A federal judge in Chattanooga has halted the planned closure of a Georgia nursing home run by the troubled Hixson-based nursing home chain, New Beginnings Care.
U.S. Bankruptcy Court Judge Nicholas Whittenburg stopped a shutoff of Medicare and Medicaid payments to Oceanside Healthcare and Rehab on Tybee Island, Ga., after New Beginnings' Chattanooga-based attorney David Fulton argued that New Beginnings wasn't being treated fairly.
The Georgia Department of Community Health found "deficiencies" at the nursing home during an inspection on Nov. 5, 2015. Inspectors said the walk-in freezer was empty and broken, the facility only had one working clothes washer, and a broken door contributed to a fly-control problem.
But Fulton said the state didn't reinspect to see that deficiencies had been fixed until more than five months later on April 25 of this year.
"They're supposed to come back and take a look at it and confirm that you've fixed the problem," he said.
The issue with taking five months to re-inspect, Fulton argued, is that the nursing home was poised to lose its Medicare and Medicaid payments on May 5 because it would have been out of compliance for six months after the Nov. 5, 2015, inspection. Because of the short length of time between April 25 and May 5, Fulton argued, New Beginnings could get shut down before it had time to fix any new deficiencies found on April 25.
"That's just not due process," Fulton said.
Whittenburg's preliminary injunction halts any cutoff of Medicare and Medicaid payments until no sooner than July 1, when a hearing on the matter is scheduled in the historic bankruptcy courthouse in downtown Chattanooga.
The preliminary injunction protects New Beginnings' right to reorganize under Chapter 11 bankruptcy, the judge's order says, including its right to sell. New Beginnings, which leases but does not own nursing homes, hopes to sell its business with the help of a New York City investment banking firm.
The second time was the charm for Fulton. He made similar arguments to keep open a New Beginnings nursing home in Jeffersonville, Ga., which closed after its Medicare and Medicaid payments were cut off in February after state inspectors found "squalid" conditions there, including five out of nine toilets that had malfunctioned for at least two weeks in a locked unit for 29 patients with Alzheimer's and dementia.
Several of New Beginnings Care's nursing homes had Medicare and Medicaid payments cut off because of deficiencies, said an objection to the temporary injunction filed by Assistant U.S. Attorney Kenny L. Saffles.
"That the New Beginnings companies have filed bankruptcy confers upon them no right to disregard federal legal requirements," Saffles argued. "They do not become exempt from regulation."
Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com or www.facebook.com/MeetsForBusiness or twitter.com/meetforbusiness or 423-757-6651.