Assisted-living company in more trouble with New Jersey

A Wisconsin company recently fined by New Jersey for providing health-care services to the elderly without a proper license has been cited for having fire-alarm systems that were not fully functioning at six of its occupied residences.

While the alarms might have sounded, said Department of Community Affairs (DCA) spokeswoman Lisa Ryan, signals would not have been sent to local fire departments, as required by law.

The residences are owned by Assisted Living Concepts of Menomonee Falls, which did not return calls for comment Wednesday.

The six residences, all current or former assisted-living facilities, are Baker House in Vineland, Lindsay House in Pennsville, Mey House in Egg Harbor Township, Granville House in Burlington Township, Maurice House in Millville, and Post House in Glassboro. Assisted Living Concepts also owns two residences in New Jersey that are currently unoccupied, Goldfinch House in Bridgeton and Chapin House in Rio Grande.

As of 6 p.m. Tuesday, five of the occupied residences were in compliance. Granville was not and was placed under fire watch, which means the owner is required to provide a person at all times to periodically check the facility for any sign of fire and to transmit the alarm to the fire department in the event of an emergency, Ryan said.

The individual must have no other duties and must keep a log of activities.

It is not known how long the systems were not fully functioning. During an inspection at Granville in October, the system was working, according to the Burlington Township Fire Department.

The state Department of Health and Senior Services (DHSS) on Friday ordered Assisted Living Concepts to stop providing health-care services at four of its former assisted-living facilities. DHSS also levied $262,500 in fines, with penalties to accrue every day that the company continued to provide health services at Granville, Mey, and Lindsay Houses.

DHSS received a request from Assisted Living Concepts for an administrative hearing on the department's cease-and-desist order and penalty assessment on Wednesday, DHSS spokeswoman Marilyn Riley said. The request will be filed with the Office of Administrative Law, which handles such hearings, she said.

In a letter to DHSS, an attorney for Assisted Living Concepts, Brian Rath of Buchanan, Ingersoll & Rooney, denied the department's allegations and argued that the department "lacks statutory and regulatory authority to impose the proposed penalty" and that its actions in enforcing the regulations are "arbitrary and capricious."

Assisted Living Concepts voluntarily surrendered its state assisted-living licenses for those facilities, and to Goldfinch, in July. Company officials said they planned to convert the facilities into apartments for the elderly, which fall under different regulations.

After the licenses were surrendered, the company appeared to continue to provide health-care services to many of the residents through an affiliated company, Swan Home Health. The company also failed to comply with state regulations for multiple dwellings, which have requirements for kitchens, locked doors, and fire protections. A temporary permit from DCA to allow the company to operate the four buildings expired Oct. 15.

The state's former ombudsman for the institutionalized elderly and director of elder advocacy, Gwen Orlowski, first raised questions about the arrangement and the safety of the residents during her tenure and in a letter on her last day on the job, Oct. 15.

Orlowski said she feared the residents were medically and financially at risk. Among her concerns was whether Swan Home Health employees are allowed under state law to administer medications.

Assisted Living Concepts president and chief executive officer Laurie Bebo said the company was registering the former assisted-living facilities with DCA as either multiple dwellings or boarding homes. The company operates 211 senior-living residences housing 9,305 people in 20 states.

Assisted Living Concepts has drawn criticism in New Jersey and other states for discharging residents after they have spent down their life savings and become eligible for Medicaid. A 2009 investigation by the New Jersey Public Advocate found that Assisted Living Concepts discharged residents in violation of its state license.

The company, whose stock is traded on the New York Stock Exchange, has made no secret of its strategy to increase the number of private-pay residents to boost its bottom line. In a document filed Nov. 12 with the Securities and Exchange Commission, the company stated: "In the third quarter of 2010, we continued to pursue our strategy of increasing both revenues and profitability by increasing private pay occupancy."