What changed in this filing

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Item 1. Business

2024-02-16 compared with 2023-02-17 · 105 added, 101 removed, 243 unchanged (46% of the section changed)

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Our principal business is the operation of skilled nursing facilities, assisted living facilities, independent living facilities, homecare and hospice agencies, and behavioral health hospitals.

Our business activities include providing sub–acute and post–acute skilled nursing care, intermediate nursing care, rehabilitative care, memory and Alzheimer’s care, senior living services, home health care services, hospice services, and behavioral health services.

In addition, we provide management services, accounting and financial services, as well as insurance services to third party operators of health care facilities.

We also own the real estate of 10 healthcare properties and lease these properties to third party operators.

We operate in 8 states and our operations are primarily located in the Southeastern and Midwestern parts of the United States.

We operate in 8 states and our operations are primarily located in the Southeastern and Midwestern parts of the United States.

Description of the Business

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The services we provide include a comprehensive range of health care services.

In fiscal 2022, 95.8% of our net operating revenues and grant income were derived from such health care services.

In fiscal 2023, 95.3% of our net operating revenues were derived from such health care services.

Highlights of health care services activities during 2023 were as follows:

Skilled Nursing Facilities.

 The most significant portion of our business and the base for our other health care services is the operation of our skilled nursing facilities (“SNF’s”).

In our facilities, experienced medical professionals provide medical services prescribed by physicians.

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Revenues from the 60 facilities we own or lease are reported as net patient revenues in our financial statements.

Management fee income is recorded as other revenues from the nine facilities that we manage.

Management fee income is recorded as other revenues from the eight facilities that we manage.

We generally charge 6% of facility net operating revenues for our management services.

The following table shows the occupancy rates for our owned and leased skilled nursing facilities:

The following table shows the occupancy percentages for our owned and leased skilled nursing facilities.

We define occupancy percentage as the ratio of actual patient days during any measurement period to the number of operational beds in a facility.

The number of beds that are operational may be less than the licensed bed capacity.

The reduction of operational beds compared to licensed beds occurs for a variety of reasons, some of which include conforming to government requirements, improving operational efficiencies, or enhancing the patient experience.

We believe reporting occupancy based on operational beds is consistent with industry practice and provides a more meaningful measure of performance.

Year Ended December 31,

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Rehabilitative Services.

 Our licensed therapists provide physical, speech, respiratory and occupational therapy for patients recovering from strokes, heart attacks, orthopedic conditions, neurological illnesses, or other illnesses, injuries, or disabilities.

We maintained a rehabilitation staff of over 1,200 highly trained, professional therapists in 2023.

Most of our rehabilitative services are for patients in our owned and managed skilled nursing facilities.

Most of our rehabilitative services are for patients in our owned, leased and managed skilled nursing facilities.

However, we also provide services to 41 additional health care providers.

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Medical Specialty Units.

 All our skilled nursing facilities participate in the Medicare program, and we have expanded our range of offerings by the creation of facility–specific medical specialty units such as our memory care units and sub-acute nursing units.

Our trained staff provides care for Alzheimer’s patients in early, middle and advanced stages of the disease.

We provide specialized care and programs for persons with Alzheimer’s or related disorders in dedicated units within many of our skilled nursing facilities.

Our trained staff provides care for Alzheimer’s patients in early, middle and advanced stages of the disease.

We provide specialized care and programs for persons with Alzheimer’s or related disorders in dedicated units within many of our skilled nursing facilities.

Our specialized rehabilitation programs are designed to shorten or eliminate hospital stays and help to reduce the cost of quality health care.

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In 2023, the rate of occupancy was 78.5% compared to 71.6% in 2022.

Certificates of Need (“CONs”) are not required to build these projects in most states, and we believe overbuilding has occurred in some of our markets.

Independent Living Facilities.

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We believe these independent living units offer a positive marketing aspect to all our senior care offerings and services.

In 2022, the rate of occupancy was 89.0% compared to 88.1% in 2021.

