The Boys from Lakewood

by James C. Sherlock

Most of them are quite young.  They have a lot in common.

• They are friends in many cases. Some grew up together. More are related through blood or marriage. Many have worked together. Some are a second generation of their families in the nursing home industry;
• To address the elephant in the room, virtually all are ultra-Orthodox Hasidic (Haredi) Jews. Most are graduates of Touro University‘s New York or Skokie campuses or Lakewood, New Jersey’s Haredi Beth Medrash Govoha (BMG). BMG, with 9,000 students is the second largest Yeshiva – rabbinical school – in the world. We note that Israel has its own issues with the Haredi. So has New Jersey and the federal government. For Jewish people everywhere, my Reformed Judaism grandsons and many of my best friends, I sincerely wish that were not the case. But it is. And it is necessary to air it.
• Many worked together for friends and family in the industry before starting their own companies. Most get nursing home administrator credentials working in a facility for a year or two before moving into chain management;
• After a few years of experience there, they start their own chains. The junior managers become CEOs and the young accountants CFOs, usually before the age of forty;
• The sources of their seed money are not banks or other traditional financial institutions but rather a relatively few number of trusts and LLCs. Private equity. Perhaps the money is not fully reported. Nothing else is.

Today we will discuss one Lakewood partnership that operates nursing homes in five states. It is the largest chain in Virginia.  

• It displays a business model that consistently features extreme understaffing combined with far above average occupancy rates.  
• Onsite-assessments by facility staff on average show their residents to be in truly exceptional need of care. That spikes insurance per diems and authorized lengths of stay.
• Low costs, high occupancy and high reimbursements have led to extraordinary profits. 
• But their facilities have been documented repeatedly by state inspectors to produce resident humiliation, horrible suffering and premature death because of what happened to them in the nursing homes not because of the afflictions with which they arrived.  

Here I will show rather than just tell readers what is wrong with government oversight at its core to demonstrate how they get away with it. It is a long story  It needs to be told.

Background.  New Jersey is a center of the nursing home chains in the mid-Atlantic, especially the worst ones. You will read below that the name of the chain under examination today is itself a complicated subject. Everything is.

One of their facilities is the infamous Colonial Heights Rehabilitation and Nursing Center (Colonial Heights) they bought in January of 2020. Criminal charges have been filed against 19 employees of that facility in the alleged wrongful death of a patient.

The chain owners have spent several hundred million dollars in the past five years acquiring facilities in batches as large as the 30 they bought from a Roanoke family in May of 2021.

We can only wonder about the origins of all of that money, not just in that one chain, but in dozens that share its business model and community connections.

Government reporting systems for nursing home owners are fatally flawed, and it matters a lot. This part is hard. It represents a bad idea poorly executed.  

Nursing facility data and updates are reported to government by owners in two systems:

• first in the web-based Centers for Medicare and Medicaid Services (CMS) National Plan and Provider Enumeration System (NPPES) to generate a National Provider Identifier (NPI) to enable government payments.
• Too often a year and more later, related changes are still not reflected in databases fed by owner inputs to the CMS Provider Enrollment, Chain, and Ownership System (PECOS). PECOS provides nearly all of the CMS data that we read about including Medicare Compare.

The two systems are not integrated. They share only a single common data entry but name it differently. “Organization Name” in NPPES is “Legal Business Name” in PECOS.  The two fields are regularly entered with different names. Or the PECOS data simply read “Legal Business Name Not Available” when it has been available for a year in NPPES.  

CMS just this month usefully updated the columnar information in Provider Information, but it is still garbage in, garbage out.  

CMS publishes the data with obvious spelling errors, omissions, ownership data that adds up to more than 100%, multiple states listed for the same owner and multiple descriptions of the same address. There has been no effective attempt by the state governments I track or by CMS to correct any of the overwhelming number of errors.

To make research more challenging, NPI and PECOS search engines tolerate no deviation from exact names, including punctuation as well as such deviations as “&” vs. “and” in the two databases. Finally, NPI searches, even unproductive ones, are limited in number in a single session. That is enforced by system protocol.

Simply stated, our governments cannot regulate what they do not understand. And they do not understand nursing homes. CMS knows it, and in response is seeking yet more ownership data detail due this month.  

That will just make matters worse unless they tackle the technical and owner input problems as an urgent priority.

A spreadsheet as a graphic novel. I offer a spreadsheet (updated to ver. 2 for Virginia Holdco LLC spelling corrections) designed to tell the story of this one Lakewood chain. I will use it illustrate for readers the complex world of nursing home ownership, the cruel business model deployed by these young men, the fantastic profits available for those who do not care about the human costs, and the games the worst of them play to stay ahead of regulators, investigators like your reporter and tort lawyers.

It is designed to be read left to right and illustrate coherent pieces of the story. Please note there are two sheets, one with the data and one explaining the superscript notes in the main sheet.  

The owners themselves submitted the data.

Naming of facilities and chains. Starting from the left in the sheet titled “68 nursing facilities”, we will see the games they play.

Naming issues adversely affect Medicare Compare users and both government and non-government researchers. In red text you can see every entry made which is no longer correct, if it ever was. It is fair to call 44 errors among the public names and business names of 68 facilities excessive.

