State Agency Takes Unprecedented Action Against SNFs
The California Department of Aging has taken the highly unusual step of asking the California Department of Public Health (CDPH) to place three Humboldt County nursing homes into receivership to ensure they remain open.
The agency made the request in a complaint it filed on Sept. 1, citing disastrous consequences should Seaview Rehabilitation & Wellness Center, Eureka Rehabilitation & Wellness Center and Pacific Rehabilitation & Wellness Center cease operations.
The three facilities contain 258 beds combined and represent about 60% of the skilled nursing facility beds in Humboldt County. Its owner, Rockport Health Care Holdings, LLC, has been in negotiations with CDPH to wind down operations, records show. So far, CDPH has rejected Rockport's requests to shut the facilities down and relocate the patients. Its current proposal, submitted to the CDPH on Sept. 13, would send some 190 patients to 24 SNFs outside of Humboldt County, including five facilities in Oregon.
Rockport and an affiliated company, Brius Healthcare, operate two other SNFs in the county, which would remain open. Rockport has claimed that rising labor expenses have put the three SNFs deeply into the red. The company said it plans to stop accepting new patients at the SNFs as of Sept. 24.
“The closure of over half of the available nursing home beds in Humboldt County would force many local residents to leave the county to find care and cause serious disruptions in the local health system,” said the complaint, which was filed by Joseph Rodrigues, the Department of Aging's long-term care ombudsman. Rodrigues said it's the first such request he has filed in his 14 years in the post. He said he was unaware of any such requests made prior to his tenure.
“I've felt compelled to speak up for the residents of these facilities and their families. These closures could have a devastating impact on them,” Rodrigues said, adding that at least 150 current patients at the SNFs would have to travel at least 100 miles away for care. “There are not a lot of resources in that part of the state. Other facilities have closed, but residents in those facilities have had other options. That is not the case here.”
The region's state Senator, Mike McGuire, D-Healdsburg, has also urged the CDPH to reject the closures and take other actions. “While the appointment of an emergency manager or a petition to the superior court for receivership of three facilities at once is unprecedented; the voluntary closure of three facilities is also unprecedented here in California,” he wrote the agency on Monday.
CDPH officials have not responded to a request seeking comment.
That the facilities are on the brink of closure has also raised concerns among the four acute care hospitals Humboldt County, which would likely have few places to discharge a frail patient who no longer needs to be hospitalized but cannot return home.
“Closing a nursing home could make it difficult to discharge patients from the hospital that need ongoing care,” said a statement issued by St. Joseph Health, which operates two hospitals in the county. “This will reduce the number of hospital beds available for patients needing to be admitted to the hospital which can lead to long emergency department waits or even the need to transfer a patient out of the area. We hope that the nursing homes can find ways to remain open.”
The CDPH could make a determination regarding receivership as early as the end of this week, Rodrigues said.
Should the CDPH agree to a receivership request, it would supplement any funding for ongoing operations at the SNF through a fund that contains fines levied against other facilities. It could operate the facilities for a significant period of time under the supervision of a county superior court judge while a new operator for the facilities is sought.
Troubled Ownership
Rockport Health Care Holdings resides within a college of limited liability corporations controlled by perhaps California's single biggest individual owner of SNFs, Los Angeles entrepreneur Shlomo Rechnitz. Reports say the 45-year-old Rechnitz owns as many as 81 SNFs statewide, representing about 7% of all such beds in California. Many are affiliated with Brius, which acts as a corporate umbrella, but records show the facilities are often contained within another corporate entity. Most of the properties have been acquired only in the past decade, often in bankruptcy proceedings. Rechnitz also operates a medical equipment supplier called TwinMed, yet another LLC.
A spokesperson for Rockport acknowledged receipt of a list of written questions submitted by Payers & Providers but did not respond further.
Rechnitz has received attention in recent years for his philanthropic impulses as much as the facilities he owns. He has drawn headlines for giving away thousands of lottery tickets to his employees. During a trip to Ireland he gave $20,000 to some 400 U.S. soldiers so they could buy a meal. In other instances, he has handed out significant sums of money to individuals and organizations whose plight he learns of in the news.
Meanwhile, it seems clear Rechnitz's largesse may not extend to his SNFs, which has led to the troubles in Humboldt County and perhaps elsewhere in California.
The National Union of Healthcare Workers labor union, which represents some 500 employees at Humboldt County hospitals, filed a letter last week with the CDPH in support of a receivership. It contends that many employees of the facilities are significantly underpaid compared to prevailing wages, and that turnover at the Humboldt County SNFs averaged 78%. It noted that registered nurses were paid anywhere from $26.82 per hour to $31.91 last year at the SNFs. Their average compensation statewide in 2013 was nearly $37 an hour, according to federal data. Nurse assistants – which comprise the bulk of the clinical staff at the SNFs – were paid an average of less than $13 an hour.
Records filed with the state have indicated that the three SNFs have been fairly profitable for years, netting more than $1 million combined as recently as 2014, but they reported combined losses of $1.7 million in the last reporting period, which covers most of 2015.
Rodrigues said the SNFs have struggled with filling vacant positions, and have resorted to hiring expensive temporary “traveler” staff. “Supposedly they are renting motel rooms and apartments for them to stay,” he said.
High employee dissatisfaction and turnover often leads to difficulties managing healthcare facilities, industry observers say, and patient care can wind up becoming lax.
California Attorney General Kamala Harris lodged an involuntary manslaughter charge against a Rechnitz-owned facility last year, Verdugo Valley Skilled Nursing and Wellness Centre in Montrose, and charged two of its employees with dependent adult abuse. The AG claimed that the lack of care given to a victim of severe burns led to his death. That facility was fined $100,000 earlier this year by the CDPH for the patient's death, the maximum under state law.
Another Rechnitz-owned facility, Alta Vista Healthcare & Wellness Centre in Riverside, was searched by FBI agents last October seeking signs of criminal activity. No charges have been filed so far in that investigation.
Records also show that a number of Rechnitz-owned facilities have been cited by both state and federal regulators for lapses in care that have jeopardized patients, or have been the subject of numerous patient complaints. South Pasadena Convalescent Hospital was decertified by the Centers for Medicare & Medicaid Services last year after a patient with a history of mental illness signed herself out, bought a gallon of gasoline in a plastic jug, then doused her body and set herself on fire, leading to her death. Gridley Healthcare & Wellness Centre in Butte County and Wish-I-Ah Healthcare & Wellness Centre in Fresno County were also decertified last year by CMS. All three facilities have since closed.
The Centinela Skilled Nursing and Wellness Centre in Los Angeles was the subject of 31 complaints since last year, records show. Although only eight were substantiated as the result of further investigation, they included a failure to obtain informed consent, lack of proper medical equipment, lack of air conditioning, failure to acknowledge patient calls and quality of care issues.
The quality of care issues surrounding Rechnitz's facilities have begun to impede his ability to acquire more SNFs in California. In July, the CDPH denied him licenses to operate five SNFs he was attempting to acquire from Los Angeles-based Windsor Cares. In a 21-page letter, CDPH cited 265 different violations at facilities he owned that occurred between June 2013 and June of this year. They included 39 citations that involved immediate jeopardy of the life of a patient, including 16 involving a pattern of behavior and 12 where the lapses were widespread.
“We are all concerned about quality of care at any nursing facility, and so when we see in surveys deficiency after deficiency, it is worrisome,” Rodrigues said.
