Vermont OKs sale of 5 nursing homes

Genesis Healthcare, a Pennsylvania-based holding company with more than 500 nursing homes nationwide, has won approval from regulators for a $39-million deal to acquire the 102-bed Springfield Health and Rehabilitation Center and four other Vermont nursing homes.

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Vermont OKs Sale Of 5 Nursing Homes By Rick Jurgens Valley News Staff Writer Tuesday, August 02, 2016 SPRINGFIELD VT NURSING HOMES GREEN MOUNTAIN CARE BOARD GENESIS HEALTHCARE Springfield, Vt. — Genesis Healthcare, a Pennsylvania-based holding company with more than 500 nursing homes nationwide, has won approval from regulators for a $39-million deal to acquire five Vermont nursing homes. Culmination of the deal will make Genesis the largest nursing home operator, with about a 30 percent share of the inventory, in each of the Twin States. Genesis Upper Valley facilities include a 110-bed facility in Lebanon and the 68-bed Elm Wood facility in Claremont. The approval was issued the same day that Genesis, which posted $5.6 billion in revenue in 2015, announced it had reached an agreement with the U.S. Justice Department to pay $52.7 million to settle allegations that Genesis violated “federal and state healthcare fraud and abuse laws and regulations.” Genesis officials did not respond to telephone requests for comment on Monday. All five members of the Green Mountain Care Board signed a decision that was issued on Friday and cleared the way for Genesis to acquire nursing homes in Springfield, Bennington, Berlin, Burlington and St. Johnsbury. The homes in the deal, which were formerly owned by Revera Assisted Living, a Canadian company, now have 579 beds and were built about 40 years ago. Genesis already operates the homes under a management contract that took effect in December. The company, which plans to eliminate 52 beds in order to add to its stock of private rooms, said it has set aside about $800 per bed, or $400,000, for “routine capital needs.” Three of the newly acquired Vermont facilities have four-star, or above-average ratings, from the U.S. Centers for Medicare and Medicaid Services, but Burlington has only two stars, signifying a below-average facility, and Berlin has the lowest rating of one star, or much below-average. The board’s approval of an application for a certificate of need included some less-than-glowing observations about Genesis. It noted that “there is undeniably room for improvement at the (four) facilities Genesis currently owns in Vermont,” in St. Albans, Newport and a pair in Rutland. Only 39 percent of the residents who died in Genesis’ existing homes received hospice services, the board noted. That was far below the company target of 80 percent. The board dismissed as not credible Genesis’ argument that there was such a low utilization rate for the specialized end-of-life care because “hospice services are not available in Vermont.” The board’s ruling also pointed to the “turn-over rates at (Genesis’) Vermont facilities as high as 72 percent for (certified nursing assistants and licensed nursing assistants) in 2015.” But the board did not follow the suggestion of Jackie Majoros, the state’s long-term care ombudsman, that during the first two years after it acquires the five new homes it file “implementation reports” every six months on staffing levels, inspection results and performance on eight measures of residents’ health. Majoros could not be reached for comment on Monday. Genesis’ $53-million settlement of the investigations and lawsuits alleging fraud and inadequate staffing dating as far back to 2005, remains “subject to negotiation, completion and execution of appropriate implementing agreements,” according to a Genesis securities filing. The alleged abuses occurred in some Genesis California nursing homes, a hospice subsidiary in Nevada and Genesis-owned rehabilitation companies in Georgia and other states. Genesis initially sought approval of its Vermont deal in October. The Vermont properties were part of a larger transaction with Revera, which had decided to exit the U.S. market. The balance of that $240-million sale, which involved 24 facilities in nine states, closed in December. That culminated a year in which Genesis posted a net loss of $426.2 million. That was the company’s fourth consecutive year in the red, and pushed its accumulated losses in that span to just over $1 billion. The Green Mountain Care Board noted that Genesis had “approximately $80 million in liquid or easily liquidated assets.” By the end of March, the cash on hand had fallen to $52 million, according to the company’s annual report. Rick Jurgens can be reached at rjurgens@vnews.com or 603-727-3229.