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Nursing Home Acquisitions Aren’t Always Good News

Last month, we posted on lawsuits brought forth by the Attorney General of Pennsylvania against nursing homes in the state. Facilities owned by Reliant Senior Care were named in the lawsuit and were sued for $2 million, the largest verdict of its kind in the state of Pennsylvania. Reliant was guilty of negligence, abuse and under staffing its facilities. This month, Priority Healthcare Group, a New York-based nursing home group, announced the purchase of 10 Pennsylvania nursing homes owned by Golden Living Nursing Homes. Golden Living is also being sued by the Pennsylvania Attorney General for violations that are strikingly similar to those committed by nursing homes owned by Reliant Senior Care.

Priority Healthcare has purchased the licenses for the nursing homes but not the actual buildings or land, which has led some skeptics to believe this was a move by Golden Living to meet promises it made to the attorney general as part of a to-be-announced deal. When questioned, Priority says that it was attracted to Golden Living’s 10 nursing homes because they are passionate about making over nursing homes in need of improvement. They also claim that they have a track record of improving such facilities, although data showing their past successes is not available.

Due Diligence is Always the Best Bet
The bottom line is that the sale of the nursing homes and the promise of better care might be nothing more than an attempt for a nursing home group facing the firing squad to show that they’re attempting to approve. By selling only licenses, Golden Living can avoid the hassle of managing the facilities, but still are able to ultimately hold the cards by maintaining ownership of the property itself. Nursing homes frequently change hands and not always for the right reasons. A May 2016 article in the Boston Globe highlighted the findings of a Harvard University study on the impact an acquisition has on nursing home quality. The study found that there was a direct link between the number of times a facility had changed hands and the number of state violations it had. The authors ultimately concluded that the changing of hands wasn’t the cause, but the fact that the facility itself was plagued by troubles and that changing ownership did little to improve it.

Those facing a similar situation should do their research to find out if a group acquiring a facility in which they or a loved one live has a proven track record of improving care. While nursing homes can be evaluated by visiting Medicare’s website, the problem is that the group or company that owns the home isn’t ranked or tracked, so it can be nearly impossible to determine if they have a positive history when it comes to operating care facilities. Regardless of the depth of information available, it is still recommended that those considering a nursing home do a side by side comparison of facilities that are in the running. Some information is always better than none.