The Toppling of a Nursing Home Empire and the Elderly and Disabled Residents Who Suffer, Where’s the Oversight?

Image: Terri Thompson

Terri Thompson’s mother has dementia and wandered out of a locked unit through two broken doors and was found in ice and snow at 4:30 in the morning with severe frostbite.Hannah Rappleye / NBC News

A nursing home chain grows too fast and collapses, and elderly and disabled residents pay the price

By Laura Strickler, Stephanie Gosk and Shelby Hanssen

NEW BEDFORD, Mass. — Once a week for two years, police Lt. Jeannine Pettiford had visited the nearby nursing home where her 52-year-old cousin with cerebral palsy lived. But on their daily phone call in early May, her cousin had bad news.

“I’m getting kicked out,” he told her.

In disbelief, Pettiford asked to speak with a nurse, who told her there were rumors of closure. Her alarm rose when she visited the facility and saw nurses crying. The nursing home’s owner, Skyline Healthcare, had told its staff there was no more money.

Skyline’s four other nursing homes in Massachusetts were facing the same crisis. Funds were so short, staff had begun buying toilet paper with money from their own pockets, according to former employees. Residents and their families discovered from local newscasts they had just 30 days to find somewhere else to live.

“Nobody from the nursing home ever called me to tell me,” Pettiford said. She was angry. And, she later learned, so were many others.

At its peak, Skyline Healthcare owned or ran more than 100 facilities in 11 states, overseeing the care of more than 7,000 elderly Americans. But during the past two years, the chain has collapsed, and more than a dozen Skyline-operated nursing homes have shut their doors, throwing residents, vendors, employees and state regulators into chaos.

For more watch Stephanie Gosk tonight on “NBC Nightly News With Lester Holt” at 6:30 p.m. ET / 5:30 p.m. CT (or check your local NBC station).

Many homes ran out of money. Others were shut down over neglect documented in government records. Fourteen homes were forced to close permanently, displacing more than 900 residents to new facilities, sometimes hours away.

The story of Joseph Schwartz and Skyline Healthcare is one of swift expansion, alleged mismanagement and catastrophic failure. An NBC News investigation reveals the scale of the Skyline debacle, in which one man built an empire that quickly crumbled, with painful consequences for vulnerable people.

It also shows the failure of state and federal authorities to keep up with just who owns and runs America’s nursing home facilities, which house 1.3 million elderly and disabled Americans — about three-quarters of them in beds paid for by taxpayers via Medicare and Medicaid. The states are responsible for tracking ownership and conditions at nursing homes within their borders, but only the federal government can monitor the performance of firms that own or operate facilities across the nation. The allegations of negligence at a major nursing-home chain come as the Trump administration is moving to ease, not increase, accountability for the industry, reducing penalties and terminating fewer contracts with problem owners.

Schwartz, meanwhile, still has ownership stakes in 53 nursing homes, according to federal records. He has not returned multiple messages and emails requesting comment from NBC News.

“I just don’t think I’ve ever seen anything like it,” said Stephen Monroe, an industry analyst of three decades who is the managing editor for the nursing home trade magazine Senior Investor. “I have no idea what that family was thinking. To go from 10 to 100 in two years with no real back office? I looked at that and said from day one, ‘Impossible.”

‘The Home Life You Crave’

A Brooklyn, N.Y.-based insurance broker and landlord, Joseph Schwartz entered the nursing home business more than 10 years ago after he sold a Florida-based insurance company.

In a 2017 deposition for a malpractice lawsuit filed by a family alleging neglect at one of his homes in Pennsylvania, Schwartz explained why he’d gotten into the industry. “”Basically, I used to do a lot of servicing in selling insurance policies to long-term care industry,” he said, “and I felt that I could, that I understand the quality care … and I will do a very good job in doing the quality care for residents.”

Image: Joseph Schwartz listed a tiny office above this New Jersey pizzeria in Wood Ridge, NJ as the location where he ran over 100 nursing homes nationwide.Joseph Schwartz listed a tiny office above this New Jersey pizzeria in Wood Ridge, New Jersey, as the location where he ran over 100 nursing homes nationwide.NBC News

He started with a half dozen homes, but after creating Skyline Healthcare he began expanding rapidly in November 2015 with the purchase of 17 homes.

Schwartz ran Skyline out of a tiny office above a New Jersey pizzeria. He was CEO, his wife Rosie co-owned most of the properties and his two sons, Michael and Louis, served as vice presidents. The company had a bare-bones website and a slogan, “Skyline: The Home Life You Crave.”

During the 2017 deposition, he said, “Skyline is an entity that is me.”

His net worth is hard to compute but real estate records show he owns over $9 million worth of real estate in the New York metropolitan area, including a gated house in Suffern, N.Y.

Within a year of his purchase of 17 nursing homes, Schwartz had taken on another 64, and by 2017 was operating more than 100.

Schwartz wouldn’t provide a number when the plaintiff’s attorney asked him repeatedly in June 2017 how many homes he ran. He confirmed it was more than five, but asked if it was more than 100, he said several times that he couldn’t recall.


