Life Care to move ahead with $24.8 million East Ridge nursing home replacement

This is a rendering of new East Ridge Life Care facility.
This is a rendering of new East Ridge Life Care facility.

Within hours after a state agency gave the thumbs-up to Life Care Centers of America's plans to replace its 40-year-old nursing home in East Ridge, company president Beecher Hunter drove down from Cleveland to talk to residents there.

The $24.8 million project will require all of the residents to relocate for two and a half years while the 130-bed facility is torn down and replaced with an 80,200-square-foot, 108-bed facility at the same address, 1500 Fincher Ave., Hunter said.

"We are meeting one-on-one with each person to talk about the transition, and we are hopeful we can find positions at our other facilities for them," he said.

Hunter said plans for the work should start "right away" after members of the Tennessee Health Services and Development Agency approved the certificate of need Wednesday in an 8-3 vote. State approval of major health care purchases or expansions is designed to regulate health care costs.

State Rep. Marc Gravitt, R-East Ridge, a city councilman and vice mayor, testified in favor of the project, saying it would benefit not just East Ridge but Hamilton County.

"I'm excited," Gravitt said following the vote. "The economic revitalization of East Ridge continues."

The agency also approved an application from Erlanger Health Systems to replace and relocate a 17-year-old linear accelerator, which is used for cancer radiation, from the downtown campus to Erlanger East. That project is estimated to cost $10 million.

Life Care filed its application in October. The new, larger facility have will fewer beds, but they all will be in private rooms with full bathrooms -- a switch from the 120 semi-private and 10 private beds available now.

The 14.6-acre site also allows for future expansion, which could include assisted- and independent-living facilities, Hunter said.

"This location, especially its proximity to North Georgia and Chattanooga and the interstate, has such potential," he said. "We're very excited."

The East Ridge Life Care facility, built in 1975, was among the company's first sites. Life Care now operates four skilled nursing homes in Hamilton County, 26 in Tennessee and 220 in the U.S.

The new nursing home will include three day rooms, an activity room, ice cream and gift shop, library, beauty shop, outdoor courtyards, walking paths, gazebos and two dining rooms. A new traffic signal will be installed at the street intersection.

Charges will rise from $450 a day for a skilled Medicare room to $472, and from $240 to $250 a day for a private-pay room.

In its application, Life Care reported the East Ridge site's gross revenue in 2013 was $13.7 million, while its net operating income after capital expenditures was $7,988. By 2018, gross revenue is estimated at $13.8 million and net operating income at $181,297.

Life Care also had to provide an update on the massive federal whistle-blower lawsuits filed in 2008 and 2012, which allege the company provided unnecessary and harmful therapies to patients to maximize Medicare billings.

The company said that no trial date has been set for the lawsuit, and that it has "substantial defenses to the allegations."

Staff writer Andy Sher contributed to this story. Contact staff writer Kate Belz at kbelz@timesfreepress.com or 423-757-6673.

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