Joseph Schwartz's, Skyline nursing homes closing in 30 days
in Massachusetts all elderly and disabled residents must be relocated within 30
days. Angry family members were never
noticed.
At its peak, Skyline Healthcare owned or ran more than 100
facilities in 11 states, overseeing the care of more than 7,000 elderly
Americans. But during the past two years, the chain has collapsed, and more
than a dozen Skyline-operated nursing homes have shut their doors, throwing
residents, vendors, employees and state regulators into chaos.
Many homes ran out of money. Others were shut down over
neglect documented in government records. Fourteen homes were forced to close
permanently, displacing more than 900 residents to new facilities with little
notice. Funds were so short; staff had
begun buying toilet paper with money from their own pockets. Residents and
their families discovered from local newscasts they had just 30 days to find
somewhere else to live.
The story of Joseph Schwartz and Skyline Healthcare is one
of swift expansion, alleged mismanagement and catastrophic failure. An NBC News
investigation reveals the scale of the Skyline debacle, in which one man built
an empire that quickly crumbled, with painful consequences to vulnerable
people.
It also shows the failure of state and federal authorities
to keep up with just who owns and runs America's nursing home facilities, which
house 1.3 million elderly and disabled Americans — about three-quarters of them
in beds paid for by taxpayers via Medicare and Medicaid. The states are
responsible for tracking ownership and conditions at nursing homes within their
borders, but only the federal government can monitor the performance of firms
that own or operate facilities across the nation. The allegations of negligence
at a major nursing-home chain come as the Trump administration is moving to ease,
not increase, accountability for the industry, terminating fewer contracts with
problem owners.
Schwartz, meanwhile, still has ownership stakes in 53
nursing homes, according to federal records. He has not returned multiple
messages and emails requesting comment from NBC News. A Brooklyn, N.Y.-based insurance broker and
landlord, Joseph Schwartz entered the nursing home business more than 10 years
ago after he sold a Florida-based insurance company.
In a 2017 deposition for a malpractice lawsuit filed by a
family alleging neglect at one of his homes in Pennsylvania, Schwartz explained
why he'd gotten into the industry. ""Basically, I used to do a lot of
servicing in selling insurance policies to long-term care industry," he
said, "and I felt that I could, that I understand the quality care … and I
will do a very good job in doing the quality care for residents."
He started with a half dozen homes, but after creating
Skyline Healthcare he began expanding rapidly in November 2015 with the
purchase of 17 homes. Schwartz ran
Skyline out of a tiny office above a New Jersey pizzeria. He was CEO, his wife
Rosie co-owned most of the properties and his two sons, Michael and Louis,
served as vice presidents. The company had a bare-bones website and a slogan,
"Skyline: The Home Life You Crave."
His net worth is hard to compute but real estate records
show he owns over $9 million worth of real estate in the New York metropolitan
area, including a gated house in Suffern, N.Y. Within a year of his purchase of
17 nursing homes, Schwartz had taken on another 64, and by 2017 was operating
more than 100.
Schwartz wouldn't provide a number when the plaintiff's
attorney asked him repeatedly in June 2017 how many homes he ran. He confirmed
it was more than five, but asked if it was more than 100, he said several times
that he couldn't recall. With more than 100 facilities, experts estimate
Schwartz would have been juggling a few hundred million dollars a year in
taxpayer money from Medicare and Medicaid.
But problems had emerged quickly. Within six months of
Skyline's entry into the Arkansas market in 2015, the state's attorney general
was investigating reports of neglect in Skyline facilities. Marcela Watkins, who visited her mother daily
in Spring Place Health and Rehab in Little Rock, said the food went downhill
once Skyline took over. She recalled staff serving raw vegetables and boxed
pizza to elderly patients.
The state attorney general later issued Skyline facilities
more than $200,000 in civil fines for neglect, preventable falls, failure to
bathe residents and maggots in a resident's personal medical equipment. In
Massachusetts, staff say the Schwartz sons visited the properties before taking
over, promising new resources. But cuts started within a year.
Certified nursing assistants were reduced from five to
three, according to ex-employees. Staff were told that disposable briefs would
be rationed to two per patient per shift, instead of as needed, meaning
patients were left to languish in their own body waste. As problems mounted,
Skyline continued to expand. In 2017, it entered South Dakota.
Schwartz reportedly leased at least half of the homes he
operated around the nation from Georgia-based Golden Living Centers, according
to local news reports and property records, which acted as Schwartz's landlord. Last year Skyline released a statement to a
South Dakota reporter blaming Golden for problems in its South Dakota nursing
homes. Skyline said the chain was "dedicated to providing quality
care" and meeting its obligations, but that Golden had caused the issues.
By September 2017, Skyline had taken over Ashton Place, a
nursing home in Memphis, Tenn. Less than two months later, a resident with a
recent leg amputation was taken from the nursing home, where he was found lying
in feces, to a hospital, where nurses discovered maggots and gangrene in his
leg, according to the police report obtained by local NBC affiliate WMC. His
death two days later prompted a state investigation, which revealed the man had
not had his dressing changed for two days. Staff said problems arose in part
when Skyline told nurses to abandon electronic medical records and go back to
paper record keeping.
A spokesperson for the state agency that approved Schwartz's
takeover of Ashton Place said while Skyline had faced problems in other states,
that did not disqualify it from operating the Memphis nursing home. A month
after the death, the Centers for Medicare and Medicaid Services (CMS), the
federal agency that oversees the nursing home industry, terminated Medicare
certification for the facility and another Skyline property in Tennessee. It
terminated a third in the state in 2018.
