SENIORS were left terrified after news abruptly broke that a popular nursing home was on the chopping block, with 100 residents already being moved out.
The impending facility shutdown comes in the wake of its parent company’s bankruptcy filing back in July.
A nursing home will be shut down in the coming weeks, and residents are already being pushed out[/caption]
Many healthcare companies across the country are struggling financially as the cost of labor, drugs, and supplies ticks upwards, outpacing inflation and heavily impacting their budgets.
Several hospitals, pharmacy chains, and nursing homes have filed for bankruptcy in past years or shut down due to high costs and mounting debt.
Magnolia Ridge, for example, a 148-bed nursing home, is expected to shut down by October 15, with roughly 100 patients currently being transferred to nearby facilities.
The impending closure of the nursing home in Gardendale, Alabama – a northern suburb of Birmingham – by federal and state regulators is relatively rare when compared to the number of struggling facilities.
Closing a nursing home is generally a last resort due to how disruptive and potentially dangerous it can be for residents, with regulators often trying to avoid shutdowns via measures such as providing emergency funding.
The decision to close Magnolia Ridge was not abrupt, however, with the Centers for Medicare and Medicare Services, or CMS, warning as early as March that it planned to close the facility, Zachary Simple, a lawyer for the US government, told The Wall Street Journal.
Judge Stacey Jernigan of the US Bankruptcy Court in Dallas was hesitant about the regulators’ decision to shutter the Alabama facility.
Jernigan was concerned that the nursing home company would not be able to secure enough new homes for all of the residents at Magnolia Ridge.
The judge also questioned the move after Magnolia Ridge was found to be providing satisfactory care, according to a patient-care watchdog appointed to review the quality of care at the chain.
However, lawyers for hundreds of residents with personal-injury claims have disputed the assessment, noting a number of examples of the low-quality care.
They argued that CMS had repeatedly slapped Magnolia Ridge with one out of five stars from 2017 to 2024, and that the nursing home’s healthcare workers spent much less time with patients than the national average.
BANKRUPTCY BUST
Magnolia Ridge is one of 175 facilities across 18 states owned by nursing-home operator Genesis HealthCare, which filed for bankruptcy back in July.
The third-largest skilled nursing facility in the country, Genesis HealthCare rakes in $2.3 billion annually and has a reported 20,000 licensed beds.
The company’s filing was pushed by lawsuits related to alleged negligence and wrongful deaths that cost Genesis HealthCare $8 million each month.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
Genesis HealthCare had been “mired in corporate inefficiencies,” including its prior growth efforts in the US, according to Louis Robichaux IV, a co-chief restructuring officer.
“It became clear that, without a more holistic solution, the company would be unable to continue delivering high quality care and appropriately invest in its facilities and equipment,” he said.
During the company’s bankruptcy filing, Genesis HealthCare’s CEO shared that it did not expect “any impact to resident care or staffing.”
Although the nursing home shutdown in Alabama is not directly related to the July filing, the company is complying with the decision.
Genesis HealthCare intends to appeal regulators’ decisions in the future but is currently cooperating with the regulators’ directive to transfer its patients.
“We don’t want to pick a fight with our regulators,” Genesis’s lawyer Dan Simon told a Dallas bankruptcy court.
The U.S. Sun reached out to Genesis HealthCare for more information but did not hear back immediately.
The nursing home chain isn’t the only company in the industry struggling.
For example, one elderly woman spent $1 million on a senior living home with the promise of a refund – but the company went bankrupt and “ran away with the money.”
Plus, earlier this year, a major healthcare giant with over 180 hospitals and clinics set out to close two life-saving locations after its bankruptcy filing.
Residents of the Magnolia Ridge nursing home are being transferred in the wake of parent company Genesis HealthCare’s bankruptcy filing[/caption]
Story idea?
If you have an exclusive idea or story tip for The U.S. Sun, feel free to reach out to me at maya.lanzone@the-sun.com!
