While announcing the sale of four state-owned senior living facilities to a private company, Gov. Patrick Morrisey assured West Virginians that his administration had rigorously vetted the buyer.
“I asked questions about quality every single day,” he said, “and I made that a priority when choosing the investor.”
But a spokesperson for his office won’t say whether the governor was aware of a federal lawsuit alleging that, since 2022, the company, Marx Development Group, has allegedly prohibited older people who use wheelchairs from living in its New York assisted living facilities.
The four West Virginia-owned aging facilities include 511 beds at John Manchin Sr. Health Care Center in Fairmont, Jackie Withrow Hospital in Beckley, Hopemont Hospital in Terra Alta in Preston County and Lakin Hospital in West Columbia in Mason County.
The lawsuit, filed in March by the nonprofit Fair Housing Justice Center, also states that the company, also known as MDG, bans older people who need diapers from living at its residences in violation of disability rights law.
MDG, along with smaller subsidiary companies, is being sued. Drew Galang, spokesperson for the governor’s office, said the MDG subsidiary being sued is not the MDG subsidiary that will be operating West Virginia’s health facilities.
“Nevertheless, companies of this size are often involved in litigation of different types over disputed allegations,” he said. “The contract between the State of West Virginia and MDG stipulates all federal and state laws must be followed, and we have no reason to believe there will be any regulatory concerns.”
The governor’s office did not provide more detailed information about the vetting process.
Morrisey, a Republican, announced he had approved the sale of the assisted living facilities during a news conference last week.
He said the sale was part of his effort to run a more efficient government, and that the facilities are operating at a $6 million yearly loss to the state.
“The private sector is going to work on private sector things,” he said. “The government works on government things.”
The Fair Housing Justice Center’s lawyers wrote in the unresolved lawsuit that the companies that own the residences receive Social Security and Medicaid funding to house New Yorkers with disabilities.
“Despite their purpose, defendants refuse to admit applicants who use wheelchairs and who have incontinence, – the very people their housing programs are intended to serve,” the lawyers wrote.
One company official in New York told a Fair Housing Justice Center investigator, posing as a family member of an interested elderly applicant, that she would have to demonstrate her walking ability and may decide, “it’s too much for me.”
In a separate case, an investigator posing as a family member was told the relative “wouldn’t be able to bring the wheelchair with him.”
MDG leadership did not respond to calls, emails and messages.
But in a court filing, the company denied the allegations.
For years, a bipartisan coalition of members of the West Virginia Legislature banded together against bills to explicitly allow the sale of the properties to private companies.
Former senator Mike Caputo, a Democrat, remembered that many people in Fairmont sent petitions and called their lawmakers to oppose those bills.
“It’s easy to pick on poor folks, and it’s easy to pick on folks with no means, because that’s kind of popular in this day and age,” Caputo said. “These facilities want the beds. They’re for profit. They’re not going to take care of folks that don’t have the means to pay.”
He wished Morrisey and other state officials would have had the courage to hold a town hall meeting.
“It looks to me like they care about as much about selling these places as someone would care about selling a used car,” he said.
Sen. Mike Oliverio, a Republican who represents parts of Marion and Monongalia counties, was part of the bipartisan opposition.
He said John Manchin Sr. Health Care Center is integral to families who need homes for elderly family members no one else will take.
The center accepts patients who require attention like those with severe mental illness, including those who act out and can be violent.
He said lawmakers weren’t involved in discussions of the sale, but he hopes the Morrisey administration required the company to accept patients with higher level needs.
“The least among us are our seniors who’ve paid taxes their whole lives in West Virginia,” he said. “They’ve worked. They’ve raised families. Now they’re at a time where they’re completely in need. We need to be there for that.”
The sale is set to close Sept. 30 with an option to extend for 30 days.
During the press conference, Morrisey said MDG was one of 140 applicants interested in purchasing the properties, and that its experience includes operating similar long-term care facilities around the region.
MDG owns 55 properties through its subsidiaries with over 5,000 licensed beds.
Noting the state faces financial strain due to the Hope Scholarship, PEIA and the federal tax bill, the governor said estimates show the state would need to spend around $100 million on the hospitals over the next few years.
“I think the current and future residents are going to be provided with the high quality health care that’s needed,” Morrisey said. “The state’s going to realize resources right away.”
The governor said MDG, which is a real estate developer, will rebuild at least three and up to five facilities.
Sen. Rollan Roberts said that in Beckley, residents have presumed for years that Jackie Withrow Hospital would ultimately be sold, although there has been concern it would be moved.
Roberts, R-Beckley, said much of it is unusable.
He said he didn’t want to draw any conclusions about one ongoing lawsuit, but he said the deal deserves scrutiny.
He said the company probably didn’t expect the onslaught of attention, and it likely would have received less of it had state officials taken a different approach to the sale and announcement.
“I think that the company is really on notice now,” he said. “I think that they will be like a person who is working while somebody is watching over their shoulder. We hope that they will do their best.”