Twenty-six Colorado nursing houses managed by the identical firm have been sued over the past 12 months for a mixed $5 million after they allegedly didn’t pay distributors who offered short-term staffing.
The nursing houses — 10 in metro Denver and the remainder positioned throughout the state — had been all managed by the identical firm, Vivage-Beecan, once they fell behind on their payments.
Whereas many elder care services confronted elevated prices through the pandemic, it will be uncommon for a facility to not pay its distributors, mentioned David Grabowski, a professor of well being care coverage at Harvard College’s medical faculty.
Residents do finest when their houses’ possession and administration are secure, so potential monetary issues that would result in a sale or closure are regarding, he mentioned.
“That’s a warning signal,” Grabowski mentioned. “Possibly past a warning signal, a cry for assist.”
Glendale-based Vivage, which introduced a merger with California administration firm Beecan in 2023, owns 17 elder care communities in Colorado, together with seven that face lawsuits. Beecan gives providers to houses in Colorado, California and New Mexico.
The 2 corporations mentioned they’re at present separate, however couldn’t reply earlier than deadline in the event that they hadn’t accomplished the merger, or had cut up sooner or later.
An announcement from Beecan mentioned the houses’ house owners employed it to enhance care high quality whereas they had been coping with staffing shortages. Nursing services struggled through the pandemic, and misplaced a mixed $122 million in 2022, it mentioned.
“The pandemic had a devastating affect on nursing houses all through the nation because of the age vulnerability of sufferers, employees shortages and burnout, and monetary pressure ensuing from momentary staffing companies charging two to 3 occasions their pre-pandemic charges,” the assertion mentioned.
Judges in Boulder District Courtroom already ordered six of the houses being sued to pay a mixed $506,000 after their lawyer stop and so they didn’t rent a brand new one by the court docket’s deadline.
If the remaining lawsuits go towards them, the house owners of the person houses may very well be on the hook for wherever from about $1,700 to greater than $1.2 million, in accordance with court docket filings. The totals might develop due to curiosity on the unique payments and authorized charges, which the shedding occasion usually has to cowl for the winner.
Not one of the attorneys representing the businesses that filed 10 of the continued lawsuits or three of the finished ones responded to questions from JHB.
If a nursing residence closed, the affect might reverberate all through Colorado’s well being care system. People who find themselves recovering from a severe harm or surgical procedure generally have to bear bodily remedy in a nursing residence earlier than returning residence. If houses closed, sufferers might get caught spending extra time in hospitals, growing prices and leaving fewer beds obtainable for others who want care.
Matt Nielsen, a regional operations director overseeing eight houses that Beecan manages within the Denver space, spoke on behalf of Wellsprings Care Middle in Englewood, which faces about $253,000 in claims.
Some houses have improved below Beecan’s administration, and Wellsprings will proceed to supply high quality care, he mentioned.
“I’ve services which have elevated their total scores from three or 4 stars (in Medicare’s scores) to 5 stars,” Nielsen mentioned.
Nineteen houses nonetheless dealing with lawsuits now belong to Kansas-based Recuperate Care, although just one go well with listed the corporate as a defendant. Representatives for the corporate didn’t return cellphone messages, and its e mail system refused to just accept messages from addresses it didn’t listing as authorised.
Who owned the nursing houses now belonging to Recuperate Care on the time once they allegedly went into debt stays unclear. Some nursing residence directors referred to as Vivage-Beecan a former proprietor, whereas representatives for the corporate mentioned it solely provided administration providers.
Nielsen mentioned he didn’t know who owned the houses he works with. An organization government pointed to SavaSeniorCare, which shut down in 2023, however didn’t reply which of the houses belonged to Sava. Beecan’s assertion mentioned Sava offered its Colorado houses to new house owners between 2021 and 2023.
A lot of the lawsuits concerned staffing corporations, although an insurance coverage firm, a pharmacy and a enterprise providing remedy for individuals who can’t swallow additionally filed claims. In the course of the pandemic, nurses had extra choices, main some to take higher-paid momentary assignments or to change to different settings, most of which pay greater than nursing houses.
A state report discovered staffing companies made roughly 50% revenue margins once they provided licensed nursing assistants, licensed sensible nurses and registered nurses within the first half of 2023. Nursing houses used fewer momentary employees hours in 2023 than that they had the earlier 12 months, however nonetheless greater than that they had in 2017.
The ratio of residents to employees and the combination of sorts of well being care employees in a house are two of crucial elements in care high quality, so any debt that interferes with a facility’s potential to employees its shifts might create an issue, mentioned Andrew Olenski, an assistant professor of economics at Lehigh College in Pennsylvania.
“A staffing firm is usually not a vendor you need to stiff,” he mentioned.
Matt Greenback, administrator for Poudre Canyon Well being and Rehabilitation in Fort Collins, mentioned the lawsuits received’t have an effect on residents. The house, which offered in September, faces about $264,000 in claims from two lawsuits.
Greenback mentioned Vivage-Beecan directed nursing houses’ funds towards the incorrect priorities and fell behind on requirements like paying for staffing. He described Vivage-Beecan as the previous proprietor, however didn’t elaborate on the place it spent the cash.
“The previous possession regime was infamous for not paying their payments,” he mentioned.
An announcement from Beecan mentioned it by no means owned Poudre Canyon, or any of the opposite houses.
Nursing houses usually don’t have many discretionary bills, with most cash going towards staffing, mentioned Nina Kohn, a regulation professor at Syracuse College in New York. That makes it significantly necessary for them to take care of a repute for paying on time, as a result of they wouldn’t be capable to perform if distributors reduce them off, she mentioned.
“Even when there may be 100% new (possession) turnover, the repute might stay,” Kohn mentioned.
Nursing houses sued over unpaid payments
Allison Care Middle, Lakewood
Arbor View Care Middle, Arvada
Aviva at Fitzsimons, Aurora
Broadview Well being and Rehabilitation Middle, Greeley
Cambridge Care Middle, Lakewood
Colonial Well being and Rehabilitation Middle, Colorado Springs
Creekside Village Well being and Rehabilitation Middle, Fort Collins
Crestmoor Well being and Rehabilitation Middle, Denver
Denver North Care Middle, Denver
Desert Willow Well being and Rehabilitation Middle, Pueblo
Elk Ridge Well being and Rehabilitation Middle, Montrose
Falcon Heights Well being and Rehabilitation Middle, Colorado Springs
Fountain View Well being and Rehabilitation Middle, Colorado Springs
Concord Pointe Nursing Middle, Lakewood
Junction Creek Well being and Rehabilitation Middle, Durango
Kiowa Hills Well being and Rehabilitation Middle, Colorado Springs
Linden Place Well being and Rehabilitation Middle, Longmont
Orchard Valley Well being and Rehabilitation Middle, Palisade
Pelican Pointe Well being and Rehabilitation Middle, Windsor
Poudre Canyon Well being and Rehabilitation Middle, Fort Collins
South Platte Well being and Rehabilitation Middle, Brush
Sterling Well being and Rehabilitation Middle, Sterling
Thornton Care Middle, Thornton
Wellsprings Care Middle, Englewood
Westlake Lodge Well being and Rehabilitation Middle, Greeley
Wheat Ridge Care Middle, Wheat Ridge
Join our weekly publication to get well being information despatched straight to your inbox.