide the LGU oversight/advocacy/planning/management functions outlined earlier in the report, and Rockland County should make a strong ongoing commitment to these system oversight functions, which will be especially important as more and more direct services are shifted to the non-profit sector and will need careful monitoring and evaluation to ensure that high quality services are provided, and that those in need of services will continue to receive them in a timely, high-quality fashion. At the same time, these LGU functions should be provided in the most cost-effective, efficient manner possible with lean staffing patterns that balance the needs for strong systems oversight and monitoring with the reality that there will be in the future much less need for administrative and financial support staff, as a result of fewer inhouse services remaining to be directly administered by County staff. With the recommended shift of the inpatient psychiatric unit to Nyack Hospital and most outpatient services to community-based agencies, we also recommend that the overall mental health system, and those served by it, will be best served if a few select direct services continue to be providedat least for the next two or three years as the revised strengthened community-based service delivery system is fully developed and maturesby County staff. These include, as outlined in the options in Chapter 5, a smaller outpatient clinic provided for the most severe, at-risk clients historically

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served by the Pomona Clinic, the provision of a scaled-back Continuing Day Treatment program, provision of SPOA services, and the continuing provision of services to the County jail and courts system. Additional state aid support should be sought to cover higher proportions of the costs of these transitional services, and the Sheriff and courts system should be expected to cover significant portions of the costs of the mental health services provided to them by the Department of Mental Health, instead of expecting DMH to continue to bear virtually the entire significant costs of providing these services.

2. WITH THE ANTICIPATED TRANSFER OF THE INPATIENT PSYCHIATRIC UNIT FROM SUMMIT PARK TO NYACK HOSPITAL, THE COUNTY SHOULD SEVER THE CURRENT RELATIONSHIP BETWEEN SUMMIT PARK AND THE DEPARTMENT OF MENTAL HEALTH, AND REMOVE ALL ASPECTS OF DMH FROM THE SUMMIT PARK ENTERPRISE FUND.
The Department of Mental Health, with its scaled-back footprint in terms of direct services, and the removal of any direct services provided in the Summit Park hospital setting, will have no need for any continuing relationship with Summit Park, the Enterprise Fund, or the overall Department of Hospitals. Furthermore, should the County decide to create a public benefit corporation to own and operate Summit Park (or anything that succeeds it) in the future, there would be no need or logic to having DMH be a part of such a corporation.

3. THE COUNTY SHOULD SEEK STATE APPROVAL TO CREATE A PUBLIC BENEFIT CORPORATION TO OWN AND OPERATE SUMMIT PARK NURSING CARE CENTER AND POTENTIALLY SUMMIT PARK HOSPITAL (WITHOUT THE INPATIENT PSYCHIATRIC UNIT).
This is not an automatic panacea to control or eliminate the historic Summit Park deficits, but it offers a more realistic opportunity to do so than continuing to attempt to manage the facility as a direct County operation. A Public Benefit Corporation would also be able to help retain the historic mission of the facility. The County would appoint representatives to the PBCs Board of Directors, and thus would continue to have a direct say in the operation of the facility, although the County would no longer have direct control over its operations and policies. Minus employees of the inpatient psychiatric unit (assuming shift of the unit to Nyack Hospital),the PBC would be able to retain current employees of Summit Park, depending on terms of the enabling legislation, while at the same time having more flexibility than currently exists with County ownership to negotiate separate labor agreements, and to implement other cost-saving approaches within the facility that may be inherently more difficult to accomplish in the Countys political environment. The creation of a PBC would enable the County to sell the facilitys assets, taking advantage of the PBCs ability to issue bonds, and thereby create an infusion of cash that could be used in various ways by the County, such as paying off portions of the legacy costs that will continue regardless of whether the County remains in the nursing home/hospital business or not. Legislation would need to be carefully drafted to limit Rockland Countys future obligations to the facility under the PBC concerning future debts and potential continuing deficits. Legislation also

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would need to be drafted to authorize the potential use (should it be approved by the State) of Certified Public Expenditures for Medicaid services as a basis for claiming 50% federal financial participation for nursing home costs, not fully reimbursed under the general Medicaid rate reimbursement methodology, that are currently subsidized by the County. The PBC would become the owner and operator of the existing Summit Park facility, and would also become the decision-maker concerning the potential future construction of a new facility (see subsequent recommendation). The existing Summit Park property could revert back to the County if the PBC subsequently builds a new facility at another site. Should this option to create a PBC not be approved by the County, or ultimately by the State, the alternate recommendation (see below) would be for the County to test the market by exploring options to sell the facility to a potential bidder committed to continuing its operation.

