Nursing home companies fall on final reimbursement rate cuts
Nursing home companies fall on final reimbursement rate cuts (Global Markets) - Shares of skilled nursing home operators Kindred Healthcare (KND.N), Skilled Healthcare (SKH.N) and Sun Health Care (SUNH.O) fell in extended trade on Friday, after regulators slashed its final Medicare payments for fiscal 2012.Stock Market Predictions
The Centers for Medicare & Medicaid Services (CMS) cut payments for skilled nursing facilities by 11.1 percent, or $3.87 billion, to correct an unintended spike in payment levels and align Medicare payments with costs.
The CMS had introduced a new model in fiscal 2011 to ensure there would be no change in overall spending levels, but it instead led to a significant increase in Medicare expenditures.
In April, CMS had proposed two options for FY2012, one which would have resulted in a net increase of 1.5 percent in Medicare payments based on inflation or a cut of 11.3 percent in reimbursement rates.
Kindred shares fell 26 percent to $14.01, after closing at $18.84, while those of Skilled Healthcare slid 20 percent to $7.00, from its closing of $8.80 on Friday on the New York Stock Exchange.
Sun Healthcare shares plunged 39 percent to $4.25, after closing at $7 on Nasdaq.
(Reporting by Shravya Jain in Bangalore; Editing by Viraj Nair)