More than 900 South Dakota seniors living in 18 nursing homes and one assisted living center were at “immediate risk of irreparable harm,” after the company running the homes couldn’t pay its bills or employees.

The state says it will make sure the new operators of the nursing homes will be providing “quality services.”

At the end of last week, a divisional vice president for Skyline Healthcare notified the state it was out of money and its South Dakota facilities only had enough food and medical supplies to last through May 2. 

The email also said Skyline wasn’t paying its employees or bills and that utilities like water were about to be shut off.

But how did things get to this dire point?

KELOLAND Investigates looked into Skyline Healthcare and what we found has us asking how it was granted ownership of the nursing homes in the first place.

Skyline Healthcare took over Golden Living Centers in South Dakota on January 1, 2017. Golden Living, which has 295 centers in 21 states, still owns the property and buildings in South Dakota and leased them to Skyline.

Skyline was responsible for the day-to-day operations of the 19 South Dakota facilities. 

According to court documents, Skyline Healthcare was dissolved May 1. 

The same thing that just happened in South Dakota also took place in the last two months in Nebraska and Kansas. Skyline also lost its facilities in Florida, Arkansas, Kentucky and Pennsylvania. 

Skyline is owned by Joseph Schwartz, a Brooklyn resident who started in the 1980s as an insurance broker specializing in long-term care.  Schwartz took over more than 100 elderly care facilities across seven states since 2015.

Skyline is headquartered in an office above a New Jersey pizza shop

KELOLAND Investigates found several lawsuits against Schwartz over unpaid bills in the past.

Schwartz and his wife are currently embroiled in a lawsuit filed against them by CIBC Bank.  Schwartz defaulted on the loans to buy nursing homes in Arkansas and now owes CIBC $1.9 million.

So who’s checking out nursing home operators in South Dakota before they’re handed over the care of hundreds of elderly people?

The State Department of Health tells KELOLAND Investigates changes of ownership for nursing facilities are reviewed and approved by the U.S. Department of Health and Human Service’s Centers for Medicare and Medicaid Services. We’ve put in calls to that federal agency to ask why Skyline was approved.

In a statement to KELOLAND Investigates, Skyline blames the problems on “obstacles created by individual property owners,” or in the case of South Dakota: Golden Living.

“Skyline has been working tirelessly for several months to transition from the nursing home and managed care industry. The process of this seamless transition has begun in various regions. As with any transition, there have been hurdles. Although a few obstacles were created by an individual property owner with locations in South Dakota, Kansas, Pennsylvania and Nebraska, Skyline is pleased to report that these issues have been addressed thoroughly and corrected. The delay, which was not occasioned by any conduct on the part of Skyline, created an unfortunately unsustainable scenario. Thankfully, Skyline has resolved every matter of contention in all respects. Skyline regrets any concern that this has caused, but will continue to keep the care of our patients our utmost priority.” — Juda S. Engelmayer, Skyline Healthcare Spokesperson This week the South Dakota Department of Health filed a motion to support Black Hills Receiver to take over the operations of the nursing homes.

“The state is supportive of the efforts of Black Hills Receiver LLC to assume operations of facilities in South Dakota currently operated by Skyline Healthcare to ensure residents of these facilities continue to receive needed services and the staff working in these facilities are supported in their efforts.  Towards that end, the Department of Health filed a motion to support the receivership action ultimately granted by the court yesterday.  We are committed to assist the interim and long-term operators of these nursing facilities to provide quality services to people across the state.” — Derrick Haskins, Communications Director, South Dakota Department of Health

The president of Black Hills Receiver LLC is Wanda Prince, who is the Vice President of Clinical Operations for Golden Living. The new LLC says it’s moving quickly as a team with each facility to focus on the health and safety of the residents and keep operations stable. 

“As the receiver of the 19 South Dakota facilities formerly operated by Skyline Healthcare, Black Hills LLC is committed to supporting the facilities as they work to stabilize the operations. We are moving quickly as a team with the local leaders and clinicians at each facility to help those leaders focus on the health and safety of the residents and support the needs of the staff. It is our goal to keep the facility operations stable so that the focus can remain on the care of the patients.” — Kelli Luneborg-Stern, Spokesperson Black Hills LLC.