4. GIVEN THE UNCERTAINTY CONCERNING THE FUTURE SCOPE OF SERVICES AND MEDICARE REIMBURSEMENT OF LTCHS AT THE FEDERAL LEVEL, CONSIDERATION SHOULD BE GIVEN TO SEEKING TO HAVE THE OWNERSHIP OF THE LTCH (MINUS THE INPATIENT PSYCHIATRIC UNIT) TRANSFERRED TO HELEN HAYES HOSPITAL, RATHER THAN HAVING THE COUNTY CONTINUE OWNERSHIP OF A HOSPITAL WITH AN UNCERTAIN FUTURE. EVEN IF THE FEDERAL MORATORIUM CURRENTLY BLOCKS ANY SUCH TRANSFERS, CONTINGENCY DISCUSSIONS SHOULD BEGIN WITH HELEN HAYES HOSPITAL TO PREPARE FOR THIS POSSIBILITY, ONCE THE MORATORIUM IS LIFTED.
This option could involve a shift of ownership of the hospital beds to Helen Hayes Hospital. It could include all 100 beds, or such number as would be negotiated with Helen Hayes. The sale price would be negotiated between the County and the State. This option could also involve the continuation of beds in the current Summit Park facility, or ultimately could include the possible construction of a new hospital facility, depending on what the future of LTCHs is determined by the federal government to be. This option could begin to be pursued immediately by the County, but could also become an issue addressed and finalized by the proposed Public Benefit Corporation. As a government-owned and operated hospital, CMS may authorize, as not contrary to the moratorium, a transfer of LTCH beds from the County to either a PBC or Helen Hayes Hospital as public ownership and operation would continue. If the moratorium expires, transfer of LTCH beds to other community hospitals could be explored by the County as an alternative to Helen Hayes Hospital.

5. THE COUNTY

SHOULD CONSIDER CONSTRUCTING A NEW NURSING HOME FACILITY APART FROM THE CURRENT SUMMIT PARK FACILITY, AND MAY ALSO CONSIDER A NEW HOSPITAL FACILITY, PENDING DECISIONS MADE CONCERNING FEDERAL RESTRICTIONS AND ANY HELEN HAYES DECISIONS.

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This decision would presumably ultimately be made by the proposed PBC. During the interim period, the current nursing care center in Summit Park would continue to operate as is, under County ownership. This recommendation assumes that the County itself would not construct a new facility if the PBC is not approved, given the added debt structure it would have to take on to do so. Decisions about the number of beds in a new facility would need to be carefully considered, given population projections involving growth in the older population, and given the potential reimbursement implications of downsizing to a lower level of nursing home classification if fewer than 300 beds are included in a new structure and the nursing home is no longer considered hospital-based. This recommendation is predicated on the assumption that the current Summit Park facility is not attractive for marketing purposes, and may be too inefficient to continue to operate cost effectively in the future, even though we have some reservations and concerns about the future of the vacant Summit Park facility that would result.

6. IF DECISIONS ARE MADE TO BUILD A NEW NURSING FACILITY AND/OR HOSPITAL, THE COUNTY SHOULD INVESTIGATE PLANS TO CONVERT THE EXISTING SUMMIT PARK FACILITY TO ALTERNATE USES.
Although this project is to consider options for the future of Summit Park Hospital and Nursing Care Center, the County should also consider potential options to adapt the existing buildings for re-use. Based on the existing building plans, there are several alternate uses that could be considered; however, all uses considered would need a full zoning study for compliance. Potential re-use options could include: Office/Business Multi-Family Residence Hotel/Conference Center Educational (Community College) Mixed use of the above options The size and bulk of the Building A may allow for a mixed-use structure, especially because the elevators are arranged in two separate banks, which can allow for separate building entrances. The large floor area on the lower levels can accommodate a variety of uses to support the primary use(s). If Building A is gut renovated from its existing hospital and nursing home use, the estimated construction costs for its reuse would range from $72 million to $100 million based on $200 to $300 per square foot. This cost would most likely be borne by a private developer.

