When Kansas placed 15 skilled nursing facilities operated by Wood Ridge, N.J.-based Skyline Healthcare into receivership in late March, it exposed some immediate problems for the new operator, Mission Health Communities.

The Tampa, Fla.-based Mission agreed to oversee operations and took control of the buildings on March 26, though it’s not clear how long it will be in charge, president and CEO Stuart Lindeman told Skilled Nursing News.

“My objective right now and when I stepped in… is that residents get taken care of and the staff get paid,” he said. “Those were the two things I was in charge of. Nothing else mattered to me. We had to pay the employees, or the residents wouldn’t get taken care of.”

Employee focus

Kansas had to take over the nursing homes after Skyline was unable to make payroll at the facilities, a pattern that has played out in multiple states around the country. The state made sure the employees were paid, Lindeman said — with particular help from Kansas Department for Aging and Disability Services (KDADS) Secretary Tim Keck, who is officially the receiver, and Mike Flanagan, an attorney serving as the receiver’s representative.

“The state of Kansas stepped in and funded the payrolls, they wired us the money to pay the staff, and that was a very nerve-wracking 24 hours,” Lindeman told SNN. “And they stepped right in. The state of Kansas did a fantastic job.”

When Mission took over operation of the buildings, the first focus was making sure residents received uninterrupted care, Lindeman said. But right after that came the needs of employees. Skyline’s employees had been paying health insurance premiums but were getting no insurance coverage, so Mission had to secure coverage retroactive to April 1.

The company ended up moving the employees to a professional employment organization (PEO). This move allowed Mission Health to become a co-employer; the PEO provides the workers’ compensation and the benefits, Lindeman explained.

Mission has also focused on transparency with staff and leadership.

“It’s working out pretty darn well,” Lindeman said. “The people in the buildings do a good job, for the most part. They want to take care of the residents.”

Repairing relationships

Angela de Rocha, director of communications for the KDADS, told SNN in April that Skyline started having issues paying its vendors last summer.

Fixing the vendor issues was complicated by the fact that Skyline appeared to be using several related companies to run its businesses in the SNFs, Lindeman noted.

“There were just weird things that just didn’t make sense to me,” he said. “What we ended up doing was saying, ‘Look, if this is a related company or related ancillary business, we need to separate ourselves from that.’ So I spent a lot of time making sure that we brought in providers that we knew.”

However this was done on a case-by-case basis, to avoid putting any unnecessary stress on the buildings and staff, he added. While Mission Health brought in a new therapy provider, for instance, it didn’t change the pharmacy partner.

“I wanted to make sure that all our vendors we were working with were good vendors and good people, and I didn’t want to have any related parties,” Lindeman emphasized.

Mission had to explain to vendors that as a receiver it would pay the bills going forward, though not the old bills Skyline owed. Utilities were the exception; to avoid the gas or power being switched off, Mission had to pay those old bills, Lindeman explained.

Overall the responses were good, but Skyline’s damage was still palpable.

“It’s still difficult for some of the local people who may have been left holding the bag not being able to get paid, and I referred all of them to Skyline’s attorneys,” Lindeman said. “The first couple weeks… 85% of my time was spent working with vendors, lining up new vendors, explaining what was going on.”

Skyline has since signaled its intention to leave the skilled nursing industry entirely as the once-mighty chain continues to implode across the country.

What’s next

In addition to caring for residents and “doing right by the employees,” the next step is implementing systems and processes, Lindeman said.

“We’re building budgets, processes around [accounts payable and receivable] — the things you would normally do in a business,” he explained. “We’re putting those systems in place so that they are sustainable businesses, so that their business is something that someone is going to want to pick up and manage and operate as we go forward.”

Written by Maggie Flynn