Welcov Healthcare — which has been cited for violations linked to the death of four residents at its Minnesota facilities — is going out of business, according to a recently published report.
Welcov President Tom Boerboom told the Torrington Telegram in Wyoming this week that the Edina-based company has "experienced some challenges" and is "winding down operations."
That's a big switch for Welcov, which borrowed $56 million to help fund expansion opportunities in 2015. At the time, the company operated more than 60 long-term, short-term and assisted-living facilities throughout Minnesota, South Dakota, Iowa, Montana, Nebraska and Wyoming.
Recently, however, the company has been turning over management of those facilities to other health care companies. It currently operates 22 facilities, including six in Minnesota, according to the company's website.
There have been other signs of distress. Two months ago, the company was sued by a Montana vendor for allegedly failing to pay $152,578 for staffing services provided by the firm since April 2018.
Welcov has not filed a response to the lawsuit, and Boerboom did not return calls for this article. Welcov founder and CEO Paul Contris declined to comment.
Boerboom told the Wyoming newspaper that the company would avoid bankruptcy by restructuring its finances, but he said Welcov would ultimately cease to exist. He said Welcov's owners plan to start a new business that will focus on a handful of health care facilities in Wyoming.
Just last month, the Minnesota Health Department cited Welcov's Bethel Healthcare Community in St. Paul for waiting 39 minutes before responding to an alarm on a resident's ventilator. The patient was dead by the time paramedics arrived. It was the third time since 2015 that Bethel was cited for violations linked to a resident's death.
In its most recent report, regulators noted that Bethel decreased staffing levels on the ventilator floor about a week before the August 2018 death. An employee told investigators that workers waited too long to respond to the alarm, noting that was "probably why the resident died."
In a written response to questions, Bethel administrator Cory Glad said the facility changed its staffing practices and beefed up training in response to the state's findings.
"Providing high-quality care and resident well-being are of utmost importance at Bethel," Glad said in the statement. "Staff has taken aggressive measures to bring the facility into full compliance since the deficiencies were cited last year."
In addition to being faulted for serious safety violations by state regulators, Welcov was recently sued by a former manager in Montana, who claimed patients at multiple facilities were being harmed by "fraudulent practices" aimed at pumping up the company's bottom line.
In his 2017 lawsuit, former Welcov manager Thane Bedwell claimed that residents were often denied basic medical services, including wound care and medication, because staffing levels were intentionally kept too low. In one case, Bedwell claimed, a resident went a week before being treated for a broken arm.
Bedwell, who operated the company's nursing home in Bozeman, Mont., from 2012 to 2016, also claimed Welcov submitted "hundreds or thousands" of fraudulent bills for services it failed to provide, entitling the government to damages. Bedwell said the working conditions were so awful that dozens of employees quit.
Welcov settled the lawsuit in 2018 without filing a legal response to Thane's allegations.
Welcov began as Mission Healthcare in 1997. On the company's website, Welcov said more than half of its facilities have won "prestigious AHCA Quality Awards," an honor celebrating excellence presented annually by the American Healthcare Association.
But Minnesota regulators have repeatedly cited Welcov for safety lapses. In 2015, the Health Department cited Welcov's Evergreen Terrace in Grand Rapids when a resident fell while being helped into a wheelchair and later died. In 2017, Bethel was cited for another ventilator-related death that occurred while a resident was attending church. In that incident, the pastor was the only person who heard the alarm because other staff members left during services. The pastor told investigators that the nurses had instructed him to ignore any alarms, according to the state report.