Rick Matros
Rick Matros
Rick Matros
Rick Matros

Sabra Health Care REIT’s skilled nursing operators aren’t experiencing much disruption with the new Patient Driven Payment Model, according to CEO and Chairman Rick Matros. 

“As they make more progress on stabilizing those cost reductions [as related to therapy changes], we’ll have a much better sense of how the combination of the rate increase and cost reductions go to improving coverage,” Matros said during a fourth-quarter earnings call Monday. 

“But, we’re really pleased with the improvements that we’ve been seeing relative to PDPM and there’s really been no disruption with any of our operators as they transition to the new system,” he added.  

Matros also said he doesn’t expect a clawback from CMS regarding the new reimbursement system, which was implemented in October. He explained that operators know the federal agency will be looking for red flags and he doesn’t expect to see many taking advantage of the new reimbursement system. 

Matros believes that operators have learned some lessons from past mistakes.

“We’re seeing a much slower and slower gravitation and percentage of concurrent and group therapy than might’ve been anticipated given the opportunities to go to 25 percent,” he said, “and I expect we’re going to see that pretty much across the board. You’re always going to have operators here and there, and if they’re doing something that’s egregious, then let those specific operators pay for it.”

However, Matros also noted that it’s still too early to make any final conclusions about PDPM.  If there is no clawback movement, he noted, there could be administrative payment adjustments moving forward.

“We’re not at a point where we could publish a snapshot, but I would say through the fourth quarter of 2019 we’re seeing rate growth net of the market basket with mid-single digits pretty much across the board,” he explained.  “Once we have some more data points, we will be able to provide a snapshot on how that impacts coverage. Hopefully we’ll be able to do that on our first quarter call early in May.”

The company reported it sold eight facilities for $7.3 million during the fourth quarter. For the year, it reported $323.6 million in aggregate sales proceeds from the sale of 39 skilled nursing/transitional care facilities and seven senior housing communities. 

Executives for the California-based real estate investment trust said the company will be focusing on growth for 2020. They reported the company completed about $38 million in investments during the fourth quarter and about $82 million during the first quarter of 2020. 

“Our focus going forward is going to be on high-yield investments, specifically skilled nursing, behavioral and addiction,” Matros said.

For more news from this earnings call, see our sister publication, McKnight’s Senior Living.