A Minnesota lawyer and nursing home president is defending his company against a receivership effort, following allegations that three facilities used residents’ personal funds for operating expenses.
State officials in late October petitioned a local court to take over three Minneapolis-area facilities citing a pattern of “failing to pay vendors for basic items, including food, telephone service, waste disposal and supplemental staffing, and had transferred thousands of dollars from resident trust accounts,” the Minneapolis Star-Tribune reported Wednesday.
But Stephen Kaminski, president of Mission Directed Health Care, Inc., which owns Bywood East Health Care, Birchwood Care Home and Grand Avenue Rest Home, said the department’s effort to control the facilities is unnecessary, blaming accusations on false statements made by facility employees.
He plans to defend his companies action at a Nov. 18 hearing with the state Department of Health.
Kaminski told the Star-Tribune his chief financial officer’s cancer treatments interrupted the paying of bills. Those bills have since been paid, Kaminski said, and the facilities are “in very good shape financially.”
Kaminski did not respond to requests for comment from McKnight’s Long-Term Care News.
“We have a lot of cash flow,” Kaminski said. He added that the three owners of the facilities have a combined net worth “in excess of eight figures.”
Some resident funds were mistakenly transferred to a separate operating account, said Kaminski, but the money has been returned.
“It was a mistake, but the money is there and the residents were not harmed in any way,” Kaminski said. “Anytime they needed money, they had it. The money was not misappropriated.”
MDH declined issued a statement in response to questions about the receivership petition:
“As alleged in the filings, [the department] has taken this step due to evidence gathered through investigation that raised serious concerns about the financial conditions at the facilities,” it said.
“Specifically, the petition alleged the Bywood, Birchwood and Grand Avenue facilities have had a pattern of failing to meet ongoing financial obligations.”
The health department said the facilities, which are identified as Medicaid-certified nursing homes by the Centers for Medicare & Medicaid Services and also licensed locally as boarding homes, were behind in payments to vendors as of October.
Bywood East Health was more than $417,000 behind, according to court documents. The state’s petition said the financial difficulties made it challenging to staff the facility, and its director of nursing told officials that of the five staffing agencies Bywood used in 2022, all but one stopped sending staff because of nonpayment.
