Nursing Home Deal Approval on Hold

The West Virginia piece of a proposed $6.3 billion national nursing home chain buyout is on hold after health care regulators agreed to reconsider their earlier approval of the deal.

With the Carlyle Group's plan to acquire HCR Manor Care under scrutiny in at least 30 other states, the West Virginia Health Care Authority set a Dec. 14 public hearing after staying the certificate of need it had granted the global investment firm.

The buyout affects seven Mountain State nursing homes that together provide nearly 1,000 beds. Authority officials cited concerns raised by the Service Employees International Union District 1199. It represents workers at some of the homes and appealed the approval.

"1199 asked us to reconsider our decision, citing a number of issues we were not necessarily aware of at the time we granted the decision," authority Chairwoman Sonia Chambers said Tuesday. "We're not issuing any sort of decision on the merits. We are just granting their request for a reconsideration."

The SEIU represents nursing home workers nationwide, including about 1,100 of Manor Care's 60,000 employees. The union has started a nationwide campaign to raise concerns about whether Carlyle would cut back on patient care, partly because the purchase will be financed heavily by debt.

"Given the history of private equity firms and the troubling track record of HCR Manor Care, we have legitimate reasons to be concerned about this buyout including concerns about the effects it could have on the quality of patient care," Sherry McKinney, District 1199's political director, said in a Tuesday statement.

A Carlyle Group spokesman did not immediately respond to a phone call requesting comment late Tuesday. HCR Manor Care officials have defended the buyout amid questions raised in other states.

Several West Virginia lawmakers expressed concerns earlier this month about the possible effect on patient care, echoing their counterparts in a growing number of states.

"I think it shows just good judgment," House Health and Human Resources Chairman Don Perdue said Tuesday of the authority's decision.

Perdue, D-Wayne and a pharmacist, said he's worked with some of the nursing homes in neighboring Ohio involved in the buyout.

"Perhaps at the time this was all working through the system, not all of the information was out there. At least, not all of the concerns," Perdue said. "It's just due diligence, and I applaud that."

HCR Manor Care is an S&P 500 company with more than 500 facilities around the country that include nursing homes, rehabilitation centers and hospice, assisted living and home health care services.