State of New Jersey
Department Of The Public Advocate
240 West State St.
P.O. Box  851  
Trenton, NJ 08625-0851
Phone: (609) 826-5090    Fax: (609) 984-4747

JON S. CORZINE
Governor


For Immediate Release: 
June 2, 2008

RONALD K. CHEN
Public Advocate


Contact:
 Laurie Brewer
609-826-5054
     609-417-0038 (cell)

 
Public Advocate Investigates Involuntary Discharge Practices of Assisted Living Facilities

As part of its investigation into involuntary discharge practices by a company that operates eight assisted living facilities throughout southern New Jersey, Public Advocate Ronald K. Chen announced today he filed court papers asking a Superior Court judge to enforce a subpoena he issued against Assisted Living Concepts, Inc.

View the following certifications/ legal documents:

 

The Public Advocate is investigating allegations that ALC is involuntarily discharging elderly residents, or threatening them with discharge once they have exhausted all of their own funds, or "spent down" their life savings, and therefore qualify for Medicaid payments to cover the cost of remaining in their assisted living apartment.

ALC is a Wisconsin-based company which owns and operates 8 assisted living facilities in New Jersey including: Baker House in Vineland, Goldfinch House in Bridgeton and Maurice House in Millville, all in Cumberland County; Lindsay House in Pennsville, Salem County;  Mey House in Egg Harbor Township, Atlantic County; Chapin House in Rio Grande, Cape May County;  Granville House in Burlington,  Burlington County; and Post House in Glassboro, Gloucester County. 

On Friday, May 30, Judge Maria Marinari Sypek, Presiding Chancery Judge for Mercer County, signed an Order to Show Cause to enforce the Public Advocate’s  Subpoena and to schedule the matter for a hearing on Thursday, June 5 at 2:30 p.m. 

As part of its investigation into ALC’s practices, the Public Advocate in January issued a subpoena seeking the names, admission and discharge summaries and contact information for every resident of ALC’s New Jersey facilities who is or was a Medicaid waiver beneficiary.  The subpoena also sought the names and addresses of residents who have been discharged, for any reason, during the previous year. 

Chen said that the Certificates of Need and Licenses issued by the Department of Health and Senior Services for all eight of ALC’s assisted living residences in New Jersey provided that as many as 30 percent of residents would be Medicaid eligible and that no resident would be discharged because of a “spend-down.” In ongoing negotiations with ALC and DHSS, the Public Advocate asserts, the company had pledged that it would not ask current  private pay residents to move out once they become eligible for Medicaid.

"Our investigation indicates that this company is placing vulnerable elderly residents at risk by displacing them from their homes in violation of ALC’s state license," said Chen.  “Our primary concern is to protect the safety, well being and peace of mind of these residents, and we have worked closely with DHSS as we conducted our investigation.” 

"Assisted Living Concepts actions are reprehensible and deny the elderly residents in their care the dignity and compassion they deserve in their later years," added Senator Van Drew, D-Cape May and Atlantic. "It's another case of companies putting profits before people and in doing so, threatens the very well-being of elderly New Jerseyans who need the strongest protections."
Van Drew is drafting legislation that would prohibit assisted living facilities from discharging resident because the converted from private pay status to Medicaid eligibility and would require all assisted living facilities in New Jersey to establish a set aside for Medicaid eligible residents, including the direct admission of Medicaid eligible residents.

The Public Advocate and the Department’s the Office of the Ombudsman for the Institutionalized Elderly became aware of the involuntary discharge issue in late 2007 after working with the family of 83-year-old Betty Merklinger, who lived in Chapin House in Rio Grande, Cape May County. 

In September 2007, Mrs. Merklinger was told by Chapin House and ALC that she would be involuntarily discharged after she had "spent-down" more than $300,000 in private funds and become eligible for the assisted living Medicaid waiver program.  In the course of investigating Mrs. Merklinger's complaint, the Public Advocate learned that ALC had adopted a policy of no longer allowing its residents to convert from private pay status to Medicaid.

In a sworn statement included in the papers filed by the Public Advocate, Mrs. Merklinger’s daughter, Marilou Rochford of Cape May, said it was important for her mother to remain in her apartment because she was declining cognitively.  Ms. Rochford said her mother relied on Chapin House’s promise that she could remain, and spent all of her private resources on the facility before being told that corporate policy had changed and she would not be allowed to remain when she converted to Medicaid.  The Public Advocate, the Ombudsman and DHSS intervened and DHSS informed ALC that involuntarily discharging Mrs. Merklinger would violate the company's Certificate of Need application.  

The Public Advocate then sought a promise from the company that it would end the practice of involuntarily discharging residents once they become eligible for the Medicaid waiver program. However, ALC refused and indicated that they intended to challenge the DHSS interpretation of its licensing requirements.

After refusing to comply with the Public Advocate’s subpoena, ALC indicated that it would not involuntarily discharge any "spend-down" residents while they negotiated changes in the company's license with DHSS.

The Public Advocate delayed enforcing the subpoena until last month, when the Department learned that ALC was either involuntarily discharging or threatening to involuntarily discharge Medicaid eligible residents of Chapin House.

Specifically, the Department of the Public Advocate learned that at least three Chapin House residents who were either on Medicaid or Medicaid eligible may have been involuntarily discharged between March 26, 2008 and April 21, 2008. The Department is also working with the family of a woman who, contrary to previous promises by the facility, was advised in April by ALC that is has changed it corporate policy and will not allow her to convert to Medicaid. 

The Public Advocate’s court papers include a sworn statement by Wildwood Crest resident Dan Elkins, who said that when his mother, Julia Elkins, moved into Chapin House in early 2007, her rent was $4,000 per month and she was advised that under the promotional special she was receiving, she could not use Medicaid funds to pay her rent for the next twelve months.  Chapin House later reassured Elkins that its new policy to cap the number of Medicaid apartments would not apply to her, and that she would be able to convert to Medicaid when she exhausted her savings and qualified.  But in April, she was advised that under ALC’s new corporate policy, it would not accept any new Medicaid residents and she would have to move out

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