Iowa nursing home chain QHC Facilities filed for Chapter 11 bankruptcy at the end of 2021 and is seeking a buyer for its facilities, following some of the largest federal fines assessed on any skilled nursing group in the state.

Clive, Iowa-based QHC cited “crippling staffing and employee retention issues” since the onset of the pandemic, in a court filing. The company operates eight skilled nursing facilities in the state as well as two assisted living facilities, with roughly 300 employees caring for 500 residents, according to the bankruptcy petition.

QHC at one point employed 700 full- and part-time workers, according to its website. Between skilled nursing and assisted living, QHC has 750 licensed beds across the state.

QHC did not return Skilled Nursing News’ request for additional comment on Monday.

The operator provides skilled nursing, restorative nursing, respite care, physical therapy, long-term care, occupational therapy, hospice, dementia care, Alzheimer’s care and rehabilitation therapy across its facilities.

QHC claimed $1 million in assets and $26.3 million in liabilities. Its senior secured lender, Lincoln Savings Bank, negotiated the use of a cash collateral in order to continue operations for just over three months, according to documents filed with the U.S. Bankruptcy Court for the Southern District of Iowa.

QHC told the court its annual revenue for 2020 was $30.4 million, and $17.3 million for 2021 through the 10 months ending Oct. 31. While federal pandemic relief helped somewhat with COVID-related losses and expenses, state relief was “limited,” QHC said in court documents.

Restructuring advisors to QHC determined it would be best to sell all properties and wind down company operations.

Susan Goodman was appointed patient care ombudsman by Judge Anita Shodeen following the bankruptcy filing; the move is common, according to an article via Bloomberg, to ensure resident treatment isn’t compromised while bankruptcy proceedings play out.

Goodman will interview patients, physicians and any other staff “as appropriate,” court documents state, in order to monitor the quality of patient care and report back to the court at 60-day intervals.

Federal fines remain

QHC allegedly still owes $703,377 in federal fines across all of its facilities – the company’s Fort Dodge Villa location alone was fined upwards of $685,000 following a state inspection citing “serious deficiencies” in resident care, according to an Iowa Capital Dispatch article.

The Fort Dodge fine was “one of the biggest fines ever levied against an Iowa care facility,” the Dispatch reported.

Unpaid fines, plus daily fines continuing to accrue at the Fort Dodge location, could add up to $1.4 million, the report said. More recently, QHC was sued by a staffing company and rehabilitation provider for nonpayment of services for a combined $1.1 million with trials set for November and January, respectively.

QHC has attempted to collect payment for care from its residents since 2018, despite fines tied to deficient care. The group sued more than a dozen of its own residents, reports said, anywhere between $3,000 and $39,000. In one case, QHC pursued legal action against a resident’s widow after that resident died with the suit still pending.

Married owners Jerry and Nancy Voyna took over the business after working “within the company home office” for 20-plus years, QHC’s website said. Court filings show Nancy Voyna as CEO, upon her husband’s death in June. The group was founded in 1977 as Quality Health Care Specialists Corp.

QHC was “highly reliant” on Jerry Voyna’s operational and financial management, court documents state.

“The financial data and records were maintained by him, and the company was faced with significant challenges in preparing financials and dealing with creditors,” Nancy Voyna said in a court filing. “As an example, he had not been remitting the quarterly Qualified Assurance Assessment Fees (‘QAAF’) to the State of Iowa. The outstanding balance is estimated to be $4 million as of the petition date.”

QHC isn’t the only nursing home provider to cite staffing pressures and other pandemic-related issues in bankruptcy filings – Pensacola, Fla.-based Gulf Coast Health Care LLC in October sought bankruptcy protection, noting “significant fiscal challenges” tied to COVID. Specifically, Gulf Coast experienced lower occupancy levels as a result of the staffing crisis.