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Kansas Moving To Shift Financially Troubled Nursing Homes To New Management

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Kansas News Service

Kansas officials are moving to protect more than 800 vulnerable residents of 15 financially troubled nursing homes across the state.

The Kansas Department for Aging and Disability Services is seeking court orders to put the facilities — currently operated by a New Jersey company — into receivership.

That would allow another company to take over operations pending arrangements to either sell the homes or close them.

“This is a highly unusual situation, but we have identified a nursing home management group that is willing to step in immediately and begin overseeing these facilities,” KDADS Secretary Tim Keck said in a news release.

“We have discussed the matter with (federal officials) and now are working to get all of the arrangements in place as soon as possible,” Keck said.

New Jersey-based Cottonwood Healthcare took over management of the facilities in the fall of 2016. It took less than a year for indications of financial problems to surface, said Cindy Luxem, president of the Kansas Health Care Association, the lobbying group for the state’s for-profit nursing homes.

“They couldn’t pay their (association) dues,” Luxem said.

More troubling, she said, were recent reports that food was in short supply at some homes.

Mission Health Care, which owns 14 nursing homes in Kansas, will temporarily administer the homes under state supervision.

Though delayed Medicaid reimbursements have recently caused financial problems for several Kansas nursing homes, Luxem said that wasn’t what caused Cottonwood’s problems.

“They just didn’t have enough working capital,” she said.

She said that Cottonwood specialized in real estate investments, not nursing home management.

Calls seeking comment from Cottonwood officials weren’t answered.

Luxem brokered meetings with the managed care organizations that administer KanCare, the state’s privatized Medicaid program, and with KDADS officials, who declined to approve the company’s request for an emergency rate increase.

“They were $12 million in the hole,” Luxem said.

The extent of Cottonwood’s financial problems came into sharper public focus last week when Nebraska officials took over the 21 homes it operated in that state.

Reached Wednesday afternoon, Merle Webster, the administer of the Cottonwood-owned Chase County Care & Rehabilitation Center in Cottonwood Falls, said he couldn’t comment on the company’s financial problems or what might happen to his facility.

“I can’t tell you much of anything,” he said. “I don’t know a whole lot.”

In addition to Cottonwood Falls, the affected homes are located in Downs, Edwardsville, El Dorado, Eskridge, Lansing, Neodesha, Pittsburg, Spring Hill, Wakefield, Wellington, Wichita and Wilson.

They will, at least temporarily, be in capable hands with Mission Health Care, Luxem said.

“I have no concerns about them,” she said. “They’re a good company.”

(This story was corrected to say that Cottonwood Healthcare operates the nursing homes.)

Jim McLean is managing director of the Kansas News Service, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio covering health, education and politics. You can reach him on Twitter @jmcleanks. Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to the original post. 

Jim McLean is a political correspondent for the Kansas News Service, a collaboration based at KCUR with other public media stations across Kansas. You can email him at jim@kcur.org.
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