Now see if you can keep track of the “chain name” pea as it moves among the shells:

• They bought six Virginia facilities in 2020 using the Innovative Healthcare Management (IHM) name.
• In May of 2021, IHM purchased 30 more in Virginia and North Carolina from the Fralin family of Roanoke.
• Later those 30 were later marketed and reported under the Medical Facilities of America (MFA) name bought from the original Roanoke owners. Those 30 are now listed in CMS records as belonging to the LifeWorks Rehab chain.
• Integrated Healthcare Management LLC’s current status with the Virginia SCC is “Inactive Voluntarily Canceled – Can Reinstate.” But it lives on in CMS PECOS records as the chain name for the six Virginia facilities bought in 2020.
• Owners reacted quickly to the bad publicity and tort actions resulting from the Colonial Heights scandal. In 2025 alone, Colonial Heights has been marketed publicly as under the management of “Innovative Healthcare Management,” then “Medical Facilities of America” and now “Lifeworks Rehab.”  
• But in PECOS Colonial Heights still under the chain Integrated Healthcare Management.  Click here. Note the chain name  Note the lack of an abuse warning, even though the arrests were nearly eight months ago. Now click on ownership details. Mr. Moshe Rajchenbach of Lakewood holds a mortgage on the place.
• Both Medical Facilities of America and Lifeworks Rehab still have public “locations” websites. They overlap in some facilities, some are in one or the other but not both, and a couple are in neither.
• All 68 have LifeWorks logos on their web pages.

Owners still advertise, presumably without blushing, that the Colonial Heights facility and the other original IHM nursing homes have “New Ownership. New Leadership. New Vision.”

Got all of that? Bless you if you do.

Whatever that chain is named this week has 68 facilities in Virginia (37), North Carolina (18), Maryland (10), Delaware (2) and Pennsylvania (1). CMS does not see six of those facilities under any chain name.

All three chain names are owned by the same Lakewood N.J. partner owners: Israel Birnbaum and Michele (Michael) Netzer.

Government data, provided by the owners, have not even begun to keep up.  

NPI Registration. There are strict rules for who is qualified as an Authorized Official to submit NPI data.

The authorized official must be a general partner, chairman of the board, chief financial officer, chief executive officer, direct owner of 5 percent or more of the provider being enumerated, or must hold a position of similar status and authority within the provider organization.

Those rules have been widely ignored here. Perhaps that is one reason why the NPI data are such a mess. There are thousands of open NPI accounts in the data for organizations that have sold their businesses or have closed and for people that are dead.

Investors. Ownership data for the facilities we are examining here is a joke.

Pretty much anything that can be wrong is wrong in the data.

• An inactive LLC is an owner.
• A direct investor LLC owns 100% of Chesapeake Health & Rehabilitation Center. Indirect investors (see the explanation in the superscript notes sheet) are reported to own 453% of the same facility. A miracle to rival the loaves and fishes. It is replicated in virtually every Virginia and North Carolina facility in this group.
• One investor is reported with addresses in three different states.
• There is more junk reporting to see.

Glance down the columns at the red annotations and you will see the errors in just this small slice of America’s nearly 15,000 nursing homes. The names in blue are or were IHM/MFA/Lifeworks officials.

Corporate Governance. The data indicate that Moshe Rajchenbach is a busy man. Especially because he now lives in Illinois.

The rest I listed to show that if one is looking to sue those with “Operational/Managerial Control,” they too are often LLCs.  Sometimes more than one.

Patient Safety, Health and Well Being Threatened by Chain Business Model. The visualizations of the data illustrate the business model discussed earlier and tell a deadly story:

• Consistent understaffing;
• High rates of Special Focus Facility program designation;
• Extraordinarily high occupancy rates. That demands a government investigation to include hospitals to see how it is possible that the worst nursing facilities have the highest occupancy rates;
• Stratospheric nursing case mix (patient needs as assessed upon entry to the nursing home) indices; and
• Substantiated complaints resulting in citations by state inspectors for federal law and regulation violations in numbers far higher than peers.

City and County Property Records Data. Groups of investors deemed private equity bought individual facilities in batches as large as the 37 bought in May of 2021 from Roanoke interests. The cost for that one batch I very roughly estimate from sample property records to have been $300 million. No traditional lenders were reported to be involved.

Financial Records in Virginia. We and our legislators are constantly told by lobbyists that nursing homes are “on the brink” of financial collapse. The cure recommended is higher Medicare and Medicaid payments and repeal of CMS minimum staffing regulations.

Some are indeed stressed, but it reasonable to ask how this chain’s 37 facilities in Virginia reported an average of 11.5% operating margins in FYE 2023 and 11.3% in FYE 2022. Annual returns on assets are near 25% in some cases. Look at the spreadsheet and you can see how they did it.  

I have written about their profitability often. Often enough apparently that the financial data appear to be no longer available online from VDH contractor vhi.org. That may be their board’s work.

Bottom line. That spreadsheet tells the story, written by the owners themselves, of these 68 facilities. 

We depend on our state and local governments to protect us. In the case of nursing homes, neither the federal government nor most states do it. Much of what our governments think they know is wrong. It is folly to use computer analytics to attempt to make sense of data as ruinously bad as this.

Their lack of oversight kills people.