Lancaster Care & Rehabilitation Center

Lancaster Care & Rehabilitation Center, which used to be called Golden LivingCenter Lancaster. 

Temporary management has been installed at Lancaster Care & Rehabilitation Center and eight other nursing homes in Pennsylvania after state agencies confirmed Skyline Healthcare “could no longer fiscally operate the facilities,” the Wolf administration said Wednesday.

Skyline started operating the home early last year, but the Lancaster facility is still owned by its former operator, Texas-based Golden Living.

In a news release, Pennsylvania Secretary of Health Dr. Rachel Levine said the departments of Aging, Human Services and Health stepped in “to ensure residents will continue to receive safe care.”

The temporary management will remain in effect until further notice, according to the release. Officials did not respond Wednesday to requests for further details.

Juda Engelmayer, who owns a public relations firm representing New Jersey-based Skyline, had previously said the finances for the 124-bed nursing home at 425 N. Duke St. were fine and that overall, “Pennsylvania is running very strong.”

But SEIU Healthcare Pennsylvania, the union representing workers at the local home, said issues including pay and insurance problems they witnessed since Skyline took over operations indicated otherwise.

Skyline paid half of $49,000 it owed SEIU but as of Wednesday still had not come through with the remaining half it had promised to pay by April 20, according to the union.

The nine homes affected include two that border Lancaster County: Exeter Greens Care & Rehabilitation Center in Berks County and Phoenixville Care & Rehabilitation Center in Chester County. The others are farther away.

Problems elsewhere

LNP reported last week that officials in two midwestern states stepped in to impose new management on several dozen facilities Skyline had been operating after it couldn’t meet payroll obligations there in late March.

South Dakota took similar action on 19 facilities this week.

“Skyline is dissolving and all of its facilities across the U.S. are being sold or placed in receivership,” the Watertown Public Opinion in South Dakota reported, attributing the information to Debbie Menzenberg, a divisional vice president in charge of Skyline facilities in South Dakota.

The publication also said that an email from Menzenberg included in court paperwork filed Monday said the South Dakota facilities had enough food and medical supplies for residents “until Wednesday, May 2”; that two facilities were in danger of having their water shut off because of unpaid bills; and that employees received letters saying their health insurance would end Monday and it was doubtful they would be paid Friday.

Engelmayer did not answer a question Wednesday on whether the company is being dissolved. But he wrote in an email that Skyline “has been working tirelessly for several months to transition from the nursing home and managed care industry.”

Asked why he didn't mention that previously, he wrote, “There have been many issues over the past several weeks involving sensitive negotiations. We were not at liberty to disclose details.”

He blamed “a few obstacles” on “an individual property owner with locations in South Dakota, Kansas, Pennsylvania and Nebraska,” and wrote that “an unfortunately unsustainable scenario” was not caused by Skyline.

Not isolated

Skyline is the second for-profit nursing home operator in Lancaster County to hit the news because of financial difficulties in the past week.

The other is HCR ManorCare, which has 245 beds in Lancaster and Elizabethtown facilities and has declared bankruptcy. LNP reported Saturday that Ohio-based nonprofit health system ProMedica has announced plans to buy the 450-some ManorCare facilities nationwide with a real estate investment trust, then operate them.

Russ McDaid is president of the Pennsylvania Health Care Association, which represents more than 500 providers among the approximately 700 nursing homes in the state.

“We are beginning to see that safety net erode with more than 100 nursing facilities in Pennsylvania having declared bankruptcy, put into receivership or having undergone a reorganization,” he wrote in an email.

He said a key reason is growing shortfall in rates for Medicaid, which roughly two-thirds of all skilled nursing facility residents rely on to pay for their care.

The shortfall is particularly damaging to for-profit homes, he said, which average 76 percent Medicaid patients. By comparison, he wrote, nonprofit homes average 59 percent Medicaid patients and have more residents paying privately “at rates that help offset their losses on Medicaid.”

Ron Barth, president and CEO of nonprofit senior services association LeadingAge PA, said in an email that the "train wreck" it has long been warning of is now here. 

Its members lose between $100 and $150 a day or between $3,000 and $4,500 per month for each Medicaid resident, he wrote, but "insist on maintaining an acceptable level of services and must generate enough revenue to provide that quality."

"That is why these facilities must limit the number of Medicaid residents," Barth wrote. 

SEIU did not answer specific questions Wednesday about impact on residents or workers at the Lancaster home, but did issue a statement from its president, Matthew Yarnell.

“Instability created by a constant churn of nursing home operators is bad for residents and bad for workers,” he wrote, saying regulators need to hold operators accountable.

“Additionally,” he wrote, “we need more transparency so caregivers and other stakeholders can weigh in on these transactions before they are approved.”

Golden Living issued a statement Wednesday saying it has no ownership interest in the Skyline companies and supports “appropriate actions that are in the best interest of the skilled nursing facility patients.”

This story was updated at 4 p.m. May 2, 2018, to include additional information.