New Investigation Puts Skyline Healthcare Back in the Spotlight

A new investigation has put Skyline Healthcare back in the national spotlight.

An investigative report by NBC News published Friday examined the rise and fall of Skyline Healthcare, the skilled nursing company that collapsed in dramatic fashion over several months.

The Wood Ridge, N.J.-based Skyline at its height owned or operated more than 100 skilled nursing facilities in 11 states, overseeing the care of more than 7,000 seniors, NBC reported. But the chain began to fall apart in the spring of last year, starting with the state of Nebraska, which had to appoint a third-party receiver after Skyline’s owners failed to make payroll. The state of Kansas followed suit soon after, and some weeks later, the company fell apart in South Dakota and in Pennsylvania.

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Other troubled states included Arkansas, where the state’s attorney general was investigating neglect reports in Skyline facilities within six months of the company entering that state in 2015, NBC reported. A possible class action lawsuit against Skyline in Arkansas was dismissed in June of last year, after the company’s spring collapse in the Midwest and in Pennsylvania.

Earlier this year, five homes still operated by Skyline in Massachusetts ran into problems, bouncing paychecks and forcing one facility to close an entire floor because of short staffing. Eventually the nursing homes were placed into receivership and closed soon after. Massachusetts Attorney General Maura Healey eventually hit Skyline’s owners with penalties of almost $85,000 for unpaid wages and missing payroll documentation.

Joseph Schwartz, who served as the CEO of Skyline, co-owned most of the properties in Skyline with his wife Rosie; his sons Michael and Louis served as vice presidents. He entered the nursing home industry more than a decade ago after selling a Florida-based insurance company, and by 2017, was operating more than 100 nursing homes, NBC said.

Experts told NBC that he would have been dealing with “a few hundred million dollars a year in taxpayer money from Medicare and Medicaid” with that number of facilities.

Schwartz reportedly leased at least half the properties Skyline operated from Golden LivingCenters, NBC reported, citing local news reports and property records.

At the time of Skyline’s collapse in South Dakota, company spokesperson Juda Engelmayer in a statement cast much of the blame on Golden Living for the issues in that state.

“Skyline has never owned the properties; rather, an affiliate was simply the care provider and tenant,” the statement said. “Skyline and its affiliates have been dedicated to providing quality care to the residents of the facilities, has absolutely been meeting its obligations to its staff and patients, and it has been engaged in good faith negotiations with the property owners, Golden Living, to come up with a viable solution.”

A spokesperson for Golden LivingCenters told NBC that the company contracted with Schwartz to run 17 properties in South Dakota, but declined to comment on other states. The spokesperson also declined to comment on whether or not Golden Living vetted Schwartz.

The company’s financial problems, and the lack of state and federal response, was a major focus of the NBC news article. Former Skyline staff told the outlet that Schwartz would bring in vendors, let bills go unpaid, and then turn to other vendors.

In Kansas, employees reported that they had no insurance despite premiums being deducted from their paychecks. In South Dakota, utilities for the facilities were on the brink of being shut down. Massachusetts AG Healey noted at the time of Skyline’s receivership in the Bay State that the company was not paying vendors.

“At least one facility has been put on notice that its food service vendor will no longer deliver food starting tomorrow [April 30, 2019] due to nonpayment,” Healey said in her receivership petition. “Another facility has run out of milk for its residents.”

States are largely responsible for determining whether a new SNF owner is financially prepared, but the process varies from state to state, NBC said. The Centers for Medicare & Medicaid Services (CMS) must receive a form when a SNF changes hands, but a spokesperson for the agency told NBC that CMS is not responsible for assessing an owner’s finances.

Federal records indicate Schwartz still has ownership in 53 SNFs, NBC reported. A CMS spokesperson confirmed that the Schwarz family retains an ownership stake in more than 50 nursing homes.

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