New York Estate Planning & Elder Law Blog
State regulators recently took control over dozens of nursing homes owned and operated by a New Jersey-based company that is responsible for over 100 facilities in eight states across the country, including three in New Jersey. In addition to operating homes in the Garden State, Skyline Health Care, LLC, owned by Joseph Schwartz, is the parent company for nursing homes and other facilities in Arkansas, South Dakota, Tennessee, Pennsylvania, Massachusetts, Nebraska, Kansas, and Florida.
According to reports, the company has failed to make its payroll in both Nebraska and Kansas, prompting state health department officials to take receivership of a combined 36 nursing homes, adult day cares, and assisted living facilities serving thousands of patients in those states. New Jersey Health Department officials acknowledged they are aware of the issues with Skyline Health Care facilities in Nebraska but has not received any reports of problems in New Jersey.
Nebraska health authorities placed 21-nursing homes and 10-assisted living facilities owned by Skyline in receivership in late March after determining that Skyline became unable to pay staff and ensure the future care of residents. Around the same time, Kansas state courts authorized a temporary receivership and are seeking a permanent one for 15-skilled nursing facilities with 845 patients, making it the largest takeover ever by that state’s Department for Aging and Disability Services.
Skyline Health Care grew quickly from a small operation that owned facilities in New Jersey and Pennsylvania to what some experts described as a major player in the nationwide nursing home industry. In just two-years, Skyline Health Care expanded its operations by taking over facilities owned by larger chains facing financial difficulties but has already found itself in similar trouble, unable to pay vendors, employees, and now defaulting on loans used to purchase those facilities.
Industry experts believe that issues like the ones plaguing Skyline Health Care occur when companies try to operate too many facilities across too many states. Additionally, the combinations of low government reimbursement for Medicaid patients, who make up the majority of nursing home residents, high debt-service payments, escalating lease agreements can compound already difficult situations. Skyline Health Care also faces a pair of federal lawsuits in Arkansas over allegations the company and its agents are responsible for the deaths of two residents at facilities owned and operated by the business.