Skyline’s involvement in the state of Kansas prompted its Legislature to pass a law this year that requires potential buyers of nursing homes to provide more in-depth information about financial solvency.
The state will require nursing home owners to provide a list of licenses the buyer/owner had held anywhere in the U.S.
The law also makes a change related to licensing based on ownership. Prior to the change, Kansas required a 25% ownership in a facility in order for a license to be suspended, denied or revoked. Now, any indirect or direct ownership applies to suspension, denial or revocation.
The Kansas Department for Aging and Disability Services (KDADS) was a key player in helping get the legislation passed.
The new Kansas law will be used to determine who nursing home owners are, their financial status and prior record of doing business, said Mike Flanagan, a lawyer from Kansas City who worked with the department on the nursing home issues.
“A number of states stepped up their game with regard to vetting for licenses (because of Skyline’s involvement),” Flanagan said. “You don’t want a Skyline 2.”
But South Dakota has not so far taken any legislative action similar to Kansas.
In October of 2018 Kansas transferred 15 failing Skyline nursing homes into receivership. A receivership meant the state of Kansas took over legal control of the nursing homes.
Flanagan said when a receivership was created, Skyline employees were brought in to a Professional Employee Organization, which provided their health care insurance and other premiums. The PEO meant employees were taken care of early in the process until the state transferred receivership of 15 former Skyline nursing homes to Mission Health of Florida.
Similar to incidents in South Dakota, some Skyline employees lost insurance when the employer allegedly failed to pay the insurance premiums after it withdrew premium money from paychecks. Flanagan said some Skyline employees had lapsed insurance and were left with medical bills.
He believes some employees filed complaints with the Kansas Attorney General’s Office.
KDADS did file a lawsuit against Joseph Schwartz, Rosie Schwartz, Louis Schwartz, Michael Schwartz, Skyline Healthcare LLC and Dorothy HealthCare Management, LLC, which alleged that the defendants committed fraud by not paying bills, withdrawing insurance premiums from employees’ pay and not paying those premiums and other actions.
Cara Sloan-Ramos, the communications director for KDADS, said the department withdrew its lawsuit and deferred any legal action to the Kansas Attorney General and/or the Department of Justice.
Here’s more on that KDADS lawsuit.
Last month, the state of Kansas finalized the transfer of receivership of 15 Skyline nursing homes to Mission Health.
“We know that other states dealing with the issues surrounding Skyline have had to make the unfortunate and sometimes unavoidable decision to close facilities and force residents to find a new place to live,” KDADS Secretary Laura Howard said in an Oct. 11 news release from the Kansas Department for Aging and Disability Services. “In our case, KDADS was determined that wasn’t going to happen and our staff worked very hard to find an alternative to displacing these seniors from their home. I’m proud today to say we were successful in avoiding that scenario.”
Here’s a link that explains more about the change in the Kansas law.