September 7, 2011 Comments (0) Blog, Securities Fraud

Changes in Medicare Policy Make for an Uncertain Future for Nursing Home Focused REITs Ventas and Sabra Health Care REIT

(Last Updated On: July 17, 2015)

A recent article at nuwireinvestor.com discussed how new Medicare policy will affect REITs whose focus is nursing homes. The new policy will see “Medicare rates…slashed by 11.1% starting Oct. 1.”   The article says that the announcement of these changes in policy “has sent nursing home operators scrambling to figure out how to pare expenses.”

This change in Medicare policy will not only impact the nursing home industry itself, but will also impact investments in nursing home related products.

The nuwireinvestor.com cited Robert Mains, a NY based research analyst, who said, “Everyone will have to re-evaluate the earnings potential of nursing home investments.” This re-evaluation will likely effect both publicly traded nursing home stocks and REITs.

The article notes that upon the policy announcement, “the big REIT stocks also took a hit.” The stock of Ventas, for example, dropped “by as much as 19%,” but has since recovered. While the REITs like Ventas and Sabra Health Care are confident that they will be able to weather the changes to the industry, the situation is worth carefully monitoring for investors. The nuwireinvestors.com article says that, “No one expects the wave of nursing home bankruptcies similar to what transpired in the late 1990s after a big Medicare rate cut. But the recent changes will cause investors to take a closer look at nursing home operations.”

The White Law Group will continue to carefully monitor this situation and how it affects investors.

If you have questions about your investment in the Ventas REIT or Sabra Health Care REIT (or another investment closely tied to nursing homes), please call our Chicago office at 312/238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at www.whitesecuritieslaw.com.

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