The merger of nursing home chains Horizon Healthcare Corp. and Greenery Rehabilitation Corp. has been put on hold following news that Massachusetts' Department of Public Health has denied Horizon's application to operate nursing homes in the state.
"It came as a total shock to us," said Horizon spokesman Michael Seelinger.
Massachusetts officials based their rejection of Horizon's operating license on evidence linking the Albuquerque, N.M.-based nursing home provider with poor patient care. They cited public health violations at three Horizon-operated nursing facilities in California and Ohio.
The decision will delay what was estimated to be an $85 million merger between Horizon and Newton, Mass.-based Greenery, which manages 21 facilities nationwide. Greenery has eight facilities in Massachusetts.
Although Horizon's Mr. Seelinger acknowledged that the decision will delay the proposed merger, he said he was optimistic that the company would obtain approval "within the next 60 to 90 days" after Horizon appeals its case by requesting an adjudicatory hearing.
Several patient advocacy groups, which had lobbied against Horizon's entry into the Massachusetts nursing home market, hailed the license denial as a victory. Representatives from Cape Cod Cares, the Cape Organization for the Rights of the Disabled and former patients and their families voiced their concerns during a public hearing on the sale in November. They were concerned that the sale to Horizon would lower the quality of patient care.
"The decision is an example of what can happen when unions and the community unite around patient care," said Bill Pastreich, director of Local 676 of the Services Employees International Union in Hyannis, Mass. The SEIU doesn't represent workers at the Greenery facilities, but the union's interest in the matter stems from its nationwide campaign to improve the staffing levels at nursing homes, he said.-