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Blossom South vows to fight court ruling that will allow shutdown

Rochester Business Journal
December 18, 2013

Blossom South LLC plans to appeal a court ruling that would let regulators shut its troubled Blossom South Nursing and Rehabilitation Center, attorneys for the beleaguered Rochester nursing home said Wednesday. 

In a decision handed down Tuesday, U.S. District Judge David Larimer turned down Blossom South’s bid to keep state and federal regulators from closing the beleaguered Rochester long-term care facility.

“The legal team at Abrams, Fensterman intends to appeal,” Abrams, Fensterman, Fensterman, Eisman, Formato, Ferraro & Eninger LLP, the Long Island law firm representing Blossom South, said in a statement.

Abrams, Fensterman managing partner Howard Fensterman did not return a call seeking further comment.

“The 160 dedicated and compassionate staff members at the facility will continue their commitment to providing the highest level of care and support for our residents, and the owners will continue their efforts to keep Blossom South open,” the statement added.

The federal Centers for Medicare and Medicaid Services and state Department of Health prevailed in the case but “should have little reason to rejoice” in their victory, which would mean relocating scores of fragile elderly and physically and mentally impaired residents “perhaps against their will,” Larimer wrote in the Tuesday ruling.

Under threat of a CMS decision to cut off the 161-bed, for-profit Rochester facility’s Medicaid funding and ordered to get ready to shut down in September, Blossom South sued the CMS and the state health department in August, winning an order from the judge that temporarily halted the Medicaid cutoff.

Larimer’s final ruling against the nursing home came less than two weeks after an administrative law judge, ruling in a separate proceeding on Blossom South’s internal appeal to the Department of Health and Human Services, turned down the nursing home’s bid to reverse CMS’ Medicaid cutoff.   

Financial statements the nursing home filed with the court show that Medicaid pays for the care of more than 95 percent of Blossom South’s residents.  

Blossom South is legally entitled to a further administrative appeal, but might have slim chances of prevailing, Larimer wrote in the Dec. 17 decision. 

In moving to retract the nursing home’s Medicaid eligibility, CMS alleged that despite many chances to do so Blossom South had failed to clear up multiple serious and longstanding violations turned up by state inspectors.

In court filings, Blossom South officials questioned the seriousness of the alleged violations and maintained that regulators had not given the nursing home enough time to respond to the charges.

Evaluating the nursing home’s violations was not within his scope, but the law was not on Blossom South’s side, Larimer wrote in the Dec. 17 ruling.

Blossom South’s Brooklyn-based managing partner, Israel Segal, a 9 percent partner in the Blossom LLC whose stated intention is to take full control of the facility, said in court filings and interviews that he had poured more than $1 million into Blossom South, hired new staff and was turning the nursing home around financially.

Blossom South lost $2.1 million in 2010 and $2.6 million in 2011. In 2012, the first full year after he took over as managing director, Segal said, he cut its loss to $752,252.

Industry experts see Medicaid’s nursing home payments as inadequate and generally see long-term care facilities that rely as heavily on Medicaid as Blossom South as not financially viable.

According to report by the American Healthcare Association, a national trade group representing some 10,000 nursing homes, Medicaid’s nursing home reimbursements fell short of home operators' actual costs last year by a national average of $22.34 daily per resident. A separate report published by an AHCA affiliate identified New York as one of the 32 states that further exacerbated the shortfall by cutting Medicaid payments in 2012. 

Only nursing homes able to offset Medicaid losses with other revenues such as higher fees charged to privately paying residents can hope to survive, Robert Hurlbut, CEO of Rohm Services Corp., which owns and runs a dozen Rochester area for-profit nursing homes, told the Rochester Business Journal in a previous interview. 

“Obviously, they’re wrong,” Segal insisted in an October telephone interview with the RBJ, maintaining that  given a chance his turnaround efforts would succeed in financially stabilizing and bringing Blossom South into compliance.

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.
 



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