by James C. Sherlock

I posted earlier today about the cutoff of Princess Anne Health and Rehabilitation Center (Princess Anne) in Virginia Beach from Medicare and Medicaid participation.  

Federal and state officials had as evidence very recent smoking guns from a February 2025 complaint inspection and a June 2025 revisit by the VDH Office of Licensure and Certification (OLC). Those were apparently the final straws in the case of Princess Anne. Combined with Princess Anne’s multi-year track record under the same ownership, those recent reports provide good and sufficient cause for the action.

Your author has named Innovative Healthcare Management, Medical Facilities of America and LifeWorks Rehab the blob. One group of chain operators and one group of owners control all three. The chain operators swap the facilities around, sometimes overnight, among the three names. They likely have a new name, or several, ready to go. So, the blob it is.

Princess Anne is not even the worst blob facility in Virginia, just the one to be exposed so badly recently.  

In a broader view, Virginia has only one Special Focus Facility (SFF) among 290 nursing homes certified for Medicare and Medicaid. An SFF is so designated because it has been so bad for so long that it needs special oversight. Henrico Health and Rehabilitation Center (Henrico), another blob outpost, is the current awardee.  

Neither the blob’s Princess Anne nor its infamous Colonial Heights Rehabilitation and Nursing Center (Colonial Heights) are even SFF Candidates. Virginia has five of those:  

• Wonder City Rehabilitation and Nursing Center in Hopewell – blob;
• Birchwood Park Rehabilitation (Virginia Beach) and Seven Hills Rehabilitation and Nursing of Lynchburg owned by Clifton, New Jersey’s Eastern Healthcare Group, a blob lookalike;
• Mount Vernon Healthcare Center of Cincinnati’s Communicare Health; and
• Augusta Nursing & Rehab Center was owned by 44-facility Consulate Healthcare of Atlanta. Consulate, after having been driven out of Florida more than a year ago, shut down operations on May 31. I don’t know what has become of that situation.

Here we will take a look at what one author has called “tunneling” of Medicare and Medicaid funds that has become the norm among the worst chains.  I probably haven’t found the full scope of the Princess Anne corporate architecture with a single hour’s research, but it is illustrative, even if child’s play compared to some of them.  

It will get your attention and inform.

The operating company. The term Princess Anne Rehabilitation and Healthcare Center as used in VDH inspection reports describes the operating company.  

The legal business name of that operating company is Princess Anne SNF LLC.  The Virginia SCC Clerk’s Information System shows a Virginia office address of 2917 Penn Forest Blvd., Ste 200, Roanoke, VA, 24018. The home office is in Lakewood.

Owners, like every Medicare and Medicaid payee, submit information into the web-based CMS National Plan and Provider Enumeration System (NPPES) to get a National Plan Identifier (NPI) number so that they can get paid. In NPPES, the owners of chains are required by CMS to name a very senior chain official such as the CEO, President, or CFO as Authorizing Official. Most do, but the blob guys found that not to their liking. They provided the name of the facility administrator instead. They do that with each of their facilities.

Meanwhile one of the partners was on social media identifying himself as “partner in MFA.” Genius.

The owners of Princess Anne SNF LLC. It is important to understand that the Princess Anne corporate architecture describes a real estate enterprise on which a healthcare facility sits as tenant.  

I offer a look at the owners. The ownership records they submit to CMS on a separate web-based system, the Medicare Provider Enrollment, Chain and Ownership System (PECOS), are a mess.  

• Princess Anne Holdings I LLC holds 100% direct ownership of Princess Anne SNF LLC.  Both LLCs are a single-use constructs designed specifically to own this business.
• Indirect owners are entities that own stakes in the direct owner. In this case, 17 indirect owners are listed for Princess Anne I Holdings LLC. Which owns 100% of Princess Anne SNF LLC.
• Princess Anne I Holdings LLC and eleven of the indirect owners share the address of 400 Boulevard of the Americas in Lakewood, NJ. Cozy. Two more are around the corner in Lakewood. The other three at a single address in Miami. The last one is in Cleveland. And, yes, each of them is a legal entity.  
• Eight owners are trusts and nine are LLCs.
• Our old friend Moshe Rajchenbach, who is deeply involved with Colonial Heights, is listed with Corporate Officer responsibilities at Princess Anne. Ouch.

