Not-for-profit to for-profit are not easy, and it took a two-year process for Blueprint to successfully close the sale of a 250-bed skilled nursing facility in Philadelphia, Pennsylvania. The property appears to be Cheltenham Nursing & Rehabilitation, one of three skilled nursing facilities owned by Dublin, Ohio-based American Health Foundation (AHF) that had agreed with the United States Department of Justice in June 2025 to pay $3.61 million to resolve claims related to billing Medicare and Medicaid for “grossly substandard skilled nursing services between 2016 and 2018.”
The facilities were sued by the DOJ in June 2022 when the United States alleged that each facility failed to follow appropriate infection control protocols and had problems maintaining adequate staffing levels. All of the allegations can be found here on the DOJ’s Office of Public Affairs website. Contemporaneously with the settlement, the AHF entities agreed to enter into a chain-wide, quality of care Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General, which will remain in effect for five years and address quality of care and resident safety within the AHF entities’ skilled nursing facilities. AHF had denied any form of wrongdoing and pointed to health officials in Ohio and Pennsylvania having certified that the alleged deficiencies in the complaint were fully remedied and addressed. The DOJ in its press release also stated that “the claims resolved by the settlement are allegations only and there has been no determination of liability.”
Nevertheless, the lawsuit added increased complexity to Cheltenham’s sale, in addition to the regulatory hurdles stemming from its sale from a not-for-profit entity to a for-profit one. Blueprint’s Ryan Kelly even testified directly in front of the Pennsylvania Attorney General to secure the necessary approvals to move the transaction forward.
At the time of marketing in 2023, the asset was still rebounding from the pandemic, but it was positioned to benefit from Pennsylvania’s Medicaid reimbursement rate enhancements effective that year. Despite these favorable tailwinds, the facility was operating with significant financial losses and occupancy hovering near 70%.
Ultimately, the selected buyer, a mission-oriented operator based in Toms River, New Jersey (according to public documents filed with the City of Philadelphia), recognized the property’s potential to stabilize operations and create long-term value. The purchase price was not disclosed. Kelly was joined by Connor Doherty, Michael Segal and Daniel Waldhorn to close the deal.
