SNF chains in turmoil.

States seize troubled nursing homes

TEXAS AND CALIFORNIA HAVE TAKEN over several nursing homes owned by Oklahoma-based Crescent HealthCare and TLC Healthcare, while Oklahoma is monitoring facilities owned by the two companies. State officials report that Crescent and TLC, both owned by Rocky Lemon, were having difficulty meeting payrolls and paying food bills. In California, investigators also found evidence of patient neglect at three TLC facilities.

John Willis, Texas long term care ombudsman, states that, "It appears Mr. Lemon simply has walked away from his facilities in terms of financing and operating them."

Texas-sized trouble

The Texas seizure of 14 Crescent and TLC facilities affects 765 residents and is reportedly the largest nursing home takeover in the state's history. (See "Under the wire," May 2001 CLTC, page 7.) Court-appointed trustees will decide which homes can remain open. Potential buyers have been found for some of the properties. As this issue of CLTC went to press in early May, three facilities had already folded.

The closing of Crescent's Dallas Health and Rehabilitation Center will necessitate relocation of more than 200 residents--100 of whom are mentally disabled and may be difficult to place. "My fear is that some of these residents will have to be relocated to facilities not in Dallas," says Karen Littlejohn, director of Dallas County's Nursing Home Ombudsman's Program.

Darren Burgess, Oklahoma Health Department assistant deputy commissioner for protective health services, says that Oklahoma is aggressively monitoring 15 Crescent facilities.

"We were informed by Mr. Lemon, and also by the actual property owners, that some of the owners were processing trustee actions against Mr. Lemon in the district court in Oklahoma," says Burgess. "Based on that, we decided to monitor the buildings."

Lemon has stated that his Oklahoma and Texas facilities were not poorly run. "They simply did not have the financial resources to operate," he was quoted as saying. "When we realized our financial situation was troubled, we took action to make sure quality resident care was not jeopardized."

$2 million in civil penalties

California has taken over three TLC facilities cited for poor care: Lodi Health Care Center in San Joaquin County, and Crescent Care Center of Yucca Valley and Crescent Alzheimer's Care Center, both in San Bernardino County. Surveyors at the three homes reportedly found residents with severe pressure sores, dehydration, malnutrition, poor hygiene, and injuries from falls.

According to Attorney General Bill Lockyer's office, the state seeks $2 million in civil penalties and restitution of at least $50,000 to the Medi-Cal program. The Ensign Group, based in San Juan Capistrano, will manage the three homes until a new owner can be found.