A Westport nursing home and six other similar facilities around the state have filed for Chapter 11 bankruptcy and plan to lay off employees Saturday as they reorganize.
In addition to Westport, the homes in Danbury, Darien, Milford, Newington, Stamford, and Wethersfield are owned by Hackensack N.J.-based Care Realty.
The company hopes to reorganize the homes’ finances and emerge stronger, according to company spokeswoman Ann Collette.
The Westport facility, Westport Health Care Center, is at 1 Burr Road and formerly was known as Mediplex of Westport. It has 120 beds.
The homes have been losing money under the state’s Medicaid and Medicare reimbursement system, and because of the cost of union contracts, Collette said. The company is considering a plan that results in about 160 layoffs.
District 1199 of the New England Health Care Employees union filed a letter of protest with the state Department of Public Health over the planned layoffs. The jobs to be cut include unionized nursing assistants, housekeepers and other staff.
The home’s previous owner, Sun HealthCare of New Mexico, signed four-year contracts with the union in 2001. The contracts include a provision that requires the company to pay nursing assistants a fee if the homes’ staffing levels drop below specified levels.
“We are trying to stay open,” Collette said. “We can’t, under the current contract.”
Jennifer Smith, a spokeswoman for 1199, said the contracts and staffing levels are similar to agreements the union has with other nursing homes in Connecticut.
The penalty for dropping below staffing levels are minimal, Smith said. It is equivalent of a day’s pay to one of the home’s nurses. The money goes into is a fund that is spent on job recruitment and training.
“It’s not enough to drive a company into bankruptcy,” she said.
In 2003, Care Realty replaced the homes’ management company, Haven Health Care, with HealthBridge, which is owned by Care Realty.
Smith said the union will ask the bankruptcy judge to study the homes’ finances in detail, because the union believes HealthBridge has siphoned the profits back to Care Realty.
“Eight months ago, these homes were operated by Haven Health Care and they were solvent,” she said. “Care Realty brought in HealthBridge and they’ve been driven into bankruptcy. It’s a shell game.”
But Collette said the cost of union contracts is one of the reasons for the Chapter 11 filing. The contracts include “terms and conditions that are an extreme departure” from contract at other homes, she said.
Care Realty owns three non-unionized homes in Connecticut that are not affected by the bankruptcy protection filing.
