A state Superior Court judge has turned over operations of a long-troubled Andover nursing home into the hands of a receiver, citing immediate concerns over the health and safety of the state's most vulnerable residents.
Judge Frank DeAngelis' decision is the latest in a string of major moves by the state's top officials to ensure the safety of residents at Woodland Behavioral and Nursing Center after surveyors twice in April and in early May found that conditions at Woodland had only gotten worse. Woodland has been on the radar of federal and state officials since police discovered 17 bodies in a makeshift morgue at the height of the pandemic in spring 2020.
The facility was visited often by surveyors, who warned that negative actions would take place if compliance wasn't met.
DeAngelis appointed Allen Wilen, a partner at the business advisory firm EisnerAmper, after a court hearing Friday on whether Woodland Behavioral and Nursing Center could continue caring for its 366 residents.
Wilen will step into the role temporarily until a final hearing takes place on July 7.
Gov. Phil Murphy and officials with the New Jersey Department of Health petitioned the courts last week to employ Wilen to take over the facilities' finances, to retain staff and maintain proper services for residents. Officials pressed the immediate need for intervention, stating that despite actions by federal and state officials, no systemic improvements had been made.
Attorneys representing Alliance Healthcare Holdings, which operates Woodland, and the owners of the property who lease the building to Alliance, known as BNJD Mulford Property, did not deny allegations raised by the Health Department with respect to the health and safety of residents, DeAngelis' decision said. Instead, they argued that the only harm was caused by the state's refusal to recognize a comprehensive remedial plan that they were aware of "before they ran into court seeking emergent relief."
BNJD said it had a signed agreement from co-owner Louis Schwartz removing him from the facility's license and had also executed an agreement with R&R Management Services LLC to take control of the facility's operations. The appointment of a receiver, the attorneys contended, was not appropriate because they had a plan in place that would have led to a comprehensive plan of correction.
But DeAngelis said during arguments on Friday that attorneys for BNJD "confirmed that the alleged agreement was just a proposal."
"The Court finds that the harm that threatens the residents of Woodland substantially outweighs any threat of any potential hardship that defendants may face through the appointment of a temporary receiver," DeAngelis wrote.
The state Department of Health issued a statement on the judge's decision, noting that Atlantic Health System, which was appointed as monitor in March, will work with Wilen to manage the daily operations at one of the state's largest nursing homes, once called Andover Subacute and Rehabilitation II.
“The receiver will ensure that employee paychecks are processed and staff retention policies and bonuses are implemented and will work with the state and other long-term care facilities to facilitate job placement for qualified individuals,” Wilen said in the statement.
Human Services Commissioner Sarah Adelman said the judge's decision recognized the "unprecedented gravity" of the situation.
In back-to-back filings on March 26, the federal Centers for Medicare and Medicaid Services ordered a halt of funds to the Medicare-reliant facility as the state revoked the nursing home's license.
Robin Ford, the state Health Department's deputy commissioner of health systems, said in court records that Woodland made no efforts to bring the facility into compliance, stating that residents were in immediate and serious risk of harm. Under the order, residents will need to be transferred to another facility by Aug. 15.
The judge noted that due to the termination of Woodland's agreement with CMS, there is a risk the facility will lose staff and have insufficient funds to continue operation in less than 60 days.
The risk of insufficient funds is coupled with concerns that the facility is nearing financial distress and is at risk of needing bankruptcy protection, state officials said in their court filings. The facility, the court records show, has a negative cash flow, limited borrowing capacity and projected required capital expenditures.
"The
financial issues coupled with the management issues continue to put the
residents at risk of harm," DeAngelis wrote. "It is clear to the court
that appointment of a temporary receiver is necessary for the protection
of Woodland's current residents."
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