Profile: Adcare Health Systems Inc (ADK.A)
19 Sep 2014
AdCare Health Systems, Inc. (AdCare), incorporated on August 14, 1991, through its subsidiaries, owns and operates retirement communities, skilled nursing facilities and assisted living facilities in the states of Arkansas, Alabama, Georgia, Missouri, North Carolina, Ohio, and Oklahoma. The Company's facilities provide a range of health care services to patients and residents, including, but not limited to, skilled nursing and assisted living services, social services, various therapy services, and other rehabilitative and healthcare services for both long-term residents and short-stay patients. The Company operates in three segments: skilled nursing facilities (SNF), assisted living facilities (ALF), and corporate & other. As of December 31, 2011, AdCare owned, leased and managed 42 facilities, consisted of 33 skilled nursing facilities, eight assisted living facilities and one independent living/senior housing facility, which total approximately 3,700 units. In January 2013, the Company acquired three skilled nursing facilities.
During the year ended December 31, 2011, AdCare acquired 16 facilities (15 skilled nursing facilities and one assisted living facility), bringing the Company's total bed count to 3,737 as of December 31, 2011. On December 30, 2011, the Company acquired Woodland Manor, a 113 bed skilled nursing facility, and Eaglewood Village, an 80 bed assisted living facility, both located in Springfield, Ohio. On November 30, 2011, AdCare acquired the Stone County facilities from White River Health System, Inc., which consisted of the Stone County Nursing and Rehabilitation Facility, a 97 bed skilled nursing, and the Stone County Residential Care Facility, a 32 bed skilled nursing facility/assisted living facility, both located in Mountain View, Arkansas. On September 1, 2011, the Company acquired the Homestead Manor Nursing Home, a skilled nursing facility located in Stamps, Arkansas; the River Valley Health & Rehabilitation Center, a skilled nursing facility located in Fort Smith, Arkansas; Bentonville Manor, a skilled nursing facility located in Bentonville, Arkansas; Heritage Park Nursing Center, a skilled nursing facility located in Rogers, Arkansas, and the Pinnacle Home Office. On August 1, 2011, five skilled nursing facilities located in Oklahoma, were purchased. On April 29, 2011, the Company acquired the Southland Care Center, a skilled nursing facility located in Dublin, Georgia; the Autumn Breeze Healthcare Center, a skilled nursing facility located in Marietta, Georgia, and College Park Healthcare Center, a skilled nursing facility located in College Park, Georgia. In April 2012, it acquired three skilled nursing facilities in Arkansas. As of December 31, 2011, the home heath business was held for sale.
The Company derives revenue primarily from the Medicaid and Medicare programs, private pay patients and managed cares payors. Medicaid covers patients that require room and services, and provides reimbursement rates. As of December 31, 2011, of the total 42 facilities, the Company managed four facilities, owned 20 facilities and operated 18 facilities, including six variable interest entities (VIE's) and 12 long-term lease arrangements. The SNF and ALF segments provide services to individuals needing long-term care in a nursing home or assisted living setting and management of those facilities. The corporate & other segment engages in the management of facilities and accounting and information technology (IT) services. Through the Company's subsidiaries, AdCare provides administrative services, as well as consultative services. The Company also provides these services to unaffiliated third party long term care operators and/or owners with whom the Company enters into contracts. As of December 31, 2011, the Company provided these services to five unaffiliated facility owners.
The Company also derives a substantial portion of its consolidated revenue from Medicaid reimbursement, primarily through its skilled nursing business. The Company monitors its patient mix, which is the percentage of non-Medicaid revenue from each of its facilities, to measure the level received from each payor across each of its business units. Medicaid is a state-administered program financed by state funds and matching federal funds. Medicaid programs are administered by the states and their political subdivisions, and often go by state-specific names. Medicaid programs generally provide health benefits for qualifying individuals, and may supplement Medicare benefits for persons aged 65 and older. Private and other payors consist primarily of individuals, family members or other third parties who directly pay for the services the Company provides. Medicare is a federal program that provides healthcare benefits to individuals who are 65 years of age or older or are disabled. Managed care patients consist of individuals who are insured by a third-party entity, a senior health maintenance organization (HMO) plan, or who are Medicare beneficiaries who have assigned their Medicare benefits to a senior HMO plan. Another type of insurance, long-term care insurance is also becoming available to consumers.
Adcare Health Systems Inc
1145 Hembree Road
ROSWELL GA 30076