In 2023 and 2022, the rate of occupancy was 89.0%.

We have one independent living facility which is a "continuing care community", where the resident pays a substantial entrance fee and a monthly maintenance fee.

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Behavioral Health Hospitals.

  Our comprehensive continuum of care includes behavioral health services to both adults and geriatric patients with psychiatric, emotional, and addictive disorders.  Currently, we operate three behavioral hospitals for adult and geriatric patients who require inpatient hospitalization due to mental disorders, including cognitive illnesses.  We also offer intensive outpatient programs with individualized treatment plans based on the patient's clinical needs.

Our comprehensive continuum of care includes behavioral health services to both adults and geriatric patients with psychiatric, emotional, and addictive disorders.

Currently, we operate three behavioral hospitals for adult and geriatric patients who require inpatient hospitalization due to mental disorders, including cognitive illnesses.

We also offer intensive outpatient programs with individualized treatment plans based on the patient's clinical needs.

Homecare Agencies .

Our home health agencies (“homecares”) assist those who wish to stay at home or in assisted living residences but still require some degree of medical care or assistance with daily activities.

Our home health agencies (“homecares”) assist those who wish to stay at home or in assisted living residences but still require some degree of medical care or assistance with daily activities.

Registered and licensed practical nurses and therapy professionals provide skilled services such as infusion therapy, wound care and physical, occupational and speech therapies.

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We provide hospice care through Caris Healthcare, L.P.

(“Caris”), a wholly owned subsidiary of NHC.

Caris specializes in providing hospice and palliative care to over 1,268 patients per day in 30 locations in Georgia, Missouri, South Carolina, Tennessee, and Virginia.

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Medicare makes daily payments based on 1 of 4 levels of hospice care.

All hospice care and services offered to patients and their families must follow an individualized written plan of care that meets the patient’s needs.

Pharmacy Operations.

 At December 31, 2022, we operated four regional pharmacy locations (two locations in Tennessee and one location each in South Carolina and Missouri).

At December 31, 2023, we operated four regional pharmacy locations (two locations in Tennessee and one location each in South Carolina and Missouri).

These pharmacies primarily service our patients that are in an inpatient setting using a central location to deliver pharmaceutical supplies.

Our regional pharmacies bill Medicare Part D Prescription Drug Plans (PDPs) electronically and directly for inpatients who have selected a PDP.

Institutional Special Needs Plan ( “

I-SNP ”

  Our I-SNP, which is called NHC Advantage, is a managed care insurance company that restricts enrollment to Medicare Advantage eligible individuals who, for 90 days or longer, have had or are expected to need the level of services provided in a skilled nursing facility.

Institutional Special Needs Plan ( “ I-SNP ” ).

We believe the I-SNP benefits our patients by providing nurse practitioners and care-coordination teams that continue to enhance the patient-centered experience and our quality of patient care.

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We generate revenues from management, accounting and financial services to third party operators of healthcare facilities, from insurance services to our managed healthcare facilities, and from rental income.

In fiscal 2022, 4.2% of our net operating revenues and grant income were derived from such sources.

In fiscal 2023, 4.7% of our net operating revenues were derived from such sources.

The significant sources of our other revenues are described as follows:

Management, Accounting and Financial Services.

 We provide management services to skilled nursing facilities, assisted living facilities and independent living facilities operated by third party operators.

We typically charge 6% of the managed centers’ net operating revenues as a fee for these services.

We provide management services to skilled nursing facilities, assisted living facilities and independent living facilities operated by third party operators.

We typically charge 6% of the managed centers’ net operating revenues as a fee for these services.

Additionally, we provide accounting and financial services to other healthcare operators.

As of December 31, 2022, we perform management services for thirteen healthcare facilities and accounting and financial services for 19 healthcare facilities.

As of December 31, 2023, we perform management services for eleven healthcare facilities and accounting and financial services for 16 healthcare facilities.

Insurance Services.

