Nursing Home Deal Ends: State Contracting With New Manager

LAS CRUCES, Jun 19, 2008 (Albuquerque Journal - McClatchy-Tribune Information Services via COMTEX) -- GEO | Quote | Chart | News | PowerRating -- Floridabased GEO Group Inc.'s contract to manage the troubled Fort Bayard Medical Center, a state-owned nursing home in Silver City, will not be renewed at the end of the month.

The state Department of Health hired GEO in November 2005 to manage the southwestern New Mexico longterm care facility, which serves 120 residents, and to manage construction of a replacement.

The company said in a news release Monday that the Fort Bayard management contract, which generated about $3.5 million in operating revenue annually, was being discontinued "by mutual agreement" with the state.

"The Fort Bayard Medical Center is one of a few state nursing homes in the country, a market segment which we will no longer pursue," said George C. Zoley, chairman, chief executive officer and founder of GEO.

Department of Health spokeswoman Deborah Busemeyer, referring to the contract decision, said, "We thought we'd benefit from going in a new direction."

The Centers for Medicare and Medicaid Services, an arm of the federal Department of Health and Human Services, has listed Fort Bayard as a "Special Focus Facility" since January 2005 because of problems with the quality of care delivered to residents.

The federal agency told state health officials this year that Fort Bayard would lose its federal certification to receive Medicaid and Medicare reimbursement because of ongoing problems with patient care and administration.

The state voluntarily relinquished its certification and reapplied March 1, but lacking federal Medicaid certification has cost the state about $2 million for April and May, Busemeyer said.

The state is completing a contract with Colorado-based Pinon Management to take over management of Fort Bayard, Busemeyer said.

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