7. ALTERNATIVE TO CORPORATION IS

THE PREVIOUS RECOMMENDATIONS: IF A PUBLIC BENEFIT NOT APPROVED, THE COUNTY SHOULD CONSIDER DIVESTING ITSELF OF THE OWNERSHIP OF SUMMIT PARK, EITHER BY SELECTING AN ENTITY TO NEGOTIATE A TRANSFER OF OWNERSHIP, OR BY CREATING A REQUEST FOR PROPOSALS PROCESS TO EXPLORE INTEREST AMONG POTENTIAL BUYERS WHO MAY

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WISH TO CONSIDER PURCHASE OF EITHER THE SUMMIT PARK NURSING CENTER, THE SUMMIT PARK HOSPITAL, OR THE COMBINATION OF BOTH.

CARE

A sale may be difficult given the facility location with respect to County property, and shared space and services, and it is difficult to know whether the County would be likely to receive full value on a sale, given current market conditions. However, the benefit of a possible sale is that there would be no further losses from the operation of the facility, and the County would receive an influx of cash for the sale. The current facility employees may be offered employment by the new operator, although not necessarily at the same salary and benefit levels (which could be addressed as part of the terms of sale of the facility). Current allocations of County costs to Summit Park would have to be reevaluated and either assigned to other County departments or some of the employees providing those services to Summit Park may be terminated, thereby potentially further reducing costs to the County in the future. Should the County decide to sell the facility, in whole or in part, it would need to be clear about the terms under which it would be willing to consider transfer of ownership of Summit Park. For example, either in the RFP and/or in individual negotiations, the County may wish to clearly specify its expectations and any non-negotiable terms and requirements. The County would need to determine what levels of assurances it needs regarding residents, current employees and other future considerations in order to feel comfortable turning over control of the facility to a new owner. Any RFP or negotiation process could be undertaken with no obligation on the part of the County to go through with a final transfer if no offers meet the Countys criteria and expectations. It should be noted that if the sale option is to be considered by the County, it is likely to take at least a year, and probably longer, for the full process to unfold and approval granted for the new owner by the State. Thus the facility would need to be maintained in operation by the County during this period of time, with continuing deficits for the County likely during this interim period.

8. ADDITIONAL ALTERNATIVE TO THE PREVIOUS RECOMMENDATIONS: IF A PUBLIC BENEFIT CORPORATION IS NOT APPROVED, AND A SALE OPTION IS NOT CONSIDERED OR NO PURCHASE OFFER IS CONSIDERED ACCEPTABLE, THE COUNTY COULD CONSIDER MAINTAINING OWNERSHIP AND OPERATION OF THE EXISTING SUMMIT PARK FACILITY, BUT ONLY IF REVENUE ENHANCEMENTS AND COST REDUCTION STRATEGIES ARE IMPLEMENTED.
As noted at the outset of this final chapter, there are circumstances under which we believe the Summit Park facility could be operated under something close to break-even, and perhaps even profitable financial conditions, involving combinations of cost reduction and revenue enhancement strategies. But we also made clear our concerns that it would be difficult to ensure that such strategies could be fully and successfully implemented, without significant changes in leadership, management and financial accountability in the oversight of the facility. Should such changes be implementedwith compliance mechanisms put in place and followedthis could become a viable option, should the County decide it wishes to continue its mission to provide nursing home and hospital services to the public in the future. But we would add one further caution: if such a decision is made to maintain ownership of the facility, it should be made with the

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understanding that the decision should be revisited over the next couple years, as the impact of changes in reimbursement practices and of changing realities related to the likely expansion of managed care programs becomes clearer in terms of their implications for future revenue generation for the Summit Park facility.

