Boston, Massachusetts — Massachusetts regulators have blocked a California nursing home operator from acquiring 11 facilities in the state, finding the company “unsuitable” to hold the licenses.
The state Department of Public Health rejected the bid by affiliates of Sweetwater Care, a Carlsbad, California-based chain, to take ownership of the 11 homes currently run by Next Step Healthcare, according to a report in the Telegram & Gazette. Sweetwater can appeal the decision, but it cannot obtain licenses for the properties while the dispute plays out.
The ruling leaves one of the state’s messier ownership sagas in limbo. A judge placed the Next Step facilities in receivership earlier this year after the chain’s landlord sued over nearly $15 million in unpaid rent, and Sweetwater has been managing the homes in the interim. Who ultimately buys them remains an open question.
A record regulators couldn’t ignore
Sweetwater’s track record loomed large over the review. In July, the California attorney general’s office extracted a $15 million settlement from the operator over staffing failures — a case that documented more than 14,000 instances of low staffing across its facilities. Several of its homes have carried low federal star ratings, and financial penalties have followed the company around.
Dignity Alliance Massachusetts, an advocacy group, publicly pressed state officials to reject the deal, and lawmakers echoed those concerns. Critics argued the state hadn’t been diligent enough vetting out-of-state buyers — a complaint that gained traction after New Jersey-based RegalCare purchased 12 Massachusetts nursing homes even though its owner had permanently lost his administrator license in New Jersey. Weeks later, regulators moved to strip all 12 of RegalCare’s Massachusetts licenses.
The state has been tightening its grip. A 2024 law gave public health officials broader authority to investigate out-of-state buyers, but the Public Health Council didn’t approve the implementing regulations until Oct. 14 — and the Sweetwater ruling landed days later.
Next Step isn’t spotless either. The company agreed to a $4 million settlement with the Massachusetts attorney general in 2024, the largest nursing home settlement in the state at the time.
For now, 11 nursing homes sit in limbo — and Massachusetts has made clear that whoever takes them over next will face far tougher scrutiny than any buyer before.
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