The owner of a Santa Ana nursing home is hoping a federal administrative law judge will restore its Medi-Cal and Medicare funding, which was cut off after it failed a state inspection in December.
Fountain View Inc., the Burbank-based owner of the Carehouse Care Center, a 174-bed facility, appealed the cutoff and anticipated that the funding would be restored in May. It took a $1.7 million charge in the first quarter related to the loss of the federal funds.
But Carehouse also failed a re-inspection in May, prompting angry charges by the operator against state inspectors and forcing it to wait until at least fall for a restoration of the funding.
“The business isn’t in any danger,” said John Stodder, a spokesman for Fountain View.
Still, the loss of funding affects the privately held company’s finances because it’s absorbing the cost of providing healthcare to Carehouse’s Medi-Cal and Medicare patients, he said.
Skilled nursing care often is expensive and private insurance to cover such costs is still uncommon. So nursing homes rely on Medi-Cal and other government programs for a large portion of their revenue.
A ruling on Carehouse’s efforts to have funding restored is expected in October, Stodder said.
“We’re very confident that we will prevail in our efforts to reverse” the decision, he said.
Stodder also criticized the California Department of Health Services, which regulates nursing homes. He called the department and its regulators “out of control” and “vindictive” in their attitudes toward Fountain View.
“It is our belief that they are not in compliance. They vehemently disagree,” said John Hagerty, the Department of Health Services’ Southern California field chief for licensing and regulation.
Carehouse was decertified in December. Hagerty said Fountain View, which owns 50 facilities in three states, appealed to the U.S. Health Care Financing Administration for re-certification of Carehouse. He added, however, that the agency declined to restore the home’s certification because some deficiencies were found on a compliance survey.
Fountain View, although private, reported some financial data for the first quarter ended March 31 because it has public debt. Revenue for the quarter totaled $71.6 million, compared with $69 million in the year-ago first quarter. Earnings before interest, taxes, depreciation and amortization were $11 million, compared with $10.9 million a year ago. n
