Sweetwater Care affiliates were blocked from acquiring 11 Next Step Healthcare nursing homes in Massachusetts, according to a ruling by the state Department of Public Health.
Affiliates of Carlsbad, California-based Sweetwater were found “unsuitable” to acquire the Massachusetts facilities by state officials.; Sweetwater can appeal the decision but isn’t allowed to obtain a license for the properties in the interim, according to a report in the Telegram & Gazette.
Elderly quality services advocate Dignity Alliance Massachusetts called on the state to block the deal, highlighting the California operator’s troubled history of running some of its facilities including low staff counts, low federal star ratings and financial penalties.
The California attorney general’s office in July reached a $15 million settlement with Sweetwater over violations to the state’s legal requirements for staffing. The operator had more than 14,000 instances of low staffing at its facilities, the report found.
Advocates and lawmakers, including Dignity, felt the state hasn’t been diligent enough when investigating out-of-state buyers like Sweetwater, pointing to New Jersey-based RegalCare as another example. Prior to buying 12 nursing homes in Massachusetts, New Jersey officials permanently revoked the license of RegalCare owner Eliyahu “Eli” Merlis to operate as a nursing home administrator in that state.
Massachusetts officials are also in the process of revoking RegalCare’s license to operate nursing homes in the state as well. A law passed in 2024 gives public health officials more authority to investigate out-of-state buyers, but the state Public Health Council didn’t approve the regulations until Oct. 14.
As for Sweetwater, the operator is still temporarily managing the 11 Next Step facilities after a judge placed the nursing homes in receivership earlier in the year. Next Step’s landlord sued Sweetwater in January over nearly $15 million in unpaid rent.
It’s unclear who will buy the Next Step properties, which have had staffing and financial challenges in recent years, the report found. Next Step reached a $4 million settlement with the Massachusetts attorney general’s office in 2024 – the largest settlement for a nursing home operator in the state at the time.
Companies featured in this article:
Dignity Alliance Massachusetts, Next Step Healthcare, RegalCare Management Group, Sweetwater Care
