Neglected: Florida’s Largest Nursing Home Owner Represents Trend Toward Corporate Control• Naples Daily News
By Melanie Payne and Ryan Mills
Consulate Health Care, Florida’s largest nursing home provider, represents a growing trend nationally: a large corporation made up of a network of related businesses operating nursing homes at a profit for their investors.
Consulate, based out of an Orlando-area business park, operates as the nation’s sixth-largest nursing home provider. Taxpayer money flows to Consulate nursing homes and profits earned go to the chain’s owner, the Atlanta-based private equity firm Formation Capital.
Related real estate, management, rehabilitation and other companies receive payments from Consulate’s nursing homes.
“Everybody knows what’s going on. Everybody knows about this shell game,” said Brian Lee, former head of Florida’s Long-Term Care Ombudsman Program in the Department of Elder Affairs, now heading the nonprofit Families for Better Care.
Consulate and Formation executives did not respond to repeated requests for interviews.
Consulate was founded in 2006 to take over operations of Tandem Health Care’s nursing homes, after that company was purchased by an investment group. Headquartered in Maitland, Consulate has grown over the years to manage 210 homes and 22,059 beds in 21 states, according to a 2016 American Health Care Association report.
The privately held company controls one out of every nine nursing homes in Florida, operating in 32 counties and every metro area.
Consulate reported operating revenues of $1.7 billion in 2016, according to the American Health Care Association.
The federal government paid Consulate’s 77 Florida homes more than $224.5 million through Medicare, or an average of $2.9 million per home, in 2015, the most recent data available.
Consulate’s homes also are paid through Medicaid, receiving an average of $206.62 a day for each eligible patient, state records show.
Despite the big money generated from Medicare and Medicaid programs serving the poor and elderly, Consulate’s nursing homes are designed to appear cash-strapped. While individual nursing home LLCs are essentially empty shells, they pay rent, management and rehabilitation service fees to Consulate or Formation Capital-affiliated companies.