Judge Assails Shutdown of Nursing Home

An angry federal judge demanded Monday to know why he was not warned before a bankrupt Reseda nursing home evicted its 63 residents late Friday night--an act that state officials declared illegal.

U.S. Bankruptcy Judge Arthur M. Greenwald appointed a trustee to immediately take over the business operations of three other nursing homes managed by the same Arizona firm, including one in Alta Loma that is on the verge of shutting down if emergency funding does not materialize.

Greenwald appointed the trustee after unleashing his wrath on attorneys who converged on his Woodland Hills courtroom for a hearing that centered on the Reseda Care Center, whose residents were rolled out of the facility in wheelchairs and hospital beds at night for lack of operating funds.

Greenwald, who has been presiding over the bankruptcy proceedings of Reseda Care, told attorneys and a court-appointed trustee that he should have been advised of the impending closure no matter how short the notice and that he was “shocked” and “very upset” over the way the situation was handled.

“I want to make it absolutely clear that this court doesn’t condone that conduct,” Greenwald said. “To move those patients out on short notice was never the intentions of this court. The patients’ health and welfare was always paramount.”

Later in the day, state officials weighed in on the decision by Alfred Siegel--the trustee appointed by the bankruptcy court to handle Reseda Care Center’s affairs--to shut down the facility last week.

Siegel violated a California law that requires 30 days’ notice before closure of any health facility, said Brenda Klutz, deputy director of licensing for the state Department of Health Services. Klutz added that the action was unnecessary because the state has an emergency fund that could have been tapped to keep the facility open, at least for a few days, while other options were explored.

“He obviously did not follow the law,” Klutz said.

She said state officials had been closely monitoring the home over the previous two weeks to ensure patient care did not suffer, and sent representatives there to check on such essentials as food and linens.

“Unfortunately, we have to rely on the information that is given to us. We were told up to the day and the hour of the [trustee’s] action that there were prospective licensees standing by [to take over]. We had no reason to believe otherwise,” Klutz said.

“We didn’t know about this until it was actually happening.”

Sheri Bluebond, an attorney representing Siegel, said neither she nor her client had been notified by Klutz’s office that emergency funding was available. Bluebond and Siegel painted a different picture of Reseda Care’s financial situation.

Bluebond said that after Siegel was appointed trustee of Reseda Care on Wednesday, he was besieged by “nonstop” phone complaints over unpaid bills by utility companies, the landlord, housekeeping services and food services. Furthermore, the nursing home lacked insurance and was $4,000 short on its last payroll and had another payroll due Thursday.

“There was no money for services,” Siegel told the federal bankruptcy judge Monday.

“These people needed to be somewhere safe. They hardly had enough food to last them through the weekend. I was not going to put 63 lives in jeopardy.”

Later in the hearing, Greenwald appointed a court trustee to take over the business operations of operating nursing homes in Long Beach, Alta Loma in San Bernardino County and a Kern County home that has already closed.

All three, and the Reseda home, are managed by Phoenix Health Group of Scottsdale, Ariz., owned by John Robertson of Utah, an attorney for Robertson said.

Of particular concern to Greenwald is the state of the Alta Loma nursing home, which attorneys contend will be closed shortly unless a $50,000 commitment can be secured from a lender to keep it open for two more weeks, while the present owners look for a buyer.

Greenwald ordered the trustee to report back to him Wednesday morning on Alta Loma’s financial situation, on the care being provided to its residents and whether provisions have been made to continue caring for them if the nursing home is shut down.

“These people are not going to be moved out in the wee hours of the morning or at night,” Greenwald said. “We’re not going to go through a Reseda again.”

According to Dun & Bradstreet, which collects financial data, Phoenix Health Group was incorporated in Arizona in June 1992, and by 1995 the company had annual sales of $7.5 million, had a net worth of $1.5 million, and had 114 employees at its various nursing care facilities. But phone calls made Monday to Phoenix Health Group’s corporate headquarters in Scottsdale would not go through.

Siegel said he plans to seize billing records from a Phoenix Health Group office in in Culver City and subpoena bank statements. He also called for an investigation to determine “what put this [Reseda] place in this situation to begin with.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Screening a Nursing Home

Tips for assessing the financial health, safety and desirability of a nursing home.

FINANCIAL STABILITY

* Question the facility administrator and director of nursing about the financial future of the facility and stability of past ownership.

* Ask for a cost report from the office of Statewide Health Planning and Development. Though often confusing, they can provide some financial data.

* Look for signs of cost-cutting such as minimal staffing, rundown equipment, poor sanitary conditions, deficiencies or any citations from the state.

PATIENT CARE--LOOK FOR:

* A current operating license from the state.

* An administrator with a current state license.

* Certification under Medi-Cal and Medicare, if the patient depends on these programs.

* A location near family members.

* Well-balanced menus and flexibility in menu planning. Ask to sample a meal.

* Hand rails in hallways, grab bars in bathrooms and other features aimed at accident prevention.

* Clearly marked exits and unobstructed paths to these exits.

* Bedrooms that open onto a corridor and have windows.

* A physician available in emergencies.

* No strong odors.

* Residents who look clean and are dressed appropriately for activities.

* Ability of residents to go out for fresh air.

* Minimal or no use of physical restraints.

* Activity room for crafts, reading and social activities. Review activities calendar.

* A friendly staff and volunteer program; swift response to call lights.

* An active residents’ council and posted bill of rights.

* Information about facility from in-house or state ombudsmen, family and friends of current residents.

* A copy of the most recent inspection reports. (Should be available at the facility, but all records may be viewed at the local office of the state Department of Health Services licensing and certification division.)

HELPFUL PHONE NUMBERS

* State long-term care ombudsman (916) 323-6681; Los Angeles County district office, state Department of Health Services: (213) 351-8200.

Source: American Assn. of Homes and Services for the Aging; state Department of Health Services; California Advocates for Nursing Home Reform