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Next Step Healthcare, a for-profit nursing home chain that prosecutors have accused of deliberate understaffing, could soon sell 11 of its 14 Massachusetts nursing homes.
The potential buyer: a for-profit nursing home chain that prosecutors have accused of deliberate understaffing.
Sweetwater Care, based in California, is asking Massachusetts health regulators for permission to permanently take over operations of the 11 Next Step nursing homes. Earlier this year, a Massachusetts judge appointed a receiver to oversee those facilities after Next Step was sued by its landlord for millions of dollars in unpaid rent. Sweetwater is currently running the facilities as a temporary operator.
Next Step has repeatedly faced enforcement action over allegations that it mistreated residents and workers, The Light reported last fall. It reached a $4 million settlement with the Massachusetts Attorney General in 2024 to resolve allegations that it put residents at serious risk by not hiring enough nursing staff.
Now, most of Next Step’s nursing homes could be sold to a company with an even larger understaffing settlement on the books. In July, Sweetwater agreed to pay $15 million after the California attorney general accused the chain of violating that state’s staffing laws and jeopardizing the safety of vulnerable residents.
Both settlements require the chains to make improvements, but only certain parts of the Massachusetts settlement would apply to the 11 Next Step facilities if and when the sale goes through.
Next Step facilities in Plymouth, Taunton, Middleborough, and Attleboro would be among those sold. The chain also owns Fall River Healthcare, but that facility is not part of the receivership and not part of the sale.
Elder advocates with Dignity Alliance Massachusetts are concerned about Sweetwater’s track record. Health officials should block the acquisition, said Paul Lanzikos, co-founder of the alliance and the state’s former elder affairs secretary.
“They clearly don’t value quality care to residents, or to their staff,” Lanzikos said of Sweetwater. “Their focus is clearly on maximizing profits and minimizing expenses.”
Staffing levels are one of the most important factors affecting whether nursing home residents get quality care and are treated with dignity, elder advocates say. Yet a New Bedford Light investigation this year found half of Massachusetts nursing homes were below the state’s minimum staffing ratios.
In an interview with The Light in August, Gov. Maura Healey said she was not proposing new changes to staffing enforcement. Last year, regulators created a new sliding scale of understaffing penalties, increasing the cost of noncompliance for some nursing homes and decreasing it for other nursing homes. Healey said she wanted to “see how it goes” before making another change.
Next Step acknowledged The Light’s requests for comment but didn’t make anyone available to answer questions about the sale.
A Sweetwater executive listed in corporate filings as a manager for the new Massachusetts nursing home companies did not respond to The Light’s two voicemails and three emails.
The state is also reviewing Royal Health Group’s potential sale of 10 nursing homes, including one in Fairhaven, to a newly formed group of companies known as AuthentiCare, The Light previously reported.
Next steps for Next Step nursing homes
Massachusetts health officials have a choice of whether to allow the Sweetwater sale.
Katheleen Conti, a spokesperson for the Department of Public Health, confirmed that Sweetwater filed an application for a license to become the new owner of the 11 Next Step facilities last month. After the company provides more information to the department, officials will accept public feedback and make a decision.
Sweetwater isn’t proposing any changes in capacity or services, Conti wrote in an email to The Light. She said there isn’t a timeline for when the sale will close because that depends on the department’s review.
State law requires the department to schedule a public hearing if 10 adults petition them to do so. Lanzikos said the Dignity Alliance was working on a petition.
Another Next Step facility not in the receivership, Westborough Healthcare, is part of a separate sale. Health officials approved Winchester-based Stellar Health Group as a suitable operator in July, Conti said in an email.
The transfer hasn’t been finalized, according to Stellar owner Ari Erlichman. He told The Light in an email that the chain was not planning any changes to capacity or services.
The future is less clear for the remaining two nursing homes in Next Step’s portfolio: Lee Healthcare, near Pittsfield, and Fall River Healthcare, which exited from a federal enforcement program designed to turn around the country’s “worst of the worst” facilities earlier this year.
