Kindred Healthcare has agreed to sell its 96 skilled nursing facilities for $700 million to a company led by BlueMountain Capital Management, a hedge fund based in New York City. Kindred will pay that money to Ventas, a real estate company that serves as the landlord for 36 of the nursing homes.
The bottom line: Kindred has wanted out of skilled nursing, which generated $1 billion of revenue for Kindred in 2016, since November. The deal was not about advancing care with new owners — it was about getting out of a business that treats a lot of poor patients on Medicaid and could also face Medicare payment cuts.
The Medicare Payment Advisory Commission has criticized the high Medicare profit margins for skilled nursing operators and recommended this year that Congress freeze payment rates.