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By Patrick Howington
The Courier-Journal
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Kensington Manor, a nursing home in Elizabethtown, Ky., stays full and has a waiting list.

Like other nursing homes in Kentucky, it has a set number of licensed beds, and normally can't add more under state rules meant to hold down health-care costs by avoiding excess services.

But under a recent relaxation of those rules, Kensington Manor soon may gain 10 beds from an unlikely source -- Madisonville, 112 miles away.

The rule change gave nursing homes in high-demand counties a chance to obtain bed capacity from counties that don't need it -- often by buying bed licenses from a competitor.

"It sounds like they're allowing the old law of supply and demand to work in long-term care," said Bernard Vonderheide, president of Kentuckians for Nursing Home Reform.

While the temporary change expired late last month, state health authorities may repeat the experiment if it brings a better distribution of nursing-home beds.

Nine nursing homes around Kentucky filed letters of intent to obtain bed licenses from homes in other counties. Each sought 10 beds, the maximum allowed. The state will rule on the requests in December.

If Kensington Manor and other homes get to add beds, it will be good news for those waiting for an opening.

"You may have a (preference) where you want a family member to go -- but if they're full up, you can't get in there," said Bonnie Jolly of Sonora, whose mother-in-law is on Kensington Manor's waiting list.

She said her mother-in-law, Blanche Jolly, 82, lives in an assisted-living community but might need to move to a nursing home soon for health reasons.

Kensington Manor is the family's first choice, based on Blanche Jolly's experience when she stayed there once before.

Kensington Manor's owner, Owensboro-based Wells Health Systems, plans to transfer the license for 10 beds from a home it owns in Madisonville.

Wells won't have to pay for that transfer, but will in other cases. The company wants to add beds in Edmonson, Lewisport and Bardwell by buying capacity from another operator for an undisclosed price.

The company's Madisonville home wasn't using 22 of its 86 licensed beds at the end of last year, state records show.

That's why the transfer -- and the regulation change that allowed it -- makes sense, said Jack Wells, president of Wells Health Systems.

"Why would you not transfer those beds from an underutilized county … (and) really do some good for families and residents and patients throughout Kentucky?" he said.

The transfer to Kensington Manor would help relieve a bed shortage in Hardin County, where more than 95 percent of nursing-home beds are occupied, while taking unused beds from Hopkins County.

Just under 85 percent of Hopkins County's nursing beds were in use at the end of last year, according to state figures. That left 108 beds unoccupied.

Population shifts and other trends have created similar disparities across the state.

Many counties have few or no available beds, while others can't use all the beds allowed under the state formula designed to determine need. Occupancy rates in counties range from 100 percent to less than 70 percent, according to state records.

Letting homes transfer bed capacity across county lines is a way to meet demand without raising the state's bed total.

Such transfers haven't been possible because of a long-standing state moratorium on adding certain health-care facilities.

The rule change lifted that moratorium temporarily.

Shawn Crouch, executive director of the state Office of Health Policy, said officials began considering the change after hearing from operators whose homes were full.

"They had no way to add any new beds … (yet) they knew there was excess capacity in other areas," he said.

Crouch said a drop in the state's overall nursing-home occupancy -- from 95 percent in 1995 to 89 percent today -- had created the pockets where beds were going unused.

The transfers will allow operators "hopefully to put the beds in places where they're needed," said Crouch, whose office is part of the Cabinet for Health and Family Services.

The cabinet worked with two nursing-home trade associations to draft the change.

One goal was to make sure a prosperous region didn't deplete a poor area by buying too many beds.

That's why transfers are limited to 10 beds.

Also, there are restrictions on which counties can gain or lose beds.

Capacity can be removed only from counties where the nursing-home occupancy rate is lower than 94.5 percent, while only counties with a higher rate than that can gain beds.

Planners didn't want the change to "create areas of need, particularly in some of the rural parts of the state," said Tim Veno, president of the Kentucky Association of Homes and Services for the Aging.

Some rural areas actually could gain beds.

Cedar Ridge Health Campus in Cynthiana, owned by Louisville-based Trilogy Health Services, would grow more than 20 percent if it gets to add 10 beds.

It has 46. That's too small to be efficient, and though it just opened a few months ago the home already has a waiting list, said Randy Bufford, Trilogy president and CEO.

Bufford said when the company built the home it included space for extra beds, "in anticipation that at some point in time we might receive this opportunity -- which of course we have."