Seven private nursing and assisted living centers in Maine, including the Penobscot Nursing Home and Northern Bay Residential Living Center in Penobscot, have been placed in state receivership because of evidence of corporate financial mismanagement. All seven sites are owned or leased by the Connecticut-based company Eagle Landing Residential Care LLC.

According to Catherine Cobb of the Maine Department of Health and Human Services, the state first became concerned earlier this year over complaints that residents at Penobscot Nursing Home were losing significant amounts of weight.

Inspectors found that vendors had stopped delivering food and supplies because of unpaid bills. As the 60-bed nursing home improved its performance, Cobb said Thursday, problems emerged in the other Eagle Landing sites.

“A couple of weeks ago, I was at one of the facilities and there was no propane. They couldn’t cook dinner, and there was no heat in part of the building,” said Cobb, the director of DHHS’ division of licensing and regulatory services. The state paid for an emergency delivery of heating oil and propane to the facility and began the receivership process against Eagle Landing at that time, she said.

A call to Gerald H. Frenette, vice president of operations for Eagle Landing Residential Care, was not returned Thursday.

A total of about 180 residents now live in the seven facilities. In addition to the two Eagle Landing facilities in Penobscot, there are five other affected sites:

. Dolley Farm Residential Care Home in Westbrook.

. Gray Manor in Gray.

. Rocky Hill Manor in Westbrook.

. Snow Pond Residential Care Facility in Sidney.

. Somerset Residential Care Facility in Madison.

All facilities are expected to remain open. The court-appointed receiver is Gail Sasseville of Auburn, a seasoned long-term care administrator with many years of experience, according to state officials.

While the state filed its petition against the facilities on Oct. 2 in Kennebec County Superior Court in Augusta, the case became public Thursday when officials from DHHS came before the Legislature’s Appropriations and Financial Affairs Committee. DHHS asked lawmakers on the panel for an initial allocation of $87,000 to allow a state-appointed receiver to manage the facilities until a more permanent solution can be found. The money is to be drawn from a special cash reserve created by the payment of penalties to DHHS from the many agencies with which it contracts for services.

According to the court petition filed on Oct. 2, the Eagle Landing facilities have experienced a number of difficulties in recent months related to their parent company’s financial status. In addition to forfeiting the delivery of food, supplies and heating fuel because of unpaid bills, some have lost telephone and Internet service and have been unable to meet payroll.

The company has “routinely” used employees’ personal credit cards to pay for food deliveries, according to the court document. An employee credit card also was used to restore telephone service at one facility after service was terminated for seven days in August, and in September employees at another facility used petty cash to purchase 100 gallons of heating fuel.

In addition, some vehicles used to transport residents to medical appointments and activities have been repossessed or threatened with repossession. Workers’ compensation and liability insurance policies have been canceled for nonpayment. And employees have been threatened with a proposed 20 percent reduction in pay, a cut so stringent it “would likely cause many employees to terminate their employment to the detriment of … residents,” according to the court document. Information about how many workers are employed at the seven facilities was not available Thursday.

DHHS Commissioner Brenda Harvey said state inspectors became “extremely concerned about whether people would be warm and fed” when deficiencies spotted during the summer showed no signs of being addressed as cool weather approached.

“There was no improvement and no plans for improvement,” she said Thursday. “The tipping point comes when the health and safety of the residents is compromised.” The Eagle Landing facilities also owe the state approximately $400,000 in unpaid taxes and penalties and another almost $794,000 more in overpayments from the state’s Medicaid computer billing program, she noted.

Richard Erb, director of the Maine Health Care Association, said nursing homes and residential care facilities struggle to make ends meet on bare-bones MaineCare payments. MaineCare is the name of the state’s Medicaid program for low-income individuals and pays the lion’s share of all nursing home charges.

Each facility’s payment rate is different, Erb said, and reflects the cost of providing care. Penobscot Nursing Home, he said, recently was being paid $141.21 per resident per day compared to the state average of $170. “That definitely creates a problem for them,” he said.

While some nursing homes offset low MaineCare rates by building their populations of residents who either are self-paid or have private long-term care insurance and by providing higher-paying Medicare rehabilitation services, Erb said smaller facilities in rural areas often have trouble improving their revenue streams.

mhaskell@bangordailynews.net

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