CROSSROADS TO SOMEWHERE: What Is Ensign Group and What Happens Next?

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WIMPY1By W.T. WIMPY HIROTO

So the great mystery of who is going to swallow up our pride and joy has finally been named: The Ensign Group, Inc., is the buyer of Keiro HealthCare.

“We deeply admire the cultural values that Keiro represents and are honored to be entrusted with this stewardship and tradition of caring,” said Christopher Christensen, Ensign’s president and chief executive officer, in officially announcing the transaction. “We are dedicated to continuing and advancing the exceptional work that Keiro has been doing in this community for over 50 years and are excited to build on their legacy. Our unique, locally-driven approach to healthcare will allow us to customize our services to meet and exceed the personalized needs of each resident, staff member, and family,” he concluded.

Keiro President/CEO Shawn Miyake countered: “While the decision to sell (has been difficult), the Keiro board and leadership … are very pleased that Ensign has stepped forward to carry on Keiro’s legacy of care for our community.”

[Commentary #1: The first rumor to surface from this verbal lovefest, putting on display Ensign’s admiration of our culture and tradition: There will be an immediate name change from Keiro to Ensign.]

The facilities, Lincoln Park (300 beds) and South Bay (98) Nursing Homes, Intermediate Care Facility (ICF-90 beds), and Keiro Retirement Home (KRH-127 units), will be purchased with cash and will be operated as a California-based subsidiary of Ensign, bringing its total number of state properties to eleven. Although the transaction was announced two weeks ago, the acquisition will not be completed until the end of the year. It will be finalized upon completion of regulatory approvals and “other closing conditions.”

And what/who is Ensign Group, you ask? Well, let’s start with the usual public relations palaver: It is the parent company of a vast health care conglomerate operating in the six western states, plus Texas, Iowa, Nebraska and Wisconsin. A total of 126 independent subsidiaries provide a broad spectrum of skilled nursing and assisted living services, home and hospice care. Another 32 facilities provide additional related services. So we’re talking major operation. Listed on NASDAQ (ENSG), it was 32.59 a week after the sale was announced.

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An anonymous source immediately provided CR2S a copy of a Phillips & Cohen LLP press release, which revealed that Ensign Group had to pay $48 million to settle whistleblower lawsuits alleging Medicare billing fraud. It alleged skilled nursing facilities operated by subsidiaries in California were billing Medicare for treatment of patients that wasn’t provided or medically necessary. It was also alleged that some patients were admitted for treatment when they didn’t need to be and that others were kept longer than was medically necessary. The eventual settlement covered allegations of fraud at six Ensign operations: skilled nursing facilities in Long Beach, San Fernando Valley, Whittier, Huntington Beach, Norwalk and Ventura.

The settlement resolved two lawsuits filed in 2006 in Los Angeles federal district court and were joined by the government.

[Commentary #2: No comment; included for your information.]

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The scuttlebutt regarding a name change has taken form since the fourth paragraph was written. Although it is apparent Ensign will gobble up Keiro in its entirety, the distinguished title apparently will not disappear into the netherworld of history. Rumor has it an entirely new operation will emerge under the venerable Keiro Healthcare name but will be without beds, patients or residents. Under the aegis of President/CEO Shawn Miyake, the new entity will focus on outreach programs relative to community health care needs. A number of current unnamed staff members are expected to join the new venture.

[Commentary #3: Rather than speculate further, it would be wise to remain silent on this matter and await “official” word on this new development.]

Although major changes may occur at the nursing homes and ICF, a nervous wait-and-see attitude prevails. But Keiro Retirement Home is an enigma. I doubt if it has anything comparable to KRH under its present umbrella of operations, so we’ll just have to wait and see what kind of landlord Ensign decides to be.

But the question of all questions persists: “What is the cash purchase price and where will it go?”

W.T. Wimpy Hiroto can be reached at [email protected] Opinions expressed in this column are not necessarily those of The Rafu Shimpo.

 

 

 

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