Skyline Health to Exit Nursing Home Industry

Craig Cloud

Skyline Health, which recently saw two of its 21 skilled nursing facilities in Arkansas put into receivership, is leaving the nursing home business.

“Skyline has made a business decision to transition away from the skilled nursing facility industry,” Michael Kosowski, a spokesman for Skyline, said in an email to Arkansas Business last week.

Kosowski said Skyline, of Wood-Ridge, New Jersey, is going through a change of ownership process for the Arkansas facilities, but declined to say which company would take control of the properties.

In April, Skyline entered into a management agreement with Infinity Healthcare Management of Illinois to operate eight skilled nursing homes and one assisted living facility that Skyline managed in Arkansas.

On May 4, the Arkansas Department of Human Services filed lawsuits to put Skyline’s Spring Place Health & Rehab in Hazen and Dierks Health & Rehab into receivership after concerns surfaced over the company’s finances and its ability to provide food to residents. It was the first time since the 1980s that DHS had sued to take control of a nursing home.

An affiliate of Reliance Health Care Inc. of Conway was appointed on May 4 to manage those two nursing homes.

“Our primary focus now is to ensure the stability of the facilities, to ensure that the health and safety of the residents are taken care of,” Craig Cloud, director of DHS’ Division of Provider Services & Quality Assurance, told Arkansas Business last week. “As we move forward then we will look … at transitioning those from a receivership to an owner that has the ability and capacity to operate those programs.”

Skyline has had recent financial problems at its nursing homes in South Dakota, Nebraska, Pennsylvania and Kansas. Its facilities in those states were placed into receivership, according to court filings.

Problems Buying Food
The DHS lawsuits filed in circuit court to appoint a receiver highlighted the alleged financial problems at the Spring Place and Dierks facilities.

The administrator at the 70-bed Spring Place told DHS’s Office of Long-Term Care that the facility was “running short of food to feed its residents because the food service providers will no longer provide food to the facility on its account,” according to DHS’ lawsuit.

On May 3, when the employees tried to buy food for that weekend, the Skyline-issued credit card was declined, according to the filing.

Meanwhile, the 70-bed Dierks facility also was having financial problems. DHS said in the lawsuit on May 4 that Dierks “is unable to procure food on a regular basis and is having difficulty paying for food for the residents at the time of delivery.”

The administrator also told an OLTC investigator that “the facility would not receive food deliveries for the remainder of the week,” the lawsuit said.

DHS’ Cloud said that no residents at the facilities went without food.

Skyline didn’t ask for a hearing on the appointment of a receiver.

For the six-month period that ended June 30, SpringBrook Health & Rehab Center of Hazen, which does business as Spring Place, reported a loss of $300,000 on revenue of $1.6 million. Dierks reported a loss of $30,000 on revenue of $2.1 million. Those were the only figures DHS had on file for the facilities. Skyline began operating in Arkansas in 2016.

For the fiscal year that ended June 30, the 21 nursing homes that Skyline operated in Arkansas had a total net income of $2 million on revenue of $159.8 million.

Under the state Freedom of Information Act, DHS released financial data for Skyline’s nursing homes, all of which participate in the joint federal and state Medicaid program, which pays for most nursing home care.

Net incomes ranged from just over $1 million at the 117-bed Fort Smith Health & Rehabilitation Center to a loss of $1.9 million at Hillview Post Acute & Rehabilitation Center in Little Rock.

The facilities are owned by Joseph Schwartz, of Wood-Ridge, New Jersey, through various corporations, including Skyline Health.

DHS’s Cloud said that the agency is monitoring Skyline’s other facilities in Arkansas several times a week.

“At this time, there’s not an immediate need for us to take action on those 19” facilities, he said.

