Owners of shuttered St. Louis nursing home kept paying themselves as money dwindled

Feb. 29—ST. LOUIS — In the years leading up to the chaotic closure of the Northview Village Nursing Home, revenues fell and resident counts dropped.

Still, the owners of the north St. Louis nursing home, the largest in the city, were sending at least $1.5 million annually in rent and other payments to their companies.

Financial documents from 2020 through 2022, newly obtained by the Post-Dispatch through an open records request, show the steady flow of money into owners' compensation, administrative services and rent paid to the owners' other businesses.

Then, in December, Northview — out of cash — abruptly shut down, forcing the frantic relocation of 174 residents, and drawing national headlines.

Critics of the industry have long contended that nursing homes are able to hide profits through a web of operating businesses, service providers and real estate holding companies. And those who watched Northview fold after its owners — Mahklouf "Mark" Suissa and Chicago nursing home magnate Eric Rothner — didn't pay workers on time say it's the latest example of the industry putting profits over people.

"They had been making millions," said Lenny Jones, Missouri director for Service Employees International Union Healthcare, which represented workers at Northview. "For them to come around and say, 'We're broke, and Medicaid rates are too low,' is just a bunch of crap."

Northview closed Dec. 15, with little more than a few hours' notice. The residents of the facility on North Kingshighway were transported overnight to more than a dozen other facilities in the area, often without informing their families or court-appointed guardians. One resident was lost on the streets for weeks.

The industry contends Northview's closure is symptomatic of low Medicaid reimbursement rates along with a staffing crisis that has already led to the closure of some homes and will inevitably doom others.

Northview was indeed losing patients and revenue, according to its financials, a sharp reversal from 2020, when it was still taking in more money than it spent.

Gross revenues fell from $17.7 million in 2020 to $13.8 million in 2022 as the number of residents in its 320 available beds dropped. Expenses hardly fell, going from $16.5 million in 2020, to just under $16.4 million in 2022. As its patient-count dipped, Northview lost its status as the largest Medicaid nursing home in Missouri and a corresponding $1 million annual payment given to the state's largest Medicaid facility.

While Northview cut some payrolls and expenses in that time, it barely touched several line items.

'You can't make the assumption'

Northview continued paying over $730,000 in annual rent to a company owned by Rothner and Suissa that held the real estate. Northview also recorded about $415,000 in "owner's compensation" every year from 2020 through 2022. And it paid exactly $441,000 in each of those three years to Suissa's company, Healthcare Accounting Services, for "home office" administrative services.

"It's a real estate business," said Steven Levin, a founder and senior partner at Chicago law firm Levin and Perconti, which focuses on personal injury and nursing home litigation. "As long as they make enough money to pay the rent to the owners of the real estate, who typically are related to the operators under another hat, it can be profitable for them but not for the residents. They also suck profits out of the home in management companies and collateral companies that provide services to them."

Rothner couldn't be reached for comment. Suissa and his attorneys did not respond to a request for comment.

But Harvey Tettlebaum, a Jefferson City attorney who represents Missouri's nursing home trade group, said such arrangements are common in the industry and don't necessarily mean the owners are taking the money as profit.

The rental payments, for instance, are often used to pay a mortgage on the property, which St. Louis real estate records indicate Northview did have until a bank in 2022 released a lien stemming from a 20-year-old loan. The payments to Healthcare Accounting Services are for back office work and the ownership compensation payments could be being used to pay other loans for operating capital at Northview, Tettlebaum said.

"You can't make the assumption that this is going into the owners' pocket," Tettlebaum said.

It's impossible to know how much of the fees paid to Suissa's Healthcare Accounting Services company amount to profit, or how much of the rental payments went to service debt on the property. In a nod to concerns about financial transparency in an industry largely paid by taxpayers, Missouri House Minority Leader and Democratic gubernatorial candidate Crystal Quade was recently at Northview's campus touting new legislation she introduced in the wake of the home's closure.

The Springfield lawmaker's bill would compel nursing homes to disclose more details about the network of companies that own and operate the facilities when they are sold. The facilities would have to disclose all of their owners, trustees and connected real estate trusts as well as any companies that provide administrative or clinical services.

