Casa Real, Santa Fe Care Cen­ter file for bank­ruptcy

Move comes af­ter $28.6M judg­ment against re­lated Pre­ferred Care fa­cil­ity in Ky.

Santa Fe New Mexican - - FRONT PAGE - By Thom Cole

The Casa Real and Santa Fe Care Cen­ter nurs­ing homes, along with re­lated fa­cil­i­ties in Es­pañola and nine other New Mex­ico cities, have filed for fi­nan­cial re­or­ga­ni­za­tion in U.S. Bank­ruptcy Court in Texas.

Also fil­ing for re­or­ga­ni­za­tion Mon­day was Pre­ferred Care Inc. of Plano, Texas, which is af­fil­i­ated with the New Mex­ico nurs­ing homes as well as 21 homes in Ken­tucky.

Gov­ern­ment in­spec­tors, res­i­dents and fam­i­lies re­peat­edly have ac­cused Pre­ferred Care and its nurs­ing homes in New Mex­ico and Ken­tucky of pro­vid­ing in­ad­e­quate care. Pre­ferred Care faces a nearly $30 mil­lion jury judg­ment in Ken­tucky and a law­suit filed by the state At­tor­ney Gen­eral’s Of­fice in New Mex­ico.

Ad­min­is­tra­tors at Casa Real and the Santa Fe Care Cen­ter said the homes con­tinue to op­er­ate but de­clined fur­ther com­ment, re­fer­ring ques­tions to a bank-

ruptcy man­ager. He couldn’t be reached for com­ment Tues­day.

Casa Real and the Santa Fe Care Cen­ter, both lo­cated in the city’s med­i­cal dis­trict off St. Michael’s Drive, are the only nurs­ing homes in Santa Fe that ac­cept Medi­care and Med­i­caid pa­tients.

In fil­ing for re­or­ga­ni­za­tion, Pre­ferred Care and its re­lated nurs­ing homes seek to be­come prof­itable through — for ex­am­ple — dis­charge of debts, rene­go­ti­a­tions of con­tracts and leases, and new fi­nanc­ing. A judge will have to ap­prove any re­or­ga­ni­za­tion plan. Pre­ferred Care and the homes can con­tinue to op­er­ate while a plan is de­vel­oped.

The bank­ruptcy fil­ings fol­low a rec­om­men­da­tion by a jury in Pa­d­u­cah, Ky., that a Pre­ferred Care nurs­ing home pay a $28.6 mil­lion judg­ment for im­proper care of a res­i­dent. The jury also found the home de­stroyed records of the res­i­dent’s care. Of the $28.6 mil­lion judg­ment, $25 mil­lion was awarded to pun­ish Pre­ferred Care and the nurs­ing home.

Pre­ferred Care also has faced nu­mer­ous law­suits over its care of res­i­dents in New Mex­ico.

The At­tor­ney Gen­eral’s Of­fice al­leges in its law­suit that Pre­ferred Care has de­frauded Med­i­caid by hav­ing in­suf­fi­cient staff to meet the needs of res­i­dents at its Santa Fe nurs­ing homes, Es­pañola Val­ley Nurs­ing and Re­ha­bil­i­ta­tion Cen­ter, and fa­cil­i­ties in four other New Mex­ico cities. Pre­ferred Care has de­nied the al­le­ga­tion.

The case is sched­uled to go to trial next year but could be put on hold be­cause of the bank­ruptcy fil­ing. A spokesman for the At­tor­ney Gen­eral’s Of­fice said lawyers were re­view­ing the is­sue.

The New Mex­i­can re­ported in July that Casa Real and its sis­ter fa­cil­ity, the Santa Fe Care Cen­ter, have re­ceived the fed­eral gov­ern­ment’s low­est rat­ing for nurs­ing homes — one out of five stars — and have been cited re­peat­edly by in­spec­tors for se­ri­ous de­fi­cien­cies in res­i­dent care over the past 15 years.

The nurs­ing homes also have faced hun­dreds of com­plaints from pa­tients and sev­eral wrong­ful death law­suits in re­cent years.

In May, the fed­eral agency that ad­min­is­ters Med­i­caid and Medi­care des­ig­nated Casa Real as a “spe­cial fo­cus fa­cil­ity” be­cause of its poor record of com­ply­ing with care stan­dards, and it said the nurs­ing home would be sub­ject to more fre­quent in­spec­tions. The des­ig­na­tion is given to the na­tion’s poor­est-per­form­ing nurs­ing homes and is meant to ad­dress the “yo-yo” prob­lem of fa­cil­i­ties rou­tinely fall­ing in and out of com­pli­ance with care stan­dards.

The only other New Mex­ico nurs­ing home des­ig­nated as a spe­cial fo­cus fa­cil­ity is Pre­ferred Care’s Sage­crest Nurs­ing and Re­ha­bil­i­ta­tion Cen­ter in Las Cruces.

For two months this sum­mer, Casa Real was barred from billing Med­i­caid or Medi­care for newly ad­mit­ted res­i­dents un­til per­sis­tent qual­ity-of-care prob­lems were cor­rected.

A state in­spec­tion in Au­gust found Casa Real res­i­dents weren’t re­ceiv­ing med­i­ca­tions as di­rected by their physi­cians and that the nurs­ing home wasn’t do­ing enough to en­sure that res­i­dents didn’t re­ceive un­nec­es­sary drugs, in­clud­ing psy­chotropic med­i­ca­tions.

Other in­spec­tions this year turned up a long list of prob­lems, in­clud­ing med­i­ca­tion er­rors, ex­pired food and drugs on shelves, un­re­ported res­i­dent in­juries and as­sault, poor care of bed sores, nurs­ing un­der­staffing and in­ad­e­quate safe­guards against the spread of dan­ger­ous in­fec­tions.

Pre­ferred Care re­peat­edly has de­clined to com­ment on in­spec­tion find­ings.

The Reuters news agency re­ported that the op­er­a­tors of the Pre­ferred Care nurs­ing homes is­sued a state­ment say­ing the bank­ruptcy fil­ings will al­low them to stay in busi­ness, pay em­ploy­ees and ven­dors, and care for 2,900 res­i­dents while seek­ing to re­struc­ture their fi­nances.

“The health, safety, and com­fort of the res­i­dents will be the pri­mary con­cern go­ing for­ward,” a spokesman for the homes’ op­er­a­tor said in a state­ment pro­vided to the news agency.

Pre­ferred Care, ac­cord­ing to Reuters, blamed the bank­rupt­cies on 163 per­sonal in­jury cases filed against the com­pany.

In its bank­ruptcy fil­ing, Pre­ferred Care’s list of its big­gest 30 debts in­cluded $350,000 owed to the New Mex­ico Tax­a­tion and Rev­enue De­part­ment.

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