Neither are part of the receivership. There are no public plans for them to be sold, which means Next Step will continue to operate them at least in the near-term.
State lawmakers tried to strengthen the state’s review of sales like these when they passed a landmark long-term care law in 2024, but health officials have stalled the effort. Two years after that law passed, state health officials are still reviewing nursing home sales following their old process because they haven’t finalized regulations for the new, more rigorous review.
The Department of Public Health has no timeline for finalizing the new regulations, though Gov. Maura Healey has said her instructions to all state agencies on finalizing regulations are to “get it done yesterday.”
Who is Sweetwater Care?
Regulators have targeted Sweetwater for serious health and safety issues, using some of the most extreme enforcement actions that nursing homes can face.
The chain and its affiliates own at least 28 nursing homes in California, Colorado, Montana, and Kansas, public financial disclosures show. Of those, 10 facilities have been flagged for abuse by Medicare. Two are in a highly selective federal enforcement program reserved for facilities with a history of serious, repeated problems. Another two facilities are candidates to be added to that program.
Nine residents were sexually assaulted by a nurse aide with a “known criminal history of abuse” at Sweetwater’s Rancho Seco Care Center near Sacramento, according to a 2025 inspection.
A resident with dementia and schizophrenia packed a bag, unscrewed security wiring using silverware, and hopped a fence to escape Sweetwater’s Valley View Care Center in a rural area of California, another 2025 inspection found. Staff didn’t notice they were gone for 16 hours, when the resident was found “wandering in an open field,” it said. It wasn’t the first time the resident had tried to escape in this way, according to records reviewed by inspectors.
Two residents died at Whitefish Care and Rehabilitation in western Montana after the nursing home failed to provide training and easily accessible equipment necessary for staff to perform lifesaving CPR, according to a 2025 inspection. Staff told inspectors they scrambled to find the necessary supplies when the residents stopped breathing, and there were no defibrillators — the devices used to shock a patient’s heart during cardiac arrest — because it was “corporate policy” not to have them.
“If we would have had all the supplies we needed, and staff had training on emergency situations, it may have helped save his life,” a staffer said about one of the residents who died.
The California attorney general filed a lawsuit against Sweetwater and its affiliates last year, accusing it of breaking the law by purposefully not meeting the state’s minimum staffing requirements. This led to “preventable neglect, abuse, and injuries,” the agency said in a press release.
Sweetwater residents had broken bones that went days without medical attention and developed bedsores that, in one case, were so deep they exposed a resident’s hip bone, prosecutors said. They accused Sweetwater of extracting $31 million in profit instead of spending that money on acceptable care.
In July, Sweetwater settled the lawsuit by agreeing to pay $12.5 million in penalties and $2.5 million toward better staffing and compliance in its California nursing homes. The settlement required the chain to hire an independent compliance monitor for at least three years to make sure it was providing quality care.
The similarities between Sweetwater’s staffing settlement and the one Next Step reached with Massachusetts prosecutors in 2024 are worrying, said Lanzikos, of the Dignity Alliance. And because Sweetwater facilities are owned through a complex web of interrelated companies, the advocates have had trouble finding any other public information by which to judge Sweetwater’s record.
“I see no redeeming qualities in any of the available information,” Lanzikos said.
How the sale could affect Next Step’s nursing homes
As Sweetwater faces obligations to increase staffing and improve care in its large portfolio of 17 California nursing homes, it’s asking state health regulators to allow it to take on a chain of 11 Massachusetts nursing homes that also need improvement.
When Next Step reached its settlement with Massachusetts prosecutors two years ago, the chain made a legal commitment to up its staffing. Public records show it still has progress to make.
An official in the Massachusetts attorney general’s office familiar with the settlement said conditions in Next Step facilities have gotten better since prosecutors began investigating the chain. The office granted The Light an interview with the official on the condition that they not be named.
