The Nursing Home Industry Lies, Cheats, and Steals with Government Help:  It’s Time to Stop the Wankery and Demand the Truth!


Dave Kingsley

Wankery:” Definition: (Noun; Vulgar Slang British)  “Pretentious, contemptible, stupid, behavior or material.”

A Message to Advocates, Activists, Journalists, & Politicians

Over the years, I have observed many legislative hearings regarding nursing home abuse and neglect. In practically every hearing, industry lobbyists claim that Medicaid reimbursement is too low. Therefore, they conclude, the public, patients, and their family members can’t expect better care.  Usually, they pull out their standard narrative of “low net” or “a thin margin.”  In essence, they are claiming that the industry is made up of incompetent businesspeople who have a tendency to invest in losing businesses.

Unfortunately, leading advocates and scholars invited to testify invariably fail to confront the industry’s hardship plea as a lie, which it is.  Basically, Medicaid is fueling a real estate industry undergirded by at least $300 billion worth of revenue producing commercial real estate.  Revenue flowing through thousands of facilities (buildings) is enhanced by a plethora of other businesses billing Medicaid and Medicare for therapies, pharmaceuticals, labor contracting, dietary provisions, management services, and anything else providers can dream up as a cost to taxpayers and as a flow of cash to one of their businesses.

Here is how it works:  the corporate entity (LLC, LP, etc.) with the license to operate a facility, i.e., provide care, also pays for services to other corporate entities owned by the same investors who own the licensed facility.  These are called “related parties.”  The LLC with the license is making a lease payment to the LLC which owns the property.  Often, nurses and nurses’ assistants are provided by a labor contractor – another LLC.  Management of a licensed facility is often provided by a management firm owned by the owners of the licenses, the properties.  This is a form of theft, but it’s legal thievery because the industry has a powerful lobby.

Payments to these related party entities increase operating expenses, lowers net operating revenue, and often result in net operating losses.  Net income therefore is often far lower for each facility because parent corporations are sucking out a huge proportion of revenue through an array of corporations.  So, lobbyists will deceitfully tell legislators that the overall “median” net income percentage (net income divided by total revenue) is a half percent or some such nonsense.

Furthermore, people not well-educated in corporate finance (which, understandably, is most people) won’t know that net income isn’t a valid metric for determining capital flowing from customers – in this case, the government – to shareholders.  A host of accounting gimmicks hide cash flow that certainly does not appear in net income.  However, that is a discussion for a later blog post.  Suffice it to say, low nets and thin margins are the warp and woof of industry propaganda – swallowed, or at least not confronted, by most everyone from advocacy groups to scholars, to journalists.

What Could We Afford if Excess Extraction of Taxers’ Money by the Nursing Home Industry Were Identified & Stopped?

We know that the nursing home business is lucrative for investors, shareholders, and executives.  We know from financial reports submitted to the Securities & Exchange Commission by publicly listed nursing home corporations that executives receive millions per year in compensation and Wall Street investors such as BlackRock and Vanguard are the largest shareholders in publicly traded nursing home stock. 

BlackRock and Vanguard are the leading asset managers on the Planet.  They would not be investing your pension, college endowment, 401K, or other assets in an industry with a track record of paltry returns. 

Some my research colleagues and I have been investing a huge amount of time compiling financial reports (otherwise known as cost reports) to various state agencies.  These reports are pervasively false, misleading, and often fraudulent.  Invariably state agencies fail to audit these documents and legislators seem oblivious to pervasive industry deception. 

Excess cash pouring out of Medicaid and Medicare through licensed skilled nursing/long-term care facilities into investors hidden behind a veil of secrecy could be utilized to keep people out of these God-awful places in the first instance or to make life comfortable for those of us who will be or are now institutionalized under horrible conditions.

The number one duty of advocates is to tell the truth to power and to force the industry to stop lying, cheating, and stealing money that could be directed toward decent, humane, treatment of disabled Americans needing assistance with basic, every day, living.  It is time to get our messaging in order.

Nursing Home Corporations are Beginning to Release Fourth Quarter Earnings. Are their Hardship Pleas Merited? Or is it Propaganda?

The Ensign Group, Inc. (Nasdaq: ENSG) has Reported Robust Fourth Quarter Earnings – Now We Need to Discuss How Well They Protected Patients in Their Care from COVID

The information in this post is based on a conference call and webcast on February 4, 2021 at 10:00 A.M. PT (  When Ensign’s annual 10-K report is available, we will analyze all quarterly reports and their annual results to determine their overall 2020 performance.  We are interested in the amount of revenue the corporation received in the form of CARES Act grants/loans and other subsidization from various federal departments (e.g., HHS, IRS, etc.).

