RICHARDTON (AP) - Hospital officials in Richardton and Dickinson have been trying to find a way to ease financial problems and convert Richardton's hospital to a nursing home. Now they think they're on the right track.

The Richardton Memorial Hospital is planning to convert to a nursing home over the next six months. St. Joseph's Hospital in Dickinson then will be eligible for a federal "critical access" designation to increase its federal Medicare reimbursements and help it pare down millions of dollars in debt.

Under federal rules, a hospital applying for critical access designation must be at least 35 miles from another critical access hospital. The Richardton and Dickinson hospitals are about 25 miles apart, so Dickinson would not be eligible unless Richardton gave up that status.

A $940,000 federal grant and a $500,000 grant from Catholic Health Initiatives, the owner of the Dickinson hospital, will help pay for the changes. A group representing Gov. John Hoeven, the state's congressional delegation and community officials worked out the plan.

"In order for this organization to convert, it would require some significant dollars," Richardton Hospital Administrator Jim Opdahl said.

Grant money will be used to buy up to 20 skilled nursing beds, at a cost ranging from $18,000 to $21,000 per bed. Under state law, the total number of nursing home beds in the state must stay at around 6,500. If the slots are not being used in one facility, others can bid on them.

"Now they (Richardton hospital officials) have resources to do so," said Ryan Bernstein, Gov. John Hoeven's attorney.

"We need to get 20 beds in place before we make the conversion," Opdahl said. "There will be money available also for us to address a number of physical plant ADA (disability) and safety code issues that will need to be brought into compliance before we can become a skilled nursing facility."

The chief executive officer of St. Joseph's Hospital, Claudia Eisenmann, said the change will mean more financial stability for the Dickinson hospital.

Facilities within the hospital are expecting to change, from 49 beds to 25 beds.

"Twenty-five beds does not mean 25 patients," Eisenmann said. "We can still have patients in observation status and we can still have them in the emergency room. So there may be any number of occasions that there are more than 25 patients being served in the hospital, but there will just be 25 inpatient beds for the purposes of when those patients are actually admitted."

No changes to equipment, services or staffing are expected, Eisenmann said.

The critical access status is expected to bring in an estimated $1.3 million in revenue per year, Eisenmann said. The hospital has been trying to pare down a $13 million debt.

Opdahl said the conversion to a nursing home must be finished next spring.

"The biggest issue is once we convert to a skilled nursing facility, we probably would not have emergency services," Opdahl said. "That's the biggest loss, but we don't do OB, we don't do surgery; we have a very limited acute care capability, so I don't see that as having an impact."