Proposed law could jeopardize long-term care facility sales, associations say - McKnight's Senior Living

Legislators contend that a bill passed out of the New Jersey’s Senate Health, Human Services and Senior Citizens Committee on Thursday could preserve healthcare workers’ wages and benefits upon the sale of the skilled nursing facility or assisted living community for which they work. But the legislation might not be such a good thing for long-term care providers, according to industry advocacy groups.

The bill, if passed by the full state assembly this year, would require that sales contracts for nursing homes and assisted living communities preserve for six months the employee wages and benefits that were in place before the sale.

“The requirement that a buyer assume the labor costs of a seller would, in certain circumstances, prevent a transaction, which could actually cost employees their jobs, force residents to be moved from their homes and create access issues for the community,” Andrew Aronson, president and CEO of the Health Care Association of New Jersey, told the McKnight’s Business Daily. “Accordingly, we have opposed the bill.”

The association is the state affiliate of the American Health Care Association / National Center for Assisted Living and the state partner of Argentum.

James W. McCracken, president and CEO of LeadingAge New Jersey & Delaware, told the McKnight’s Business Daily that his association’s focus related to the bill is that the market remain healthy and that sponsorship transitions aren’t impeded by legislation that would devalue the cost of the property or make a sponsorship transition less attractive to a potential sponsor or buyer.

“The industry is having a really difficult time right now, and there are going to be sponsorship transitions — there probably just have to be — and we don’t want to put rules in place that are going to jeopardize successful transitions,” he said. “That’s our concern with this bill, is that it could potentially jeopardize transitions that have to happen in the industry for a variety of reasons.”

A potential buyer might have its own benefit package and have particular ideas about making the facility viable but would be hindered by state rules, McCracken said. In effect, a new operator, for a period of time, would be required to follow the same procedures as a facility that was being closed perhaps because of financial issues, he added.

“This is a matter of, what do we need to do in the state of New Jersey to make sure our residents are receiving great care?” McCracken said.

Labor organizations, however, have a different view of the legislation.

“Our members have suffered the consequences of mergers that resulted in the loss of wages and benefits, and it can cause people to leave their job or continue to work demoralized,” Bridget Devane, public policy director for Health Professionals and Allied Employees, a union representing 14,000 healthcare employees, testified before the committee, according to written comments shared with the McKnight’s Business Daily.

“Over the last few decades, HPAE members, in their experience, have witnessed new owners take over and immediately cut labor costs, either through layoffs, cutting benefits or cutting wages, all in an attempt to protect the bottom lines,” she added.

source: https://www.mcknightsseniorliving.com/home/news/business-daily-news/proposed-law-could-jeopardize-long-term-care-facility-sales-associations-say/

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