Questions Remain About Pennsylvania’s Vetting of Skyline Healthcare

Questions are swirling about Pennsylvania’s approval process for nursing home owners after Wood Ridge, N.J.-based Skyline Healthcare collapsed less than a year after the state Department of Health signed off on the company.

That’s according to a deep dive from The Reading Eagle, published on Sunday. Four years before Joseph Schwartz, the owner of the troubled nursing home chain, took over seven Pennsylvania nursing homes, he was sued in the state of Florida due to allegations of diverting premiums that should have gone to employee health care claims, the publication reported.

The Keystone State’s review of Schwartz’s ability to take over troubled nursing homes appears to have relied heavily on self-reported information, documents obtained by the Eagle under Pennsylvania’s Right-To-Know Act suggest.

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Skyline fell apart over the course of several months in 2018, starting in the state of Nebraska and continuing its collapse in Kansas, South Dakota, and finally Pennsylvania. The company was unable to make payroll in Nebraska and Kansas, ran out of funds to care for residents in South Dakota, and had to turn over its facilities in Arkansas to new management in April of last year.

The fact that Skyline was able to take over more than 100 nursing home sites across multiple states, despite little information being available about the company, highlighted issues with the nursing home license process, The Philadelphia Inquirer noted last year.

Schwartz already operated two nursing homes in Pennsylvania, but because licenses to operate health care facilities cannot be transferred, he was required to submit an application upon the purchase of the operating rights to seven nursing homes from Golden Living Centers.

Pennsylvania requires providers to have no criminal past and to be “a responsible person,” the Eagle said. But because the Florida lawsuit was a civil case, it would not have shown up in a criminal case search. The Eagle requested copies of all documents reviewed by the Pennsylvania Health Department prior to approving the license transfer, but the department released some documents and withheld others, according to the publication.

The Health Department declined to go into how thoroughly it examined Schwartz’s background, the Eagle said. However, public records indicate Schwartz faced a 2009 Pennsylvania lawsuit from a pharmacy claiming breach of contract, a $2,500 New York State Insurance Department fine from 10 years ago, and several business liens, according to the publication.

Department spokesman Nate Wardle would not tell the Eagle if the Department of Health knew about the Florida lawsuits and the allegations against Schwartz. He did tell the Eagle that the agency assesses operators as required by law, including “ensuring the buyer does not have any issues at other facilities, does not have a criminal past and is capable of providing safe care.”

Pennsylvania does not require a surety bond, a financial guarantee that owners will meet their obligations, and the Health Department refused to make public documents that might have shown the financial requirements for nursing home applications, the Eagle reported.

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