News release: MDH takes control of Owatonna and Faribault nursing homes to protect residents

News Release
May 8, 2015

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MDH takes control of Owatonna and Faribault nursing homes to protect residents

The Minnesota Department of Health (MDH) assumed control of Faribault Care Center and Owatonna Care Center today to protect residents' health and safety and ensure continued care as out-of-state operators face financial difficulties. MDH took over management under a receivership order granted Thursday by a Ramsey County judge.

MDH used its emergency powers to assume control of the nursing home after learning that the owner of the property, a Maryland-based real estate investment trust called Omega Health Care Investors, and Utah-based Deseret Health Group, the operator and manager of the facilities, were facing financial challenges and were no longer going to be operating the nursing homes.

Last week, MDH staff spoke with a Deseret executive who reported the company was having cash-flow difficulties. Concerned that the company's financial difficulties could threaten services for residents, MDH petitioned the court for permission to assume control of the nursing homes.

"We took this step as a last resort once it became clear the nursing home licensee was no longer going to be able to care for residents and provide the basic necessities," said Minnesota Health Commissioner Dr. Edward Ehlinger. "We are assuring family members and residents that they can safely stay at the facilities while the situation is being resolved."

MDH has arranged for Volunteers of America National Services, a Minnesota nonprofit corporation, to serve as the facility's managing agent during the receivership. Residents and staff were informed of the change on May 8. Faribault Care Center currently has 52 residents and Owatonna Care Center has 36 residents. About 130 employees work at the two facilities. MDH and the temporary management team will stabilize the facilities' operations to make sure that employees are paid and patients receive quality care.

Nursing home receiverships are authorized by state law and used only in emergency situations. The department's goal in a receivership is to protect the health and safety of residents. By law, the receivership cannot exceed 18 months. In a receivership, MDH becomes responsible for operations and finances of the nursing home. It typically appoints a managing agent to conduct the daily work of managing the home.


Media inquiries:

Scott Smith
MDH Communications