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The fate of eight financially struggling Iowa nursing homes rests largely in the hands of a state district court judge and the Kansas City, MO, receiver appointed to oversee a dispute over $133,000 in failed July rent payments.

Rebecca Brommel, an attorney representing the facilities’ operating companies, told the Des Moines Register the firms were unable to reach an agreement with the landlords on how to mitigate the additional financial impact on the nursing homes, and are in the process of searching for a new “party” to assume operational control. 

Representatives of the eight homes, which have at least 450 beds among them, reported they were in “dire” financial positions. None has more than 40 days of available operating cash, the company representing the landlord-plaintiffs told Judge David Nelmark. The judge appointed attorney Michael Flanagan receiver.

“We will take the time necessary to stabilize them,” Flanagan told McKnight’s Long-Term Care News Monday. He said the only issue the court is concerned with at this time is “unpaid rent.”

The involved operating companies are: OpCo Clinton, IA, LLC; OpCo Keosauqua, IA, LLC; OpCo Newton, IA, LLC; OpCo Urbandale, IA, LLC; OpCo Sioux City, IA, LLC; OpCo Sigourney, IA, LLC; OpCo Keota, IA, LLC; and OpCo Four Seasons IA, LLC, and their guarantor, HoldCo Tabletop, LLC.

Receiver not only concern

News of the eight struggling facilities comes after the closure of 11 of the state’s nursing homes since December 2021, the Iowa Health Care Association noted. Another nursing home and assisted living provider, QHC, is currently in the bankruptcy process

Both Brommel and the IHCA said that the facilities’ fates are a reflection of broader problems over the past year.

“Long-term care facilities in Iowa and across the country have faced significant financial stresses due to COVID, inflation, supply chain issues and workforce shortages, and these facilities are no different,” read Brommel’s statement to the court, which she shared with McKnight’s. “The operating companies continue to put the health and safety of the residents first and are working cooperatively with the newly appointed receiver and his selected management company as they take over the operations.”

The IHCA said that the closures were largely due to financial stress from inflation, supply chain issues and workforce shortages. Industry leaders have called for an increase in government support so workers can be paid more.

While facing many of the same pressures non-healthcare businesses now do, nursing homes cannot respond to those pressures in the same way other businesses can, Iowa Health Care Association president and CEO Brent Willett told reporters.

“And so we are incurring ongoing and devastating financial losses, which, unfortunately, has begun to result in the closure of nursing homes across the state of Iowa,” he said.