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Massachusetts’ Department of Public Health has ruled that Sweetwater Care affiliates are unsuitable to acquire 11 nursing homes previously operated by Next Step Healthcare. Sweetwater may appeal, but cannot obtain licenses for the homes while the decision stands; it is still temporarily managing the facilities under court-ordered receivership.
Massachusetts’ Department of Public Health has ruled that affiliates of Sweetwater Care are “unsuitable” to acquire 11 nursing homes formerly operated by Next Step Healthcare, blocking a proposed transfer of the facilities. Sweetwater can appeal, but according to the Telegram & Gazette, it cannot obtain licenses for the homes while the decision remains in effect; it is still temporarily managing them under a court-ordered receivership.
The ruling applies to 11 Massachusetts nursing homes and their proposed acquisition by Sweetwater affiliates, based in Carlsbad, California. The state’s finding concerns whether the affiliates are suitable to take ownership and operate the facilities. The source report does not provide the full text of the ruling or a detailed account of the department’s reasoning.
Sweetwater’s continued role is distinct from ownership: it is temporarily managing the homes after a judge placed them in receivership earlier this year. That arrangement followed financial trouble at Next Step. The landlord sued Sweetwater in January, alleging nearly $15 million in unpaid rent; the allegation is reported as part of the dispute, rather than a finding detailed in the state ruling.
The report says advocates and lawmakers raised concerns about Sweetwater’s record. California’s attorney general’s office reached a $15 million settlement with the operator in July over violations of state staffing requirements. The report also cited more than 14,000 instances of low staffing at Sweetwater facilities. Those figures are part of the concerns reported by advocates and the publication; the available material does not establish that they were the sole basis for Massachusetts’ decision.
A Change in the Homes’ Ownership Path
The decision leaves the homes’ long-term ownership unresolved and prevents Sweetwater from completing the acquisition through the licensing process for now. Because the facilities remain under temporary management, the immediate question is how they will be run while a buyer or other durable arrangement is determined. The source does not identify a replacement purchaser.
The ruling also bears on state oversight of nursing-home buyers. Advocates have argued that regulators should scrutinize out-of-state operators more closely before allowing them to take over facilities. The case puts that debate into practice: a state finding of unsuitability has blocked a proposed deal, while residents and staff still depend on continuity of care and operations during the receivership.
For residents and families, the acquisition decision does not by itself answer whether staffing, finances, or daily services at the homes will change. The available report provides no facility-by-facility update on operations or resident care. Those outcomes will depend on management arrangements and any later sale or licensing decision.
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The Next Step Receivership and Oversight
Next Step Healthcare had faced staffing and financial challenges in recent years, according to the source report. In 2024, the Massachusetts attorney general’s office reached a $4 million settlement with Next Step, described at the time as the largest settlement with a nursing-home operator in the state. The homes later entered receivership after a judge acted earlier this year.
Massachusetts lawmakers passed a 2024 law giving public health officials more authority to investigate out-of-state buyers. The Public Health Council approved related regulations on October 14, 2026, according to the report. Advocates have also pointed to RegalCare, another out-of-state operator: New Jersey officials permanently revoked owner Eliyahu “Eli” Merlis’ license to work as a nursing-home administrator there before RegalCare acquired 12 Massachusetts homes. Massachusetts officials are in the process of seeking to revoke RegalCare’s state operating license, the report says.
The Sweetwater decision follows those concerns, but the available information does not establish that the RegalCare matter directly determined this ruling. Nor does it state whether the newly approved regulations were applied to the Sweetwater acquisition. The chronology and the department’s written explanation would be needed to assess how the law and rules informed the decision.
““Unsuitable””
— Massachusetts Department of Public Health, as reported by Skilled Nursing News
Appeal, Buyer and Care Plans Unresolved
It is not clear whether Sweetwater has filed or will file an appeal, what grounds it might raise, or how long the licensing restriction will remain in place. The source report does not reproduce the full decision or specify whether the state set conditions that could change the suitability finding.
The eventual buyer of the 11 homes has not been identified. It is also unclear how long the court-appointed receivership arrangement will continue, what entity will manage the homes if Sweetwater’s role changes, and whether operations or staffing will be altered. The report gives no current, home-by-home account of staffing, resident services or financial status.
The reported staffing figures and prior settlements help explain the scrutiny surrounding the transaction, but the available material does not show which evidence the department relied on or how each concern weighed in its decision. The status and timing of any further licensing action are also not specified.
Appeal and Future Operator Decisions
The next immediate development would be any appeal by Sweetwater and the state’s response. Until the decision changes, the reported licensing restriction means the affiliates cannot take licensed ownership of the homes, while Sweetwater remains in a temporary management role under receivership.
Residents, families and staff will need updates from the court, state regulators and the receiver on operational responsibility and the search for a long-term operator. A sale or other transfer would require the relevant approvals; the source does not give a timeline or name a prospective buyer. Further details from the written ruling could clarify the state’s grounds and the path available to the parties.
Key Questions
What did Massachusetts decide about Sweetwater?
The Department of Public Health found Sweetwater affiliates unsuitable to acquire 11 nursing homes formerly operated by Next Step Healthcare, blocking the proposed acquisition.
Can Sweetwater appeal the decision?
Yes. The source report says Sweetwater can appeal. It does not say whether an appeal has been filed or provide a deadline.
Who is managing the nursing homes now?
Sweetwater is still temporarily managing the 11 homes under a court-ordered receivership, according to the report. The longer-term operator has not been identified.
Why did advocates oppose the acquisition?
Dignity Alliance Massachusetts cited concerns about Sweetwater’s record, including low staffing, low federal star ratings and financial penalties. The report also describes a $15 million California settlement over staffing-requirement violations; it does not provide the full reasoning behind the Massachusetts ruling.
What happens to the homes next?
The homes remain in receivership while the licensing decision stands. The next steps may include an appeal and a search for a long-term buyer or operator, but the report gives no timeline or confirmed purchaser.
Source: rss
