Manor finds new contractor

It’s back to the drawing board for the Prince William Health System to find a new solution to the future of Annaburg Manor nursing facility in Manassas.

Last spring, Health System officials began negotiations with two separate companies, Kendal Corporation and Medical Facilities of America Inc. to construct two nursing homes under partnership arrangements to replace the aging Annaburg Manor structure. They were confident everything was on target.

However, in July, Kendal Corporation put the project on hold. In November, after the Virginia General Assembly failed to pass Medicare Cliff Relief legislation, Medical Facilities pulled out due to risky market conditions, saying it was not prepared to commit capital and resources to the project due to significant drop in Medicare and Medicaid reimbursement.

Michael Schwartz, president and chief executive officer of the Health System, announced Thursday that another health care company has been found to build two new 120-bed facilities to replace Annaburg.

“We have selected Virginia-based Smith/Packett [Med Com Inc.] and Commonwealth Care to build two replacement facilities on two separate sites in Manassas or surrounding area. We have a real estate firm presently seeking two site locations,” said Schwartz.

Schwartz said of the six or seven groups interviewed last year to build the two new structures, Smith/Packett came in a strong second.

“In their latest proposal, they made several adjustments, which made it more compatible with what we wanted,” Schwartz said of Smith/Packett, which owns 30 other similar facilities on the East Coast.

“Smith/Packett and Common-wealth Care have 20 years of experience working together in the building and management of long-term care facilities,” said Schwartz.

The two new homes, which will replace the 245-bed Annaburg Manor, are expected to cost about $17 million and be ready for occupancy in about 21/2 to three years.

Smith/Packett would build and own the two facilities. They would then hire a long-term management company to handle the day-to-day operations of the facilities.

The Health System would have a small equity share in the new facilities and final control over the quality-of-care standards. Current Annaburg Manor employees would staff the new facilities and the Health System would have the right to acquire 100 percent ownership of the facilities if desired at some future point. He said with other needed improvements being made at Prince William Hospital, the Health System did not have sufficient funding to build the two facilities themselves.

“Our options are limited due to the very difficult circumstances that are complicating the long-term care industry in Virginia. Factors, such as pending decreases in Medicare and Medicaid reimbursements, rising insurance and litigation costs and difficulty in recruiting and retaining nurses have plagued the long-term care industry in the state and nation,” Schwartz said.

“We believe getting Smith/Packett to build the two facilities is the best solution for our community because it improves the quality of care while reducing the healthy system’s financial risk,” he said. “Both companies are well-respected by state agencies that oversee long-term care in the state.”

Schwartz said after the two new Annaburg facilities are built, the present wings at the facilities would be torn down and new independent living units would be erected. Some nursing home beds would be maintained at the site. The manor house will be preserved and its future is to be determined.

With Kendal and Medical Facilities pulling out, the Health System lost at least six months in its efforts to replace the present Annaburg.

“This has been a very long and thorough process. I believe we have come up with a solution that not only improves the quality of long-term care for the community, but also reduces the risks facing the hospital. The thing I hear most often from patients at Annaburg and their families is, move forward quickly and get the new facilities built.”