Iowa nursing home chain owes $6 million to taxpayers

A bankrupt Iowa nursing home chain with a history of abuse and neglect violations owes taxpayers $6 million in unpaid fines and fees.

QHC Facilities, which owns eight nursing homes and two assisted living facilities in Iowa, has been cited for at least 184 regulatory violations in the past 20 months while neglecting to pay fines for poor quality care and fees that would have boosted the pay of front-line workers.

Recently, QHC found a potential buyer in Blue Diamond Equities, and the sale of the chain is expected to be finalized next month. But there still are several unresolved issues related to the fees, fines and advance payouts owed by QHC to the state and federal government:

— Federal fines: Court records show the chain owes the federal government a total of $2,108,910 for unpaid fines related to quality-of-care regulatory violations and COVID-19 Accelerated and Advanced Payments it collected in the midst of the pandemic.

Of the eight nursing homes that owe money, three have either closed or are in the process of being shuttered, leaving five with debts now being negotiated in conjunction with the sale of QHC. Those five homes owe $1,704,954 to the federal government, and QHC has proposed that it be allowed to pay $962,061 of that amount to cure the debt.

— State fees: State records show that QHC owes the Iowa Department of Human Services $3,930,784 in unpaid fees. With more than 300 other creditors lined up and seeking payment from QHC, the company is now asking that its debt to the state be treated as a “lower priority.” According to the Iowa Attorney General’s Office, negotiations on that point are continuing.

“In addition to the state’s efforts to secure payments through the bankruptcy matter, we are focused on ensuring that all involved parties are aware of their regulatory and patient care responsibilities, which should remain the first priority,” said Lynn Hicks, chief of staff for Iowa Attorney General Tom Miller.

The eight skilled nursing facilities owned by QHC are the Crestridge Care Center in Maquoketa; Crestview Acres in Marion; Sunnycrest Nursing Center in Dysart; QHC Fort Dodge Villa; QHC Humboldt North; QHC Humboldt South; QHC Mitchellville; and QHC Winterset North. The two assisted living centers are QHC Madison Square in Winterset and QHC Villa Cottages of Fort Dodge.

Collectively, those facilities have a maximum capacity of more than 700 residents. Last year, QHC employed roughly 300 full-time and part-time workers.

QHC self-reported $4 million owed to state

QHC’s path to bankruptcy dates back to last year when company owner Jerry Voyna died. His wife, Nancy, took over the company and began looking for a buyer.

In court filings, she stated that after her husband’s death it was discovered the company had not been paying a series of quarterly fees owed to the state, leaving an accumulated debt of almost $4 million.

She reported that debt to the Iowa Department of Human Services in November 2021, and then, a few weeks later, filed for bankruptcy.

The quarterly fees, called “quality assurance assessment fees,” are to be paid to the state and are designed to increase a facility’s cost of doing business.

The increased expense enables the facilities to draw down more in Medicaid reimbursement from the federal government for resident care, offsetting the cost of the fees they’ve paid to the state.

Several weeks ago, QHC notified the court it intended to close the Sunnycrest, Humboldt South and Mitchellville homes.

The Mitchellville and Sunnycrest homes are in the process of closing and Humboldt South now appears to have closed.

This article originally appeared in Iowa Capital Dispatch.

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