UPDATED: Brius Rescinds Cancellation of Partnership Contract, Halts Closure of Two Skilled Nursing Facilities

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A recent protest in front of Partnership Healthcare. - MARK MCKENNA
  • Mark McKenna
  • A recent protest in front of Partnership Healthcare.
UPDATE: Partnership Healthcare announced yesterday in a press release that Rockport had rescinded letters terminating its contract with the MediCal administrator, meaning that patients in the facilities, or entering the facilities via the hospital, will not have to have their coverage re-negotiated.

“We are happy that a larger closure was avoided and that our fragile members in these facilities will not be forced out of their home communities.” said Liz Gibboney, CEO of Partnership. “We will continue to put our members first and work to ensure they receive high-quality care.”

The press release adds that "PHC is exploring non-institutional long-term-care options for its members, including PACE (Program of All-Inclusive Care for the Elderly), Home Health programs, and similar services."

Previously:

Brius Healthcare announced today that two of the three skilled nursing facilities slated to close — Eureka and Seaview Rehabilitation and Wellness Centers — will remain open. In a statement emailed to local news outlets, Brius owner Shlomo Rechnitz said his company anticipates a continued financial loss due to staffing costs. To mitigate that loss, it "will be establishing a charity foundation in Humboldt County for the care and treatment of the elderly to directly fund these losses."

The Journal has reached out to Brius's spokesperson, Stefan Friedman, for more details on the foundation as it is not immediately clear whether Rechnitz will be directly funding it or setting up the foundation and soliciting donations from community members. We will update when there is more information.

The path to fiscal clarity for the facilities — which allege a $5 million loss due to staffing costs yet pays money back to Rechnitz in the form of lease agreements and other related party expenses — is even less clear as sources say Brius has also cancelled its agreement with Partnership Healthcare, the region's MediCal provider. The two entities have been negotiating over the reimbursement rate for the last five months, waging a bitter public relations war. Partnership has stated it is reimbursing the facilities at more than the state-mandated rate — and more than the state average — and encouraged Brius to "look internally" to address financial issues.

Robert Layne, spokesperson for Partnership, confirmed today that Brius has cancelled its contracts with Partnership for all five facilities, effective Dec. 23. MediCal patients entering the facilities from the hospital may have their entry delayed as their reimbursement is negotiated on a case-by-case basis.

Rechnitz's statement again put the onus on Partnership, saying, "We won’t be a part of patients being forced to move 300 miles away simply because the system fails to appropriately pay for their healthcare."

The Journal has also received confirmation and supporting documentation from the California Advocates for Nursing Home Reform that Rockport Healthcare, the administrative company for Brius's Humboldt holdings, is recruiting patients and family members to bring suit against Partnership, although Layne said Partnership has not yet received notification of a lawsuit.

In a phonecall to the Journal, State Senator Mike McGuire said he appreciated “Rockport coming to the same reality” as those who fought to keep the facilities opened. But he also said the threat of closure was a manufactured crisis and “extortion.” McGuire he believed the entire situation was “grandstanding” meant to negotiate a higher rate.

“Bullying does not work in Humboldt County,” McGuire added. “We are going to continue to monitor the situation.”


Editor's Note: This blog has been updated from a previous version to clarify that patients currently in the facilities will not experience a change in their contracts. Incoming patients will have their contracts negotiated on an individual basis.

STATEMENT FROM SHLOMO RECHNITZ, BRIUS HEALTHCARE:

Today, we informed the California Department of Public Health that we are rescinding our closure plans for Seaview Rehabilitation and Wellness Center and Eureka Rehabilitation and Wellness Center, and will only move forward with our closure plans at Pacific Rehabilitation and Wellness Center.

As a result of this request, no patients will need to be transferred out of the community. All patients at Pacific Rehabilitation and Wellness Center will be offered relocation at our other four local skilled nursing facilities.

It is important to understand how we got here, and how we have arrived at this decision.

Last year, our five skilled nursing facilities in Humboldt County began experiencing significant financial losses due to the lack of available health care workers in Humboldt County and the lack of adequate reimbursement.

To help drive recruitment, we raised salaries in November 2015 and January 2016, but our losses only multiplied. Five months ago, we approached all community stakeholders to seek solutions to the desperate problems of a staffing shortage that has negatively impacted not only us, but local hospitals and other healthcare providers throughout Humboldt County.

After months of searching for solutions and because the outlook for 2017 was more dire than 2016, we made the difficult decision to file closure plans for three of our local facilities. Despite efforts of some local officials and a local union to disparage us, we took efforts to work with everyone to ensure a safe and orderly transfer of our patients.

In the months since announcing these closures we have continued to attempt to work with others to come up with a different way out. However, it has become clear that the critical participants are not willing to do anything to solve these serious problems. After speaking at length with the patients, families and staff throughout Humboldt County, we have decided that despite the enormous financial difficulty that we will sustain as a result, there is no way we can close these facilities.

We won’t be a part of patients being forced to move 300 miles away simply because the system fails to appropriately pay for their healthcare.

In addition, as these facilities will continue to lose money, we will be establishing a charity foundation in Humboldt County for the care and treatment of the elderly to directly fund these losses. We will be working with local stakeholders to determine how we can better care for our elderly and ensure that they have the necessary care and services locally.

We appreciate the stakeholders that worked with us throughout this difficult process, and look forward to our continued work throughout Humboldt County.


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