Nursing home chain at center of USA TODAY's COVID-19 probe plans IPO – USA TODAY

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The parent organization of one of the nation’s largest nursing home chains filed paperwork for an initial public offering in what could set a record for transactions of its kind.
American Healthcare REIT is the majority owner of nursing home properties operated by Kentucky-based Trilogy Health Services, which was at the center of a USA TODAY investigation into nursing home deaths during the height of the pandemic. 
The real estate investment trust would be traded on the New York Stock Exchange and could raise millions of dollars in the initial public offering.
USA TODAY reported in March that the chain’s 113 facilities collectively reported some of the worst death rates in the nation­ to the federal government. After publication, the chain revised its figures and cut its death toll by 42%, although it still ranked among the worst performers during COVID-19’s winter 2020 surge.
More:This nursing home chain stood out for nationally high death rates as pandemic peaked
The REIT acknowledged to investors in its filing Friday with the Securities and Exchange Commission that it has faced downward financial pressure due to the pandemic, inflation and worker shortages. But its COVID-19 death rates compared to peers has not been reflected in communications to investors. 
The scale of the death revisions prompted a review by the Centers for Medicare and Medicaid Services, which one of the agency’s chief medical officers called “concerning.” Spokesperson Elaine Kanellis told USA TODAY in June that the regulatory agency had asked Trilogy for an explanation of its revisions After reviewing an audit completed by a contractor for the company, she said CMS now considers the review closed.
The Southern California-based real estate investment trust owns and operates health care real estate – including senior housing, hospitals and medical offices. It operates 313 buildings in the U.S. and U.K. and has roughly $4.5 billion in assets including 9,636 skilled nursing beds.
As of now, the company is a non-traded real estate investment trust, available only to “accredited investors.” On the stock market, it would be available to a much wider investor pool.  
Overall, American Healthcare REIT continues to rebound from the pandemic and reported more than $200 million in net operating income in 2021, a metric used to gauge profitability.
“I see two main benefits for this company to file for its IPO, first they’re highly leveraged with $2.4 billion in debt and it will improve profits,” said Matt Kennedy, a senior strategist with Renaissance Capital. “And it’ll achieve liquidity for shareholders.”
Based on Friday’s filing, Kennedy expected shares to be listed before the end of the year, but he noted 2022 has been one of the slowest on records for IPOs given the volatile stock market.
American Healthcare REIT says Trilogy has largely recovered from the pandemic. Occupancy rates have surged from 66.9% in December 2020 to 81% in June 2022.
In its Securities and Exchange Commission filing about the IPO, the company said it is “focused on expense controls, with specific emphasis on reducing reliance on “agency” staffing and that its nursing homes will “have the opportunity to increase rates, which we believe is a valuable quality in an inflationary environment.”
Costs per share of the new stock to be traded as “AHR” on the New York Stock Exchange were not disclosed.
The Midwest chain originally reported 772 deaths at 113 facilities from October 2020 through February 2021. The cut later of 325 deaths, which the company said was based on federal guidance, dropped its reported rate from highest to third-highest among the nation’s 10 largest nursing home chains.
More:This nursing home chain reported the highest COVID death rate. Then it deleted deaths.
Trilogy’s revisions deleted as many deaths as had been removed by all 13,500 other facilities combined. No other chain came close and most large chains that revised their numbers added deaths, according to a USA TODAY analysis of the data posted on the Centers for Medicare and Medicaid website.
After initially offering to share results of an internal audit that led to the reductions, company representatives have kept their process private. A company spokesman this week declined to offer more details. 
More:When does a nursing home COVID-19 death count? It’s complicated.
Federal representatives say they have concluded their review of Trilogy’s death reporting and received assurances that “they had modified their internal reporting system to prevent the issue from happening again.”
USA TODAY has filed Freedom of Information Act requests for documentation of the federal review that has yet to be provided.
Nursing homes became the focus of increased inquiry amid the pandemic. One federal OIG report found 1 million of the nation’s 3 million nursing home residents contracted COVID-19 in 2020.
The White House is preparing to use its executive authority to tighten industry regulations while some members of Congress say they want to dig into the corporate owners and operators.
LOOKUP: Nursing homes COVID-19 deaths database
On Wednesday, the Select Subcommittee on the Coronavirus Crisis will release findings of its investigation into for-profit nursing home chains. It will hold a hearing to examine the issue that afternoon.
Contributing: Jayme Fraser
Nick Penzenstadler is a reporter on the USA TODAY investigations team. Contact him at [email protected] or @npenzenstadler, or on Signal at (720) 507-5273.


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