GOSHEN — Nurses picketed, state Department of Health inspectors swarmed, and complaints streamed to local elected leaders and the Times Herald-Record in the months after for-profit owners bought the former Elant nursing home in Goshen.
Now, nearly a year after the home became Sapphire Nursing and Rehab at Goshen, a Westchester law firm has filed a scathing lawsuit against the business, and the attorneys are seeking class-action status.
The plaintiffs, a current resident of the home and the estate of a deceased resident, accuse the owners of slashing staff so deeply that residents often sat in their own waste, begging visitors for bathroom help, meals and care.
The suit seeks monetary damages, but also asks the court to require the home to provide proper care.
Sapphire's troubles under its new leadership reflect a larger trend, according to nursing home experts.
Facing challenges like inadequate government reimbursements and a lack of self-funded patients, New York's nonprofit nursing home companies are increasingly selling to commercial operators that cut staff to boost revenue.
Trouble began in Goshen when Brooklyn investors Richard Aryeh Platschek, Esther Farkovits, Machla Abramczyk and Robert Schuck acquired the nursing home and three others in Beacon, Newburgh and Wappingers Falls from nonprofit Elant Inc. in September.
They immediately began shedding staff in Goshen, which led to a "failure to maintain a safe, clean, comfortable and homelike environment," according to the state DOH and a state-ordered corrective action plan.
As a result, residents were left unattended for hours, medication errors occurred and patients were not kept hydrated, properly nourished and infection-free, according to the DOH.
The lawsuit against Sapphire at Goshen concurs with the DOH's findings. It was filed July 31 in state Supreme Court in Orange County by Finkelstein, Blankinship, Frei-Pearson & Garber, LLP, of White Plains, which represents current resident Mary Rice, 93, and the estate of former resident Adeline Ramlow, who died in November at age 96.
Ramlow’s family claims that during a visit, a half-dozen nursing-home residents pleaded with them for food, help eating and diaper changes, and staff was nowhere to be found. Joe Guyt, 54, of Central Valley, is considering joining the suit. His mother, Lillian, died at the home in February. She was 84.
“My family and I believe the administrators at Sapphire have my mother’s blood on their hands because she laid there for days, if not weeks, with a urinary tract infection, because she wasn’t being changed properly, which turned to sepsis,” Guyt said. “You can be for-profit and still care for the residents. You can be efficient in other ways, and still give critical medical attention.”
After layoffs late last year, the home provided just 1.9 hours of individual patient care per day from certified nursing assistants, 0.40 hours for licensed practical nurses, and 0.24 from registered nurses — sharp cuts from 2016 totals under Elant of 2.29 hours from CNAs, 0.88 hours from LPNs and 0.58 hours from RNs, according to the DOH.
Sapphire at Goshen should provide 2.58 hours from CNAs, 0.71 hours from LPNs and 1.32 hours from RNs, based on the home’s federally reported acuity level, according to nursing-home expert Charlene Harrington.
After the ownership transition, "it was horrible," said Middletown Mayor Joe DeStefano, whose father is a resident at the Goshen home. "It’s no question staffing was the difference after the transition to new owners. ... Thankfully, they've improved the care for my father lately, and it's because of all the attention on the place from Congressman (Sean Patrick) Maloney and others."
In the spring, Sapphire compliance officer Jay Pepper said he planned to fill up to 26 positions. In recent months, he has declined to say how many people have been hired and whether they're RNs, CNAs or LPNs. Pepper recently told the Record, "Sapphire at Goshen is in substantial compliance" with the state corrective action plan.
For-profit nursing homes
Across the state, nonprofit nursing homes are increasingly selling to for-profits that are often more willing to make staff cuts to handle the elder-care industry's many challenges, said Dan Heim, executive vice president at LeadingAge New York, a trade group representing nonprofit and government-owned geriatric-care providers.
"Not-for-profits are mission-based providers, and as such they’ve got their own philosophy about how they’re going to provide care that often manifests in a different staffing pattern, quality-of-life activities and initiatives," Heim said.