[RESERVED]

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Summit Park Care Center - Status Quo Option

2010 Year 1 NH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 32,535,758 2011 32,991,259 32,991,259 Year 2 2012 33,453,136 33,453,136 Year 3 2013 33,921,480 33,921,480 Year 4 2014 34,396,381 34,396,381 Year 5 2015

Appendix B - Page 1

Year 10 2020 37,388,710 37,388,710

32,535,758

34,877,930 34,877,930

22,610,723 8,197,396 3,450,564 927,371 5,903,455 41,089,509 (8,553,751)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (10,320,514) (9,352,870) (141,236) (19,814,620)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (9,858,637) (9,960,807) (126,779) (19,946,222)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (9,390,293) (10,608,260) (111,322) (20,109,874)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (8,915,392) (11,297,796) (95,500) (20,308,689)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (8,433,843) (12,032,153) (200,103) (20,666,099)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (5,923,063) (16,485,093) (200,103) (22,608,259)

Other OPEB Interest Expense County Transfers Net Deficit

(9,352,870) (56,441)

(17,963,062)

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,656,052 219,929 4,027,474 5,903,455

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

Summit Park Care Center - New Build Option

2010 Year 1 NH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 32,535,758 2011 32,991,259 32,991,259 Year 2 2012 33,453,136 33,453,136 Year 3 2013 33,921,480 33,921,480 Year 4 2014 34,396,381 34,396,381 Year 5 2015

Appendix B - Page 2

Year 10 2020 39,179,461 1,619,746 40,799,207

32,535,758

36,548,426 1,619,746 38,168,172

22,610,723 8,197,396 3,450,564 927,371 5,903,455 41,089,509 (8,553,751)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (10,320,514) (9,352,870) (141,236) (19,814,620)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (9,858,637) (9,960,807) (126,779) (19,946,222)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (9,390,293) (10,608,260) (111,322) (20,109,874)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (8,915,392) (11,297,796) (95,500) (20,308,689)

24,668,248 9,867,299 3,623,092 3,379,764 6,198,628 47,737,031 (9,568,859) (12,032,153) (3,958,786) (25,559,798)

24,668,248 9,867,299 3,623,092 3,379,764 6,198,628 47,737,031 (6,937,824) (16,485,093) (3,202,752) (26,625,669)

Other OPEB Interest Expense County Transfers Net Deficit

(9,352,870) (56,441)

(17,963,062)

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,656,052 219,929 4,027,474 5,903,455

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

Summit Park Care Center - Sale Option

2010 Year 1 NH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 32,535,758 2011 32,991,259 32,991,259 Year 2 2012 33,453,136 33,453,136 Year 3 2013 16,960,740 14,400,000 31,360,740 Year 4 2014 -

Appendix B - Page 3

Year 5 2015 -

Year 10 2020 -

32,535,758

22,610,723 8,197,396 3,450,564 927,371 5,903,455 41,089,509 (8,553,751)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (10,320,514) (9,352,870) (141,236) (19,814,620)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (9,858,637) (9,960,807) (126,779) (19,946,222)

11,587,995 4,654,454 1,811,546 502,577 6,083,165 24,639,738 6,721,002 (10,608,260) (55,661) (3,942,918)

5,967,702 5,967,702 (5,967,702) (11,297,796) (17,265,499)

5,967,702 5,967,702 (5,967,702) (12,032,153) (17,999,855)

5,967,702 5,967,702 (5,967,702) (16,485,093) (22,452,795)

Other OPEB Interest Expense County Transfers Net Deficit County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

(9,352,870) (56,441)

(17,963,062)

1,656,052 219,929 4,027,474 5,903,455

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

1,738,855 115,463 4,228,848 6,083,165

1,738,855 4,228,848 5,967,702

1,738,855 4,228,848 5,967,702

1,738,855 4,228,848 5,967,702

Summit Park Care Center - Closure Option

2010 Year 1 NH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 32,535,758 2011 32,991,259 32,991,259 Year 2 2012 33,453,136 33,453,136 Year 3 2013 8,363,284 8,363,284 Year 4 2014 Year 5 2015

