Cold Spring Hills Center for Nursing & Rehabilitation can't pay staff, plans to 'evacuate' 300 residents as early as Friday, sources say

The financially troubled Cold Spring Hills Center for Nursing & Rehabilitation plans to begin "evacuating" its more than 300 elderly and disabled residents as early as Friday as the facility can no longer afford to pay its staff, multiple sources familiar with the plan told Newsday.

The move comes as the state Department of Health mulls an application for Eliezer Jay Zelman, who owns several nursing homes elsewhere in New York, to become Cold Spring Hills' temporary receiver, taking over all facility operations, including paying staff.

If the application is approved in the coming days, the "temporary evacuation" of the facility’s more than 330 residents could be halted, according to a source familiar with the receivership plan. 

Health department spokeswoman Monica Pomeroy said the department has not received every necessary document for the "change of ownership application from Mr. Zelman, nor have we received the required receivership documents from the operator’s counsel, despite our attempts to secure this required information."

If the receivership plan is rejected, Long Island’s second largest nursing home will permanently close its doors, the source said.

In a letter to staff Tuesday night, Cold Spring Hills Administrator Edline Joseph said the nursing home would close on Dec. 31 “although we are diligently attempting to reopen the facility under new ownership or postpone the closure.”

Inability to pay staff

The facility is owned by embattled nursing home magnate Bent Philipson and his family, records show.

"A temporary evacuation is something that would happen in event of an emergency, like a hurricane or catastrophic loss of power, or, in our case, the inability to staff the facility, because we're not going to be able to pay nurses past this week," the source told Newsday Tuesday. "What we would be doing is moving all of the patients to other facilities that are willing and able to take them in for a temporary period until such time as the facility can run safely again. And that would be as soon as the receiver is appointed. It could be days; could be longer."

Zelman, Joseph and Linda Wickens-Alteri, the nursing home's court-appointed independent health monitor, did not respond to multiple requests for comment.

In September, Cold Spring Hills attorneys asked the state health department to appoint a receiver — confirmed by three sources as Zelman — to operate the nursing home before potentially purchasing the facility.

The department sought additional information on the plan last month and had multiple meetings with nursing home attorneys and Zelman.

Financially distressed nursing homes occasionally are put into a receivership, a remedy that allows a third party to operate the facility, most often during periods of litigation or financial distress.

Pomeroy said the office has yet to receive or approve a relocation plan for Cold Spring Hills' residents.

"If the operator determines the need to relocate residents and submits the required documents, the department will oversee the process to ensure the residents’ health, safety and well-being is the top priority and is protected," she said.

Jonathan Nolan said his older brother, Peter Nolan, 75, has been a resident at Cold Spring Hills for two years, where he's bedridden and has Parkinson's disease. 

"My stomach is turning just thinking about it," Jonathan Nolan, 63, of Halesite, said of an emergency evacuation. "It's just a nightmare. I'm just trying to help my brother out."

Richard Mollot, executive director of the Manhattan-based Long Term Care Community Coalition, which advocates for nursing home residents, said emergency evacuations of nursing homes "are extremely rare. To me this reflects a serious breakdown in the safeguards that exist to protect residents and the integrity of the use of public funds which pay for most nursing home care." 

 Staff layoffs expected

On Tuesday, Joseph told all nonessential employees, including administrative workers and recreation program staff, they'd be laid-off on Dec. 23, according to several employees who attended the meeting. The rest of the nursing home staff would be let go, assuming the receivership is not approved, once the last resident is moved out, officials said.

The majority of Cold Spring Hills employees are members of 1199SEIU United Healthcare Workers East.

Union president George Gresham said the nursing home’s owners are forcing more than 300 "vulnerable seniors and people with disabilities out of their home during the holidays, while laying off hundreds of workers. We are focused on doing everything possible to assist our members, residents, and their families during this transition."

For several weeks, the cash-strapped nursing home has been piecing together its $1.14 million weekly payroll either using private capital or through a court-restrained account with money owed to the company from compensation for Medicaid and Medicare services provided to residents. On Dec. 10, state Supreme Court Justice David Cohen permitted the company to utilize the funds on a one-time basis to pay staff.

A transcript of the hearing, provided to Newsday, provides previously unreported details about the scope of the facility's financial troubles.

Paul Kremer, an attorney for the nursing home, told Cohen that Cold Spring Hills owes approximately $50 million to various creditors, including roughly $6 million to the union benefit fund.

"We do not have enough cash to continue operating for any significant period of time and make good on the full $6 million," Kremer said. "To say nothing of the other debt that we owe to other creditors. … We are not able to pay our debts as they come due. In the conventional sense, we are insolvent. We have been for a long time."

In April, state Supreme Court Justice Lisa Cairo appointed Wickens-Alteri as part of the resolution of a lawsuit — which also included a more than $2 million financial penalty — between state Attorney General Letitia James and Cold Spring Hills. James charged in the suit that the facility neglected resident care and skirted state laws through a fraudulent business setup designed to enrich its owners.

Last year, the nursing home got one of the largest federal financial penalties in the country for jeopardizing patient safety.

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.