 NHC owns a Tennessee domiciled insurance company that provides workers’ compensation coverage to substantially all of NHC's owned and managed healthcare facilities.

A second wholly owned insurance subsidiary is licensed in the Cayman Islands and provides general and professional liability coverage in substantially all of NHC’s owned and managed healthcare facilities.

NHC owns a Tennessee domiciled insurance company that provides workers’ compensation coverage to substantially all of NHC's owned, leased and managed healthcare facilities.

A second wholly owned insurance subsidiary is licensed in the Cayman Islands and provides general and professional liability coverage in substantially all of NHC’s owned, leased and managed healthcare facilities.

Rental Income.

 The healthcare properties currently owned and leased to third party operators include nine skilled nursing facilities and four assisted living communities.  

The healthcare properties currently owned and leased to third party operators include nine skilled nursing facilities and one assisted living communities.

Government Stimulus Income.

We received government stimulus funds as part of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES ACT").

We received government stimulus funds as part of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES ACT").

The CARES Act provided $2.2 trillion of economy-wide financial stimulus in the form of financial aid to individuals, businesses, nonprofits, states and municipalities.

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The Company recorded $0, $11,457,000 and $63,360,000 of government stimulus income from the PRF for the years ended December 31, 2023, 2022, and 2021, respectively.

Operating Income.

We generate non–operating income from equity in earnings of unconsolidated investments, dividends and realized gains and losses on marketable securities, interest income, and other miscellaneous non–operating income.

Non – Operating Income.

Quality of Patient Care

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In July 2022, CMS launched its enhanced Five-Star Quality Rating System which integrates weekend staffing rates for nurses and information on annual turnover among nurses and administrators.

The tables below summarize NHC's overall performance in these Five-Star ratings versus the skilled nursing industry as of December 31, 2022:

Industry Ratings

The tables below summarize NHC's overall performance in these Five-Star ratings versus the skilled nursing industry as of December 31, 2023:

Total number of skilled nursing facilities, end of period

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Development and Growth

We are undertaking to expand our post–acute and senior health care operations while protecting our existing operations and markets.

The following table lists our recent construction and purchase activities.

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Placed in Service

Skilled Nursing

Knoxville, TN

February 2020

Assisted Living

September 2020

Skilled Nursing

Kingsport, TN

December 2020

Tullahoma, TN

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Behavioral Health Hospital

Cedar Bluff, VA

Skilled Nursing

Nashville, TN

Tallahassee, FL

Assisted Living Facility

New Operations

Vero Beach, FL

Assisted Living Facility

New Operations

Merritt Island, FL

Assisted Living Facility

New Operations

Business Segments

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(1) inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals and (2) homecare and hospice services.

The Company also reports an “all other”

category that includes revenues from rental income, management and accounting services fees, insurance services, and costs of the corporate office.

See Note 6 in the notes to the consolidated financial statements for further disclosure of the Company’s operating segments.

The Company also reports an “all other” category that includes revenues from rental income, management and accounting services fees, insurance services, and costs of the corporate office.

See Note 6 in the notes to the consolidated financial statements for further disclosure of the Company’s operating segments.

Customers and Sources of Revenues

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Certain groups of patients receive funds to pay the cost of their care from a common source.

The following table sets forth sources of net patient revenues for the periods indicated: 

Year Ended December 31,

Private Pay and Other

We attempt to attract an increased percentage of Medicare and private pay patients by providing rehabilitative and other post–acute care services.

These services are designed to speed the patient's recovery and allow the patient to return home as soon as it is practical.

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For each eligible day a Medicare beneficiary is in a skilled nursing facility, Medicare pays the facility a daily payment, subject to adjustment for certain factors such as a wage index in the geographic area.

The payment covers all services provided by the skilled nursing facility for the beneficiary that day, including room and board, nursing, therapy and drugs, as well as an estimate of capital–related costs to deliver those services.

Medicaid is a medical assistance program for the indigent, operated by individual states with the financial participation of the federal government.

The states in which we operate primarily use a cost–based reimbursement system.

