Firm seeks OK for $15.6m rehab hospital at Pease

Northeast Rehabilitation Health Network is seeking regulatory approval to build a 33-bed rehabilitation hospital at Pease International Tradeport in Portsmouth.

The Salem-based medical provider is looking at several sites on which to build a 36,000-square-foot facility with a treatment gymnasium.

Company lobbyists revealed their growth plans last month at a Senate committee hearing at which they spoke against legislation to extend a 12-year ban on new bed capacity in this specialty field of medicine. Three company officials warned the proposed moratorium extension on new rehab hospital beds contained in House Bill 723 would block a $15.6 million construction project. The hospital would eventually employ 80 full-time doctors, therapists, nurses and a few skilled aides, they said. Physicians on the premises would direct teams of occupational therapists, physical therapists, speech therapists and other clinicians in aggressive treatment protocols.

Northeast owns a rehab hospital in Salem and another at Southern New Hampshire Medical Center in Nashua. It operates four outpatient facilities between those two cities, 16 similar clinics in northeastern Massachusetts and a home health company.

The Seacoast specialty hospital would serve 36 communities from Rochester and Farmington to Plaistow and South Hampton. It would receive most of its caseload through referrals from the surrounding acute care hospitals. Patients recovering from brain and spinal cord injuries, cancer, strokes, hip fractures, auto accidents, heart attacks, major burns and other trauma would train all day at Northeast to gain back as much independence as possible.

John Prochilo, chief executive for Northeast, said the Seacoast facility would fill a major gap in services.

“Nearby hospitals have expressed concerns about their inability to discharge patients to an appropriate rehab hospital level of care because it isn’t there,” Prochilo said. “They have to meet all their discharge guidelines and can’t do it prematurely.”

The New Hampshire Certificate of Need Board approves or denies major health-care projects based on the medical and economic need for them. As a rule of thumb, the regulatory agency likes to see 12 acute rehab beds for every 100,000 residents. By that formula, the Seacoast currently falls short by 33 beds.

Northeast has an application pending before the board, and a hearing could take place by end of the summer. The related paperwork was sealed from the public last month as being incomplete. Prochilo said his company has invested thousands of man-hours in the planning.

Competitors often oppose Certificate of Need requests. The New Hampshire Health Care Association, a trade group for nursing homes and assisted living centers, favors the moratorium and plans to fight the Portsmouth project during the regulatory process.

John Poirier, president of the association, said rehab centers are significantly more expensive than both nursing homes and skilled nursing facilities, which also provide medical and therapeutic services.

“What would the new hospital do to existing rehab programs?” Poirier asked. “Do we allow it to put one or two of them out of business?”

Acute hospitals receive their Medicare payments based on the average length of stay and cost for a given diagnosis and procedure. Those hospitals stand to lose money on patients who remain longer than the norm.

If people can leave sooner to an appropriate and aggressive level of care, the hospital can avoid costs. Medicare will fund a certain niche of suitable patients at Northeast after their federal health insurance stops paying for them at Wentworth-Douglass in Dover or Portsmouth Regional Hospital.

Lisa Shapiro, an economist advising Northeast, offered an amendment to HB 723 removing the moratorium on rehab beds, but leaving it in place for nursing homes.

“The four Seacoast hospitals support building our facility at a place like Pease with good access to all of them,” Shapiro said.

Susan Palmer Terry is a planning consultant for Northeast for the Pease venture. “This project will have minimal impact on other facilities,” she told senators. “But it’s dead if you keep the rehab moratorium.”

Northeast gave lawmakers a study by the Center for Medicare Advocacy showing rehab hospitals may cost more per day than a nursing home, but claiming the results are cheaper in the long run.