Skyline to Exit Skilled Nursing Space as Another State Takes Over

The Pennsylvania Department of Health appointed temporary leaders at nine nursing facilities that were operated by Skyline Healthcare after the department determined that Skyline no longer had the money to run the facilities.

“We have installed temporary management at all nine facilities to ensure residents will continue to receive safe care,” Secretary of Health Dr. Rachel Levine said in the press release announcing the move. “We are taking this action to ensure residents have continuity of care and their needs are met.”

The temporary management will be in place until further notice, according to the release.

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The step comes after South Dakota’s Hughes County Circuit Court appointed Black Hills Receiver LLC to take over 18 skilled nursing facilities and one assisted living facility in the state. They were operated by Skyline Healthcare, which was unable to provide care for the residents, according to court documents.

It’s a situation that mirrors the ones in Nebraska and Kansas, where Skyline facilities were placed in receivership in late March after the company could not pay its employees.

The union SEIU Healthcare of Pennsylvania, which represents nursing assistants at four of the facilities in that state, had run into issues with Skyline not paying into the workers’ training and education fund.

In Kansas, meanwhile, the company at one point bounced a $200,000 check on its bed taxes and had problems paying vendors as early as the summer of 2017. A spokesman for Cottonwood Health Care, Skyline’s Kansas affiliate, said at the time that the issues in that state were due to external issues related to leases and Medicare reimbursement.

The report from South Dakota indicated that Skyline would be dissolving as a company. At the time, Skyline said in a statement to SNN that the company was exiting the skilled nursing and managed care space.

When pressed for specifics about the company’s exit strategy, Skyline spokesperson Juda Engelmayer told Skilled Nursing News, ‘When we are ready to talk about those plans, we will.”

Skyline Healthcare seemingly sprang out of nowhere to purchase more than 100 skilled nursing facilities across the country beginning in 2015, according to an April investigative report by the Philadelphia Inquirer — which also discovered that its headquarters consist of a small office above a pizzeria. Its abrupt implosion has caused concerns in states across the East and Midwest, and has brought increased scrutiny to the nondescript LLCs and holding companies that purchase and operate SNFs in the United States.

Transfers in New Jersey

Joseph Schwartz, who is listed as the manager of Skyline in a 2016 Securities and Exchange Commission (SEC) filing, owns three nursing homes in the company’s home state of New Jersey: Hudson View Care & Rehab Center in North Bergen, Brookhaven Health Care Center in East Orange, and the Voorhees Care & Rehabilitation Center in Voorhees Township.

The New Jersey Department of Health told SNN that while there is no indication of any funding issues at the facilities, there is a buyer for those three properties: Chaim Scheinbaum.

Donna Leusner, director of communications at the New Jersey Department of Health, confirmed that Scheinbaum is one of the owners of the Andover Subacute and Rehabilitation I and II facilities in Andover, N.J., which were purchased by Skyline Healthcare in late 2016.

The other owner at Andover, according to Nursing Home Compare and the New Jersey Department of Health’s website, is Louis Schwartz.

An article in the Kansas City Star from April 15 listed a Louis Schwartz as a member of the family that owns Skyline. In addition, a 2017 document from the U.S. Bankruptcy Court for the Middle District of Tennessee — related to the sale of assets to Skyline Healthcare — lists a Louis Schwartz as the vice president of mergers and acquisitions at Skyline Healthcare. An operator who answered the phone at Skyline told SNN that a Louis Schwartz is vice president of acquisitions.

Scheinbaum did not respond to an e-mail and phone call seeking comment.

The New Jersey Department of Health received the three applications from Scheinbaum on April 19. Though the department expects the deal to “move quickly,” Leusner noted the specific timeline will depend on the transaction’s complexity and any follow-up questions the department has.

Written by Maggie Flynn

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