PHOENIX -- An Ahwatukee nursing home is losing its Medicare and Medicaid funding amid allegations of patient neglect.

The Evergreen Foothills Health and Rehabilitation Center sent out notices Thursday saying Medicare and Medicaid patients would have to be relocated. The state is working to move those patients.

"What we will do then is work with our members and make sure that they understand what's going on, why it's happening, and about the different options that are out there for them," said Rainey Daye Holloway of the Arizona Health Care Cost Containment System.

Arizona Department of Health Services records paint a troubling picture of the nursing home. Problems cited include: failing to investigate injuries to rule out abuse; failing to provide regular catheter cleansing for one patient; and failing to notice when one patient had three broken ribs.

"When Medicare and Medicaid shuts off funding, that's a pretty severe and pretty unusual action," said Michael Murphy of the Department of Health Services. "Any time when you have vulnerable, elderly residents who are put in a position where they could be harmed, it's disturbing."

Evergreen referred CBS 5 to attorney Jason Smith, who stressed that, although Medicare and Medicaid funding will officially be cut next month, the state is allowing the center to remain open. Smith said the nursing home believes its due process was violated and intends to file a lawsuit.