A Texas corporation is asking a federal bankruptcy court in Fort Worth to take an action which would put thousands of lives in danger in Kentucky. If the court grants their request, not only is there a high degree of likelihood that elderly Kentuckians will suffer and die, but Kentucky taxpayers will inevitably be forced to pick up the bill for almost two dozen long-term care facilities in this state.
Recently, Preferred Care, Inc., a Texas-based chain of nursing homes, filed for bankruptcy. It now seeks to simply transfer its nursing home licenses — including 21 here in Kentucky — to new owners, without the background checks normally associated with such a transfer. It has asked the bankruptcy court to approve this transfer.
Kentucky law requires a background check when a new licensee tries to open a new home, to ensure that a responsible, safe, and reputable owner will be overseeing the management and operations of the long-term care facility.
Yet, if the court approves Preferred Care’s proposal, the 21 homes will be turned over to a different corporation without this kind of vetting and review. This threatens to lead to some horrific consequences.
Why do I say this? The company looking to take over these homes has a disturbing track record of poor care, widespread abuse, chronic understaffing, and other problems too numerous to list in this column. Sapphire, the New York company seeking to assume ownership of the Preferred Care homes, is part of a larger conglomerate known as the Bluegrass Portfolio (of which SentosaCare, another New York-based nursing home corporation, is the largest member).
The corporations in this portfolio are centrally managed, and have ownership overlap. They also have similar reputations for subpar resident care, and long, troubled histories. In 2017, a federal class action suit was filed against Sapphire, alleging that it was bringing immigrant nurses into this country as indentured servants. These nurses were coerced into signing contracts making them liable for a $25,000 penalty if they attempted to leave their positions before their contracts expired.
Yes, the same kind of contracts that have been equated to human trafficking and slavery.
During bankruptcy transfers such as the one envisioned here, our courts and the government should use the same strict and stringent standards that they use for any new licensee. They should begin with an investigation.
What would even a cursory investigation find? Stories of Sapphire’s staff protesting untenable working conditions, state-mandated investigations into Sapphire’s consistently poor levels of care, dangerously low staffing levels, and unsanitary and unsafe living conditions.
If all of that can be uncovered with a simple Google search, imagine what would be revealed with a deeper, more intensive investigation.
Though the owners of Preferred Care are comfortable transferring ownership to this troubled company, it’s unlikely residents and their loved ones, state officials, and taxpayers will feel the same. Perhaps bankruptcy courts should invite the Department of Public Health to file an amicus curiae, when these kinds of transfers are contemplated.
As someone who has had the misfortune of watching a parent suffer and die at the hands of an abusive and neglectful nursing home, I know firsthand the tragedy which is likely to befall the residents and their loved ones. If this transfer goes through, we will not only see widespread abuse and neglect, but the commonwealth will very likely be eventually compelled to send in emergency personnel and pay for care that was not given. At taxpayers’ expense.
The good news is that this can be stopped. The court can ask the proposed home owners — whether Sapphire or someone else — to submit a full application (sort of a health care transferee prospectus). It can demand that the applicant meet the same strict requirements that the state requires, for the good of Kentucky, for the good of our loved ones, and for the good of all nursing home residents.
I urge families with loved ones in these nursing homes to pay attention to their residents and, should they find problems, to report them right away.
Wanda Delaplane of Lexington is a retired assistant state attorney general specializing in consumer protection.