Report: Nursing home stocks weathering economy OK, but reimbursement concerns loom

Share this content:
At least a handful of for-profit nursing home companies' stock values are holding strong, despite an overall shaky economy, a new Dow Jones report notes. The key has been relatively stable Medicare and Medicaid payments, though there is concern about payment levels for fiscal 2010 that are expected to be announced around the end of the month, report authors note.

Kindred Healthcare, Skilled Healthcare Group, and Sun Healthcare Group have all seen their share values fall by more than in half from 52-week highs. But each also has been holding steady in 2009. The recently signed economic stimulus bill will provide about $87 billion in Medicaid funding, which is helping company values, observers say.

But with healthcare reform on every lawmaker's mind this year, nursing homes could fall victim to the payment axe they have luckily not seen in recent years. Many observers are very interested in what the Centers for Medicare & Medicaid Services might do to counterbalance providers receiving $770 million more than anticipated in Medicare payments for nine higher-acuity reimbursement groups that were added in 2006. Most insiders expect proposed Medicare cuts, or at least a proposed freeze, but almost all acknowledge it is unknown whether lawmakers will have the resolve to act on any such proposals.