Private Equity Group drops offer to purchase five Vermont nursing homes



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A group of New York-based nursing home investors have abandoned efforts to buy five of the state’s largest and most troubled facilities.

Priority Healthcare Group has withdrawn its request to the Vermont Agency of Human Services to assume full control of Burlington Health & Rehab and houses of the same name in Bennington, Berlin, St. Johnsbury and Springfield, according to a spokesperson for the current owner, the national health care conglomerate. Genesis HealthCare.

Investors with questionable records want to buy five Vermont nursing homes. Will the state leave them?

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The request had been pending for over a year. A Seven days a background investigation of buyers last July revealed problems at some of the homes in the group owned by other states.

The pullback comes just as state officials were preparing to make a decision on the demand, which affects more than 500 beds, or nearly 20% of all skilled nursing home care in Vermont. It follows a hearing earlier this month in which agency officials examined Priority’s track record and questioned the complex and changing ownership structure of the Vermont deal.

State examines investor offer to take over five Vermont nursing homes

State examines investor offer to take over five Vermont nursing homes

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Priority Healthcare is led by David Gamzeh and Akiva Glatzer, who operate more than 30 nursing homes in Michigan, Pennsylvania, Indiana and Massachusetts. The company has also operated Barre Gardens in Barre since 2017.

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David Gamzeh (left) and Akiva Glatzer at a December hearing with the Vermont Agency of Human Services - COURTESY OF © ️ SEVEN DAYS

  • Courtesy © ️ Seven days
  • David Gamzeh (left) and Akiva Glatzer in a December hearing with the Vermont Agency of Human Services

The struggling Genesis agreed to sell five of its nine Vermont homes to a group of private investors, including Gamzeh and Glatzer, in October 2020 amid a financial crisis fueled by a pandemic. The deal was worth $ 46.6 million, according to a disclosure from the United States Securities and Exchange Commission.

A set of buyers that includes Gamzeh and Glatzer closed their doors last year. Since then, Priority subsidiaries have managed each of the five facilities through contracts with Genesis, which were not subject to state approval. Over the past 13 months, Priority has reshuffled leadership in homes and rolled out new logos and names, even as its request for ownership of operations has been pending with the state. Burlington Health and Rehab, for example, is now called Queen City Nursing and Rehabilitation.

The state considered the transfer of ownership request in an interim process that provided no opportunity for the public to participate. Under the interim rules, the authority to approve or deny a request rests with the Secretary of Social Services – currently Mike Smith, who is retiring on Friday, December 31.

Gamzeh and Glatzer revised their candidacy last summer after Seven days and Social Services Agency officials asked about their third investing partner, Akiko Ike, and his wife, a prominent nursing home investor named Ephram “Mordy” Lahasky, who did not been nominated as a candidate. They removed Ike’s name from the request and told officials at the December 2 hearing that neither she nor Lahasky would have any control over the operations.

Smith and other agency officials bluntly criticized aspects of Gamzeh and Glatzer’s request at that December 2 meeting, noting that their funding documents continued to portray Lahasky as an active manager of the company.

What Priority’s decision to withdraw her application means for the five nursing homes was not immediately clear. Genesis spokeswoman Lori Mayer said in a statement that the company “is working with officials at Priority to ensure that the centers remain compliant with state and federal regulations.” Gamzeh and Glatzer’s lawyer in Vermont, Shireen Hart, did not comment or respond to a question on Tuesday afternoon as to whether her clients intended to reapply at a later date.

The facilities had below average federal quality ratings under Genesis. In 2020, Genesis agreed to pay the State of Vermont $ 740,000 to settle negligence claims at St. Johnsbury Health & Rehab, Berlin Health & Rehab, and Burlington Health & Rehab.

Last month, Burlington Health and Rehab was listed as a “specialized facility” by the Centers for Medicare & Medicaid Services, a federal program for the nation’s worst performing nursing homes.

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