Financial Strugle Closes Large Medicaid Assisted Living Facility

Westchester Plaza in Fort Worth, Texas—the largest assisted-living facility for Medicaid recipients in the state announced in July it will close its doors after 19 years, and gave residents until Aug. 10 to find new living arrangements, according to the Associated Press over 100 people were affected by the closing.

The 12-story building, located at the center of Fort Worth’s medical district, has operated as an assisted living community since 1998. The facility has been advertised as “affordable luxury assisted living,” with each resident occupying a one-bedroom apartment.

The age and size of the building have caused regulatory and financial challenges.

The nonprofit controlled by Sweeney, WGH Heritage, reported a more than $2 million deficit in its most recent tax filing; the organization also reported multi-million dollar deficits in 2014 and 2013.
The company faced even more financial struggles beforehand, as it defaulted on its loans and had to reconstruct $20 million in debt backed by the U.S. Department of Housing and Urban Development.
In 2014, a deal fell through between the company and Irvine, California-based real estate investment trust which had plans of buying the property to build a $108.6 million combined residential/commercial development in its place.

Despite the selling point of “affordable luxury assisted living,” the facility faced operational issues as it was handed a lawsuit based on complaints that it did not have a proper sprinkler system for eight months in 2012, according to Tarrant County district clerk records. As a result, WGH Heritage shelled out $30,000 in civil penalties to the Texas attorney general’s office to settle the suit.

The Texas Department of Aging and Disability Services also investigated complaints against the facility in 2012. Most recently, state regulators investigated a complaint in March, finding that the facility had “failed to follow its internal policies regarding the prevention, detection and reporting of abuse, neglect or exploitation.”

According to a press release, “Despite the ballooning population of low-income seniors and individuals with disabilities, the number of Medicaid-assisted living providers in Texas has steadily declined due to low reimbursement rates, changes in process management of the Medicaid Waiver program, and expansion of alternative entitlement programs”. The release also stated that Westchester Plaza property management would be helping residents find relocation with the help of local groups and “Managed Care Organizations contracted to manage the Star+Plus Medicaid Waiver program.

Medicaid cuts in the healthcare bill proposals could be brutal for people living in nursing homes

Is this the future of Medicaid funded Nursing Home and Assisted Living in America?

The New York Times reports that 42% of Medicaid spending goes to services like nursing home care. Cutting spending in the program would hit the elderly, or put pressure on nursing home operators to cut back. That rollback in Medicaid funding could particularly hit one unexpected group of people: elderly people living in nursing homes.

Even though elderly Americans get medical coverage from Medicare — that program doesn't automatically cover long-term stays in nursing homes. For the most part, people pay out of pocket for nursing homes. Once that gets depleted, residents start to qualify for Medicaid to cover their stay.

Westchester Plaza residents must move out 

Medicaid covers more than 74 million Americans, including low-income people, families, and kids, as well as pregnant women, people with disabilities, and the elderly. The New York Times detailed the impact of Medicaid cuts on nursing home care in a story , and reports that — even though they only make up 6% of all Medicaid enrollees — those who use long-term services like nursing homes account for about 42% of total Medicaid spending.

Cuts to Medicaid spending could put those services on the chopping block.

"Moms and kids aren’t where the money is," Damon Terzaghi, senior director at the National Association of States United for Aging and Disabilities told The Times. "If you’re going to cut that much money out, it’s going to be coming from older people and people with disabilities."