Literature Review

CareTrust REIT expands in the Midwest with $97M deal Modern Healthcare; by Diane Eastabrook; 12/10/24 CareTrust REIT has acquired a 46-facility skilled nursing and senior housing portfolio in the Midwest for $97 million. The San Clemente, California-based real estate investment trust said in a Monday news release the facilities include more than 3,800 beds and were purchased through a bankruptcy sale of the assets from an unnamed debtor. It did not disclose the names or specific locations of the facilities.

Why repeat offender nursing homes elude accountability Modern Healthcare; by Diane Eastabrook and Tim Broderick; 12/10/24 Fallbrook Rehabilitation and Care Center stands out as one of the worst among the more than 1,200 nursing homes in Texas and the nearly 15,000 facilities nationwide. Over a three-year period at the skilled nursing facility in Houston, one patient died after staff did not notice her ventilator had disconnected.  ... The Texas Department of Health and Human Services cited Fallbrook for more than 50 other health and safety violations. Fallbrook was fined about $640,000 between April 2021 and July 2023, according to Modern Healthcare analysis of April 2024 CMS data. The amount was among the top 30 fines paid by nursing homes nationally and was more than six times the average fine other Texas nursing homes with CMS one-star ratings were assessed during that period. Yet the 200-bed nursing home collected more than $20 million in reimbursements from Medicare, Medicaid and health insurance companies in 2021 and 2022, ... The ownership groups can control facilities through convoluted webs of individuals, private equity investors, limited liability companies, real estate investment trusts and other trusts that often transfer money to related companies or third parties with ownership interests in the nursing homes. The Human and Human Services Department Office of Inspector General has identified this as a problem.

A healthcare system’s moral bankruptcy goes viral MedCity News; by Neal K. Shah; 12/5/24 Brian Thompson's murder was chilling, but the social media response of this tragedy was equally shocking, if eye-opening. It shows a massive collapse of public trust in our healthcare system, a system so broken that it bankrupts families, denies life-saving care, and treats death as an acceptable cost of doing business. When UnitedHealthcare CEO Brian Thompson was gunned down outside a Manhattan hotel ..., something chilling happened: thousands of Americans responded not with horror, but with dark jokes and scathing comments about the health insurance industry. People shared stories of being denied coverage by the company and drew parallels comparing the CEO’s death to the ways they’ve been mistreated by America’s healthcare system. ... The tragedy of Thompson’s death is compounded by a cruel irony: He was rushed to Mount Sinai  — a healthcare system whose hospitals UnitedHealth removed from its network only a few months ago, leaving thousands of patients scrambling. Even in death, he couldn’t escape the byzantine system his company helped create.

Forcura and Axxess announce palliative care software integration Bluefield Daily Telegraph, Jacksonville, FL; Business Wire; 12/9/24 Forcura, a healthcare workflow management company, announced a strategic partnership enhancement with Axxess, the leading global technology platform for healthcare at home, by expanding connectivity to Axxess’ palliative care platform. Consequently, Axxess’ palliative care client organizations now can manage the workflow associated with onboarding and coordinating care for patients through a bi-directional API integration with Forcura. Together, Forcura and Axxess can provide shared home health, hospice, home care and palliative care clients a seamless interoperable experience.

VitalCaring’s PE backers considering appeal of Encompass, Enhabit lawsuit Hospice News; by Jim Parker; 12/6/24 Nautic Partners and The Vistria Group, the private equity backers of home health and hospice provider Vital Caring, are mulling a potential appeal of a federal court’s recent decision in a dispute with Encompass Health (NYSE: EHC) and Enhabit Inc. (NYSE: EHAB). A federal judge in Delaware on Monday ordered VitalCaring, Nautic and Vistria to share 43% of future profits Encompass Health and Enhabit Inc. The two companies allege that the founders of VitalCaring, including CEO April Anthony, used unethical practices to get the company off the ground, adversely affecting the two plaintiffs. Anthony previously served as CEO of Encompass Health’s home health and hospice segment. The two private equity firms, co-defendants in the lawsuit, are now considering their legal options.

Residential Hospice brings hospice care to eastern Kansas and western Missouri PR Newswire, Kansas City, MO; by Residential Home Health and Hospice; 12/4/24 Tutera Senior Living & Health Care (Tutera) and Residential Home Health and Hospice (Residential) have expanded their partnership and service offering, Residential Hospice is now acting as the preferred provider of hospice services. Tutera and Residential have been in a partnership since May 2022 with Residential providing home health care in their Kansas City market. "The focus of our partnership with Residential is to support patients at every stage of care in the communities we serve," said Randy Bloom, President/COO Tutera Health Care Division. "By expanding the partnership with Residential, we increase access to care and are better able to meet the healthcare needs of our community."

Delaware Court of Chancery awards damages and other relief to Encompass Health and Enhabit for misconduct by April Anthony, other former officers, and private equity firms Vistria Group and Nautic Partners Associated Press (AP) - Business Wire, Birmingham, AL and Dallas, TX; 12/4/24 On Monday, Encompass Health and Enhabit won their lawsuit in the Delaware Court of Chancery related to breaches of fiduciary duty by April Anthony, Luke James, and Chris Walker while they served as the senior officers at Encompass Health’s former home health and hospice division, which is now Enhabit. The Court awarded judgment against private equity firms Vistria Group and Nautic Partners and the home health and hospice business now known as VitalCaring Group for aiding and abetting “the egregious breaches of the duty of loyalty” by Anthony, James, and Walker. The case was the subject of a 7-day trial in December 2023. After considering “the damning record presented at trial,” the Court found that, while employed by Encompass Health, Anthony, James, and Walker usurped acquisition opportunities falling within Encompass Health’s line of business, used Encompass Health’s confidential information, and swayed key Encompass Health employees to join them with the promise of equity in the home health and hospice competitor that Anthony now heads. 

