Although Arundel Geriatric and Nursing Center has filed for Chapter 11 bankruptcy protection, its owners say patients will not be affected and there are no plans to lay off any of the 120 employees.
"It's a positive business move for us," said Michael J. Francus, treasurer of the Glen Burnie nursing home, which also is owned by his father, Joseph B. Francus, a clinical psychologist.
Burdened with debt accumulated because of a new $3.8 million unit for psycho-geriatric patients and with revenues below projections, the center had no choice but to file for bankruptcy to give it time to reorganize, Michael Francus said.
Adding to the problems is a delay in getting state licensing for beds in the new facility, which opened in May. Only 42 of the 84 beds in the new building are licensed, he said.
Two months ago, the state Department of Health and Mental Hygiene had threatened the nursing home with sanctions after a routine inspection uncovered problems with providing proper patient care in the new unit.
Since the report, the owners have corrected all the violations and the state is no longer threatening to sanction the nursing home, according to Carol Benner, acting director of licensing and certification for the state health department.
Benner said the state will closely monitor the center to ensure the quality of patient care is not reduced because of the bankruptcy.
While Arundel had passed inspection and received licenses for 42 beds since opening the unit in May, the center failed a review done in October. That resulted in a delay in getting licensing for another 22 beds.
Francus said it will be another 30 to 60 days before the center might get approval for more beds.
The new unit already was nine months behind its scheduled opening, Michael Francus said. He said the extra delay due to problems with the state health department drove the center to bankruptcy court.
The new unit, called the Point Pleasant Building, is equipped to care for patients with psychological problems and other diseases such as Alzheimer's.
Including the main building that has a 115-bed capacity, Michael Francus said, the facility has 58 unoccupied beds that are costing it $150,000 a month.
"The unoccupied beds are a revenue drain," he said yesterday.
Michael Francus filed for protection from creditors Wednesday. The filing includes the nursing home and two holding companies associated with the center, in the 7300 block of Furnace Branch Road. Combined, the businesses have assets of $8.2 million and debt of $8.9 million.
"I think this is the medicine that will help us do well in the future,he said. "We were not taking our last breath. We have cash to operate but we needed to file for bankruptcy to keep open."
"This is a true reorganization," he said. "All we need to do is fill the rest of the beds and we will be fine."
The nursing home also had faced becoming ineligible for Medicare and Medicaid reimbursements because of the violations.
A 71-page report released in November by the state health department detailed deficiencies with staffing and supervision at the new satellite unit.
Most of the violations stemmed from not hiring and training enough nurses and aides, the report said. The inspection also found that several mentally ill patients were left unsupervised. Other problems noted in the report included poor hygiene, such as failing to clean up after incontinent patients, and not following proper procedures in changing catheters.
However, none of the incidents posed a serious, immediate threat to the patients' safety, Benner said.
"As soon as we identified the problems the owners made immediate plans to make corrections," Benner said.
Benner said since 1987 the nursing center has had no major violations. The recent violations were strickly due to the efforts to open the new building, she said.
"They opened the unit and just weren't ready yet," Benner said. "But I want to stress that they worked quickly to fix the problems. There was no denial or effort to fight with us."
The nursing center's 115-bed main building passed the state's annual inspection last spring.
The main facility, formerly known as the Plaza Manor Nursing Home, had a history of state health violations under a different ownership.
In 1984, under the previous owner, the health department imposed a ban on admissions and threatened to revoke the nursing home's license. The ban came shortly after a 79-year-old patient wandered outside in his underwear and shoes and froze to death.
Some of the deficiencies cited by the health department in 1984 included lack of necessary physician care and inadequate supervision of patients.
Despite some 50 deficiencies, the nursing home was allowed to remain open under conditions that it would be sold, and its
management turned over to new owners.
Michael Francus said he and his father formally took over the nursing home in 1985.
He said the majority of the center's vendors have agreed to continue doing business during the reorganization. He said a secured creditor, Mercantile-Safe Deposit and Trust Co., has also been working with the company.
"If anything we have more money to put in patient care," Michael Francus said. "What we have done is put the residents and employees first and vendors second."