The Cold Spring Hills Center for Nursing & Rehabilitation in Woodbury...

The Cold Spring Hills Center for Nursing & Rehabilitation in Woodbury seen in May of 2020. Credit: Christopher Ware

A Nassau County judge has rejected a request by state Attorney General Letitia James' office to appoint independent financial and health care monitors at Cold Spring Hills Center for Nursing & Rehabilitation in Woodbury, arguing the measure was "unwarranted at this juncture."

The Oct. 20 decision by state Supreme Court Justice Lisa Cairo is a significant win for Long Island's second-largest nursing home, which still faces a lawsuit from the attorney general's office, along with efforts by the state Health Department to have the court appoint a caretaker to operate Cold Spring Hills. The Health Department is also seeking to revoke the embattled facility's operating permit.

The attorney general's office sued Cold Spring Hills in December, alleging that the facility's owners and management diverted more than $22.6 million in Medicaid and Medicare funds for residents' care by using a fraudulent network of a dozen companies to conceal upfront profit-taking.

Meanwhile, nursing home officials have declined to make timely payments to the National Benefit Fund of 1199 SEIU, the union that provides health care to its 440 employees. The monthslong dispute has prompted dozens of staffers to find or seek other jobs. Earlier this month, Cold Spring Hills made a payment to the Benefit Fund, extending their health care until Dec. 15.

In her ruling last week on the health and financial monitors, Cairo wrote that while the allegations from the attorney general's office "paint a picture of potential misuse of facility funds for personal profit, absent full findings of fact and in light of the now resolved issue of imminent loss of employee benefits, the court finds the large scale emergency relief sought by the instant order to show cause to be unwarranted at this juncture."

An attorney for Cold Spring Hills declined to comment on the ruling. In court filings, facility attorneys have suggested the appointments of attorney general monitors were a "draconian remedy" that would provide watchdogs with “unrestricted power” and would probably lead to the closure of the 588-bed facility.

The attorney general's office declined to comment.

In her ruling, Cairo also ordered Cold Spring Hills to make required payments to the Benefit Fund "in a timely manner" and not to violate local, state or federal laws and regulations.

In a statement, the union said Cairo's order "will allow caregivers to continue to provide care to the residents of Cold Spring Hills while ensuring that they are able to protect their health and that of their families. Now it is time for the owners of Cold Spring Hills to complete the process of bringing in a receiver to operate the facility.”

The court has yet to make a decision on the Health Department's request for a caretaker, or temporary manager, to be installed to run the facility. The Health Department declined to comment.

But in an Oct. 13 letter to Cairo, Cold Spring Hills attorney John Martin said his client was engaged in discussions with at least two potential buyers of the nursing home, each of whom would serve as a temporary receiver for the facility — negating the need for a Health Department caretaker. The potential buyers were not identified.

Health Department records identify Cold Spring Hills as a one-star facility — its lowest ranking for categories such as quality of care, preventive care and resident safety. 

Since September 2019, the state has received 207 complaints about Cold Spring Hills and issued 32 citations to the facility, records show. The statewide average during that period was 22 citations.

The two sides are due back in court on Dec. 4.

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