LAWRENCE COUNTY Consultant finds flaws in transfer of manor

A second report on Hill View is expected in a few weeks.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- A company trying to buy Lawrence County's nursing home prematurely started transferring money into its own accounts and made significant increases in supplies at the home, according to a report by a consultant hired by the county.
On Tuesday, three representatives of ZA Consulting of Harrisburg gave commissioners a report of their initial findings at Hill View Manor. The company is expected to do a more in-depth investigation and get back to the county in a few weeks, said Lisa Wilt, senior director of ZA Consulting.
Commissioners hired ZA Consulting after the sale of the home and nearby property to private buyers Sylvan Heights Realty Partners failed. Also a focus of the investigation is Americare, the management company hired earlier this year to run Hill View Manor. Americare is also owned by one of the Sylvan Heights Realty Partners, John Hadgkiss.
Wilt said that ZA needs more specifics about the sales agreement with Sylvan Heights Realty Partners and its intent before making a final recommendation but that already it has found problems.
"Sales agreements usually outline what is to occur upon closing. What seems to have happened here is the operation of the facility started to change as if ownership had changed," Wilt said. "In our opinion this is not in compliance with the sales agreement."
State halted sale
The sale of the home was halted by the Pennsylvania Department of Health in August.
Commissioners found at that time that about $500,000 from private-pay patients was being put into a private bank account opened by Sylvan Heights Realty Partners.
ZA Consulting reported that money from private patients and commercial insurance companies stopped coming to the county in February.
"The money put into Sylvan's account was not put there legitimately," Wilt said. "There was no provision in the [sales] contract."
ZA's report noted that all Medicare and Medicaid payments were sent to the county controller.
Last week, George Howley, one of the Sylvan Heights Realty Partners, said he believed the sales agreement gave Sylvan the right to deposit the money into the private account. Howley said he outlined where the money was during a May meeting with the commissioners, Controller Mary Ann Reiter and other county officials.
Commissioners and Reiter said that they attended a May meeting with Howley but that there was no talk of the private-patients' money going to a Sylvan account.
Howley could not be reached Tuesday to talk about the specifics of ZA Consulting's report.
Rise in buying, costs
ZA Consulting also reported a spike in supplies for the facility in the time Americare managed it.
The daily patient cost increased by $43, as the patient population decreased, Wilt said. The consultant called the increase "significant" but could not say how much it increased the previous year. She said nursing homes often see a 3 percent to 5 percent annual patient cost increase.
The investigation showed costs went up for groceries, dietary supplies, medical supplies, consulting fees, major equipment purchases, travel expenses, gas and insurance, the report said.
All of these things increased, while the patient population steadily decreased from 75 percent occupancy in January 2002 to 52 percent July 31, 2003.
Wilt said they will also investigate why the population declined and ask employees if recruiting methods changed under Americare.
The report also noted that Americare's contract called for the company to submit written budget reports to the county no later than 45 days after the end of each month, but none were made.
"Had the Americare complied with this stipulation, the county would have identified this diversion of cash at an earlier time," the report states.
Hadgkiss, who is Americare's president, did not return calls Tuesday seeking comment.