OLATHE, Kan. — Next week the Johnson County Board of County Commissioners (BOCC) will consider terminating an agreement for the Johnson County Nursing Center.
In 2007, Johnson County entered into a 20-year agreement with Evergreen Living Innovations (ELI) to manage and operate the nursing home.
“We have a current agreement with Evergreen Living that provides county subsidy and use of a county building for the provision of their services,” Deputy County Manager Maury Thompson said.
ELI currently leases the Johnson County Health and Human Services Center at 11875 South Sunset Drive in Olathe. The facility was constructed in 1996, and based on its current condition, county staff recommends the facility be demolished.
Under the current agreement the county pays ELI $800,000 annually to support the facility. That agreement is set to expire in 2027, but next week the board will consider using $29 million from the Countywide Support Fund (CSF) to end the contract early.
If the BOCC votes to terminate the agreement, the county will pay ELI $5 million to cover the outstanding balance owed under the 2007 contract. The county would also provide an additional $24 million to support the construction of a new facility for ELI.
“The concept was that the county would subsidize the operation by the tune of $1 million over 20 years. This would allow the board to raise funds and be able to redevelop on their own,” BOCC Chair Ed Eliert said.
“Obviously a couple years later after that was passed a severe recession occurred. Due to no fault of the board’s effort, that funding has not been able to be raised in the private sector.”
Evergreen Living Innovations CEO Chris Osborn said the 112-bed facility is currently serving roughly 70 residents.
“Currently one of our neighborhoods is shut down due to staffing shortages. We are at 71 residents currently and 16 hospice patients, total,” Osborn said.
Plans are not yet finalized for the new facility, but Osborn said the new campus would be similar in size to allow for the care of up to 120 residents.
Roger Templin, an attorney representing ELI, said per the contract with the county, roughly two-thirds of ELI residents are Medicaid recipients.
“It has always operated at essentially a loss, because of our contract with the county which required us to do 65% as minimum of Medicaid [patients]. We have always historically tried to do more than that, which we can only do because of the county subsidy,” Templin said.
Templin said going forward the number of Medicaid patients accepted to the new facility will likely need to change. Osborn said at minimum the company would like at least 30% of the residents to be Medicaid recipients.
“It’s a shortfall of about $50 a day, getting close to $12,000 a year per individual on Medicaid to make that up. We’ve also looked at starting an endowment fund that would help offset that cost to allow us to increase the number of Medicaid individuals that we are able to care for,”Osborn said.
If the termination agreement is approved by the board, the county would no longer subsidize ELI services. The board is scheduled to review the termination agreement on Thursday, Sept. 29.