Under cost–based reimbursement systems, the skilled nursing facility is reimbursed for the reasonable direct and indirect allowable costs it incurred in a base year in providing routine resident care services as defined by the program.

The states in which we operate primarily use a cost–based reimbursement system.

Seniors who enter skilled nursing facilities as private pay patients can become eligible for Medicaid once they have substantially depleted their assets.

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Private paying patients, private insurance carriers and the Veterans Administration generally pay based on the center's charges or specifically negotiated contracts.

We contract with over 60 managed care organizations ("MCO's") and insurance carriers for the provision of healthcare services by our owned and managed healthcare facilities.

We contract with managed care organizations ("MCO's") and insurance carriers for the provision of healthcare services by our owned, leased and managed healthcare facilities.

Government Regulation

General   

Health care is an area of extensive regulatory oversight and frequent regulatory change.

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These regulatory bodies, among other things, require us annually to license our skilled nursing facilities and other health care businesses.

To operate skilled nursing facilities and provide health care services we must comply with federal, state and local laws relating to the delivery and adequacy of medical care, distribution of pharmaceuticals, equipment, personnel, operating policies, fire prevention, rate–setting, building codes and environmental protection.

Changes in the laws or new interpretations of existing laws as applied to the skilled nursing facilities, home health and hospice, or other components of our health care businesses, may have a significant impact on our operations.

Changes in the laws or new interpretations of existing laws as applied to the skilled nursing facilities, home health and hospice, or other components of our health care businesses, may have a significant impact on our operations.

Governmental and other authorities periodically inspect our healthcare facilities and home health and hospice agencies to assure that we continue to comply with their various standards.

We must pass these inspections to continue our licensing under state law, to obtain certification under the Medicare and Medicaid programs, and to continue our participation in the Veterans Administration program.

We can only participate in other third–party programs if our facilities pass these inspections.

From time to time, we, like others in the health care industry, may receive notices from federal and state regulatory agencies alleging that we failed to comply with applicable standards.

These notices may require us to take corrective action and may impose civil money penalties and/or other operating restrictions.

If our skilled nursing facilities or home health and hospice agencies fail to comply with these directives or otherwise fail to comply substantially with licensure and certification laws, rules and regulations, we could lose our certification as a Medicare and Medicaid provider and/or lose our licenses.

If our healthcare operations fail to comply with these directives or otherwise fail to comply substantially with licensure and certification laws, rules and regulations, we could lose our certification as a Medicare and Medicaid provider and/or lose our licenses.

Local and state health and social service agencies and other regulatory authorities specific to their location regulate, to varying degrees, our assisted living facilities.

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There is no advance assurance that we will be able to obtain a Certificate of Need in any instance.

In some states, approval is also necessary in order to purchase existing health care beds, although the purchaser is normally permitted to avoid a full-scale Certificate of Need application procedure by giving advance written notice of the acquisition and giving written assurance to the state regulatory agency that the change of ownership will not result in a change in the number of beds, services offered and, in some cases, reimbursement rates at the facility. 

While there are currently no significant legislative proposals to eliminate Certificates of Need pertaining to skilled nursing care in the states in which we do business, deregulation in the Certificate of Need area would likely result in increased competition and could adversely affect occupancy rates and the supply of licensed and certified personnel.

A significant goal of the federal health care system is to transform the delivery of health care by holding providers accountable for the cost and quality of care provided, Medicare and many commercial third-party payors are implementing Accountable Care Organization ("ACO") models in which groups of providers share in the benefit and risk of providing care to an assigned group of individuals.

Other reimbursement methodology reforms in which we are participating or expect to participate in include value–based purchasing, in which a portion of provider reimbursement is redistributed based on relative performance on designated economic, clinical quality, and patient satisfaction metrics.

Also, CMS is implementing demonstration programs to bundle acute care and post–acute care reimbursement to hold providers accountable for costs across a broader continuum of care.