The owners are real estate investors who put their money, or at least these specific LLCs and trusts do, only with the blob. Individual facilities have greatly different characteristics, including costs of acquisition and profit potential.  

The blob partners pretty clearly auctioned shares in each individual facility to the highest bidders. Most investors bought stakes in a very large number of the facilities to spread risk. In the case of Princess Anne, they have reported to the government that they sold 653% of Princess Anne SNF LLC on the 28th of May, 2021, 100% to the direct owner and 553% to owners of the direct owner.  

It must have been quite an auction.

The indirect owner trusts and LLCs are diversified, or not, depending upon your definition of diversified.  

Some like Edward 1998 Family Grantor Trust (Edward) have a stake in every one of the blob facilities in Virginia and North Carolina and no other nursing home investments. Edward has reported two addresses in Lakewood, one in Fairfax and one in Brooklyn. It even reported addresses in Lakewood and Brooklyn on the same day. But, then, the trustee also is reported in CMS records to have bought 25% of 553% of Princess Anne Holdings I LLC, which owns 100% of Princess Anne SNF LLC. So, go figure.

The real estate. The building was constructed in 2015. The property and improvements were sold on 06/02/2021 to 1948 Landstown Centre Way LLC for $11,055,000. Its assessed valuation is now $16,968,300. 1948 Landstown Centre Way LLC is the landlord to which Princess Anne SNF LLC pays rent.  

We don’t know who owns 1948 Landstown Centre Way LLC, but we can guess. Those same property records show landlord’s mailing address to be identical to that of the operating company. Which happens to be the Virginia office of Medical Facilities of America. MFA is no longer listed as a chain in CMS records. 

More sophisticated enterprise variants. Princess Anne offers an example, believe it or not, of a relatively simple modern nursing home enterprise architecture. 

• Other chain owners more sophisticated than the blob break their assets up into small chains, only some of which they share with the government in PECOS.  
• They establish NPI-registered Durable Medical Equipment & Medical Supplies companies and Non-emergency Medical Transport (VAN) companies at the same addresses of the nursing home operator companies as tenants of the property companies. All three then bill Medicare and Medicaid separately.
• They establish property holding companies, operator holding companies, debt holding companies, tenant holding companies and parent holding companies for those child holding companies.  
• Some establish specialty pharmacy companies that bill Medicare and Medicaid and use their nursing homes as buyers.  
• Some effectively control small private banks that serve as their lenders.  
• I have even seen one of their law firms listed as an owner of a client’s facility.
• Some sell the rent forward with collateralized rent obligations that are identical to the collateralized debt obligations that nearly collapsed the banking system. They then take the money and buy more nursing homes.

Basically a Michael Lewis plot. I will offer an example here soon.

CMS’ crippling problem. It sounds like I must be making all of that up. But it must be right. It has been reported by the owners to CMS. And yes, the state of CMS ownership records is a scandal. And they know it and are trying to fix it. By insisting on yet more reporting of data. The real problem is CMS’ systems and data architectures. Which are completely broken, unintegrated, use different names for the same data and thus both let owners get away with this and are resistant to AI tools for analysis. They are helpless in the face of the more sophisticated players and schemes.

Bottom Line. In the simple enterprise architecture of Princess Anne, all of those LLCs, trusts and named corporate officials like Mr. Rajchenbach get a cut of the residents’ insurance money or private payments – as rent or as fees from the operating company of Princess Anne Health and Rehabilitation Center.  

Since all of those entities are owned by the same people, they can charge and pay what they wish.

That is why there is not enough money left to take care of the residents.