Nursing homes get two prospective buyers, but closure hearing still going forward

Two prospective buyers expressed interested in one or more of the four nursing homes in state receivership Friday, but a Superior Court judge declined to reschedule an upcoming hearing on a motion to close the homes.

Court-appointed receiver Phyllis A. Belmonte recommended closing the homes after determining that they cannot generate enough income to cover their operating expenses. The homes–University Skilled Nursing and Rehabilitation in New Haven, Bishops Corner Skilled Nursing and Rehabilitation in West Hartford, Soundview Skilled Nursing and Rehabilitation in West Haven and Rocky Hill Skilled Nursing and Rehabilitation–have 472 beds and employ about 400 people. They predominantly care for people covered by Medicaid.

Friday’s hearing was intended to give potential buyers a chance to come forward before a hearing on Belmonte’s motion to close the homes, scheduled for Tuesday. Attorneys for the unions representing workers at the facilities and the property owner asked Judge Jerry Wagner to delay the closure hearing for three weeks so the prospective buyers could assess the situation and potentially move forward.

Kevin A. Creane, an attorney for the New England Health Care Employees Union, District 1199, argued that holding a hearing on closing the homes would lead the staff, residents and families to assume they were closing, causing residents to leave.

“It becomes a fait accompli,” he said.

But Assistant Attorney General Henry A. Salton argued that delaying the closure hearing comes at the expense of state taxpayers. While the homes are in receivership, the state Department of Social Services is covering losses of about $1.7 million a month, he said. A federal statute that takes effect Wednesday would also extend the process for closing homes, requiring additional documentation.

Wagner said he would not reschedule the closure hearing, but said it could be continued on Tuesday if it’s warranted.

Debra Howe, president and CEO of Florida-based Airamid Health Management, one of the prospective buyers, asked for about three weeks to do a full assessment of the homes. She said the company feels strongly that the University and Rocky Hill homes would be possible to turn around.

The company would need more time before committing to Soundview or Bishops Corner, Howe said.

The four homes were most recently managed by Genesis Eldercare Network Services, and Howe said her company has taken over more than 20 facilities that had been run by Genesis.

Howe faced questions about how her company could operate the homes that are now running at a significant loss, with challenges including competition from other homes with empty beds in the area, a state effort to allow more people to receive long-term care at home instead of in nursing homes, and the prospect of no increase in Medicaid rates that pay for most of the homes’ residents. The four homes had net losses of nearly $6.5 million in 2009, according to Belmonte’s motion.

“By what magic do you think your organization can restore these homes to viability?” Wagner asked.

“I don’t have a magic wand, sir,” Howe said. But she said her company could get goods and services at better rates from vendors and has a lean management structure, unlike Genesis, which she called a “very large corporate machine.” She also cited her company’s experience running homes under similar financial constraints in Florida, Pennsylvania and Massachusetts.

The second prospective buyer, Calvin A. Moffie of Guilford, said he is only interested in Bishops Corner, which his family operated for 20 years until the mid-1990s, when it was known as West Hartford Manor. Moffie’s father founded the firm Connecticut Health Facilities.

Bishops Corner has 120 licensed beds and 102 residents, mostly covered by Medicaid. Moffie said he wants to reduce the home to 80 licensed beds and run it with a focus on rehabilitation and health and wellness services, with only half the patients covered by Medicaid.

Moffie said he has recently rehabilitated three nursing homes in Guilford, Southport and Greenwich, one which was acquired from receivership and one from bankruptcy. Moffie said he has not inspected Bishops Corner but that he anticipated investing $6 million in renovations or new construction. He said he would not agree to take on operating losses while the facility is being renovated, but said he would expect to repay the state and the landowner once the changes are complete.

Long Term Care Ombudsman Nancy Shaffer asked how Moffie would identify the residents who would need to move out of the home to meet his goals of reducing the size and proportion of residents on Medicaid and said she had concerns about the idea of moving so many residents out of their home. Moffie said he hoped the moves would be voluntary and that he would work with the ombudsman and state Department of Public Health in the process.