During the 4th quarter (Oct, Nov, Dec), the COVID pandemic spiked to levels unseen prior to that time.  Here are a few highlights from the Ensign release of 4th quarter results, which includes annual results:

  1. Earnings per share of $0.82 represent an increase of 67.3% over the prior year quarter.

  2. Earnings per share of $3.06 represent an increase of 86.6% over the prior year.

  3. Revenue of $2.4 billion for the year is an increase of 18.3% over the prior year.

  4. Medicare days increased by 22.1% over the prior year; hence, skilled revenue increased by 14.7% over the prior year.

  5. Real estate segment income of $31.3 million is an increase of 79.2% from the prior year.

  6. 2020 net income of 174.6 million is an increase of 74.8% over 2019. Fourth quarter earnings of $44.9 million represents an increase of 33.9% over the 4th quarter of 2019.

Although Ensign stock crashed with the rest of the market in mid-March 2020, it has recovered and has been trading in the low $80s.  It closed on Friday, February 5, 2021 at $83.82.  Analysts have rated it as “strong buy” (

CEO Barry Port had the following to say about 2020 operating results: “In spite of the continued challenges brought on as the result of the ongoing global pandemic, we are very happy to report another record quarter as we achieved our highest earnings per share in our history.”  He went on to praise the performance of “local teams” in protecting patients from COVID-19.

Whether The Ensign Group Deserves Praise for its Protection of Patients from COVID Remains to be Seen.  What Happened in Kansas City is not Strong Evidence that the Company Placed Care Over Extraction of Cash.

I must say that reading Port’s glowing report of Ensign’s infection and disease control effectiveness, I’m experiencing cognitive dissonance.  Last April, The Ensign Group’s Riverbend facility in Kansas City, KS began to appear in the local media as something of a poster child for COVID-19 deaths in nursing homes (e.g., Laura Bauer, “Two more COVID-19 deaths at Riverbend nursing facility in KCK reported Sunday,”

In January of 202 – prior to public awareness of the severity of the pandemic – the Riverbend facility received the lowest rating of 1 out of 5 stars on the CMS Nursing Home Compare website.  The facility was cited for lack of infectious disease control.  Apparently, fixing that problem was not a high priority for the company. As early as January, the world was becoming aware of a novel virus that could become a deadly pandemic outside of China’s borders.

I was interviewed by Fox4 News regarding the Riverbend situation and the nursing home industry in general. My words were reduced to rather meaningless soundbites.  Unfortunately, local and national media are not geared these days to in-depth research and analysis.  After focusing on the scandalous Riverbend deaths for a short period of time, the media jumped to the next scandal and then to the next scandal and on and on – from scandal to scandal.  No adequate analysis of the overall industry has been forthcoming.  Hence, Mark Parkinson and the AHCA can get away with claiming that the industry couldn’t afford to do any better than they have done.

Will the industry escape accountability for the deaths of people entrusted to its care?  Will our government, media, and the public just move on with no serious inquest into how corporations could remain profitable while they allowed perhaps 200,000 people in their facilities needlessly suffer and die? I’m horrified by the thought that the answer to these questions will be yes.  I’m not hearing much interest in pulling back the curtain on the opaque finances of the closely held corporations paid with Medicare and Medicaid dollars to determine what they could have and should have done to protect their patients.

By Dave Kingsley


   By Dave Kingsley

Don’t worry about the financial impact of COVID-19 on the nursing home industry.  Corporations paid to provide long-term care appear to be doing well financially.  In this post, I want to begin a discussion of the industry’s and regulators’ failure to protect patients from a scourge they should have known was coming.  Unfortunately, nursing home owners are not being held accountable.  Quite to the contrary, they are being financially rewarded as victims of the pandemic.

    My purpose in this post is to highlight the subsidization of the industry through immediate cash infusions while nursing home personnel have been forced to work in the same low paid jobs without adequate personal protective equipment.  This is an initial post in a series of posts in which I will provide information gleaned from the 2nd quarterly reports of three different types of publicly listed nursing home corporations – privately held corporations’ financial information isn’t available because they are not required to file reports with the SEC.

