News Feature

Originally published in Castine Patriot, October 23, 2008
PNH placed in receivership by state agency
Financial tug of war with state

Click here to see the full Penobscot Nursing Home Archive.

by Faith DeAmbrose

The Maine Department of Health and Human Services stepped in October 2 to seize control of the Penobscot Nursing Home and five other Maine health care facilities owned by Connecticut-based Eagle Landing Residential Care, and operating as Elrcare Maine, LLC, placing them into receivership.

A receivership allows a forced but temporary transfer of control from a private entity to a receiver appointed by the state. The intent of receivership, explained Catherine Cobb of the Maine Department of Health and Human Service, is to examine businesses records, determine viability and recommend a course for future action. The court appointed Gail Sasseville, a licensed administrator, as receiver and she will work from the Maine headquarters of Elrcare in Westbrook.

Under state statute, MDHHS has the authority to petition the court for receivership for a variety of reasons, but in the case of Elrcare Maine, the problem was financial. According to Cobb MDHHS learned the company had unpaid bills, had received disconnection notices for utilities, had bounced payroll checks and at one facility had run out of oil and propane. It was when she learned one facility was out of fuel the state intervened, said Cobb, arranging for the delivery of oil and propane.

Eagle Landing’s owner Sifwat Ali explained in a recent interview that the situation is complicated and believes the state rushed into the receivership with haste and without giving him the opportunity to defend himself or to look into the allegations, which span six separate facilities, properly. Ali said he received notification via e-mail from MDHHS one day before the department filed its petition, which “didn’t give me or my attorney the opportunity to mount a defense.”

Ali said his attorney is trying to get the receivership terminated and is working to draft a plan that will be acceptable to all concerned parties outlining a path to its end.

The nursing home will continue to operate as normal while in receivership and will have the ability to take new patients. “It is important for people to know that the [Penobscot Nursing Home] is fully operational and taking care of its patients,” said Cobb. The department has allocated $87,000 from its funds for the receivership, which includes a salary for the receiver. “The receiver has to apply the resources necessary to meet the current expenses,” said Cobb, who added that the infused funds are expected to be paid back to the department.

Ali contends a portion of the companies financial problems have been generated by the state and although he wants to work with MDHHS to remedy the situation, all parties involved need to have a real discussion about “who owes who what.”

Ali traces a portion of the problem’s root to the Penobscot Nursing Home this past year where deficiencies were found during an annual visit from the department, which needed remedy. The problem of financial viability came into question at this time and the company has since come current with its bills as part of an agreement with the state. While PNH worked to eventually satisfy the deficiencies identified by the state, the federal Medicare system denied the business the ability to take new patients covered by Medicare, which reduced the number of occupied beds by 30 percent, or approximately $130,000 per month, for five months. “I can sustain that kind of loss for a month or two,” said Ali, “but when it became unsustainable I asked for help [from MDHHS] and instead of helping, dug in their heels.”

In addition to the loss of income at PNH, the company pays $90,000 a month to the state for overpayments it made to five Elrcare Maine facilities in a previous year. Ali said the state currently owes his company money for Medicare payments, which he is unable to collect. “Even though the state owes us just about as much as they say we owe them we are forced to make the payments,” said Ali, “and as the state uses the assertion that our finances are in trouble they are helping to fulfill the prophesy by withholding more than $200,000 a month and by being 30 to 60 days behind in the payments when they are made.”

Ali said his company is “solvent” and at no time have any of his patients been at risk. Addressing the state’s position the company bounced payroll checks and had services disconnected, Ali said he believes the claims have been “exaggerated,” but that he is looking into them.

As part of the receivership process, Sasseville is expected to make a series of recommendations to MDHHS and one of three things can happen, explained Cobb: the facilities could be returned to their owner, they could be sold with the consent of the owner or they could close. “It is premature to know which direction this will take right now,” said Cobb, adding that each facility will be examined independently.

Ali said it is his intention to work through the receivership process as quickly as possible and to come to an agreement with MDHHS to regain control of his facilities.