Nursing home chain at center of USA TODAY’s COVID-19 probe plans IPO


The parent organization of one of the nation’s largest nursing home chains has filed documents for an initial public offering in what could set a record for such deals.

American Healthcare REIT is the majority owner of nursing homes operated by Kentucky-based Trilogy Health Services, which was the focus of a USA TODAY investigation into nursing home deaths during the height of the pandemic.

The real estate investment trust would be listed on the New York Stock Exchange and could raise millions of dollars in the IPO.

USA TODAY reported in March that the chain’s 113 facilities have collectively reported to the federal government some of the worst death rates in the nation. After the release, the channel revised its numbers and reduced its death toll by 42%, although it still ranked among the worst performers during the winter 2020 surge of COVID-19.

After:This chain of nursing homes stood out with high death rates nationwide as the pandemic peaked

The REIT acknowledged to investors in its Friday filing with the Securities and Exchange Commission that it had faced downward financial pressure due to the pandemic, inflation and labor shortages. But its COVID-19 death rates relative to its peers were not reflected in investor communications.

The breadth of the death reviews prompted a review by the Centers for Medicare and Medicaid Services, which one of the agency’s chief medical officers called “concerning”. Spokeswoman Elaine Kanellis told USA TODAY in June that the regulatory agency asked Trilogy for an explanation of its revisions. After reviewing an audit conducted by a contractor for the company, she said CMS now considers the review closed.

What is American Healthcare REIT and why are they doing an IPO?

The Southern California-based real estate investment trust owns and operates healthcare real estate, including senior housing, hospitals and medical practices. It operates 313 buildings in the United States and the United Kingdom and has approximately $4.5 billion in assets, including 9,636 skilled nursing beds.

Currently, the company is an unlisted real estate investment trust, accessible only to “accredited investors”. On the stock market, it would be accessible to a much larger pool of investors.

Overall, American Healthcare REIT continues to rebound from the pandemic and reported net operating income of more than $200 million in 2021, a metric used to gauge profitability.

“I see two main benefits for this company to file for its IPO, first they are highly leveraged with $2.4 billion in debt and it will improve earnings,” said Matt Kennedy, senior strategist at Renaissance Capital. “And that will provide cash to shareholders.”

Based on Friday’s filing, Kennedy expected the shares to go public before the end of the year, but he noted that 2022 has been one of the slowest on record for IPOs considering stock market volatility.

American Healthcare REIT says Trilogy has largely recovered from the pandemic. Occupancy rates increased from 66.9% in December 2020 to 81% in June 2022.

In its filing with the Securities and Exchange Commission regarding the IPO, the company said it “is focused on controlling expenses, with particular emphasis on reducing dependence on the “agency” staff and that their nursing homes will have “the ability to raise rates, which we believe is a valuable quality in an inflationary environment.

Per-share costs for the new stock to trade as “AHR” on the New York Stock Exchange were not disclosed.

What happened with Trilogy’s COVID death count?

The Midwest chain originally reported 772 deaths at 113 facilities from October 2020 to February 2021. The subsequent reduction of 325 deaths, which the company said was based on federal guidelines, dropped its reported rate from the highest in third highest among the nation’s 10 largest nurses. domestic channels.

After:This nursing home chain has reported the highest COVID death rate. Then he removed the deaths.

Trilogy’s revisions removed as many deaths as had been removed by the other 13,500 establishments combined. No other chain came close, and most of the big chains that revised their numbers added deaths, according to a USA TODAY analysis of data published on the Centers for Medicare and Medicaid website.

After initially offering to share the results of an internal audit that led to the cuts, company representatives kept their process private. A company spokesperson this week declined to provide further details.

After:When does a death related to COVID-19 in a nursing home count? It is complicated.

Federal officials say they have completed their review of Trilogy’s death reports and received assurances that they “have modified their internal reporting system to prevent the problem from happening again.”

USA TODAY has filed requests for federal review documentation under the Freedom of Information Act that have not yet been provided.

What is Congress and the government doing about nursing homes?

Nursing homes have become the focus of increased investigation amid the pandemic. A federal OIG report found that one million of the nation’s 3 million nursing home residents contracted COVID-19 in 2020.

Weekly deaths linked to COVID-19 in retirement homes

The White House is preparing to use its executive authority to tighten industry regulations while some members of Congress say they want to dig into business owners and operators.

LOOK FOR: Nursing Home COVID-19 Deaths Database

On Wednesday, the select subcommittee on the coronavirus crisis will publish the findings of its investigation into chains of for-profit retirement homes. She will hold a hearing to consider the matter in the afternoon.

Contributor: Jayme Fraser

Nick Penzenstadler is a reporter with USA TODAY’s investigative team. Reach him at [email protected] or @npenzenstadler, or on Signal at (720) 507-5273.

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