Court Orders VitalCaring to place 43% of profits into trust for Encompass Health Hospice News; by Jim Parker; 12/3/24 A federal judge in Delaware has ordered home health and hospice provider VitalCaring Group and its private equity backers to share future profits with Encompass Health (NYSE: EHC). The case has a long circuitous history that dates back to 2022 when Encompass Health spinned off its home health and hospice business as a standalone company, now known as Enhabit Inc. (NYSE: EHAB) brand. At the time, VitalCaring CEO April Anthony was CEO of the Encompass home-based case segment. “Encompass is entitled to one recovery,” a court opinion indicated. “That recovery takes the form of an equitable payment stream of VitalCaring’s future profits to be administered via a constructive trust, certain mitigation damages, and attorneys’ fee.” The court ordered that 43% of VitalCaring’s future profits be placed in trust to benefit Encompass. The remaining 57% would go to VitalCaring’s private equity backers, the Vistria Group and Nautic Partners.

Big Bend Hospice’s promise to North Florida [New parent company, Seven Oaks Health] Tallahassee Democrat; by Bill Wertman, "Your Turn"; 11/29/24 As CEO of Big Bend Hospice, I see every day how vital our mission focused hospice care is to families across North Florida. Yet, in today’s healthcare landscape, nonprofit hospices like ours are increasingly rare. Only about 30% of hospices nationwide operate as nonprofits (CDC, 2020), and for-profit hospices have made up nearly all new providers in recent years (Hospice News, 2022). These changes mean that the type of personalized, community-centered care that Big Bend Hospice provides is at risk of disappearing. In 2024 alone, 12 hospice acquisitions took place, with about half involving nonprofit organizations (Hospice News, 2024). This trend is forcing many nonprofits to either consolidate or scale back services. For Big Bend Hospice, the choice was clear: expand our offerings to meet more in-home healthcare needs, while keeping compassion and family-centered care at the forefront. To accomplish this, we established Seven Oaks Health, our new parent company. With Seven Oaks Health, we’re creating a sustainable model that enables us to support families from diagnosis through end-of-life, especially in the rural areas we’ve served for over 40 years. By broadening our services, we’re ensuring that more families have access to high-quality care wherever they call home.

Blue Ridge Hospice eyes N. Va. expansion, breaks into preventative care Washington Business Journal; by Sara Gilgor; 11/27/24 Winchester nonprofit Blue Ridge Hospice is heading into 2025 with plans to accelerate its regional expansion - by broadening its services, beefing up its headcount, teaming up with other local health systems and employers, and penetrating new pockets within Northern Virginia. The organization has provided hospice and palliative care in Virginia for patients with terminal illnesses from cancer to dementia for 43 years, only recently breaking into Greater Washington via Loudoun County. But now, increasing demand in the market and challenges within the larger health care landscape have led the business to rethink both its own structure and how it delivers care to the elderly patients it serves, often not until the ends of their lives. That's why the parent organization is rebranding as Blue Ridge Care. Its patients often regret not seeking its help earlier, President and CEO Jason Parsons told me in an interview, so it's repositioning itself to care for patients well before they would ever need hospice. ... Blue Ridge, now with nearly 400 employees, is looking to add another 50 to 60 people - including doctors and nurses - to its headcount in 2025, Parsons told me. And it plans to invest between $3 million and $5 million into next year's expansion, after putting in $10 million over the last two years, he said.

Faith Home Health and Hospice to take over Holton Hospital’s home-based care programs Hospice News; by Jim Parker; 11/27/24 Kansas-based Faith Home Health and Hospice will acquire the home-based care operations of Holton Community Hospital. The hospital in September announced that it would be closing its home health and hospice services as of Dec. 31, citing “significant financial challenges brought on by changes in health care payment models, the expansion of Medicare replacement plans and increasing competition from other agencies.” “[The two organizations are] actively working towards finalizing a purchase agreement that ensures [the hospital’s] dedicated local staff will continue to provide compassionate care to the community,” Holton Community Hospital CEO, Carrie Lutz, said in a press release. 

Transactions: Elevance Health’s home-based care bet; Eden Health, Mission Health expand hospice footprints Home Health Care News; by Andrew Donlan; 11/26/24...will fall under Elevance’s Carelon arm. Eden Health acquires A Plus Hospice Care Eden Health of Northern Nevada has acquired A Plus Hospice Care. The deal was official as of Nov. 1. [Full access to the article might require a subscription.]

Addus taking a cautious approach to hospice deals Hospice News; by Jim Parker; 11/22/24 Valuations in the hospice space have led Addus Homecare (Nasdaq: ADUS) to take a more conservative approach to hospice transactions as it actively seeks home health and personal care deals. Hospice multiples reach record highs in 2020 and 2021, as much as 26x. Since then the price tags have reportedly come down, but they haven’t gone far enough, according to Addus President and COO Brad Bickham. The company also seeks to bulk up its home health business relative to the scale of its hospice operations. “First and foremost is the pricing aspect of it. But secondly, it’s probably sequencing to a certain extent,” Bickham said during the Stephens Annual Investment Conference. “Our hospice platform is certainly significantly larger than our home health platform. We have found that home health does a good job of feeding hospice in the markets where we do have that overlap. It’d be good to essentially catch up our home and health platform at the hospice side, and certainly it’s a cheaper valuation.”