Photo credit: Getty Images
Photo credit: Getty Images

One of New York’s largest nursing homes was held in contempt by a state Supreme Court Justice Tuesday for failing to make court-ordered payments to ensure that staff can continue receiving healthcare benefits. 

Justice Lisa Cairo initially ordered Cold Spring Hills Center for Nursing and Rehabilitation to pay $2.65 million in a “timely manner” to an SEIU benefit fund in October 2023. The payment was to ensure the 606-bed facility’s more than 400 union employees would not lose their guaranteed benefits. 

New York has joined federal regulators in an active push for heightened oversight of long-term care providers in recent years. 

By mid-March, however — five months after issuance — the Woodbury, NY, nursing home had not yet made the court-ordered payment. The benefits are set to expire on April 22, according to the benefit fund. 

In an affidavit signed March 25, co-owner Avi Philipson argued that the facility had not violated court orders because benefits had not yet been denied. He further argued that Cold Spring Hills lacks the funds to make the payment immediately.

“Cold Spring does not have adequate cash reserves or receivables to cover the amount that the AG says must be paid to the funds,” the affidavit reads. “The facility is currently running at a significant loss, which I have been able to partially mitigate only by transferring money that I borrowed to Cold Spring, at no cost to the facility.”

Court denies arguments

The court rejected those arguments, however, with Cairo noting that the ordered payments were not intended to rectify the harm of losing benefits but to stop those payments being lost in the first place. 

“Respondents’… position that there is no injury until the benefits terminate is also not persuasive as that is the precise result the October 2023 Order seeks to avoid,” Cairo wrote. “Based upon the facts herein, specifically the Fund’s notice… that benefits will terminate on April 22, 2024 as a result of CSH’s failure to make required payments, the Court is satisfied that a finding of civil contempt is appropriate.”

Cairo also noted $2.5 million had been transferred to Cold Spring’s accounts between October and January from an entity owned almost entirely by Philipson. She stated that facility leadership’s claims of insufficient funding lacked evidence.

Cairo ordered Cold Spring to make the full payment by April 17 or to appear before the court on April 18 to receive a further “appropriate penalty.” 

Cold Spring Hills did not respond to McKnight’s request for comment Friday. 

The ruling was only a partial victory for New York Attorney General Letitia James, who had asked the court to also hold co-owners Philipson and Joel Leifer — the latter of whom claims to have not been a managing member of Cold Spring since 2019 — in contempt.  

Union leadership applauded the court order.

“We welcome the court’s decision requiring Cold Spring Hills’ management to make their contractually required payments to the workers’ health benefit fund,” an SEIU statement said. “A stable workforce is critical for quality resident care and protecting employees’ health insurance is key to retaining the nursing home’s skilled caregivers.”

This is not the first high-profile case against a New York nursing home pursued by James this year — a Long Island facility was ordered to pay more than $8 million in early march for staffing and fraud violations.