The settlement required the chain to make payments to a state nursing home fund, invest certain sums in its own staffing budget, and hire an independent monitor to make sure it was following through. Next Step has done all of that, the official said.
Yet average staffing levels across the chain have been flat since the settlement was reached. Just two of the 14 Next Step nursing homes met state staffing standards at the end of last year, according to federal data analyzed as part of The Light’s staffing investigation. Half of the chain’s nursing homes didn’t spend enough of their revenue on direct care for residents in 2025, a state report shows.
Multiple Next Step facilities failed to prevent residents from escaping and hitting each other during the past year, health inspections show. Lynette Couture, a resident at Plymouth Harborside in late 2025, described waiting hours for care as she lay in excruciating pain.
The attorney general’s office stepped in when the 11 Next Step facilities went into receivership this year, securing a court order that keeps the compliance monitoring and staffing commitments in place. But if and when Sweetwater becomes the permanent operator, the compliance monitoring will end at the newly sold nursing homes, while staying in place at any facilities still owned by Next Step.
The settlement was written in such a way that no new operator would be required to continue the compliance monitoring, the official said, because prosecutors didn’t want such a requirement to scare off prospective buyers.
Sweetwater, or any other buyer, would still be bound by the settlement’s requirements to keep making certain payments — they include a $1,083,333 investment in staffing and $250,000 toward state nursing home quality improvement fund, both due at the end of this year.
But the exact amount each company could pay is still being sorted out, the official said. It’s a legal gray area because the chain is splitting up.
Even if the Sweetwater sale goes through for the 11 facilities it’s asking to buy, Next Step may still run Fall River Healthcare and Lee Healthcare indefinitely. There’s also the lone nursing home, Westborough Healthcare, slated to be sold to Stellar Health Group.
While the receivership case is a sign that Next Step faces financial challenges, the official said the company doesn’t appear headed off an immediate financial cliff. If the office does see signs of that, it can step in and file for a separate financial receivership to keep the two facilities running.
How we got here
The potential sale of most Next Step nursing homes stems from a financial dispute the chain is having with one of its landlords.
Next Step owns the businesses that operate its 14 nursing homes, but it rents the land and buildings from three other corporate entities. The 11 nursing homes that Sweetwater is set to take over are owned by a real estate trust called Cuarzo Healthcare.
Cuarzo sued Next Step in January, claiming it was owed more than $15 million in unpaid rent and related fees, mainly from 2022 and 2023. It claimed Next Step was in “dire financial condition” in court filings, though Next Step disputed that characterization.
A Middlesex Superior Court granted Cuarzo’s request to appoint a receiver, an independent manager who would keep the facilities running as the lawsuit continued. The receivership allowed Cuarzo to bring in a temporary operator to handle day-to-day management at each facility.
Sweetwater became the temporary operator in July after disputes arose with the previous temporary operator. Now, Sweetwater is asking health officials to allow it to run the 11 nursing homes permanently. Cuarzo would still own the real estate and rent it to Sweetwater, according to receiver Michael Flanagan.
That’s a problem, elder advocates say — both for these 11 nursing homes and for the industry at large.
Landlords are focused on collecting rent to make a profit, Lanzikos said. Nursing homes receive a significant amount of revenue from publicly funded insurance programs, and any public money spent on rent can’t go toward providing care for residents. Two Next Step nursing homes spent just two-thirds of their revenue on direct care in 2025, far below the 75% spending threshold that the state requires.
While nursing home operators like Sweetwater have to be reviewed by state health officials before they can take over a facility, there’s no equivalent review for nursing homes’ landlords.
“There’s no easy way to hold the landlord accountable, because the landlord is not subject to oversight by the Department of Public Health or any other entity,” Lanzikos said.
This reporting was supported by a grant from the Fund for Investigative Journalism.
Email Grace Ferguson at gferguson@newbedfordlight.org.
