Athena Health Care Systems, one of the largest nursing home chains in Connecticut, owes more than $750,000 in taxes, utility costs and interest on missed payments to municipalities, records show.
In some municipalities, the company is at least two years behind on real estate and personal property taxes, according to documents obtained by The Connecticut Mirror. In at least two cities — Torrington and Waterbury — tax collectors have referred Athena’s overdue taxes to the state marshals for collection, and several towns have filed liens against the properties.
The company owes about $764,700 to municipalities, records show.
“We acknowledge that we have fallen behind schedule in meeting tax obligations, a situation that has arisen due to unforeseen challenges in the industry including staffing challenges in health care and inflation on all requisite supplies and labor leading to shortfalls,” Lawrence Santilli, president and CEO of Athena, said in a statement Wednesday.
In Middletown, where Athena owns the Wadsworth Glen Health Care and Rehabilitation Center and Middlesex Health Care Center, which is in the process of closing, the company owes about $322,100 across the two facilities for taxes and water and sewer expenses.
Athena petitioned to close Middlesex on Dec. 14, and the state Department of Social Services approved the shutdown eight days later. Residents are in the process of moving to other nursing homes. In his request to close Middlesex, Santilli estimated the facility was losing $500,000 a month.
Middlesex is the second nursing home Athena has closed recently. In October, the state allowed the company to shutter Crestfield Rehabilitation Center in Manchester after Santilli filed a notice that he was losing $300,000 a month at that facility.
In Granby, where Athena operates MeadowBrook of Granby, the company owes $123,971: $49,383 in sewer costs, $59,237 for real estate taxes and $15,350 in business personal property taxes, records show.
Athena also owes $67,670 in taxes, water and sewer expenses and marshals’ fees in Torrington, where it runs the Litchfield Woods Health Care Center and Valerie Manor. The city has referred some of the overdue bills to a state marshal.
In Waterbury, the company owes at least $47,638 for overdue taxes, city officials said. The city turned the debt over to state marshals. Athena owns Abbott Terrace Health Center in Waterbury.
And Athena owes money to other towns where it operates nursing homes, including $43,256 on two facilities in Bristol, $21,469 in Naugatuck — which has filed two liens — and $37,383 in Glastonbury, local officials said. Only Newtown reported that Athena was up to date on taxes and other costs.
“Athena acknowledges its shortcomings, but it is important to understand the context of our business, which includes a 40-year history of operating skilled nursing facilities throughout the state of Connecticut and its willingness to step up and take on challenges to support care of its residents when others would not,” Santilli said. “An example is the COVID-19 pandemic, which continues to have an effect on the industry and Athena, including the labor shortages mentioned.”
He referenced the COVID recovery centers that Athena helped run during the height of the pandemic.
“We want to [assure] our stakeholders that this is a top priority, and we are working with the necessary tax authorities to ensure all outstanding taxes are addressed,” he said. “Our commitment to delivering high quality care and customer service remains unwavering. We continue to prioritize the wellbeing of our residents, employees and the communities we serve.”
The owner of the Newtown property where two facilities are up-to-date is listed as CT Toddy Hill Road RE, LLC, and the bills were sent to a Long Island-based real estate company called Vantage Point Capital, tax records show.
There are two nursing homes listed at that address: the Newtown Rehabilitation and Health Care Center and The Commons of Newtown.
On its website, Vantage Capital boasts of its “collective focused experience in identifying, analyzing and acquiring assets and maximizing asset value.” The company “provides acquisition capital and becomes an equity partner that focuses on acquiring and then triple net leasing health care facilities.”
Vantage Capital is run by Eugene Ehrenfeld, and since late 2020, it has created LLCs that match the addresses of every Athena nursing home in Connecticut, according to state records. Ehrenfeld did not return calls or an email seeking comment on his company’s relationship to Athena.
Athena, based in Farmington, runs 21 nursing homes across Connecticut, 17 in Massachusetts and five in Rhode Island. In Connecticut, it serves more than 2,500 residents.
“Certainly, this is concerning. Companies should pay their taxes,” said Rep. Matthew Lesser, D-Middletown, a co-chair of the legislature’s Human Services Committee. “It’s something I’m concerned about, but it could also be an indicator of other problems.”
Rep. Michelle Cook, D-Torrington, said cities and towns could seize the properties if a tax bill goes unpaid long enough, meaning residents and workers would be displaced.
“At the end of the day, there are people calling these facilities their home, and by the neglect of the owners, they are putting people in harm’s way,” she said. “You also have people working there — this is their livelihood. This is how they pay their bills. And you are putting them in harm’s way by potentially not having a job if that place has to close.”
“The other part of this is, you have a municipality they’re supposed to be paying taxes to. They are a for-profit business,” Cook said. “That is also a neglect to the municipality and the state. That tax is considered in everybody else’s budgetary projections. If there’s money owed to local taxpayers by a business and corporation, that takes money out of education for kids, that takes money out of all sorts of things that your municipality can utilize those dollars for because they count on them.”
Rep. Jane Garibay, a co-chair of the Aging Committee, said the non-payment of taxes highlights the need for better transparency in nursing home finances. The legislature last year passed a bill that takes steps to boost transparency in how nursing home owners report spending taxpayer money, but Garibay said the law could be strengthened further.
“This is why it’s so important to know where their money is right now,” she said. “It’s still vague. Why are [some] paying rent to themselves when they’re not paying their taxes?”
Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, which represents many of the state’s for-profit nursing homes, declined to comment on Athena’s overdue taxes and utility costs but said he is concerned about lagging Medicaid reimbursement rates.
“I am unable to comment on the Athena provider tax situation as I have no first-hand knowledge of those facts,” he said. “However, I do have a reasonable concern that considerable slippage in accounts payable (payments owed to suppliers and other vendors) is yet another signal that Connecticut nursing facilities are losing their financial footing as they move further to the other side of the COVID-19 public health emergency.”
“On Medicaid payment shortfalls alone in Connecticut, it’s well documented that state Medicaid funding is lagging well behind the extraordinary staffing cost increases, contracted agency staffing costs and inflation that escalated during the public health emergency and remain a major concern for providers. I think these circumstances, when present, can be an early warning sign that there’s financial instability in a specific nursing home, nursing home company or in the nursing home sector generally.”
The overdue taxes are the latest in a string of financial troubles for the company.
In 2022, Athena agreed to pay a $1.75 million fine to the Massachusetts Attorney General’s office for admitting people with substance abuse issues to its facilities without being able to provide appropriate treatment.
Six temporary employment agencies filed lawsuits against Athena in Connecticut, alleging the company failed to pay them more than $142,000 for employees they provided since 2021 to offset staff shortages. Another lawsuit claimed Athena owed nearly $2 million for temporary workers provided by a separate company. And an Iowa-based insurance company filed a federal suit alleging Athena failed to pay more than $6 million in health insurance claims from its employees, an issue that prompted state officials to contact the U.S. Department of Labor to investigate.
The company has also been cited over problems with staffing and patient safety in multiple states and has faced a wrongful death lawsuit.
In a Nov. 27 memo to workers, Santilli said Athena was six months behind on paying health claims for workers on its health plan.
“Athena has not been able to promptly meet all the funding requirements of the employee health plan. … In our continuing efforts to address shortfalls with funding the health plan, we have hired outside personnel to assist us to properly administer the health plan moving forward,” he wrote.
Santilli asked workers whose claims had been sent to collection agencies, whose credit had been damaged and whose out-of-pocket medical expenses had exceeded amounts they were required to pay to contact the company’s benefits manager.
There were about 2,500 workers on the company’s health plan, Athena officials said in December.
