The operator of three Minneapolis facilities that provide care for adults with mental illnesses has fallen into financial disarray, with employees calling on state health regulators to intervene to protect vulnerable residents.
A state audit found that Mission Directed Health Care Inc., which owns homes that care for about 160 people with mental illnesses and other health problems, is failing to pay vendors for essential services such as food, internet service and medical supplies. The facilities collectively owe hundreds of thousands of dollars to vendors, and have been making unauthorized withdrawals from resident accounts, according to an audit completed in January by the state Department of Human Services (DHS).
Even as the company struggled to pay its bills, owner Stephen Kaminski of Minneapolis has withdrawn more than $150,000 from one of the facilities since last October, according to the audit. The facility lacked records showing why Kaminski withdrew the money, auditors found. Kaminski also paid himself a bonus of $75,000 from a federal grant program designed for staff retention at care facilities. Auditors determined that Kaminski was not eligible for the government payments — often referred to as "hero pay" — because he does not work on-site.
Kaminski has declined multiple requests to comment on the audit and his company's finances.
The situation has become so dire in recent weeks that some of the company's staff and administrators are urging state regulators to take swift action to take over the facilities, to avoid their closure and the potential displacement of residents, including many who struggle with serious psychiatric disorders and were previously homeless.
Last October, the Minnesota Department of Health asked a Ramsey County District Court to appoint a receiver to operate the facilities, citing a pattern of failure to pay vendors for items such as food, drugs, staffing and insurance. In a written statement, the agency said it cannot initiate a receivership until one is ordered by the court, which has not occurred. Three court hearings on the receivership have been canceled since mid-November; the next one is scheduled for April 26.
The Department of Health noted that it's highly unusual for the agency to take control of long-term care facilities through receiverships. In a recent statement, the agency said receiverships are reserved for "extraordinary situations" that require the agency to preserve the health and safety of residents and families. The agency has declined to comment further on the case.
"It's appalling that an owner of a care home can get away with not paying its vendors, and I don't understand why the state Health Department does not act more proactively in correcting this," said Dr. Robert Sonntag, the longtime medical director at Grand Avenue Rest Home, a 20-bed facility for women in south Minneapolis that is owned by the company. "Eventually residents are going to suffer."