All told, 46 percent of New York’s nonprofit nursing homes and 98 percent of government-run homes operated in the red in 2015, according to a LeadingAge analysis. Those losses have led to many sales. From 2006 to 2017, New York's nonprofit nursing-home tally fell from to 213 from 283, while the for-profit total grew to 371 from 322, according to Heim.
Although Medicare reimbursements are generous, they only pay for a nursing-home patient’s first 100 days of care, leaving homes dependent on less generous Medicaid reimbursements thereafter, Heim said. Most people lack the savings for elder care, and underused long-term care insurance is pricey, so Medicaid picks up the slack, he added.
Between 75 percent and 80 percent of all resident days in New York’s nursing homes are covered at least partly by Medicaid, according to Heim. On average, Medicaid underpaid New York nursing homes by an estimated 17.1 percent in 2015, or $48.43 per resident per day, compared to the actual cost of care, according to the accounting firm Hansen Hunter & Co.
Thanks to for-profit operators' staff cuts, homes have become more profitable, Harrington said. After five straight years of increases, the average nursing home was worth $99,200 per bed in 2016, according to a recent report in the trade publication SeniorCare Investor.
"Believe me, these for-profit owners are not going to lose money," Harrington said. "That’s the whole point of cutting all the staff. ... They're in the business of making money."
Carly Moore Sfregola, a spokeswoman for the American Health Care Association, cautioned not to paint all for-profit providers with a negative brush. Her trade group represents America's for-profit and nonprofit long-term care providers.
Yes, Sfregola said, some nursing homes "are struggling for a wide variety of reasons including poor Medicaid reimbursement rates, low census, staffing costs, the cost of medical technology, capital upkeep of the building, mortgages and the high cost of medication."
"However, broad generalities about changes in ownership don’t play out across the field," Sfregola said. "The best way to gauge the quality of care provided in skilled nursing centers is by looking at health outcomes for the people under our care."
But while every for-profit nursing-home operator is not a bad actor, Elant's decision to sell its homes illustrates the challenges nonprofits face competing and finding new owners.
Elant’s decision to sell
Elant began 33 years ago as the Arden Hill Senior Health System when it opened its first nursing home, the Arden Hill Life Care Center.
By 2005, the company had changed its name to Elant and grown into eight interwoven nonprofits operating six nursing homes and other adult-care facilities across the mid-Hudson. At its peak, Elant had a $50 million budget, served 2,350 people daily and employed 760, but it struggled financially in later years.
Today, it operates only the Glen Arden assisted-living facility next to Sapphire's Goshen home. Between 2012 and 2015 alone, Elant hemorrhaged $20.1 million running the Goshen facility, according to tax records.
Other Elant properties offset those losses, but Elant lost $4 million systemwide in 2016, its last year as a full company, said Donna Cornell, Elant’s board chairwoman and a board member since 2004.
The company's troubles stemmed from maintaining staffing levels that were higher than some local nursing homes, relying on low Medicaid reimbursements and lacking the economies of scale or purchasing power of larger chains, Cornell said.
Adding to Elant’s costs, each home operated with its own leaders, not a centralized administration. Crucially, the company’s more profitable private-pay patient total also dropped to 8 percent from 17 percent in the firm's final years, Cornell said, leaving Medicaid to make up more of the home's revenue.
"With Medicaid reimbursements reduced by the federal government, between the feds and state, and the overall loss of the private pay market, we just took it on the chin," Cornell said.
In 2015, Elant’s board reached agreements with Sapphire’s owners to sell the company's four remaining mid-Hudson homes for more than $10 million, plus $12.9 million in mortgages and $13.8 million in other liabilities.
But the complex sales and state approval processes didn't conclude until September. Today, Cornell attributes the former Elant homes' issues to staff cuts.
"I don’t think anyone anticipated these kinds of problems when Elant's homes were sold," said Cornell, who added that New York law places the responsibility of screening nursing-home buyers on the state DOH. "The biggest issue is personnel. You can’t run homes and not have violations if you don’t have the right staff levels."