Albion, New York — A stalled nursing home sale in Western New York is turning into a warning shot for states that are making ownership transfers slower, costlier and harder to predict.
Industry reports say Elemental Management has pulled out of a planned purchase of The Villages of Orleans Health & Rehabilitation Center in Albion after nearly three years of regulatory delays. The 120-bed facility had once been county-owned, but under its current operator it fell to a one-star rating and became entangled in a fraud case brought by the New York attorney general in 2022.
Elemental had been working toward an October closing on both the operations and real estate. But in a Feb. 6 letter to the New York State Department of Health, company president and managing member Joseph Murabito said regulatory uncertainty, shifting standards and mounting financial strain made the deal impossible to justify.
He argued that the state’s certificate-of-need and change-of-ownership process had become an obstacle to replacing a troubled operator instead of a path to doing it quickly and safely. Murabito warned that if the process continues in its current form, it could push qualified operators away from the sector altogether.
That concern is surfacing as more states tighten oversight of nursing home transactions. According to a recent National Academy of State Health Policy report, states are collecting more ownership and financial data during these reviews in an effort to keep bad actors out of the market. Ohio now requires broad ownership disclosures, proof of financial security and at least five years of operator experience. Pennsylvania also expanded reporting requirements, including disclosures tied to financial distress and criminal history.
Consumer advocates support stronger guardrails, especially around private equity involvement. But providers say the process can swing too far. The American Health Care Association said longer and more complicated approvals can create real uncertainty for buyers, operators and staff, while also threatening resident access if struggling facilities can’t transition to new leadership in time.
Those delays can be expensive. Journey CEO Bernie McGuinness said some ownership changes in other states have taken 17 months to close, and anything beyond six months cost his young company heavily in interest expense. That echoes broader concerns SCJ has already reported about the expansion pressures facing newer nursing home operators as they try to scale in a difficult financing environment.
Why it matters
The fight here isn’t over whether states should review deals closely. It’s over whether they can do it fast enough to keep viable buyers at the table. If they can’t, facilities that need new capital and management may end up waiting even longer for help.
