HORSESHOE BEND -- The abrupt pullout of an out-of-state ownership group left Arkansas nursing homes scrambling to find new places for residents before their supplies ran out, while regulators deemed a state takeover "not appropriate in this case."
Between a nursing home here and its sister facility in Hope, more than 60 frail residents are being scattered to other facilities after Georgia-based Marsh Pointe Management bowed out as their operator last week, two months after taking over the sites.
Such abrupt closures are unusual in Arkansas, unlike in other states, a representative of the state's nursing home industry said.
Records show that in early November, the state's Office of Long Term Care, which oversees nursing homes, denied an application filed by Christopher Brogdon of Atlanta for Marsh Pointe to run the homes.
Brogdon, who is licensed to operate homes in Hazen and Lonoke, is under federal court order to repay more than $80 million to investors, whom a federal watchdog accused him of swindling in nursing home deals. He did not respond to a cellphone message seeking comment.
After reviewing federal Centers for Medicare and Medicaid Services ratings for homes that Brogdon controls in Arkansas and other states, Arkansas officials determined that he "had not demonstrated that his facilities were in substantial compliance with state and federal laws," a Department of Human Services spokeswoman said Friday.
On Tuesday, officials from the Marsh Pointe company told administrators at the Horseshoe Bend home that they would no longer pay for supplies, including food. (The Arkansas Democrat-Gazette's efforts to reach the nursing home in Hope and its administrator have been unsuccessful.)
Responsibility for both facilities fell back to the previous manager, Cathy Parsons, who said in an interview Friday that she does not have the money to operate the nursing homes long-term.
Out of options, the Horseshoe Bend property's administrator, Shelly Draper, said she activated an emergency plan to find beds for 21 people, seeking to refer them elsewhere as resources dwindled.
"My job is to protect these residents," she said. "I had no other choice but to send residents where I know they will be taken care of, where people will have supplies."
On Thursday, a temporary sign in front of the Horseshoe Bend nursing home read "South Bend Nursing," its new name under Marsh Pointe Management.
In the home's lobby, three residents in wheelchairs sat between the welcome desk and a Christmas tree, waiting for transport vans to arrive and take them to other homes. Staff members wearing scrubs stood close by, some of them cried as they took turns bending down to embrace the residents.
"I didn't know I had so many friends," an elderly woman said as she exchanged goodbyes.
Another woman in a wheelchair asked where she was going, and a staff member reminded her, "Calico Rock."
Arthur Pigg, 72, was still in bed in Room 14, lying amid a cluttered sea of moving boxes and personal items -- music stands, a guitar, a box of instant cocoa -- not yet packed. His prints of Vincent van Gogh's paintings were still fixed to doors and walls.
Pigg, who began living at the home after a stroke in the spring of 2018, said he'd been in the middle of planning a transfer to another facility for better rehabilitation services when news of the closure broke last week.
"Suddenly the management was running up and down the hall telling us, you've got to be out of here by Friday. ... [The operators are] not going to pay one more penny," he said. "Not food, not nothing."
Pigg said he would likely end up in a facility in Mountain Home, about 70 miles away and roughly an equal distance from his family's home near Viola. He described the closure as mostly an inconvenience for him, though he worried about other residents, who would sometimes ask him where they were or how to find their rooms.
As he spoke, a man's muffled cry could be heard from elsewhere in the home, calling "hey," "hey," "hey," for several minutes.
Pigg said he did not blame the nursing home's staff members for what had happened, adding that they had done a good job with the tools they'd been given.
"From almost the first day I've been here, they've had owners and operators who never supported them properly, who put continuous barriers in the way of their doing their work for us," he said.
"The thing that really hurts is the suddenness of it."
'NOT APPROPRIATE'
Asked if it would have been preferable for the state to take over the Hope and Horseshoe Bend homes, Amy Smith, South Bend Nursing's director of nursing, said she would have "welcomed" that approach.
"It would have been less traumatic for everybody, all the way around," she said. "There would have been an adjustment period that we could have approached this differently."
Human Services Department spokeswoman Marci Manley wrote in an email that the state had considered intervening through what's called a receivership "only to the extent that we recognized it was an option."
"We determined it was not appropriate in this case because Cathy Parsons was doing what she needed to do to keep her residents safe. When she determined that she could not meet their care needs due to her financial circumstances, she implemented her existing procedures to transfer the residents to a safe place," she said.
Finding new placements for residents, she wrote, is the responsibility of administrators and staff members, adding that state monitors have been on-site.
Arkansas Code Annotated 20-10-904 lays out five reasons for which a judge may approve a state takeover. One of the reasons is that "a facility intends to close but has not arranged at least [30] days prior to closure for the orderly transfer of its residents."
Insolvency is another reason. A third is an emergency that threatens residents' health or welfare.
Twice in as many years, Arkansas has invoked the receivership process to seize control of troubled nursing homes. Before 2018, the state had gone more than three decades without using that authority.
State law sets specific procedures for receivership, but essentially officials request a court order granting them control of nursing homes. The state then contracts with an operator for day-to-day management.
Most recently, the state seized five nursing homes operated by Keith Head of Conway in October after vendors and utility companies threatened to cut off the facilities over unpaid debt. Head agreed to the takeovers, and the state is still functioning as the receiver in those cases.
SKYLINE FALLOUT
The Hope and Horseshoe Bend nursing homes shared the same ownership and management teams for several years, state records show.
Companies owned by the Luth family, which lists a Sherwood address on business records, bought the Horseshoe Bend property in 2007 and the Hope facility in 2013, according to real estate records. Messages left at a phone number listed for the companies were not returned.
The family was the licensed operator for both facilities for years previous to leasing day-to-day management to New Jersey-based Skyline Health Care in 2017.
