The Santa Fe New Mexican reported on the ongoing litigation saga related to bankruptcy of Preferred Care Inc. of Plano, Texas.  New Mexico’s Attorney General filed a lawsuit four years ago alleging inadequate care of residents at nursing homes in Santa Fe and 10 other New Mexico communities.  The lawsuit alleges the operators received hundreds of millions of dollars from Medicare, Medicaid and private-pay residents without providing basic care.

However, justice may not occur because the operators of the nursing homes — all affiliated with Preferred Care Inc. of Plano, Texas — filed for bankruptcy last year. Preferred Care, whose affiliated companies operated nursing homes in 12 states, also declared bankruptcy.  While the bankruptcies are pending, the Attorney General’s Office is barred from proceeding with its case against the New Mexico nursing home operators and Preferred Care.

Attorney General Hector Balderas said he is frustrated that the lawsuit against Preferred Care and its affiliated nursing home operators has been “disrupted and delayed by companies that have attempted to escape without paying their fair share to New Mexicans and prevented swift trials in New Mexico.”

Vulnerable populations should never be reliant on providers that cannot immediately pay damages for the harms they have caused,” Balderas said in written statement.

While the lawsuit by the Attorney General’s Office has stalled, the Preferred Care operators are moving to close or transfer the New Mexico homes to new management. A company called 1650 Galisteo Street Operations, a subsidiary of Genesis HealthCare, on Nov. 1 took over the long-troubled Casa Real nursing home in Santa Fe. Genesis is one of the nation’s largest nursing home chains.

Genesis HealthCare, whose subsidiary took over Casa Real, is a Pennsylvania holding company with more than $5 billion in annual revenues. Its subsidiaries operate more than 400 skilled-nursing facilities and assisted/senior living communities in 30 states. Genesis early this year restructured its finances to avoid a possible bankruptcy filing.

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