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Massachusetts health officials have blocked Sweetwater Care affiliates from acquiring 11 Next Step Healthcare nursing homes, finding the affiliates “unsuitable.” Sweetwater may appeal, but cannot receive licenses for the properties while the decision stands; it continues to manage the homes under court-ordered receivership.
Massachusetts health officials have blocked Sweetwater Care affiliates from acquiring 11 nursing homes operated by Next Step Healthcare, ruling that the proposed buyers are “unsuitable.” Sweetwater can appeal, but according to the Telegram & Gazette report cited by Skilled Nursing News, it cannot obtain licenses for the facilities while the ruling is in effect. The decision leaves ownership unresolved while Sweetwater continues to manage the homes under court-ordered receivership.
The ruling was issued by the Massachusetts Department of Public Health, which found Sweetwater affiliates unsuitable to acquire the facilities. The state’s decision concerns the transfer of the nursing homes, not an announced immediate end to Sweetwater’s current management role. A judge placed the facilities in receivership earlier in 2026, and Sweetwater remains their temporary manager, according to the source report.
Sweetwater, based in Carlsbad, California, may appeal the state decision. The report says the affiliates are not permitted to obtain licenses for the properties in the interim. The state has not, in the supplied reporting, announced a replacement buyer or a timetable for resolving the homes’ ownership.
The proposed acquisition drew objections from Dignity Alliance Massachusetts, an elder-care advocacy group. The group cited concerns about Sweetwater’s operating record, including low staffing levels, low federal star ratings at some facilities and financial penalties. Those concerns formed part of the public debate around the proposed deal; the official action described in the report is the state’s finding that the affiliates are unsuitable.
Who Will Run the 11 Nursing Homes?
The decision affects the future ownership of 11 Massachusetts nursing homes and leaves their longer-term operator uncertain. Because the properties are in receivership and Sweetwater remains a temporary manager, the state’s ruling does not by itself identify who will take over or how a sale will proceed. Residents, families and staff may be watching for updates on continuity of care and operations as that process develops; the source report does not describe a change to day-to-day services resulting from the ruling.
The case also tests how Massachusetts applies its authority to review buyers from outside the state. Advocates and lawmakers have argued that regulators need to scrutinize prospective owners’ records before nursing home acquisitions are completed. The ruling shows that officials can block this proposed transfer on suitability grounds, while leaving open whether an appeal or a new buyer will resolve the properties’ future.
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Sweetwater’s Record and State Oversight
Dignity Alliance Massachusetts pointed to Sweetwater’s history at some facilities, including staffing concerns, low federal ratings and financial penalties. In July 2026, California’s attorney general’s office reached a reported $15 million settlement with Sweetwater over violations of California staffing requirements. The report said the operator had more than 14,000 instances of low staffing at its facilities. Those figures and the settlement relate to California; they are not, on their own, findings about conditions at each of the 11 Massachusetts homes.
The Sweetwater decision comes amid broader scrutiny of nursing home buyers. Advocates have cited New Jersey-based RegalCare as a warning: before it acquired 12 Massachusetts nursing homes, New Jersey officials had permanently revoked the administrator license of its owner, Eliyahu “Eli” Merlis. Massachusetts officials are also in the process of revoking RegalCare’s state operating license, according to the report. The comparison reflects concerns raised by advocates; the Sweetwater ruling is a separate decision involving different companies and facilities.
A 2024 Massachusetts law gave public health officials more authority to investigate out-of-state buyers. The Public Health Council approved related regulations on October 14, 2026, the report said. The state’s new ruling follows that regulatory development, though the supplied material does not specify which provisions or findings were decisive in the Sweetwater suitability determination.
The 11 Next Step homes have also faced financial and staffing difficulties, according to the report. Next Step reached a $4 million settlement with the Massachusetts attorney general’s office in 2024, described at the time as the largest settlement for a nursing home operator in the state. Separately, the landlord of the properties sued Sweetwater in January over nearly $15 million in unpaid rent. These are distinct matters from the state’s acquisition ruling.
““unsuitable””
— Massachusetts Department of Public Health, as described in the ruling
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Appeal, Buyer and Home Operations
It is not yet clear whether Sweetwater will appeal, how long any appeal would take or whether a court or agency review could change the outcome. The source report also does not identify a prospective alternative buyer or say when the 11 properties might leave receivership.
The specific findings and evidence behind the state’s suitability determination are not detailed in the supplied material. It is also unclear whether the ruling changes staffing, services or other day-to-day arrangements at the facilities. Sweetwater’s current role is described as temporary management under receivership, not as ownership of the homes.
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State Review and Ownership Decisions
The immediate next step could be an appeal by Sweetwater, which the company is allowed to pursue, although the report does not say that one has been filed. Unless the decision changes, the affiliates cannot obtain licenses to acquire the properties. The state’s licensing restrictions and the receivership therefore remain central to what happens next.
Officials and the court will need to address the facilities’ longer-term ownership, but no sale process, replacement operator or deadline is confirmed in the source material. Residents, families and workers can expect further developments as the appeal question and search for a future owner become clearer. The reported financial and staffing challenges at the homes make the status of stable management an ongoing concern, but the next operational decisions have not been announced.
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Key Questions
What did Massachusetts decide about Sweetwater?
The Department of Public Health found Sweetwater affiliates “unsuitable” to acquire 11 Next Step Healthcare nursing homes and blocked the proposed deal.
Can Sweetwater appeal the ruling?
Yes. The report says Sweetwater may appeal, but it does not say whether the company has filed one. The affiliates cannot obtain licenses for the properties while the ruling remains in effect.
Who currently manages the 11 homes?
Sweetwater is still temporarily managing the facilities under court-ordered receivership, according to the report. The ruling blocks its acquisition bid but does not identify an immediate replacement manager.
Has another buyer been named?
No. The report says it is unclear who will buy the properties. It does not provide a buyer, sale timetable or confirmed end date for the receivership.
Source: rss
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