Financially troubled Athena Health Care Systems has sold five of its Connecticut nursing homes to a former competitor that has agreed to pay back taxes and debts owed to vendors and add $2.6 million to cover unpaid employee health insurance costs.
The purchase price was not disclosed.
The state Department of Public Health recently approved the deal, transferring the five facilities to National Health Care Associates, a long-time nursing home provider based in New York.
The five homes that are now owned by National are the Newtown Rehabilitation & Health Care Center, Beacon Brook Health Center in Naugatuck, Montowese Health & Rehabilitation Center in North Haven, Sharon Health Center and Evergreen Health Care Center in Stafford Springs.
The five nursing homes have about 500 residents combined as of the end of May, according to state Department of Social Services data. The homes are at about 67% occupancy, lower than the statewide percentage of 86% occupancy.
The terms of the DPH licensure agreement highlight some of the financial difficulties that have befallen Athena — which, with this sale, is no longer the largest nursing home provider in the state. Athena still owns 14 nursing homes, down from 22 a year ago.
As part of the licensure transfer, DPH is requiring National to pay all vendors that Athena owed money to within 120 days, pay any back taxes owed to the towns where the facilities are located and contribute $2.6 million to its employees’ health care insurance fund to cover all medical bills.
Athena owed nearly $47,000 in back taxes to four of the communities where the nursing homes are located, records show.
Kevin Battistelli, National’s chief development officer, said the company has delivered quality post-acute care to residents throughout the northeast for more than 30 years. National already owns 14 nursing home in Connecticut, according to its website.
“We look forward to providing same quality and compassionate care to these centers,” he said.
State Rep. Jane Garibay, D-Windsor, who co-chairs the Aging Committee, said National “has been a good provider and responsive to DPH when there have been issues in their facilities over the years.”
“They are a known entity in Connecticut, so I can only hope that is a good thing for our elderly residents,” she said.
Long Term Care Ombudsman Mairead Painter said her office has had mostly good interactions with National, and she sees the sale as a chance for residents and staff to “start new.”
“This potentially could be a really good deal for the residents and staff in these homes,” Painter said. “Hopefully the quality in these homes will improve and they can finally move forward.”
Athena Health Care spokeswoman Savannah Ragali wouldn’t say whether the company is looking to sell any of its other facilities. Besides the 14 Connecticut nursing homes, it also owns 16 in Massachusetts and five in Rhode Island.
“We are actively working to create a sustainable model and are evaluating all options to ensure the best outcomes for Athena Health Care Systems, its residents and employees,” Ragali said.
“We continue to run our 14 skilled nursing centers above the state average in occupancy, which reinforces our commitment to care and to provide access to care for residents,” she added.
The sales are the latest changes in the state’s nursing home industry, which has seen several homes close permanently and others sold to out-of-state providers over the past 18 months as the industry continues to recover from the pandemic.
Besides Athena, national chains such as Genesis have systematically been selling Connecticut facilities. Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, said seeing National step up to buy some of the struggling Athena homes is a good sign for the industry.
“While the Connecticut nursing facility sector has been in a period of transition with a significant increase in ownership changes and facility closures since the COVID-19 public health emergency, it is certainly reassuring to the facility residents and staff when the new operator is a well-known health care provider with a long and strong history of delivering quality skilled nursing facility care in Connecticut, as is the case with National Health Care Associates,” Barrett said.
The Connecticut Mirror has chronicled the growing financial problems at Athena over the past several months and legislators’ concerns about how the fiscal troubles are impacting residents’ care.
Several employees have contacted The CT Mirror with stories of being unable to pay medical bills and having medical procedures canceled because Athena was behind in paying employee health care claims.
In a memo to more than 2,500 employees last winter, Athena’s President Larry Santilli acknowledged the problem.
“Athena has not been able to promptly meet all the funding requirements of the employee health plan. As a result, we are approximately 6 months behind in paying submitted health claims. In our continuing efforts to address shortfalls with funding the health plan, we have hired outside personnel to assist us to properly administer the health plan moving forward.”
Santilli promised the company “intended to fully fund all outstanding claims,” but some employees said recently that medical expenses still aren’t being paid.
Ragali said Wednesday that Athena is still working on the health insurance issues.
“Athena Health Care Systems is continuing to make progress in paying outstanding employee health insurance claims,” Ragali said. “We are actively meeting with the Department of Labor to rectify this situation and ensure that all claims are resolved properly.”
DPH spokesman Christopher Boyle said a key requirement of the sale is the independent nursing consultant, whom National will have to hire for at least a year. The consultant will work 12 to 40 hours per week monitoring nurse staffing levels and quality of care at all five facilities.
Two of the five homes that National purchased have been cited for “immediate jeopardy” orders — findings that indicate violations in a nursing home caused or were likely to cause harm or death to residents — since 2022, records show.
The Newtown facility was issued an immediate jeopardy order in 2023 for a lack of staff that left many residents stuck in their beds without trips to the bathroom or diaper changes. Some nursing aides reported having as many as 20 residents to care for during their shifts.
The other conditions that DPH has placed on National include:
Appointing a free-floating registered nurse supervisor for the first and second shifts to assess patient care.
Designating a registered nurse to do at least eight hours of training for employees who deal with residents.
Contracting with an environmental consulting firm to evaluate each facility.