Four nursing homes in Pittsburgh narrowly avoided closure thanks to an agreement reached on Monday to sell the properties to WeCare Center. This New York-based company operates 10 facilities across two states. This sale was crucial in preventing the shutdown of these nursing homes and ensuring continuous care for the residents.
Bankruptcy Court Approval
A bankruptcy court judge approved the sale following an agreement between creditors and the federal government, as reported by the Post-Gazette. The previous owner, South Hills Operations, is undergoing Chapter 11 bankruptcy, and this sale is a vital part of their financial reorganization plan.
Recent Closures and Bankruptcies
The state has seen several nursing home closures and bankruptcies recently. Mountain View Care and Rehabilitation Center residents had to be relocated after its closure. LaVie Care Centers, which operates nine facilities in Pennsylvania, also filed for Chapter 11 bankruptcy in recent months.
South Hills' situation mirrored the predicament of Comprehensive Healthcare in September 2023. Comprehensive Healthcare faced the potential closure of seven nursing homes unless it could sell them to Kadima Healthcare Group. This sale proceeded after the Department of Labor (DOL) failed to secure a preliminary injunction related to back wages and overtime claims against Comprehensive.
South Hills' Financial Troubles
Another bankruptcy court hearing for South Hills is scheduled for July 15. This hearing will address several critical issues: assuming labor agreements with SEIU Healthcare Pennsylvania for nursing home employees, establishing new contracts with Cigna Health & Life Insurance and AmeriHealth Caritas Health Plan, and setting limits on potential Department of Labor claims for back wages.
A 2018 lawsuit alleged that South Hills workers were routinely denied overtime pay for years. According to the lawsuit, around 6,000 workers are owed $20 million in back pay, and the facilities are liable for an additional $20 million in liquid damages. A final ruling on this case is expected in August.
The Facilities and the Sale
The four facilities involved in the sale, which have a combined 464 beds, are Monroeville Rehabilitation and Wellness Center, Mt. Lebanon Rehabilitation and Wellness Center, Murrysville Rehabilitation and Wellness Center, and South Hills Rehabilitation and Wellness Center.
While the terms of the sale were not disclosed, South Hills indicated that there were no other buyers and that the facilities would have closed if the sale to WeCare had not been approved. The facilities are controlled by Fort Smith, Ark.-based real estate investment trust (REIT) Cuarzo Healthcare Capital.
Future Outlook
The agreement to sell these nursing homes to WeCare Center provides a crucial lifeline, not just for the facilities themselves but for the residents and staff who depend on them. The successful sale is expected to stabilize operations and maintain the quality of care provided to the residents. Additionally, it offers a chance for financial recovery and restructuring, potentially paving the way for a more secure future for these nursing homes.
Conclusion
The rescue of these four nursing homes in Pittsburgh highlights the ongoing challenges faced by nursing homes in Pennsylvania. While the sale to WeCare Center averts immediate closure, the sector remains vulnerable to financial instability and regulatory challenges. Continuous efforts and strategic decisions will be required to ensure the long-term sustainability and quality of care in Pennsylvania's nursing home sector.