Stephenson County committee hears one bid to operate county nursing home, reviews large accounts-receivable write-offs

The Stephenson County committee on a recent morning heard a presentation from Serenity Estates — the sole respondent to the county's request for qualifications to operate/purchase the county nursing facility — and reviewed a separate revenue-cycle cleanup that identified roughly $329,000 in write-offs over four months.

The matter drew public comment from Cody Dornis, who identified himself as a union representative with MASONI Council 31. "We are against privatization. We are against the sale of the county home," Dornis told the committee, urging the board to examine buyers' ties to private-equity and real-estate interests and to insist that resident care, not profit, guide any sale.

Serenity Estates' managing partner Jennifer Daugherty and her partner, John Coglinis, told the committee they aim to stabilize operations and keep all beds certified and staffed. "We don't view this as an opportunity or just a transaction. We view this as a partnership with people of Freeport and the surrounding communities," said Jennifer Daugherty, introducing Serenity Estates' record of turning around struggling facilities.

Why it matters: the committee discussion combined two financially consequential items: a single bid to operate the county-owned nursing facility (the committee's request for qualifications produced one proposal) and a review of recent billing and collections work that adjusts the facility's accounts receivable and short-term cash position. Both affect whether the facility can maintain staffing, vendor contracts and certification for Medicare and Medicaid patients.

What the committee heard

Marcos (identified in the meeting transcript as a facility presenter) gave the committee monthly operational figures and a census update, reporting the facility's census at 48 residents and describing continued reliance on contracted nursing and CNA labor. He said payroll is a major recurring cost, "which again run around a 115,000 every 2 weeks," and that contract labor remains a top expense.

On revenue recovery, Marcos summarized work performed by the vendor Quality Healthcare Resources (the committee discussed the vendor as part of MatrixCare-related services) and provided month-by-month write-off figures the vendor recommended after completing its review of claims going backward 12 months. Marcos reported the vendor's final review yielded write-offs of approximately $14,000 for February, about $70,000 for March, about $128,000 for April and about $117,000 for May. Marcos said the vendor completed the contracted review and that the resulting adjustments and write-offs will be submitted to the county board for approval.

Marcos also described accounting reclassifications the vendor performed, including transfers of some claims to private-pay status so the facility could pursue collections from residents and families, and noted payments due to the vendor for services. He told the committee the vendor's billed amounts included "around a $15,000 amount for May [and] almost a 134,000 amount in April" as part of the reported work.

Committee members asked about billing age and whether the vendor had gone back further than 12 months; Marcos said the vendor's contract covered a 12-month retrospective review but that some adjustments reached older claims where work was possible. He described a new monthly triple-check review intended to prevent future loose ends in claims processing.

Questions about operations, contracts and rates

Board members asked how the facility markets to private-pay residents and whether the facility's private-pay rate was competitive. Marcos said a private-pay rate had made the facility less competitive in the region and indicated that updated Medicare/Medicaid cost reports filed this year could lead to an adjustment in reimbursement rates and possibly permit lower private-pay rates going forward.

When asked about the facility's U.S. Department of Veterans Affairs contract, Marcos told the committee that negotiations for a VA contract had been on hold pending the county's consideration of a change in ownership because a new owner would require separate VA negotiations.

Serenity Estates' background and allegations raised

Jennifer Daugherty and John Coglinis described their operating model: taking over financially troubled facilities, addressing compliance and billing, and investing to stabilize operations. Daugherty said Serenity Estates seeks to keep staff in place and maintain Medicare and Medicaid certifications so residents can remain close to home.

Board members and the public pressed Serenity Estates on past citations at facilities the company has operated. Daugherty addressed an abuse-related citation tied to a Lincolnshire facility and said the citation recorded on federal sources dated to May 2023 under prior ownership and management. She said Serenity Estates took management of that facility in September (she gave a September 1 takeover date) and described court negotiations around a prior owner's bankruptcy in which Serenity Estates agreed to cover payrolls to keep the building open. "We took over payrolls, health care insurance, and billing," Daugherty said, describing judicial relief that allowed the facility to remain open while the new operators stabilized the site.

Procurement and the lone bid

Committee members also discussed the timing and publicity of the county's RFQ. County staff said the RFQ was posted to the county website and advertised in the Freeport Journal Standard for five days beginning May 9. Several members said they expected broader outreach and expressed concern that the county received a single bid. One board member noted that the letter of intent attached to the bid proposed the buyer would retain accounts receivable created while the county operated the facility; several members questioned whether that arrangement effectively transfers cash the county otherwise would receive.

What the committee did not do

No final sale or transfer vote is recorded in the transcript. The committee received the Serenity Estates presentation, heard union and board-member concerns about privatization and private-equity ties, and reviewed the accounts-receivable cleanup report. Marcos stated the revenue-cycle adjustments and recommended write-offs will be forwarded to the county board for approval; the transcript does not record a decision on the Serenity Estates bid.

Next steps

According to remarks in the meeting, the revenue-cycle write-offs and related accounting adjustments will be presented to the county board for approval. The committee did not record a formal vote on the bid during the portion of the transcript provided; board members said they expected additional financial documentation, including accounts-receivable aging reports, before committing to a sale or transfer.