Texas Advocates for Nursing Home Residents: Hearings on Mariner Sale Must Be Held; Mississippi AG Warns Nursing Home Sale Trends Hinder Enforcement o

21 October 2005

The following news release is
issued by the Coastal Bend Chapter, Texas Advocates for Nursing Home
Residents:
The president of the Coastal Bend Chapter, Texas Advocates for Nursing
Home Residents, urged Texas lawmakers on Thursday to hold hearings into
whether recent nursing home ownership changes are putting the state's 85,000
elderly residents at risk.
Libby Edwards, of Corpus Christi, said her organization is concerned by
testimony by Arkansas state officials on the topic on Wednesday that a trend
in nursing home sale transactions has effectively neutered the state's ability
to regulate or enforce quality standards.
Last December, a group of New York-based real estate investors bought
Mariner Health, the 3rd largest nursing home chain in the U.S., for $1.09
billion, stripped the company of its assets and created a licensing entity
worth only about $12 million. That company is now being sued in several
states by vendors and suppliers who say they are not being paid and the
company is insolvent. Mariner owns more than 70 homes in Texas.
"If the company is not paying its bills, how long will it be before homes
start cutting staff or closing altogether?" Edwards said.
Special Assistant Attorney General Scott Johnson told Mississippi
lawmakers that in a case of abuse or neglect of a resident, the state's only
recourse is to go after the license holder. However, if the license holder
does not own the facility or any assets, the action is moot.
"You can't collect money from someone who doesn't have any. If you're
operating on a shoestring budget and you have a $4,000 judgment, how are you
going to get that?" he said.
The same investors that bought Mariner are poised to buy Arkansas-based
Beverly Enterprises for $1.9 billion. But the Mariner lawsuits and other
questions about the track record of the investors appear to have stalled the
buy-out until at least Nov. 18.
Arkansas lawmakers are expected to question Beverly Enterprise officials
at an Oct. 25th meeting of the Joint Public Health, Welfare and Labor
Committee. Beverly officials have said they will attend the hearing and
answer questions. Beverly officials first said they would attend, then backed
out, of the Mississippi hearing.

Contact: Mike Kelly 512-327-6788.