QHC Management, a company that owns 10 nursing homes in Iowa, filed for bankruptcy this year. The company also owes $2.1 million dollars in taxes.
As a result, the company plans to close three nursing homes in Iowa. The homes located in Dysart (Sunnycrest Care Center), Mitchellville and Humbolt South are on the list of closures.
The company owns a total of 8 nursing homes and 2 assisted living facilities and is trying to sell all of them. The closure of the three facilities could result in the displacement of 53 residents.
Sunnycrest houses 25 residents. QHC told the court that both the Mitchellville and Dysart locations were each operating at "a seriously diminished census level making it uneconomic to continue operations."
The attorneys representing the federal government intervened and notified the court that the homes were required to provied 60 days' written notice of closure to the state inspectors, the Iowa Long Term Care Ombudsman's Office and residents of each facility.
The lawyers also argued that a facility must have a written, state-approved plan to transfer and relocate all of the residents before they can close the facilities.
The Department of Justice said, "Protecting the life, health, and safety of the approximately 53 residents still living at the three facilities is the United States' utmost concern."
Noting that Sunnycrest in Dysart is in a rural area of Iowa and that due to the lack of other nursing homes nearby, some families "may have to drive multiple hours to visit a loved one." As a result, the court ordered QHC to comply with "any applicable regulations and rules" that govern the process of closing a Medicare-certified nursing home.
Iowa Department of Inspections and Appeals has approved plans to close the Humboldt South and Sunnycrest locations, but has not yet received a plan to close the Mitchellville location.
The court declared that any Medicare decertification would not be effective until the residents were transferred out of the facilities.
The federal government also argued that QHC must pay back the COVID-19 Accelerated and Advanced Payments it had collected as well as pay the fines and penalties for the regulatory violations, which adds up to $2,108,910.
According to the federal government, the following amounts are owed to the government by each QHC facility are as follows:
Crestridge Care Center: $32,182
Crestview Acres: $93,863
Sunnycrest Care Center: $3,250
Fort Dodge Villa: $865,775
Humboldt North: $32,500
Humboldt South: $67,226
QHC Mitchellville: $385,708
Winterset North: $628,407
There is a hearing set for August 1, but the U.S. Department of Justice is asking the court to delay due to a scheduling conflicts.
Lawyers for the government said that two other companies have shown interest in buying QHC but the companies have to decide which facilities to purchase and keep open, and which Medicare-Certification agreements would be taken over by the company Blue Diamond.
QHC is also in a legal dispute with Cedar Healthgroup concerning a $600,000 deposit put down when it had agreed to buy the company. The court has not issued a decision in that dispute.