"One parent company could be charging an exorbitant amount of rent," Quade said in an interview that day. "Transparency is just so important."

A relationship unravels

While Northview faced financial pressure from its heavy reliance on a large Medicaid population and declining revenues, it also faced a unique challenge from its owners.

As a Missouri Department of Health and Senior Services report revealed last month, it was a dispute between Suissa and Rothner that ultimately sunk Northview.

The owners' names are redacted in the report, referenced only as "Owner A," "Owner B" and "Owner C." The Post-Dispatch has identified them by matching details from the report with other state records.

According to the report, Suissa and his chief financial officer, Matt Furgerson, blamed Rothner for Northview's sudden closure. Rothner holds a nearly 40% stake in the company that owns the Northview Village real estate at 2415 North Kingshighway. He also was Suissa's partner in another company tied to the operation of Northview.

Suissa, in one of his few comments to the Post-Dispatch, alluded to issues with his business partners without naming them.

"Of course, I would have done it a different way," he said shortly after the December closure. "I have other partners also involved, but unfortunately that's the way it happened."

The report showed Suissa and his officers also told staff it was Rothner's fault.

"After a long fight to get the ownership to fund Northview's continuing losses, I, nor (Suissa) have been able to get funds from the other part of the ownership group for Northview," Furgerson, the CFO, wrote in an email obtained by state inspectors. "(Suissa) is not able to fund this as he has exhausted everything he has from funding his homes for so long. I am not sure what to say as I have had many solutions to get us through our cash flow issues, but I do not have a solution this week. I spoke to (Suissa) and he suggested that you give employees (Rothner's) office information as we were expecting funds from him and he is not budging."

According to the report and interviews with workers, Northview staff noticed that their direct deposit had not come through early on the morning of Dec. 15. Many had bills they routinely paid the morning of payday. A nurse told a state inspector that "when employees found out they would not be paid, staff came in for work and turned around and left."

Other employees still worked through the night to help find new housing for confused and upset patients.

One former worker filed a class-action lawsuit against Northview and Healthcare Accounting Services shortly after the closure, alleging the companies didn't properly notify workers of the impending layoffs. Her attorneys cited Rothner's refusal to fund payroll and said it amounted to a decision "to abruptly shut Northview's doors, despite financial alternatives readily available to continue operating."

Suissa and his attorneys, in a recent court filing, said no layoff notice was required because it was the workers' fault the facility shut down.

"Defendant only announced a delay of funds, not that the facility was to be shut down," Suissa's attorneys wrote. "The shutdown occurred as a direct impact of the looting and rioting of employees."

'He's a ruthless guy'

After the Northview debacle, Rothner and Suissa's relationship, which stretches back at least 30 years at Northview and includes some shared ownership at other homes in Missouri and Illinois, may be unraveling.

Earlier this month, another nursing home owned by the Suissa and Rothner families shut down. Illinois regulators cited "financial" reasons in the Feb. 8 closure of the 266-bed Salem Village Nursing Home in Joliet, near Chicago. In November, a resident there attacked fellow resident Michael Pappas, 61, who died, spurring a state investigation, according to media reports.

The closure of Northview, and now Salem Village, are only the latest high-profile incidents involving Rothner-owned nursing homes.

New Jersey homes where Rothner's son, William "Avi" Rothner, held ownership stakes in the real estate saw a rash of deaths that drew national scrutiny at the onset of the pandemic. In Illinois, regulators have taken aggressive action over the years to respond to problems at Eric Rothner's homes in the Chicago area.

Still, a Rothner home in 2010 prepared for a surprise inspection from the Illinois Attorney General's office after someone in government tipped it off, the Chicago Tribune reported. And in 2012 Rothner managed to expel state monitors from another of his homes.

"The Rothners have a long history of poor quality facilities across multiple states," said Timothy Poore, whose Orlando-based company ATP Healthcare helps hospitals, including some in St. Louis, place patients in long-term care facilities.

Levin, the Chicago attorney, has sued many of Rothner's homes in recent decades over poor conditions and care.

Like Suissa found out at Northview, Levin learned the businessman wasn't one to yield to pressure.

"He's a ruthless guy," Levin said. "He never backs down."

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