Undercurrents: Sea View Nursing Home and Residents Get Another Reprieve

A regular Source column, Undercurrents explores issues, ideas and events developing beneath the surface in the Virgin Islands community.

Attorneys for Sea View Nursing Home and for the federal Centers for Medicare and Medicaid Services have asked the District Court to put a hold on a pending suit, saying they expect to resolve differences by May 18.

The Joint Motion to Stay filed Monday morning gives no detail about how the parties expect to resolve the matter, but a source with knowledge of a court hearing Monday afternoon said Sea View has submitted a candidate to be the temporary manager of the facility and CMS has agreed to review the submission. CMS also has agreed not to stop payments or to transfer Sea View residents from the facility at least until May 18 or until the judge rules on the pending suit. Those actions had been expected as early as Friday.

Problems at Sea View go back at least to 2013, and the facility has been operating under a swinging pendulum for the past year. It filed suit just a week ago, seeking an injunction to prevent what looked to be the imminent final blow.

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At stake are some 16 nursing home residents, their families, and hundreds of thousands of dollars in federal Medicaid payments channeled through the Virgin Islands government.

Sea View filed suit 10 days ago, seeking an injunction to prevent CMS from halting payments and transferring patients. It named both CMS and the U.S. Department of Health and Human Services as defendants.

The V.I. government, which actually has responsibility for Medicaid patients, was not named in the suit. Through its Department of Human Services, the local government has long contracted with the privately owned Sea View to house those patients. Sea View also used to house Medicare patients and some patients with private insurers.

District Judge Curtis Gomez held a hearing last week on the request for an injunction. The hearing was focused on whether or not the court even has jurisdiction over the matter.

Assistant U.S. Attorney Joycelyn Hewlett, representing the defendants, had argued the court does not have jurisdiction. For one thing, the federal government is immune from suit unless it agrees to be sued, she argued, and the ceiling on money damages for this type of action ($10,000) is far below the Medicaid money at stake in this instance.

Included in Hewlett’s motion is information that CMS paid $359,467 in Medicaid reimbursements to the V.I. government for just the first quarter of the 2015 fiscal year, that is from October 1 to December 31, 2015.

She also included a brief history, beginning with a CMS report, or “survey” dated September 13, 2013, which concluded there were major deficiencies at Sea View and it was therefore in non-compliance with Medicare and Medicaid standards of care.

Although Sea View representatives say they tried to correct the deficiencies, subsequent surveys in March 2014, October 2014 and April 2015, all cited shortcomings. In January 2015, CMS sent a letter notifying Sea View that its provider agreement would be terminated effective June 30, 2015.

The situation generated considerable publicity and eventually resulted in CMS and Sea View owner Dr. Alfred Heath reaching an agreement: CMS would back off its claims for penalties and Sea View would relinquish its right to oppose sanctions stemming from the various surveys and also make way for new ownership. Additionally, CMS would continue to cover the costs for existing Medicare and Medicaid patients at Sea View until Human Services transferred them to another facility or until January 2016, whichever came first, but it would not cover any residents coming to Sea View after June 30, 2015.

A year ago, there were more than 30 residents in the facility. About half that number remain.

In January, a day before the deadline in the agreement, there was a codicil added to it, extending federal payments another six months, to July 30, but also with the stipulation that a temporary manager be in place by March 31 and a purchase agreement for the facility be in place by May 1.

In its recent suit, Sea View claimed CMS made it virtually impossible to comply with either of those stipulations, insisting on unnecessary qualifications for the manager and refusing to guarantee to a potential buyer that it would continue federal payments for residents.

Sea View claims CMS therefore violated the agreement. CMS claims Sea View violated it because, as Hewlett wrote in her motion to dismiss, the breach of contract claim “flows back to the findings of non-compliance” in the surveys.

Those claims will be moot if the tentative agreement reached Monday results in an actual resolution. 

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