In a bland brick office building across the street from a King Kullen supermarket in New York’s Long Island, nursing home magnate Ephram “Mordy” Lahasky is tallying up his latest deals. It’s a Friday afternoon in early February, and Lahasky has recently picked up 17 facilities in Ohio, he says, a couple in Massachusetts, and has his eye on five more in the south.
Separately, Genesis HealthCare, which was owned by private equity firms Formation Capital and JER Partners before a 2015 merger with a public company, delisted its stock last year as part of a restructuring that gave an ownership stake to an affiliate of a small outfit headed by New York nursing-home investor Joel Landau.
Lahasky does not maintain a corporate web site. Although federal data don’t present the full picture of Lahasky’s nursing-home affiliations, the 97 facilities for which CMS officially listed him as an owner as of February show a pattern of understaffing and subpar quality.
Lahasky first got into the nursing home business in 2012, he says, with the help of Benjamin Landa, then head of New York nursing home company SentosaCare. In a 2019 ruling in a class action lawsuit that did not involve Lahasky, a federal judge in Brooklyn found Landa and affiliated entities liable under human-trafficking law in connection with the recruitment of Filipino nurses working in nursing homes. Landa and the other defendants denied the allegations in court.
— David Stevenson, a health policy professor at Vanderbilt University School of Medicine Meanwhile, payroll questions emerged at other Lahasky-affiliated facilities. The Department of Labor in 2018 filed suit against CHMS Group, a Lahasky-affiliated provider of payroll and other back-office services, and 14 Pennsylvania facilities co-owned by Lahasky, alleging a failure to compensate employees for all the overtime hours they worked.
It’s now common for nursing homes, including those affiliated with Lahasky, to pay not only rent, but also management fees and other service fees to related entities. Following private equity buyouts, nursing homes’ management fees and lease payments tended to increase sharply, according to a 2021 study by researchers at the University of Pennsylvania, New York University, and the University of Chicago, while cash on hand decreased.
The scene was far more chaotic in some facilities co-owned by Lahasky. By late May 2020, Brighton Rehabilitation and Wellness Center in Beaver, Penn., had 335 occupied beds, and 76 residents had died of COVID-19, at the time one of the country’s deadliest nursing home outbreaks, according to CMS data. An inspection that month found that facility staff hadn’t been adequately trained in infection control procedures.
The day after the indictment, the Pittsburgh Post-Gazette published an opinion piece by Lahasky that said the federal government was threatening people affiliated with Brighton Rehab with indictments “if they do not offer evidence in support of the federal government’s theory about what happened at Brighton.” Lahasky also set to work investigating the Mt. Lebanon staffing situation himself, he says.
“For some reason, the state of Vermont looks at the application and says, ‘Mordy Lahasky’s involved. He’s got all these problems in Pittsburgh,’” Lahasky says. “Aren’t you innocent until proven guilty?” He acknowledges that his name was on the loan documents. “The bank wanted my guarantee. I gave them a guarantee. So what?” he says.
The pension fight is part of a broader effort to ensure workers are correctly compensated, according to workers and officials at 1199SEIU United Healthcare Workers East, a union representing staff at Pearl as well as Comprehensive Rehab and Nursing Center at Williamsville, which is co-owned by Lahasky.
In contrast to the scrutiny in Vermont, nursing-home regulators in the eight states involved with the Diversicare deal generally didn’t give Lahasky a hard time, he says. In Missouri, which is home to three Diversicare facilities, the Department of Health and Senior Services wasn’t aware of the Diversicare acquisition before receiving questions from MarketWatch, says agency spokesperson Lisa Cox.
The resident was on a hunger strike, aiming to bring awareness to conditions at the facility, according to the report. “I worry about those that can’t speak for themselves,” the resident told the inspector.
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