NY Supreme Court Takes Action Against Nursing Home for Benefit Neglect
A state Supreme Court Justice held one of New York’s largest nursing facilities in contempt on Tuesday for failing to make court-ordered payments to ensure staff continued access to healthcare services.
In October 2023, Justice Lisa Cairo ordered Cold Spring Hills Center for Nursing and Rehabilitation to pay $2.65 million in a “timely manner” to an SEIU benefit fund. The contribution was intended to ensure that the 606-bed facility’s more than 400 union employees did not forfeit their promised benefits.
In recent years, New York has joined federal regulators in actively advocating for increased monitoring of long-term care providers. By mid-March, five months after issuance, the Woodbury, NY, care home had yet to make the court-ordered payment. The benefits will expire on April 22, according to the benefit fund.
In an affidavit signed on March 25, co-owner Avi Philipson claimed that the facility did not violate court orders because benefits had not yet been denied. He also claimed that Cold Spring Hills lacked the cash to make the payment quickly.
“Cold Spring does not have adequate cash reserves or receivables to cover the amount that the AG says must be paid to the funds,” according to the statement of facts. “The facility is currently running at a significant loss, which I have been able to partially mitigate only by transferring money that I borrowed to Cold Spring, at no cost to the facility.”
The Court Rejects Arguments
However, the court rejected those claims, with Cairo emphasizing that the mandated payments were not designed to compensate for the harm caused by losing benefits, but rather to prevent those payments from being lost in the first place.
“Respondents’… position that there is no injury until the benefits terminate is also not persuasive as that is the precise result the October 2023 Order seeks to avoid,” he said. “Based upon the facts herein, specifically the Fund’s notice… that benefits will terminate on April 22, 2024, as a result of CSH’s failure to make required payments, the Court is satisfied that a finding of civil contempt is appropriate.”
Cairo further reported that $2.5 million had been moved to Cold Spring’s accounts between October and January from a company owned nearly completely by Philipson. She claimed that the facility leadership’s assertions of low funds lacked evidence. Cairo ordered Cold Spring to pay the full amount by April 17 or appear in court on April 18 to suffer an additional “appropriate penalty.”
Cold Spring Hills did not respond to McKnight’s request for a statement Friday.
The decision was only a partial triumph for New York Attorney General Letitia James, who had requested the court to also hold co-owners Philipson and Joel Leifer, the latter of whom claims to have not been a managing member of Cold Spring since 2019, in contempt.
The court order was praised by union leaders.
“We welcome the court’s decision requiring Cold Spring Hills’ management to make their contractually required payments to the workers’ health benefit fund,” according to a statement from the SEIU. “A stable workforce is critical for quality resident care and protecting employees’ health insurance is key to retaining the nursing home’s skilled caregivers.”
This is not the only high-profile lawsuit James has taken against a New York nursing home this year; in early March, a Long Island facility was sentenced to pay more than $8 million for staffing and fraud breaches.