Last year, the state took over two homes operated by Skyline, which in a span of three years rose from obscurity to obtain control of more than 100 nursing homes nationwide -- and nearly two dozen in Arkansas.
The firm collapsed last year, with its owners claiming insolvency while the company controlled 10% of Arkansas' licensed nursing home beds.
State officials worked to find replacement operators to care for residents and ultimately avoided closing any of the nursing homes.
Parsons obtained the operator licenses for the Horseshoe Bend and Hope homes from Skyline in February 2018, records show. The Luth family approached Parsons to step in at those properties, she said in an interview.
In October, Brogdon's Marsh Pointe assumed management of the two nursing homes. Simultaneously, Brogdon applied for the operating licenses at the two sites.
After the state rejected Brogdon's licensure bid, "it kind of got thrown [back] in my lap," Parsons said.
Parsons could not bankroll continued operations of the two nursing homes, she said. Because she had relinquished control to Marsh Pointe, she would have had to invest significant startup cash to resume operations, she said.
"That would be walking in and having to take everything back over and starting fresh with them," said Parsons, who still operates Bear Creek Healthcare in De Queen. "There's a lot of startup money [required]. It's hard to run a nursing home. You have to have money in your pocket to do it."
Parsons offered help to both homes until residents are transferred, and her De Queen nursing home provided food and supplies to the Hope property, she said.
NO STEPS YET
An Arkansas Democrat-Gazette investigation published in April found that the state granted Brogdon licenses to operate nursing homes in Hazen and Lonoke, despite an $83.1 million fraud judgment levied against him in 2015.
The U.S. Securities and Exchange Commission sued Brogdon for securities fraud in November 2015. One month later, a federal judge ordered him to repay investors in 19 bond and private financing offerings.
The SEC complaint accused him of using the money he raised for personal gain and to prop up business interests that were outside the scope of the borrowing. It said Brogdon misled investors in nursing homes and other long-term care facilities as far back as 2000.
The court deemed Brogdon unfit to run publicly traded companies and barred him from management or director roles at firms that report to the Securities and Exchange Commission.
Human Services Department spokeswoman Amy Webb at the time called the finding "concerning" and said officials were unaware of the case when Brogdon received his licenses.
Webb also said then that it was unclear whether state laws would have allowed officials to reject Brogdon's licensure applications because of the federal judgment.
Manley said Friday that the state has not taken any steps toward revoking the licenses already held by Brogdon. Existing operators are monitored through facility surveys, a separate process, she said.
In October, when the state took control of five nursing homes operated by Head, officials said they were planning a package of new policies, rules and laws to strengthen vetting of incoming nursing home operators and provide the state with more leeway to reject applicants.
CHANGES SOMETIMES
In an interview, Draper and Smith said the closure of the Horseshoe Bend nursing home upended their hopes for revitalizing it, which both said they felt a personal connection to.
Draper, for example, got her license to become the home's administrator after starting work there as a dietary aide and seeing more than a dozen administrators and interim administrators lead the facility in just a few years.
Both underlined that the site's closure is unrelated to past quality problems noted by inspectors and said they'd hoped for a turnaround under their new management group.
According to information on government databases, the Hope facility earned average ratings on inspections in the past few years, but the Horseshoe Bend site has struggled, being selected as a "special focus facility" in January by federal regulators.
That's an intensive-monitoring designation for nursing homes with the greatest number of violations, the most serious infractions or problems that recur over a long period.
Smith and Draper said access to more resources would have improved the home's performance. For example, they would have liked to purchase tools to alert staff members when a resident gets too close to the door, which Smith said would help with situations such as one in which a resident left the facility.
For that incident, they received an "immediate jeopardy" citation, she said. That's for "a situation in which entity noncompliance has placed the health and safety of recipients in its care at risk for serious injury, serious harm, serious impairment or death," according to federal regulations.
Pigg, the Horseshoe Bend resident, said he had observed some problems with maintenance during his time living there, pointing to worn trim near the ceiling of his room.
He had spoken with inspectors visiting the facility under the more intensive monitoring of recent months and sometimes he reported things he saw as problems, such as staffing levels.
"Sometimes you see changes, and sometimes they come back with 'They meet state minimums,'" he said.
"[But] we all knew that unless they got a real manager in -- someone who really cared about this place -- its days were numbered."
WHAT'S NEXT
Horseshoe Bend Mayor Craig Huckaby said the closure caught local officials off guard, adding that he'd attended an open house with hot dogs and a bounce house at the property just a few weeks before.
There's no similar facility in the town of about 2,100 people, he said. He expressed concern for the nursing home's roughly 40 employees losing their jobs during the holiday season, as well as for those who will have to travel to visit family in homes elsewhere.
"[Other homes are] not that far -- but it's 15 minutes as opposed to on the way home," he said.
By the end of the day Friday, Smith said she expected seven or eight residents to remain at the Horseshoe Bend property. Soon they too would be sent with boxes of puzzles, slippers and other possessions to nursing homes in Ash Flat, Cave City and other towns.
The Hope home had 44 residents when the transfers began, and four remained there Friday, Manley said.
Rachel Bunch, executive director for the Arkansas Health Care Association group that represents some nursing homes, said this situation is unusual for the state, where she could recall only a handful of such closures over the past 10 years. That's unlike a national trend of home shutterings, she added.
Arkansas Advocates for Nursing Home Residents President Martha Deaver said the denial of a licensure application by regulators may be "unprecedented."
Manley said the state has no information on previous denials.
Deaver expressed frustration that the state did not take control of the two facilities, citing what she said is a poor record of care, but she said she's "pleased" by stricter scrutiny of license applicants.
"They're not saying, 'Here's some more money' -- and really it would be in essence -- 'to put in your pocket,'" Deaver said.
SundayMonday on 12/08/2019