States Focus on Maintaining Services Amid Skyline Receivership

Last week approximately 1,650 nursing home workers in Nebraska received paychecks after Cottonwood Healthcare, known as Skyline Healthcare, failed to make payroll in late March.

The funds went out on Friday, Ken Klaasmeyer of Klaasmeyer & Associates Inc. told the Omaha World-Herald.

Klaasmeyer & Associates was appointed to manage the facilities while a long-term plan is developed for the 21 nursing facilities that were owned by Cottonwood Healthcare.


Employees at the Nebraska facilities went three weeks without payment, the World-Herald reported on March 26.

Nebraska is not the only state that has faced issues with the Wood Ridge, N.J.-based Skyline, which also failed to make payroll at 15 facilities in Kansas. That state is seeking the power to take over the properties.

Kansas was able to make payroll for the employees on April 2, Angela de Rocha, director of communications for the Kansas Department for Aging and Disability Services (DADS), told Skilled Nursing News.


The state received permission from the Supreme Court of Kansas to consolidate its cases for receivership in 13 district courts into one case with the Johnson County District Court on April 6. It also has a temporary restraining order that says Skyline can no longer operate any of the facilities, de Rocha said.

Skyline has not challenged any of the steps Kansas has taken to place the facilities in receivership and did not send a legal representative to the Johnson County Court when the cases were consolidated, she said. The company told Kansas on March 26 that it would not be able to make payroll, whereupon the DADS went into action to facilitate a receivership action, she explained.

“We know that they started having problems paying their vendors last summer,” de Rocha noted, adding that Skyline owes the federal government $250,000 and the state of Kansas approximately $500,000 in bed taxes. At one point, the company bounced a $200,000 check on its state bed taxes, though it was eventually able to pay Kansas for that amount, she said.

A hearing is scheduled for April 13 to make the presumptive receivership for the Kansas nursing facilities permanent. In the meantime, the nursing home residents are still receiving care with essentially the same staff and no interruptions or changes, according to de Rocha.

“Our priorities are to continue the care that the residents of the nursing facilities are getting, so that they don’t experience any interruption, and also to pay the people that are providing that care,” de Rocha said.

A statement from Cottonwood Health Care spokesman Michael Kosowski issued April 5 said the facilities in Kansas, which were leased from an affiliate of Golden Living, were placed in the temporary receivership “due to external issues.”

“We maintain that since the receiver was appointed, we have done everything in our power to work with the state and temporary receiver to ensure the continued successful operation of the facilities,” Kosowski said in the statement.

The “external issues” were related to the leases and Medicare reimbursement, Kosowski told SNN in an email. He added that Cottonwood is currently unable to comment on “certain non-public issues.”

When asked for further information about the situation, Golden Living said in an emailed statement to SNN that it is unable to comment on providers that it does not own or operate.

Written by Maggie Flynn

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