Lawyers representing the Sea View Nursing Home and the Centers for Medicare and Medicaid Services agreed Wednesday to extend until July 30 the deadline for sale or lease of the St. Thomas facility, according to a statement issued Friday.
A status conference was held Wednesday during which the parties agreed to continue and extend a “standstill” agreement through July 30, during which time the parties will take steps to continue improvements at Seaview and continue settlement negotiations regarding management and a potential sale or lease of the facility.
Trouble for Seaview, the only skilled nursing and rehabilitation facility in St. Thomas, began when the facility received a CMS report, or “survey,” dated September 13, 2013, which concluded there were major deficiencies at the facility and it was therefore in non-compliance with Medicare and Medicaid standards of care.
Sea View representatives say they tried to correct the deficiencies, but follow-up surveys in March 2014, October 2014 and April 2015, all cited shortcomings. In January 2015, CMS sent a letter notifying Sea View that its provider agreement would be terminated effective June 30, 2015. CMS and Sea View owner Dr. Alfred Heath agreed that CMS would back off its claims for penalties and Sea View would relinquish its right to oppose sanctions stemming from the surveys and make way for new ownership. CMS agreed to continue covering the costs for existing Medicare and Medicaid patients at Sea View until Human Services transferred them to another facility or until January 2016, but would not cover any new residents coming to Sea View after June 30, 2015. This last provision caused the population of the facility to drop from 30 to about 15.
CMS informed Sea View that it would continue federal funding only until May 4, for the sole and express purpose of providing adequate time to transfer Sea View’s residents to the care of a new provider. CMS began coordinating a plan to move Sea View’s residents, via air ambulance, to stateside nursing homes.
But Sea View claimed that CMS breached the terms of the agreement and filed suit, seeking an injunction to prevent CMS from halting payments and transferring patients. It named both CMS and the U.S. Department of Health and Human Services as defendants.
In its complaint, Sea View contends that CMS arbitrarily rejected a qualified team proposed to provide temporary management of the facility, and unreasonably refused to consider certain requirements posed by other prospective temporary managers and purchasers of the facility, effectively rendering it impossible for Sea View to place a temporary manager and to enter into a binding contract of sale.
At Wednesday’s status conference in District Court, CMS agreed to continue federal payments for eligible residents through July 30, and to not undertake efforts to relocate the residents in the interim. The parties are scheduled to appear before the District Court again in mid-July to provide an update on the status of settlement negotiations.