Mariner Post-Acute to close Greeley office

Deep Medicare cuts lead to corporate restructure for Mariner

GREELEY — Citing deep cuts in Medicare reimbursements that have slashed company revenues, Mariner Post-Acute Network Inc. will close 20 of its corporate offices around the country, including one in Greeley.

“We’re closing corporate offices and laying off 300 corporate employees,´ said Kim Spell, spokeswoman for the Atlanta-based company. “It’s painful, but we’re forced to layoff these hardworking corporate employees in an effort to not have to close any [nursing] homes or lay off any caregivers. Our goal is to make sure that direct patient care is not affected.”

In Greeley, six employees will be let go or relocated as the Mariner Post-Acute Network corporate office at 2020 Clubhouse Drive closes. Spell said that closures would begin June 1 and be complete by month’s end.

Mariner Post-Acute Network operates four nursing-home facilities in Greeley — 11 total in Fort Collins and the rest of Northern Colorado. The Greeley office oversaw operation of all the Northern Colorado facilities, though none of the facilities will be affected by the corporate-office closing, Spell said. The company will centralize corporate operations at its Atlanta headquarters and its Austin, Texas, site, she said, and regional representatives will work out of their homes.

In a prepared statement, Keith B. Pitts, chairman of the board and chief executive officer of Mariner Post-Acute Network, said, “Massive Medicare cuts by the federal government — billions and billions more than the $9.5 billion planned for in the 1997 Balanced Budget Act — have created turmoil in our industry…These were difficult decisions for our company, but the government’s cuts left us no other choice.”

For the quarter ended March 31, 1999, the company reported a net loss of $79 million. The company’s net loss for the six months ended March 31, 1999 was $118 million

Due to these losses, the company was in violation of several covenants under its senior credit facilities. Subsequent waivers from the credit facilities have resulted in a limitation on revolving credit availability, tightened financial covenants and an increase in pricing for borrowings.

The company has also had to cancel contracts to provide therapy services to its rehabilitation subsidiary, Prism Rehab Systems. Those cancellations effectively closed Prism facilities around the country and led to 7,000 layoffs nationwide.

Mariner also sold its outpatient rehabilitation clinics and hospital-rehabilitation-management contract business to Healthsouth Corp. and National Rehab Partners Inc. respectively.

Overall, efforts to restructure the company were undertaken to preserve the scope and quality of care offered at Mariner-owned facilities, Spell said.

Jean Belt, director of nursing at Spring Creek Health Care Center in Fort Collins, a 200-bed Mariner facility, said the company has reassured them that provision of care will not be disrupted.

“Mariner is making cuts but not at the facility or care level,” Belt said. “Medicare reimbursements have decreased significantly, and our rehab-therapy staff was cut by about a third, which means we have to use more on-call therapists, but the company is trying to maximize what it has and restructure what it can to deal with the cuts.”

Belt said administrative functions performed by the Greeley office will now be handled by regional representatives in Lakewood, and she doesn’t expect any noticeable change in administrative services.

“It’s a shift, but it’s not so so bad,” she said. “They’re doing what they said they would — preserving quality of care.”

Mariner Post-Acute Network, operates more than 400 skilled nursing, sub-acute and assisted living facilities with approximately 50,000 beds.

American Pharmaceutical Services, the company’s institutional pharmacy group, operates 41 institutional pharmacies. And the company’s specialty hospital group operates 11 long-term acute-care hospitals.

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