December 14, 2021 — Sherwood Oaks, the nursing home in Fort Bragg, is in a serious crisis, according to a report by Dr. William Miller, the Medical Director and Chief of Medical Staff at Adventist Health Mendocino Coast. At last night’s meeting of the Mendocino Coast Healthcare District, he told the board that the property, but not the nursing home itself, is in escrow, and the nursing home is desperately short-staffed.
Miller said if the California Department of Public Health does not provide emergency nursing staff, the facility could close by the new year. The home also lacks a director of nursing. And Will Maloney, the administrator, is retiring next week. Miller said family members of the 36 residents currently on site would start receiving phone calls apprising them of the situation this morning.
He reported that several meetings yesterday yielded assessments of immediate, mid-range, and long-term levels of crisis. After the staffing, there are serious issues of about $1.5 million worth of deferred maintenance on the property and $2 million in outstanding fees due to the state.
He sounded something close to a note of optimism when Director Norman Devall asked him if it was possible that the facility would be closed by January 1st.
“If the State does not step up and provide emergency relief nursing, then there is that potential,” he acknowledged. “I find it hard to believe that the State would allow that to happen. They did step up and provide the necessary RN staffing during the covid outbreak. I know that the county is very concerned about this, and they are reaching out to their partners in the State to make sure that that never happens. But that is obviously the concern.”
The party interested in purchasing the property is Schlomo Rechnitz, who owns 81 nursing homes in the state of California. Rechnitz is the subject of a multi-part investigation by CalMatters reporter Jocelyn Wiener, who has documented multiple instances of how the state’s irregular licensing practices have set the scene for poor infection control protocols, lack of oversight, and multiple injuries and deaths at facilities owned by Rechnitz and his affiliates.
Earlier this month, Rechnitz’ lawyer, Mark Johnson, confirmed in an email to KZYX that an affiliate of his client is in negotiations to purchase the property and the building where Sherwood Oaks is located. He added that, “The nursing home remains with the current operator. If and when the transaction is completed, my client will have no role whatsoever in operations of any facility on that site. My client’s role will be solely that of a landlord.”
The property’s total assessed value, according to Parcel Viewer, is about $2.8 million. It was last sold in May of 2003. The owner is RBJ and Associates, LLC, which, according to Open Corporate, is linked to Richard Azevedo, of Auburn, California. None of the five phone numbers associated with his name were in working order earlier this month. The property has not been sold yet, according to the county recorder’s online database, which is updated regularly.
Miller said it was key to find out how much Rechnitz is willing to put into fixing the property, which is not in great shape.
“I do want to say that everything at the moment is in operation, is functional, that the care is safe and good,” he began. “However, these things are challenging in the way that if any of them got worse or broke down, that could potentially lead to some serious problems.”
There is an outstanding court order for the facility to come into compliance with ADA requirements. The deadline for that passed about a year ago, and Miller said the upgrades would be about $120,000. The generator also needs to be replaced, which is “about a $200,000 ticket item.” The boiler needs to be replaced, for another $200,000. The heating system needs to be modernized with electric heat pumps, for $500,000. The roof needs to be replaced, at an estimated cost of $150,000. There is also an eight-inch subsidence in the parking lot and underneath a wall in the kitchen, due to an underground fuel tank which was improperly decommissioned in the 70’s, “so now the thing is rusted and collapsed,” Miller explained. “That obviously means that that wall might be condemned. I don’t think the whole facility would be condemned, but possibly the wall and part of the kitchen.”
Miller added that a contractor has proposed a solution, which has not been approved by the agency responsible for maintaining safety standards at medical facilities, so an estimate of that repair is not available. Without immediate staffing, though, the residents will have to be relocated, and there is not another qualified facility on the coast.
With an aging population, a nursing home could be a flourishing business, but the majority of the Sherwood Oaks residents are on MediCal or MediCare, neither of which offers nursing home operators an appealing margin. Medicare covers 100% of the first 20 days of a stay, with 100 days total, at a much lower rate after the first 20. However, Medicare has never paid for nursing home care, and MediCal pays for about ⅓ of the cost of a nursing home bed. “It has to have a better payer mix, in which private insurance covers the rest, ” Miller said. “In other words, if they have enough good-paying patients, that offsets the MediCal patients.”
And most health insurance doesn’t pay for nursing homes at all. Still, Miller thinks the long-term solution is building an entirely new nursing home. “Personally, I think it should start off as a not-for-profit facility,” he opined. “Obviously, building a new nursing home is going to take years, so that solution is one that can only occur, or really be discussed, after we get the immediate challenge addressed.”
KZYX reporters cover local news for Mendocino County, California, Monday through Friday in six and a half minute reports. Featuring Sarah Reith, Michelle Blackwell, Eileen Russell, and Marty Durlin.