A significant goal of the federal health care system is to transform the delivery of health care by holding providers accountable for the cost and quality of care provided.

Medicare and many commercial third-party payors are implementing Accountable Care Organization ("ACO") models in which groups of providers share in the benefit and risk of providing care to an assigned group of individuals.

Also, CMS is implementing programs to bundle acute care and post–acute care reimbursement to hold providers accountable for costs across a broader continuum of care.

These reimbursement methodologies and similar programs are likely to continue and expand, both in public and commercial health plans.

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Our behavioral health hospitals also participate in the Medicare and Medicaid program.

During the fiscal years, we received payments from Medicare and, if participating, from Medicaid.

During the fiscal years presented, we received payments from Medicare and, if participating, from Medicaid.

We record as receivables the amounts we ultimately expect to receive under the Medicare and Medicaid programs and record into profit or loss any differences in amounts received at the time of interim or final settlements.

There have not been any adjustments that have had a material adverse effect on the Company within the last three years.  

Medicare Legislation and Regulations

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Medicare is uniform nationwide and reimburses skilled nursing facilities under a fixed payment methodology called the Skilled Nursing Facility Prospective Payment System ("SNF PPS").

The SNF PPS includes a new case-mix model called the Patient-Driven Payment Model (“PDPM”), which focuses on a resident’s condition and care needs, rather than the amount of care provided to determine reimbursement levels.

The SNF PPS includes a case-mix model called the Patient-Driven Payment Model (“PDPM”), which focuses on a resident’s condition and care needs, rather than the amount of care provided to determine reimbursement levels.

PDPM utilizes clinically relevant factors for determining Medicare payment by using ICD-10 diagnosis codes and other patient characteristics as the basis for patient classification.

PDPM utilizes five case-mix adjusted payment components:

physical therapy (“PT”), occupational therapy (“OT”), speech language pathology (“SLP”), nursing and social services and non-therapy ancillary services (“NTA”).

It also uses a sixth non-case mix component to cover utilization of skilled nursing facility (“SNF”) resources that do not vary depending on resident characteristics.

physical therapy (“PT”), occupational therapy (“OT”), speech language pathology (“SLP”), nursing and social services and non-therapy ancillary services (“NTA”).

It also uses a sixth non-case mix component to cover utilization of skilled nursing facility (“SNF”) resources that do not vary depending on resident characteristics.

In July 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates and policy changes for skilled nursing facilities, which began on October 1, 2023.

The fiscal year 2023 rule provided for an approximate 2.7% increase, or $904 million, compared to 2022 levels.

The net increase includes a 3.9% market-basket increase plus a 1.5% market basket forecast error adjustment, less a 0.3% productivity adjustment and a 2.3% decrease in the FY 2023 SNF PPS rates as a result of the recalibrated parity adjustment.

The recalibrated parity adjustment is a total of 4.6% and is being phased in over the next two years (2.3% annually).

The Coronavirus Aid, Relief and Economic Security Act (the “CARES”

Act) and other subsequent Congressional actions temporarily suspended Medicare sequestration beginning May 1, 2020 through March 31, 2022.

The fiscal year 2024 rule equates to a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in fiscal year 2024 compared to 2023 levels.

The rule includes a 3.0% market basket rate increase, a 3.6% market basket forecast error adjustment, less a 0.2% productivity adjustment, as well as a negative 2.3%, or approximately $789 million, decrease in 2024 SNF Payment Prospective Systems rates as a result of the second phase of the Patient Driven Payment Model parity adjustment recalibration.

The Coronavirus Aid, Relief and Economic Security Act (the “CARES” Act) and other subsequent Congressional actions temporarily suspended Medicare sequestration beginning May 1, 2020 through March 31, 2022.

The Medicare sequestration policy reduces fee-for-service Medicare payments by 2 percent.

Effective April 1, 2022, sequestration was reinstated but only 1% was reduced from Medicare payments from April 1, 2022 through June 30, 2022. 