Skyline Nursing Homes in Arkansas
For fiscal year ended June 30, 2017

Batesville Health & Rehab
Net Income:    $125,464
Revenue:    $8,038,019
Licensed Beds:    150
Occupancy Rate:    65.36%

Broadway Health & Rehab, West Memphis
Net Income:    $45,220
Revenue:    $9,191,200
Licensed Beds:    119
Occupancy Rate:    82.90%

Capital Health & Rehabilitation Center, Little Rock
Net Income:    $574,738
Revenue:    $7,781,049
Licensed Beds:    120
Occupancy Rate:    73.66%

Creekside Health & Rehab, Yellville
Net Income:    -$506,792
Revenue:    $6,258,775
Licensed Beds:    96
Occupancy Rate:    76.58%

Dierks Health & Rehab Center^*
Net Income:    -$30,821
Revenue:    $2,168,078
Licensed Beds:    70
Occupancy Rate:    76.27%
*For the six-month period that ended June 30, 2017. The nursing home is being operated by an affiliate of Reliance Health Care Inc. of Conway.

Fort Smith Health & Rehabilitation Center
Net Income:    $1,004,333
Revenue:    $9,353,766
Licensed Beds:    117
Occupancy Rate:    94.16%

Heritage of Hot Springs Health & Rehab
Net Income:    $904,719
Revenue:    $9,377,980
Licensed Beds:    152
Occupancy Rate:    77.56%

Hillview Post Acute & Rehabilitation Center, Little Rock
Net Income:    -$1,900,241
Revenue:    $8,197,595
Licensed Beds:    140
Occupancy Rate:    67.14%

Homestead Health & Rehabilitation Center, Stamps
Net Income:    -$33,111
Revenue:    $4,233,222
Licensed Beds:    94
Occupancy Rate:    53.49%

Jonesboro Health & Rehab
Net Income:    $615,554
Revenue:    $10,804,276
Licensed Beds:    136
Occupancy Rate:    92.28%

Lindley Health & Rehab Center, Newport
Net Income:    $721,968
Revenue:    $9,119,556
Licensed Beds:    120
Occupancy Rate:    84.00%

Little Rock Post Acute & Rehabilitation
Net Income:    $386,241
Revenue:    $11,525,898
Licensed Beds:    154
Occupancy Rate:    57.80%

Madison Health & Rehab, Little Rock
Net Income:    -$212,292
Revenue:    $7,160,613
Licensed Beds:    140
Occupancy Rate:    54.99%

Magnolia Health & Rehabilitation
Net Income:    -$522,555
Revenue:    $9,031,018
Licensed Beds:    140
Occupancy Rate:    80.18%

Mine Creek Health & Rehab

Net Income: -20,753

Revenue:    $4,768,560
Licensed Beds:    78
Occupancy Rate:    73.79%

Mountain View Health & Rehabilitation Center
Net Income:    $725,413
Revenue:    $6,464,668
Licensed Beds:    97
Occupancy Rate:    74.14%

North Little Rock Health & Rehabilitation
Net Income:    $777,461
Revenue:    $9,740,426
Licensed Beds:    140
Occupancy Rate:    86.30%

Ozark Terrace Health & Rehabilitation Center, Rogers
Net Income:    $531,011
Revenue:    $6,606,288
Licensed Beds:    110
Occupancy Rate:    68.48%

Searcy Health & Rehab
Net Income:    -$1,424,744
Revenue:    $7,675,848
Licensed Beds:    245
Occupancy Rate:    37.59%

SpringBrook Health & Rehab Center, Hazen^*
Net Income:    -$302,085
Revenue:    $1,655,564
Licensed Beds:    70
Occupancy Rate:    59.35%
*For the six-month period that ended June 30, 2017. The nursing home is being operated by an affiliate of Reliance Health Care Inc. of Conway.

White Hall Health & Rehab
Net Income:    $634,532
Revenue:    $7,927,812
Licensed Beds:    120
Occupancy Rate:    68.87%

Totals        
Net Income:         $2,093,260
Revenue:          $159,780,211    
Licensed Beds:             2,608

Source: Arkansas Department of Human Services