In the midst of the Covid-19 pandemic, nursing homes across the United States faced daunting challenges. One such example is The Ensign Group Inc., the second largest for-profit chain in the country. A descriptive case study delves into the financial and quality metrics of this publicly traded U.S. nursing home chain during the age of Covid-19. The case study is available here: kingsley-harrington-2022-financial-and-quality-metrics-of-a-large-publicly-traded-u-s-nursing-home-chain-in-the-age-of
In a post on Tuesday, I wrote about an Arizona case involving arbitration agreements and non-disclosure clauses. An Ensign owned facility was a key component of the legal matter involving Arizona’s Attorney General.
The Ensign Group Inc. operates 228 nursing homes and senior living facilities through a complex organizational structure comprising more than 430 corporate entities. Despite the pandemic, Ensign experienced rapid growth, reaching $5 billion in revenues and a market capitalization of $4.5 billion in 2020 to 2021. This growth was fueled by Medicare and Medicaid revenues, as well as government Covid-19 relief.
To optimize shareholder value, Ensign utilized strategies such as real estate purchasing, debt financing, spin-off companies, and tax arbitrage. However, despite its financial success, the company faced challenges in maintaining quality care outcomes. Prior to and during the pandemic, Ensign’s nursing homes had low registered nurse and total nurse staffing levels, as well as regulatory violations and below-average ratings.
During the Covid-19 pandemic, Ensign’s nursing homes also experienced high infection rates. This raises questions about the company’s priorities, as its small board, executives, and institutional investors seemed focused on protecting shareholder interests rather than ensuring that professional standards and regulatory requirements were met.
Ensign has also had its share of legal issues, though the issues are not unique to Ensign alone. Given the size of Ensign the scale of the legal cases is large by comparison to other smaller providers. Below is a sample of cases involving Ensign.
- Settlement ($3,000,000) in California – A class-action lawsuit was filed against The Ensign Group for allegedly failing to provide sufficient healthcare staffing at its nursing facilities in the state, which is required to ensure an adequate level of care for residents. State regulations require nursing homes to provide a minimum amount of daily nursing time per resident. Non-compliance with these regulations constitutes a cause of action. Additionally, the lawsuit claimed that the nursing home engaged in fraudulent marketing practices in violation of the False Claims Act. ARCE v. ENSIGN GROUP INC (2023) | FindLaw
- Settlement ($48,000,000) in California – TA whistleblower lawsuit was filed against The Ensign Group, accusing the nursing home chain of ordering unnecessary treatments for residents to inflate Medicare billings. Federal prosecutors brought the case under the False Claims Act, involving six nursing homes within the chain. Office of Public Affairs | Nursing Home Operator to Pay $48 Million to Resolve Allegations That Six California Facilities Billed for Unnecessary Therapy | United States Department of Justice
- Ensign’s statement with respect to the False Claims Act case is here: The Ensign Group, Inc. – The Ensign Group Announces Settlement With U.S. Department of Justice
By bed count, Genesis is the largest nursing home operator in the nation with 41,977 beds (2022) and 357 facilities in 26 states. By patient revenue however, Ensign is larger. The top fifteen operators are below.
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