Beginning July 1, 2022, sequestration was increased back to the 2% reduction of Medicare payments for the remainder of 2022. The CARES Act extends the sequestration policy through 2030 in exchange for this temporary suspension. 

Medicare is uniform nationwide and reimburses homecare agencies under a Patient-Driven Groupings Model (“PDGM”).

Effective April 1, 2022, sequestration was reinstated but only 1% was reduced from Medicare payments from April 1, 2022 through June 30, 2022.

Beginning July 1, 2022, sequestration was increased back to the 2% reduction of Medicare payments for the remainder of 2022.

The CARES Act extended the sequestration policy through 2030 in exchange for the temporary suspension.

Medicare is uniform nationwide and reimburses homecare agencies under a Patient-Driven Groupings Model (“PDGM”).

Under PDGM, Medicare provides homecare agencies with payments for each 30-day period of care provided to beneficiaries.

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There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive.

While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs.

The payment under the Medicare program is also adjusted for certain variables.

In October 2022, CMS released its final rule outlining fiscal year 2023 Medicare payment rates.

In November 2023, CMS released its final rule outlining fiscal year 2024 Medicare payment rates.

CMS projects payments to home health agencies in fiscal year 2024 will increase in aggregate by 0.8%, or $140 million.

The increase reflects the effects of the home health payment update percentage of 4.0%, a permanent behavioral assumption adjustment resulting in a decrease of 3.5%, and an estimated 0.2% increase that reflects the effects of an update to the fixed-dollar loss ratio used in determining outlier payments.

The increase is the result of a 3.3% market basket update, reduced by a 0.3% productivity adjustment.

The increase is offset by a behavioral adjustment that will cut payments by a net 2.6%.

The behavioral adjustment was designed to achieve budget-neutral implementation of the PDPM.

Finally, CMS also adjusted the fixed-dollar loss ratio for outlier payments, which will increase payments by 0.4%.

Medicare payment rates are calculated as daily rates for each of four levels of care we deliver.

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CMS issued a rate increase of 3.1%, or $780 million, effective October 1, 2023.

The increase is the result of a 4.1% inpatient hospital market basket increase reduced by a 0.3% productivity adjustment.

This increase is the result of a 3.3% market basket increase reduced by a 0.2% productivity adjustment.

The FY2024 hospice payment update also includes an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made annually.

The cap amount for FY2023 is $32,487.

The cap amount for FY2024 is $33,494.

Medicaid Legislation and Regulations

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Some states will not keep pace with post-acute healthcare inflation.

States are currently under pressure to pursue other alternatives to skilled nursing care such as community and home–based services.

Medicaid programs are funded jointly by the federal government and the states and are administered by states under approved plans. 

Most state Medicaid payments are made under a prospective payment system or under programs which negotiate payment levels with individual providers. 

States are currently under pressure to pursue other alternatives to skilled nursing care such as community and home–based services.

Medicaid programs are funded jointly by the federal government and the states and are administered by states under approved plans.

Most state Medicaid payments are made under a prospective payment system or under programs which negotiate payment levels with individual providers.

Some states use, or have applied to use, waivers granted by CMS to implement expansion, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards.

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We estimate the resulting increase in revenue for the 2024 fiscal year will be approximately $9,000,000 annually, or $2,250,000 per quarter.

We have also received from many of the states in which we operate a supplemental Medicaid payment to help mitigate the incremental costs resulting from the COVID-19 public health emergency.

Effective July 1, 2023 and for the fiscal year 2024, the state of Missouri implemented specific individual nursing facility increases.

We estimate the resulting increase in revenue for the 2024 fiscal year will be approximately $5,000,000 annually, or $1,250,000 per quarter.

We have also received from many of the states in which we operate a supplemental Medicaid payment to help mitigate the inflationary labor and medical supplies costs resulting from the pandemic.

For the years ended December 31, 2023, 2022 and 2021, we have recorded $20,214,000, $19,442,000 and $20,482,000, respectively, due to these supplemental Medicaid payments.

