A nursing home owner and operator in New York City will be required to open two new facilities as part of a settlement announced late last week.
New York State attorney general Eric Schneiderman also slapped the Brooklyn-based Allure Group with $2 million in fines stemming from the company’s acquisition and subsequent sale of two SNFs in the city, which officials said were performed abruptly — and, in one case, violated regulations regarding the transfer and operation of non-profit facilities.
An affiliate of Allure purchased the CABS Nursing Home in Brooklyn in 2013, after its previous non-profit owners endured four years of losses, according to the government’s settlement documents. Kings County officials approved the transaction in 2015, and less than a year later, the site was closed — despite a certificate-of-need petition filed with New York State Department of Health indicating it would remain open for three years at the same staffing levels.
In 2014, an Allure affiliate bought Rivington House, a nursing home on the Lower East Side of Manhattan that specialized in care for residents with HIV and AIDS. The struggling operators had already filed paperwork to close, according to the attorney general’s office, but agreed to sell the property with the understanding that a non-profit health care facility would continue to operate on the site.
Instead, Allure went on to pay New York City $16.1 million to remove a deed restriction that required the property to house a clinic, and subsequently sold the facility to private investors who intended to convert the building into condos, the New York Daily News reported.
“As detailed in a report by the New York City Department of Investigation, city officials … were aware of the deed restriction removal months in advance, yet raised no objection or took any step to ensure that the property would continue to serve the community or a public purpose,” the AG’s office wrote in its report.
Under the terms of the deal, Allure must make “commercially reasonable efforts” to establish replacement health care facilities in Brooklyn and on the Lower East Side, providing 90-day updates until the facilities open. The company must also operate the Greater Harlem Nursing Home, a 200-bed facility of which it has served as a receiver, for nine years, and donate $1.25 million to non-profits that operate on the Lower East Side.
“The processes that led to the closure of Rivington House and CABS never should have happened – this settlement ensures they won’t happen again, while addressing critical healthcare gaps in the impacted communities,” Schneiderman, a Democrat, said in a statement. “We’re requiring Allure to open new healthcare facilities in Brooklyn and the Lower East Side, and make major improvements to its Harlem facility, while also providing $1.25 million to non-profits serving vulnerable New Yorkers.”
The remaining $750,000 in the settlement will go to pay state penalties and costs.
“We are pleased that, following a careful review, both the New York attorney general and the Department of Health have not only approved The Allure Group’s acquisition of the Harlem Center for Nursing and Rehabilitation, but are encouraging and supporting Allure’s future investments in health care facilities in the Lower East Side and in Brooklyn,” Andrew J. Levander, an attorney from the law firm Dechert who represented Allure, told SNN in a statement.
Written by Alex Spanko
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