Nursing home stocks rally in wake of Medicare reduction proposal
Nursing home stocks rally in wake of Medicare reduction proposal
Shares of Kindred Healthcare Inc. rose 6.2%, while Skilled Healthcare Group Inc.'s stock jumped 9.5%, and Sun Healthcare Group Inc. shares soared 11.5%, The Wall Street Journal reported. News of the $390 million in cuts appeared to come as a relief to investors. Many analysts had been predicting a larger reimbursement cut, the Journal said.
The Centers for Medicare & Medicaid Services proposed on Friday trimming Medicare payments to skilled nursing facilities by 3.3% in FY 2010-a $1.050 billion "adjustment." Although CMS said the cuts would be largely offset by a 2.1% market—basket increase (or $660 million), providers still rallied against the proposal.