We have recorded these payments in net patient revenues in our consolidated statements of operations.  

In most of the communities in which we operate health care facilities, we compete with other health care facilities in the area.

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In competing for patients and staff, we depend upon referrals from acute care hospitals, physicians, residential care facilities, church groups and other community service organizations.

The reputation in the community and the physical appearance of our facilities are important in obtaining patients since members of the patient’s family generally participate to a greater extent in selecting skilled nursing facilities than in selecting an acute care hospital.

We believe that by providing and emphasizing rehabilitative, as well as patient-centered healthcare services, we can broaden our patient base and to differentiate our operations from competing operations.

As we continue to expand into all areas of senior health care, we monitor proposed or existing competing operations.

Our development goal is to link our skilled nursing facilities with our senior living communities, home health and hospice operations, and behavioral health hospitals;

therefore, obtaining a competitive advantage for our operations.

Our development goal is to link our skilled nursing facilities with our senior living communities, home health and hospice operations, and behavioral health hospitals;

therefore, obtaining a competitive advantage for our operations.

Human Capital

As of December 31, 2022, we had 12,355 full-time and part-time employees (“partners”) through our Administrative Services Contractor (National Health Corporation).

As of December 31, 2023, we had 13,123 full-time and part-time employees (“partners”) through our Administrative Services Contractor (National Health Corporation).

None of our partners were represented by a collective bargaining agreement.

We believe relations with our partners are good.

Our partners are guided by NHC’s Code of Conduct, and they take pride in their work.

The Company’s partners appreciate different perspectives and embrace the opportunity to work with those of diverse backgrounds.

Our partners are guided by NHC’s Code of Conduct, and they take pride in their work.

The Company’s partners appreciate different perspectives and embrace the opportunity to work with those of diverse backgrounds.

Total Rewards

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These rewards include not only wages and salaries, but also health, welfare, and retirement benefits.

Our partners accrue earned time off (“ETO”) with the flexibility to use this time at their discretion.

We offer comprehensive health insurance coverage to all eligible partners as well as a partner and family sick time program which allows partners to accrue paid sick time based on hours worked and to use that time for themselves or family members in need of care.

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Also, to foster a stronger sense of ownership, we offer an Employee Stock Purchase Plan where partners may purchase company stock through payroll deduction.

We face competition in employing and retaining nurses, technicians, aides, and other high-quality professional and non–professional employees.

To enhance our competitive position, we offer a robust educational tuition reimbursement program, an American Dietetic Association approved internship program, specialty designed nurse aide training classes, and there is financial scholarship aid available for various health care vocation programs.

We also conduct an "Administrator in Training" course, which is 24 months in duration, for the professional training of skilled nursing facility administrators.

Presently, we have three (two male and one female) full–time individuals in this program.

All six of our regional vice presidents and 50 of our 68 health care center administrators are graduates of this program.

Presently, we have six (four male and two female) full–time individuals in this program.

All six of our regional vice presidents and 52 of our 68 health care center administrators are graduates of this program.

We regularly utilize third-party consultants to conduct anonymous surveys to seek feedback from our partners on a variety of topics, including but not limited to, confidence in company leadership, competitiveness of our compensation and benefits package, career growth opportunities and improvements on how we can continue to make our company an employer of choice.

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Centers for Disease Control and local governments, and we took action to ensure our partners were safe.

Some of the preventative measure we have implemented included:

increased hygiene, cleaning and sanitizing procedures at all locations;

provided additional personal protective equipment to partners;

restricted travel and encouraged quarantine upon return;

encouraged employees to take time off for illness;

established strict protocols and screening for outside guests;

enabled partners to work from home where possible.

We have a long and proud history of investing in the communities where we live and work.

Through the National Health Foundation (the “Foundation”) and The Foundation for Geriatric Education (“TFGE”) we give back by providing grants to nonprofits and providing tuition reimbursement to partners to further their education in the field of geriatrics.

We also have a Compassion Fund which is used to help support partners in times of need.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business