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Show frmBH oo3 Ksm .laatssdm -- t ' lY Ll-?futf THENAJfpNAL -- i - - - t ,i, K ' W.' ' f 42 . Business news and commentary Volume 6 Number Wednesday, June 22, 1977 51 Officials suspect link between Utah firm and Arizona promoters New rules force nursing homes into financial crisis Claiming to be in the midst of a financial crisis, members of the Utah Nursing Home Association have dispatched a messenger to the nations capital in efforts to change federal Medicaid regulations. Dennis McFall, before he left, said he hopes to persuade Health UNA vice-preside- nt Education Welfare and by Tom Horton costs were determined last year, the operator "When by Sheri Poe Enterprise Staff Writer (HEW) officials to investigate Utah Department of Social Services regulations regarding Medicaid cost reimbursements at nursing homes. The regulation, which became effective in January, stipulates all cost assessments at homes must be based on a 70 percent occupancy rate. Richfield Care Center, which operated in the black for a year before the stipulation became effective, has lost $65,000 in operating costs due to the cost reimbursement program. McFall said. Distribute costs on broader base The ruling states all nursing homes must assume 70 percent of their beds are occupied when they determine daily patient costs. This means a facility with only 40 of 100 beds occupied must distribute the cost of running the home (staff, services, etc.) as if it had 70 paying clients. (The purpose of the ruling was to reduce federal outlays to Medicaid patients, who comprise more than 70 percent of Utahs nursing home clients.) projected $38-$4- 4 start-u- Enterprise Staff Writer costs ot p per patient per day to cover operating costs while building up a patient count," McFall said. The new regulation precludes start-u- p costs, and St. George is losing about $20,000 monthly in operating fees because the new rule forces it to daily charge only $20-$2- 5 rather than the planned $38-$4St. George has filled only 29 of its 100 beds since its March 15 opening, far below the 70 percent occupancy rate required by Medicaid. Won't last a year "Were all borrowed out," Paul Harker. operator of the St. George facility, complained. "With the current rate of losses, I wont be able to stay open a year. Harker said a state comprehensive health committee report compiled during the NURSING HOMES, 32) fa-(S- Real Would-b- e ce real estate brokers and sales agents arc swamping the state licensing department, hoping to beat the scheduled toughening of license requirements. ments from 30 patients to break even," rate is double that of states of comparable size. that, the home non-existe- nt Mc- Fall said. McFall said the St. George Care Center exemplifies what will happen to new homes opening this year under the regulation. St. George leases facilities from Carriage Corp.. a medical services contractor, so it accrued no construction But costs before opening. during its first three months of operation, it has fallen $60,000 ir. debt. local, state and federal authorities for possible rnnncotinns to a notorious clan of convicted Arizona land promoters and defrauders. Officials of the Salt Lake County Attorneys office, the Utah Attorney Generals office, the U.S. Securities and Exchange Commission and the Federal Bureau of Investigation all indicate they arc investigating complaints regarding Fruit Juice Corp. and Fruit Juice Corp. of Salt Lake City. According to the Securities and Exchange Commission, both companies were created with funds from Century Mortgage Company Utah company suspected Ltd., a Utah of bilking investors of $1 million last year. now-defun- ct Both companies were also apparently established by principals of Fruit Juice Corp. of Phoenix, who Arizona authorities say they arc about to charge with defrauding investors of over $35,000. Victims in Arizona have testified promoters told them Utahs Fruit Juice Corp. was the parent corporation of the Phoenix firm. (The Utah firms were incorporated Nov. 11, 1976, the Phoenix firm on Oct. 25, 1976.) According to Phoenix authorities, money from the Phoenix Fruit Juice Company was deposited in the bank account of imprisoned Arizona land promoter Johnney B. Kearney. The Utah Fruit Juice companies have sold vending machines and cans of fruit juice to several Utahns for contract amounts of approximately $2,900 apiece. Lending officers at local financial institutions. Continental Bank and Trust and AVCO Financial Services, which have financed purchases for individuals, say they have not heard many complaints from buyers. According to SEC investigators all three vending machine companies were set up by Rex W. Parsons and Richard K. Kcrckas with $55,000 which originated from Century Mortgage in 1976. The money was channeled through Market Fund Inc. of Denver, which Parsons has managed, before being "loaned" to the fruit juice firms. Parsons was convicted in 1976 on charges he defrauded Denver banks of $6 million. He is also alleged by the SEC to have looted thousands of dollars from Century Mortgage after he took control of the firm while Kearney was imprisoned by federal authorities. Also tied to the Fruit Juice scheme is Ned Warren, the longtime king of Arizona land promoters, who received money from both Century Mortgage and Fruit Juice of Phoenix. Warren has been convicted of extortion, land fraud and bribery. (Sec LINK, page 25) estate licenses in demand w'ould have to receive pay- like Two Utah companies are being investigated by 4. According to officials of the department of business regulation. during the past three month clerks have been processing applications from real estate broker and sales agent applications at a rate of 1,000 monthly. Of those applicants, about 500 are actually licensed each month. The Utah "In a case 50 cents Utah Edition "Its a madhouse," says department investigator Robert The panic started Hall. about three months ago. and its getting worse all the time." estate law from both broker and sales agent applicants. training course in real Salt Lake City businesses, especially those with high gross sales figures, may collectively shell out an additional $400,000 annually as commissioners try to raise $3 Currently, Utah requires a general course for an agent's license. A broker is required to take an additional 36 hours of advanced real estate sales training. 24 hours of appraisal courses and 30 hours of financing courses, in addition to putting in three years of sales experience. 30-ho- ur million in additional revenue. The money will be generated through a hike in business license fees, along with boosts in property and utility taxes and garbage collection fees. The revenue increase proposal is scheduled for presentation in a public hearing late in June. In addition to the courses, the state requires applicants to test, including pass a two-paa multi-stat- e test on general sales, and a test specifically on Utah real estate law. rt Half enter the sales force department records show 943 persons applied to In May, take the exams, slightly over is apparently in The "panic" response to scheduled stiffening of Utah's license requirements, due Jan. 1, 1978. At that time, the state will require an additional 30 hour 600 actually took the test, and about 500 passed and were licensed. the state of (Sec LICENSES, page 18) By comparison, Businesses face higher iicense fees Bernice Anderson examines a few of the hundreds of real estate applications swamping her division. City licensing director John Wheat says the proposal means a total revision of business licensing formulas, and "is weighted heavily towards making big businesses pay their share." License fees will be based on e an increment scale, with LICENSE FEES, page 20) bes-(Se- |