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Skyline’s Wreckage, The US Healthcare Travesty – Help Wanted – Frank Romano Taking Care of Skyline’s Patients

Losing money and struggling to find workers, a nursing home operator feels the squeeze

Nursing assistant Rachael Moreau (right) helped resident Katherine Lapre at Brandon Woods home in Dartmouth.
Nursing assistant Rachael Moreau (right) helped resident Katherine Lapre at Brandon Woods home in Dartmouth.(JONATHAN WIGGS/GLOBE STAFF)

DARTMOUTH — When five Skyline nursing homes shut their doors last month, Frank Romano came to the rescue. He accepted more than three dozen old and frail residents at a pair of nursing homes he owns here and in neighboring New Bedford.

Now he’s scrambling to find nurses to care for them, along with more kitchen, laundry, and maintenance workers. As he looks for help, he’s struggling to operate the properties profitably in a Massachusetts long-term care sector that’s been losing money for years.

“They’re human beings, and I want to do the right thing,” said Romano, 76, chief executive of Essex Group Management, which owns six nursing homes and two assisted living residences. “But for every Skyline resident I took in, I’m losing $37 a day.”

Romano’s homes boast distinctive features — a Japanese koi pond and red British phone booth brighten the grounds of his Brandon Woods home here — but they face the same financial squeeze that’s weakened most of the state’s remaining 386 skilled nursing facilities.

Thirty nursing homes have shuttered in the past 18 months — and 214 since 2000 — a little noticed 35 percent shrinkage that has uprooted many of the state’s most vulnerable residents.

After a state court appointed a receiver to manage the shutdown of the five South Coast homes operated by Skyline Healthcare, residents were moved with little notice — or choice about their destination.

“They said, ‘We’re closing up shop and you’re going,’” recounted John Pine, 88, one of about 15 residents sent to Brandon Woods in Dartmouth. “Some went here, some went somewhere else. . . . They just put you where they want.”

In all, 245 residents were displaced from the five Skyline nursing homes in New Bedford, Fall River, and Dighton after their New Jersey-based operator surrendered its licenses earlier in the spring. Many of their residents are disabled or suffer from dementia, and most need help with daily activities such as getting out of bed, eating, and using the toilet.

The circumstances behind the Skyline closings are under investigation by the state attorney general. A pending lawsuit by the state of Florida accuses the company of deducting money from employee paychecks for insurance that wasn’t provided. Former employees and operators who took over Skyline homes in other states have said the company bounced checks.

John Pine recently was relocated to Brandon Woods home in Dartmouth, where he was assisted by unit manager Christine Cabral.
John Pine recently was relocated to Brandon Woods home in Dartmouth, where he was assisted by unit manager Christine Cabral.(JONATHAN WIGGS/GLOBE STAFF)

Its unraveling was only the latest setback for the Massachusetts nursing home industry.

Romano, a gregarious businessman who greets many of the residents and employees of his homes by name, can tick off the pressures facing operators.

They’ve gotten only small payment adjustments from MassHealth, the state Medicaid program that covers two-thirds of nursing home residents. The adjustments don’t keep pace with rising labor costs and expenses such as utilities and real estate taxes.

At the same time, employers such as Amazon, which opened a massive warehouse in Fall River two years ago, woo nursing home workers with slightly higher wages.

Romano said he can’t find enough workers to staff his properties here or in Tewksbury, Milford, and Worcester. It’s especially tough to recruit certified nursing assistants. He offers base pay of $15 an hour — plus a differential for evening and overnight shifts, along with overtime and bonuses to cover weekend shifts — but still finds it hard to compete with Amazon, which a spokeswoman said pays warehouse workers as much as $18.25 an hour.

“They’re offering higher wages, he said. “That’s where people are going.”

New federal restrictions on immigrants, who make up about 40 percent of nursing home employees, further aggravate the crisis. Early next year, the US government is set to end temporary protected status granted to Haitians who came here to work after the country’s 2010 earthquake. That means Haitian nursing home workers, including those at Romano’s homes, will be forced to return to the island.

“These are the workers who never call in sick or come in late,” said Tara Gregorio, president of the Massachusetts Senior Care Association, a Waltham-based trade group for the state’s nursing home operators. “These are the workers we can least afford to lose.”

Nursing home operator Frank Romano is having a hard time finding employees.
Nursing home operator Frank Romano is having a hard time finding employees.(JONATHAN WIGGS/GLOBE STAFF)

Romano said he has taken out advertisements seeking American citizens to work at some of the jobs being vacated. “None of them even want to apply,” he said.

In response, Romano sought and received permission from Puerto Rico, a US territory, to bring 150 workers to his Massachusetts properties over the next year. They include nurses, nurse assistants, personal care aides, housekeepers, and mechanics. But to make sure they can afford to live in a high-cost state, he’ll also have to provide housing for them.

He’s counting on the state government to boost MassHealth reimbursements for nursing home residents, which would in turn increase his revenue. State lawmakers have recommended modest payment increases for the coming fiscal year, but thus far the Baker administration has budgeted no new funding.

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