Nursing home operator with troubled Vermont facilities files for bankruptcy

Updated July 23 at 4:27 p.m.

Genesis HealthCare, a prominent nursing home provider in Vermont and one of the largest skilled nursing companies in the nation, filed for bankruptcy last week. 

Genesis currently operates three long-term care facilities in the state: the Bel Aire Center in Newport, the Mountain View Center in Rutland City and the Saint Albans Health & Rehabilitation, a spokesperson told VTDigger.

There are provisions in the bankruptcy filing to ensure staff at all Genesis-owned facilities, including the three in Vermont, retain positions, pay and benefits, for residents to continue receiving care during the court proceedings, and for the company’s vendor agreements to stay in place, according to the spokesperson. 

“There will be no expected impact to patient care as a result of this filing. Our daily operations remain unchanged, and our commitment to those we serve continues uninterrupted,” the spokesperson wrote.

According to bankruptcy documents filed in the Northern District of Texas U.S. Bankruptcy Court, Genesis has racked up between $1 billion and $10 billion in estimated liabilities, including over $700 million in unsecured claims to their 30 highest creditors. This includes $324 million in a real estate loan, over $103 million in deferred payroll taxes to the Internal Revenue Service and over $12 million owed to the New England Health Care Employees Pension Fund. 

Genesis faced challenges due to legacy debt, including “approximately $8 million per month in settlement and defense costs arising from alleged personal injury and wrongful death claims, most of which date back many years,” Genesis’ co-Chief Restructuring Officer Louis Robichaux IV wrote in the court document. 

Genesis skirted bankruptcy in the spring of 2021 after the private equity-backed company RenGen HealthCare provided an influx of capital, according to a case brief filed by Robichaux. RenGen, backed by Pinta Capital Partners, is also aiding Genesis’ “exit plan” through the form of a stalking horse bid, setting a minimum price for the company at auction, Robichaux wrote.

Three New York-based owners planned to take over five of the nine facilities Genesis owned in Vermont in 2020, including Bennington, Berlin, St. Johnsbury, Burlington and Springfield, after financial struggles, Covid-19 outbreaks, neglect cases and safety violations. According to reporting by Seven Days, the New York buyers dropped their bid for the five facilities in 2021 after state scrutiny into their previous management of facilities. 

The Genesis spokesperson wrote that the company has no current ownership stake and is not affiliated with any nursing homes other than the Bel Aire Center, the Mountain View Center and Saint Albans Health & Rehabilitation. 

However, Vermont’s business database shows that limited liability companies registered to six other facilities previously owned and operated by Genesis in Bennington, Berlin, Burlington, Rutland, Springfield and Saint Johnsbury were noted as affiliates or subsidiaries of Genesis in the bankruptcy filings. 

The spokesperson did not say why these limited liability companies were listed in the bankruptcy documents. The Department of Disabilities, Aging and Independent Living did not immediately respond to inquiries regarding the current ownership and operating companies of the six facilities. 

Genesis’ bankruptcy filing comes after the company has faced a number of controversies in recent years.

U.S. Sen. Elizabeth Warren, D-Mass., spoke out against Genesis in 2021, calling the $5.2 million bonus to the company’s top executive amid patient deaths and Covid-19 outbreaks a display of “unfathomable greed.”

In one of the largest nursing home settlements in the state’s history, Genesis HealthCare entered a $740,000 settlement with the Vermont Attorney General’s Office in 2020, which created a patient care coordinator position and mandated at least two years of ongoing monitoring. 

The settlement followed four reports of neglect that resulted in a resident’s death and two residents being hospitalized at the then-Genesis-operated facilities Burlington Health & Rehab, Berlin Health & Rehab and St. Johnsbury Health & Rehab. 

The Vermont Attorney General’s Office sent a letter “identifying some concerns” to Genesis when the settlement ended in 2023, and there is no present ongoing monitoring, according to the office’s Chief of Staff Lauren Jandl. However, Division of Licensing and Protection surveys reveal recent deficiencies at the Mountain View Center and Saint Albans facility. 

In a survey of the Mountain View Center in June, residents said they were questioned by a staff member following a previous complaint and feared they would face retaliation if they spoke out about their concerns with care.

Another resident reported verbal abuse from a licensed nurse assistant after experiencing incontinence, according to the report. The division’s surveyors also found that a resident diagnosed with multiple sclerosis, which affects the body’s ability to regulate temperature, reported inconsistent temperature being set in their room that caused the resident to be cold despite reporting concerns with the heating to staff. 

The division’s report stated that numerous medications, cleaning supplies and food kept past expiration dates were in view as well.

According to a January survey of the Saint Albans Health & Rehabilitation center, the division found the building had numerous environmental safety violations. The report included descriptions of cracks and bare plaster spots on walls, a displaced electric outlet, visible rust and brown stains on a heater and bathrooms with broken or no toilet paper holders and tiles that were caked in unknown substances. On April 2, the division conducted a revisit survey and found the center in compliance. 

Kaili Kuiper, the state’s long-term care ombudsman with Vermont Legal Aid, said the organization has heard complaints from residents at Genesis-operated facilities and other privately run, private equity-backed facilities in the state of poor food quality and staff turnover, which indicate challenges in providing “good quality, patient centered care.” 

Executive Director of the Long-Term Care Coalition, Richard Mollot, said the organization has tracked an increasing “corporatization of nursing home care” in which for-profit, and private equity health care providers cut costs, particularly staffing, at the expense of quality care. 

Mollot said low staffing and a lack of hours nurses have to spend with residents tend to indicate quality of care at nursing homes. Currently, the average nursing staff hours per day for residents in Genesis-operated facilities in the state is below the Vermont average and the expected amount set by the Long-Term Care Coalition.

Sam Peisch, a health policy analyst with the state’s Health Care Advocate’s Office at Vermont Legal Aid, said there is broad consensus and concern regarding increasing private equity ownership of nursing homes due to lack of quality care, staffing level and health outcomes. 

According to data with the Private Equity Stakeholder Project, 26% of nursing homes in the state are run by private equity or private equity-backed companies. With a large aging and elderly population, Peisch said Vermont faces a “dystopian challenge” with lack of viable health care and nursing home ownership and operating options.

Peisch said the state’s existing protections and transparency requirements for private equity ownership in health care and nursing homes are weak. He said Vermont Legal Aid is advocating for a bill, introduced this past legislative session, to increase health care transaction oversight and hopes the bill gains traction next session.

Peisch said the main objective of the bill is to arm regulatory bodies with strong state statutes to act upon when requirements for transactions are not being followed, to “prevent some of the worst harms” that result from the private-equity model in the health care industry from happening in Vermont in the future.

Corrections: The photo for this story has been updated to show a facility currently operated by Genesis HealthCare. Additionally, an earlier version of this story misspelled Richard Mollot and Sam Peisch’s last names.