When Comprehensive Healthcare bought the sprawling structure from Beaver County in 2014 for $37.5 million, what was then known as Friendship Ridge had been costing county government millions in losses each year.

That was despite almost annual budget cuts and a nearly full, 589-bed building, where 84% to 89% of the long-term residents’s care was paid for by Medicaid.

In a region with many private nursing homes that often have caps on how many Medicaid residents they take, Brighton/Friendship Ridge had for decades been the place where people landed when they couldn’t afford something else, residents’ families and staff say.

“It is the home of last resort for many residents,” said a former full-time nurse. “Many of the [long-term] residents there now, we were their fifth choice because other nursing homes wouldn’t take them.”

But Comprehensive’s strategy to turn Brighton around was not focused on its Medicaid population - residents whose care is paid for by the state because they don’t have assets of their own.

Comprehensive won the right to buy Brighton in 2014 over four other bidders in part because it promised to renovate the building. But the initial renovation work went almost exclusively to areas where it planned to care for residents who needed short-term rehabilitation, not long-term care.

It spent millions renovating The Grove wing and its three floors for residents who needed physical, occupational or speech therapy.

That was important to Comprehensive’s strategy to turn the facility into a moneymaker because rehabilitation primarily is paid through Medicare, which is paid by the federal government and generally reimburses at a higher rate than Medicaid.

Before the 2014 sale, the county received about $1 million a year from Medicare for providing physical, occupational and speech therapy.

Comprehensive drove that revenue to more than $9.5 million by 2018. It came from Medicare, Medicaid and private pay sources, with $8.6 million coming from Medicare alone in rehabilitation fees.

That increase in rehabilitation revenue helped push Comprehensive’s annual profits at Brighton up immediately. It made $4.1 million its first year, 2014, doubling that in 2015, to $8.2 million, and it made at least $2.2 million each year until 2019, when an increase in nursing staff expenses resulted in its first loss — $741,000 — since it bought the nursing home.

Comprehensive has found other ways to make money off of Brighton, too. Each year, one Comprehensive corporation that manages the building pays rent to another Comprehensive corporation that owns the building — rent that has steadily risen from $3.9 million in 2014 to $6.8 million in 2019. In addition, Comprehensive pays itself a “management fee” that has averaged $1.2 million a year.

The state Department of Human Services says both payment methods are legal under nursing home regulations.

But critics say that allowing nursing homes to charge themselves rent and management fees is a way to appear to have lower profits than they actually do, which not only potentially reduces their tax liability, it allows nursing homes to argue for more funding.

“It’s a shell game,” said Brian Lee, former long-term care ombudsman for Florida and now executive director of the nursing home resident advocacy group Families for Better Care. “It dupes the state officials into thinking [nursing homes] have razor thin margins.”

Comprehensive did renovate the second floor of the West wing as double rooms for long-term residents, and was preparing to renovate the third floor starting this year when the outbreak began, staff members say. But no work had begun in the East and Main wings, where the majority of long-term residents live.

Having four people in a room is a vestige of nursing homes’ past and is unusual today, experts said.

“The quad rooms are not popular and not necessarily used in nursing homes across the state,” said Zach Shamberg, CEO of the Pennsylvania Health Care Association. His organization represents the state’s for-profit nursing home industry, though Brighton’s owners are not members. “Very rarely do you see the quad rooms anymore.”

Any that are left probably will be gone in a few years, as will double rooms, he said.

“Every nursing home operator is looking past COVID now to having just single rooms” because of the recognition that having multiple residents in a room can spread disease, he said.

  Nov. 20: Agency staffing