A New York judge will not name independent monitors for an embattled nursing home, saying the state attorney general’s request was “unwarranted at this juncture.”

New York state Supreme Court Justice Lisa Cairo ruled against Attorney General Letitia James (pictured, center), saying the independent financial and health monitors that were recently requested are not needed at Cold Spring Hills Center for Nursing & Rehabilitation in Woodbury. 

“Although the allegations considered as a whole paint a picture of potential misuse of facility funds for personal profit, absent full findings of fact and in light of the now resolved issue of imminent loss of employee benefits, the court finds the large-scale emergency relief sought by the instant order to show cause to be unwarranted at this juncture,” Cairo wrote in her ruling issued Friday. 

In July, the National Benefit Fund of 1199SEU sent notice that employees’ benefits would be terminated due to lack of payment. The facility made a partial payment that continued benefits through Oct. 15. Cairo’s ruling directed the facility’s owners to make all payments to ensure unionized employees retain their benefits, saying it “is imperative that [facility] staffing is adequate to ensure the safety of both patients and employees.”

James filed suit against Cold Springs Hills in December 2022, alleging the owners had siphoned off $22.6 million in Medicare and Medicaid funds through a “fraudulent network of companies that were used to conceal up-front profit taking.”

She also alleged that an “exorbitant” amount of rent has been paid to Cold Spring Realty, which she says is “owned and controlled by facility owners” and that payments on a “fraudulent” promissory note on a loan of $16 million with 13% interest is being paid by the nursing home.

Cold Springs’ attorneys previously said that appointing independent monitors would result in shuttering the facility. The lawyers also told Cairo in an Oct. 13 letter that there are at least two potential buyers who are interested in taking over Cold Springs Hill and serving as a temporary receiver. The letter notes that one potential buyer has been approved by the state Department of Health twice this year and has “strong support” from 1199SEIU.

The lawyers also continue to push Cairo to dismiss the case. In an Oct. 19 letter, they cited a recent ruling in which the US Court of Appeals for the Second Circuit ruled against a realtor who had filed a False Claims Act against a nursing home and Catholic health system on Long Island, NY. 

The court found that St. Catherine of Siena Nursing & Rehabilitation, the Catholic Health System of Long Island, and St. Catherine of Siena Medical Center did not improperly use reimbursements it received for “services already rendered” when it paid for nursing home expenses. The realtor alleged the nursing home had been defrauded of “hundreds of thousands of dollars.”

Cold Spring’s attorneys told Cairo that the ruling in United States ex rel. Quartararo v. Catholic Health System of Long Island Inc. means that James’ case has no basis since her “central narrative” is that Cold Springs’ owners “misappropriated” reimbursements for other uses. 

The ruling is “an important decision … which directly holds that Medicaid and Medicare payments to a nursing home for service already rendered to its residents need not be spent on additional resident care, as opposed to other expenses of the nursing home,” the lawyers wrote.