Appendix B - Page 4

Year 10 2020 -

32,535,758

22,610,723 8,197,396 3,450,564 927,371 5,903,455 41,089,509 (8,553,751)

23,175,991 9,308,907 3,623,092 1,005,155 6,198,628 43,311,773 (10,320,514) (9,352,870) (141,236) (19,814,620)

26,652,389 10,705,243 3,804,247 1,005,155 6,198,628 48,365,662 (14,912,526) (9,960,807) (126,779) (25,000,112)

13,326,195 5,352,622 1,902,123 502,577 3,030,036 24,113,553 (15,750,269) (10,608,260) (111,322) (26,469,851)

3,030,036 3,030,036 (3,030,036) (11,297,796) (95,500) (14,423,333)

3,030,036 3,030,036 (3,030,036) (12,032,153) (200,103) (15,262,293)

3,030,036 3,030,036 (3,030,036) (16,485,093) (200,103) (19,715,232)

Other OPEB Interest Expense County Transfers Net Deficit

(9,352,870) (56,441)

(17,963,062)

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,656,052 219,929 4,027,474 5,903,455

1,738,855 230,925 4,228,848 6,198,628

1,738,855 230,925 4,228,848 6,198,628

869,427 46,185 2,114,424 3,030,036

869,427 46,185 2,114,424 3,030,036

869,427 46,185 2,114,424 3,030,036

869,427 46,185 2,114,424 3,030,036

Summit Park LTACH - Status Quo

2010 Year 1 LTACH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 20,071,443 2011 20,352,443 3,074,763 537,812 23,965,018 Year 2 2012 20,637,377 3,074,763 537,812 24,249,952 Year 3 2013 20,926,301 3,074,763 537,812 24,538,876 Year 4 2014 21,219,269 3,074,763 537,812 24,831,844 Year 5 2015

Appendix B - Page 5

Year 10 2020 23,065,249 3,074,763 537,812 26,677,824

21,516,339 3,074,763 537,812 25,128,914

3,074,763 537,812 23,684,018

6,809,155 5,180,787 3,193,001 1,062,971 3,641,865 19,887,779 3,796,239

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 2,773,630 (2,816,591) (161,885) (204,845)

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 3,058,565 (2,999,669) (145,314) (86,419)

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 3,347,488 (3,194,647) (127,598) 25,243

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 3,640,456 (3,402,299) (109,463) 128,693

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 3,937,526 (3,623,449) (229,359) 84,717

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 5,486,436 (4,964,439) (229,359) 292,638

Other OPEB Interest Expense County Transfers Net Deficit

(2,816,591) (64,693) 914,955

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,021,625 135,675 2,484,565 3,641,865

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

Summit Park LTACH - Sale Option

2010 Year 1 LTACH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 20,071,443 2011 20,352,443 3,074,763 537,812 23,965,018 Year 2 2012 20,637,377 3,074,763 537,812 24,249,952 Year 3 2013 12,000,000 12,000,000 Year 4 2014 Year 5 2015

Appendix B - Page 6

Year 10 2020 -

3,074,763 537,812 23,684,018

6,809,155 5,180,787 3,193,001 1,062,971 3,641,865 19,887,779 3,796,239

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 2,773,630 (2,816,591) (161,885) (204,845)

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 3,058,565 (2,999,669) (145,314) (86,419)

1,911,979 1,911,979 10,088,021 (3,194,647) (63,799) 6,829,575

1,897,733 1,897,733 (1,897,733) (3,402,299) (5,300,033)

1,897,733 1,897,733 (1,897,733) (3,623,449) (5,521,182)

1,897,733 1,897,733 (1,897,733) (4,964,439) (6,862,172)

Other OPEB Interest Expense County Transfers Net Deficit

(2,816,591) (64,693) 914,955

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,021,625 135,675 2,484,565 3,641,865

