Latest sign of trouble in the senior housing industry
Last week, Reuters reported that U.S. nursing home giant HCR ManorCare is planning to file for Chapter 11 bankruptcy in the near future, transferring ownership to its landlord, Quality Care Properties Inc.
It’s the latest sign of distress in an industry that has been beset by revenue issues for the better part of a decade, caused by issues with changing Medicaid and Medicare reimbursements, rising costs, and low occupancy rates.
Last Friday, Quality Care announced it would become the full owner of the Toledo, OH-based company’s skilled nursing, assisted living, hospice, and homecare businesses across the United States.
“This agreement facilitates a consensual resolution that provides stability and flexibility for the business. We see this as the best available opportunity to improve a challenging situation,” said Quality Care CEO Mark Ordan.
With almost 300 skilled nursing and assisted living locations throughout the United States, HCR ManorCare has been beset by problems making rent for at least the past nine months. Reports indicate the level of debt reached $300 million before the two sides struck a deal.
A release from Quality Care indicated there will be no impact on patient care, and that all ManorCare employees will be “unimpaired” by the changes.
SOURCES: Reuters, Toledo Blade