Last month Transitional Care Management received State of Illinois approval to build two new short-term rehabilitation skilled nursing facilities in Lisle and Aurora, Illinois.  Shortly thereafter three local area nursing homes filed lawsuits against TCM to try and stop the construction of these buildings.  Based on the letters filed in opposition to the State of Illinois approval, existing providers have an issue with TCM’s claims that existing SNFs in this area do not provide short term high level of acute care.  I do not doubt that the plaintiffs in the lawsuit provide short term rehab services.  Many SNF providers give not only long term care to their residents but offer a suite of services including short term rehab, which is a lucrative segment of these facilities.  TCM, however, is providing short term services at a stand-alone facility as opposed to the mixed use traditional nursing home environment.  TCM believes that baby boomer short term rehab residents would prefer their stand-alone facility to the traditional mixed resident nursing home with short term and long term residents.  I don’t doubt that this is correct.  The local homes argue that TCM will be in a lucrative position to cherry pick the highest paid recipients of care from the market, leaving existing operators with less revenues. And I also suspect this will be true.  The problem for the existing local area facilities is that the State of Illinois has determined a need for beds in each of the areas and the CON rules do not differentiate between short term and long term skilled nursing beds.  Until that happens, long term care facilities will have to compete with short term rehab facilities for available beds and, eventually, revenues.