    If the public thinks providers of nursing home corporations are financially strapped due to the COVID pandemic, they will be dissuaded from that perspective by the 2nd quarterly 10-Q reports filed by a sample of publicly listed corporations. Consider the financial reports of the following representative corporations:

The Ensign Group

    The Ensign Group, a holding company, owns the fifth largest nursing home chain in the United States.  The company was formed in 1999 and, based on SEC filings, has demonstrated a robust growth and strong financial performance.  According to its 2020 2nd Quarter report (10-Q)[1], its earnings of $.78 per share was a 100% increase over the prior year quarter.  Revenues for the quarter were $584.7 million and increase of 18.6% over the prior year quarter.  Net income for the quarter was $43.1 million, an increase of 99% over the prior year quarter.

   Apparently TEG was doing so well, the corporation decided to return $110 million it received from the federal government under the CARES Act[2], which was basically a handout to America’s corporations for keeping them solvent even though nursing home companies had a guaranteed price and ongoing revenue.  Furthermore, they benefitted from the Payroll Protection Program and the HEROES’ Act intended to help companies keep employees paid and enough capital to maintain solvency.  Although, the TEG balance sheet indicates that the company has $210 million in cash and $302 million in accounts receivables, it still took perhaps a 100 million dollars of PPP money and a host of other CMS supplemental payments.

Ventas Real Estate Investment Trust

    Ventas Real Estate Investment Trust (REIT) is illustrative of one of various types of corporations dependent on revenue from skilled nursing facilities.  REIT’s in the nursing home business are a special type of commercial real estate, but they are also a special type of skilled nursing home corporation.  Although they buy and lease facilities, they actually lease to contractors such as Brookdale from whom they often buy facilities and lease them back while also maintaining an interest in and control over operations. Furthermore, REITs have an operational interest in skilled nursing facilities.  Ventas describes its business this way: “We primarily invest in senior housing, research and innovation, and healthcare properties through acquisitions and lease our properties to unaffiliated tenants or operate them through independent third-party managers.”

    According to Ventas’s 10-Q[3], the COVID pandemic has not been financially disastrous due to the injection of funds from the CARES, PPP, and HERO’S acts.

    “In our healthcare triple-net leased properties portfolio, we collected substantially all rent due in the first and second quarters. This cohort of tenants has benefitted from significant government financial support to partially offset the direct financial impact of the COVID-19 pandemic on healthcare providers. Nationally, hospital inpatient admissions and surgeries have rebounded, although still below pre-COVID-19 levels, depending on the particular market.”

Brookdale Senior Living

Brookdale Senior living is the largest operator of senior living properties.  The company has sold most of its real estate. 

During months ended June 30, accepted $33.5 million of cash from CARES Act.  During July 2020 company applied for additional grants Emergency Funds based on 2% of portion of 2018 gross revenue from patient care

Under the CARES Act, the Company has elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020, the Company has deferred payment of $26.5 million of payroll taxes and presented such amount within other liabilities within the Company’s condensed consolidated balance sheet.[4]

As of June 30, 2020, total liquidity was $600.2 million, consisting of $452.4 million of unrestricted cash and cash equivalents, $109.9 million of marketable securities, and $37.9 million of additional availability on revolving credit facility.

Eric Carlson of Justice in Agency statement

    Eric Carlson, of Justice in Aging served on the so-called “Independent Nursing Home COVID-19 Commission,” and was the only member who refused to endorse the commission report resulting from a series of secret meetings between July and September.  I say good for him!  I say shame on those other members who either fully or partially endorsed a report that allowed the Trump Administration and nursing home corporations escape responsibility for dereliction of their duty to protect nursing home patients during the COVID-19 pandemic.

    Mr. Carlson gave the following reason for his refusal to endorse the report: “With limited exceptions, these recommendations … do not address accountability of nursing homes and their operators.” Having spent a considerable amount of time analyzing the report thus far, I would say that he is correct.

    Not only did CMS use the report to excuse its own inept and failed response to the COVID-19 pandemic, it also ignored failure of the industry and expectations from nursing home corporations in the future.  The Trump Administration failed to hold corporations accountable.  Furthermore, they have been providing generous subsidies through the CARES, PPP, and HEROES Acts passed by congress in March to keep employees paid and businesses from bankruptcy.


[2] Two major pieces of legislation, the CARES Act, and the HEROES Act, which include cash grants, support for employees, and deferred payroll taxes are responsible for injecting hundreds of millions of dollars into the three corporations featured in this post alone.  The text of the acts can be found at:;  Detailed information from the income, balance sheet, and cash flow statements of major publicly listed nursing home corporations’ cash and equivalents, earnings, and liquidity indicate a rather strong financial position after several months of a nationwide pandemic.