Trends in Long-Term Care - U.S. Senate Special Committee on Aging

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There is no change <strong>in</strong> the quality of service. There is no change <strong>in</strong>
the accommodation provided to the elderly patrons <strong>in</strong> that nurs<strong>in</strong>g
home, and what we merely had was a change <strong>in</strong> ownership, new faces
runn<strong>in</strong>g the <strong>in</strong>stitution, and receiv<strong>in</strong>g a profit, and so these are transfers
which we believe greatly affected medicaid.
Senator Moss. These are the five different nurs<strong>in</strong>g homes which you
checked?
Mr. MOAN. That is correct. We have had as many as 36 transfers of
recorded actions, let's put it that way, 36 recorded actions, <strong>in</strong> I believe
it was a 10- or 15-year period, so the average comes out to be a
little bit greater than 23 transfers, or 2 transactions a year, the transaction
is actually a sale, a mortgage, or a lease, so the property is cont<strong>in</strong>ually
be<strong>in</strong>g exchanged, or be<strong>in</strong>g manipulated <strong>in</strong> some way, somehow
for reasons which the public documents so far do not disclose.
Mr. HALAMANDARIS. The question that occurs to me, is what degree
do disclosures be<strong>in</strong>g made <strong>in</strong>dicate a common practice here <strong>in</strong> New
York City, and if you could give me some idea of the scope of your
<strong>in</strong>vestigation. have you limited your <strong>in</strong>vestigation particularly to Dr.
Bergman and his family, or have you done this throughout the State
of New York?
My question aga<strong>in</strong> restated, is this a common practice, or did you
focus <strong>in</strong> on one home?
Mr. MOAN. Most of our title searches were done <strong>in</strong> New York City.
We have some from the outer boroughs, and from, I believe, Westchester,
and other areas <strong>in</strong> New Jersey, as a matter of fact.
We have not focused <strong>in</strong> on any one family. It appears to be an <strong>in</strong>dustrywide
practice, because whenever we asked for a title search, it
<strong>in</strong>evitably takes 3 weeks to come back, and it <strong>in</strong>evitably comes <strong>in</strong> with
10 pages worth of transfers such as we had here today, and it certa<strong>in</strong>ly
is not isolated to any one component of the <strong>in</strong>dustry.
The age of the <strong>in</strong>stitution does have an effect. A nurs<strong>in</strong>g home that
was just built, certa<strong>in</strong>ly it -will not have all of those transfers, but an
<strong>in</strong>stitution, which is an old build<strong>in</strong>g, particularly a renovated build<strong>in</strong>g,
will have undergone any number of transfers <strong>in</strong> the past few years.
We have also found, I believe, <strong>in</strong> the Mayflower Nurs<strong>in</strong>g Home, and
I would have to check our files, but we have a great number of transfers.
Senator Moss. Does the State department of health now have any
option, or must it accept those sales prices when apply<strong>in</strong>g for transfers,
go<strong>in</strong>g on, with prices go<strong>in</strong>g up?
Mr. MOAN. The ones I showed <strong>in</strong> the last chart, one of the reasons
that they said they were, they granted <strong>in</strong>creases, was because they were
mortgages, those rents were necessary to cover outstand<strong>in</strong>g mortgages.
Now, I do not know for a fact whetler those mortgages were entered
<strong>in</strong>to the way these mortgages were, the earlier mortgages were,
or between companies and related <strong>in</strong>stitutions, or the commercial lend<strong>in</strong>g
<strong>in</strong>stitutions, but I do know that what we have found is that these
build<strong>in</strong>gs, and these properties have always been well overf<strong>in</strong>anced and
that is that they have always had debts, much greater than we could
justify accord<strong>in</strong>g to their assessed value, or accord<strong>in</strong>g to the renovations
that allegedly have been <strong>in</strong>cluded <strong>in</strong> the build<strong>in</strong>g themselves, so
that if you have a build<strong>in</strong>g that is worth less than half a million dollars,
grant<strong>in</strong>g it the total amount of purchase price, and the total