The Minnesota Department of Health has assumed emergency control of two southern Minnesota nursing homes after their nationally based parent company ran out of money to buy medical supplies and meet Friday's payroll for 130 nurses and other caregivers.
A Ramsey County judge approved state receivership Thursday for Faribault Care Center and Owatonna Care Center, which together have nearly 90 residents, and the Health Department on Friday put the homes under the temporary control of Volunteers of America, a Minnesota-based nonprofit organization.
Unlike the last state takeover, of the Camden nursing home in June 2014, which was triggered by a buildup of safety violations, the Health Department stepped in this week to prevent care and safety problems from emerging, said Health Department spokesman Scott Smith. "It was more a concern that there would be staffing shortages and supply shortages coming up."
Financial problems for Utah-based Deseret Health Group have triggered similar actions in other states, according to Associated Press reports. In Wyoming, the company gave 60-day notice this week that it would be closing two nursing homes. In Nebraska, state authorities similarly seized control of two homes to prevent any disruption in care for residents.
Faribault Care Center has 52 residents and Owatonna Care Center has 36. No changes in care or operation are expected in the immediate future.
The Faribault and Owatonna facilities had been cited for violations of state care standards as recently as February 2014 and October 2014, respectively. In Faribault, an inspector found inadequate attention to at least six claims of rude or abusive behavior by staff. In Owatonna, one resident had waited an hour for a nurse to respond to a call and provide a bedpan. Another was taking an anti-anxiety medication without clear documentation or efforts to use non-medication options, according to state records. Both homes corrected the violations within weeks, according to licensing records, before any fines or other penalties were imposed.
The first sign of financial trouble came in February when Omega Health Care Investors, the Maryland real estate trust that owned the buildings and hired Deseret to operate them, notified the state that it had concerns about how the facilities were operated. On May 1, state health officials learned that Omega had suspended a line of credit to Deseret, which had defaulted on its debts, according to court receivership records. Without an expected $350,000 in financing from Omega, an executive with Deseret told the state it wouldn't be able to replace medical supplies as of May 6 or pay employees as of May 8, the records state.
Smith said Volunteers of America also handled temporary management of the Camden facility, and will make recommendations about operations at the Faribault and Owatonna homes before they are turned over to new owners. The receivership has an 18-month time limit, he added.
State takeovers to ensure safety and financial viability of nursing homes are unusual, Smith said. Two also occurred in 2009. In early 2007, the health department stepped in to monitor day-to-day operations at the Veterans Home in Minneapolis after three deaths related to neglect of care and a series of poor safety inspections.