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

536,353 56,984 1,304,397 1,897,733

536,353 56,984 1,304,397 1,897,733

536,353 56,984 1,304,397 1,897,733

536,353 56,984 1,304,397 1,897,733

Summit Park LTACH Closure Option

2010 Year 1 LTACH Net Patient Service Revenue Other Operating Revenue: County Jail County of Rockland Other Total Operating Revenue Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense 20,071,443 2011 20,352,443 3,074,763 537,812 23,965,018 Year 2 2012 20,637,377 3,074,763 537,812 24,249,952 Year 3 2013 Year 4 2014 Year 5 2015

Appendix B - Page 7

Year 10 2020 -

3,074,763 537,812 23,684,018

6,809,155 5,180,787 3,193,001 1,062,971 3,641,865 19,887,779 3,796,239

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 2,773,630 (2,816,591) (161,885) (204,845)

6,979,384 5,883,267 3,352,651 1,152,128 3,823,958 21,191,388 3,058,565 (2,999,669) (145,314) (86,419)

1,911,979 1,911,979 (1,911,979) (3,194,647) (127,598) (5,234,224)

1,897,733 1,897,733 (1,897,733) (3,402,299) (109,463) (5,409,496)

1,897,733 1,897,733 (1,897,733) (3,623,449) (229,359) (5,750,542)

1,897,733 1,897,733 (1,897,733) (4,964,439) (229,359) (7,091,532)

Other OPEB Interest Expense County Transfers Net Deficit

(2,816,591) (64,693) 914,955

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,021,625 135,675 2,484,565 3,641,865

1,072,706 142,459 2,608,793 3,823,958

1,072,706 142,459 2,608,793 3,823,958

536,353 56,984 1,304,397 1,897,733

536,353 56,984 1,304,397 1,897,733

536,353 56,984 1,304,397 1,897,733

536,353 56,984 1,304,397 1,897,733

Appendix B - Page 8

Mental Health Expenditures - Status Quo Option

2010 Year 1 Mental Health 2011 Year 2 2012 Year 3 2013 Year 4 2014 Year 5 2015 Year 10 2020

Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense Other OPEB Interest Expense County Transfers Total Expense

17,983,328 6,708,341 1,758,780 368,144 3,731,142 30,549,735

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

(8,812,369) (76,771)

(9,385,173) (192,108) 41,791,580

(9,995,209) (172,444) 42,381,951

(10,644,898) (127,598) 42,986,793

(11,336,816) (109,463) 43,660,577

(12,073,709) (229,359) 44,517,367

(16,542,028) (229,359) 48,985,686

39,438,875

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,102,125 242,155 2,386,862 3,731,142

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

Appendix B - Page 9

Mental Health Expenditures - LGU Option

2010 Year 1 Mental Health 2011 Year 2 2012 Year 3 2013 Year 4 2014 Year 5 2015 Year 10 2020

Operating Expenses: Salaries and Wages Employee benefits Supplies and other Depreciation County Allocations Total Operating Expense Other OPEB Interest Expense County Transfers Total Expense

17,983,328 6,708,341 1,758,780 368,144 3,731,142 30,549,735

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

18,432,911 7,617,947 1,846,719 399,022 3,917,699 32,214,298

7,668,493 3,434,619 461,680 399,022 3,917,699 15,881,514

4,080,354 2,040,177 461,680 399,022 3,917,699 10,898,932

4,080,354 2,040,177 461,680 399,022 3,917,699 10,898,932

4,080,354 2,040,177 461,680 399,022 3,917,699 10,898,932

(8,812,369) (76,771)

(9,385,173) (192,108) 41,791,580

(9,995,209) (172,444) 42,381,951

(10,644,898) (127,598) 26,654,009

(11,336,816) (109,463) 22,345,211

(12,073,709) (229,359) 23,202,001

(16,542,028) (229,359) 27,670,320

39,438,875

County Allocations: Admin & Gen'l Insurance Dept of Gen'l Svcs

1,102,125 242,155 2,386,862 3,731,142

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699

1,157,231 254,263 2,506,205 3,917,699