What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-11-19 · 93 added, 58 removed, 652 unchanged (19% of the section changed)

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We are a leading post-acute healthcare company primarily focused on delivering high-quality skilled nursing care through a portfolio of independently operated facilities.

Founded in 2013, we are one of the largest skilled nursing providers in the United States based on number of facilities, with 314 post-acute care facilities across 17 states serving over 30,100 patients daily.

Founded in 2013, we are one of the largest skilled nursing providers in the United States based on number of facilities.

We also provide senior care, assisted living, and independent living options in some of our communities.

In total, we operate 321 post-acute care facilities across 17 states serving over 31,700 patients daily.

Our significant historical growth has been primarily driven by our expertise in acquiring underperforming long-term custodial care skilled nursing facilities and transforming them into higher acuity, high value-add short-term transitional care skilled nursing facilities.

We believe our success is driven in significant part by our decentralized, local operating model, through which we empower local leaders at each facility to operate their facility autonomously and deliver excellence in clinical quality and a superior experience for our patients.

We believe our success is driven in significant part by our locally led, centrally supported operating model, through which we empower local leaders at each facility to operate their facility autonomously and deliver excellence in clinical quality and a superior experience for our patients.

We provide our independently operated facilities with a comprehensive suite of technology, support, and back-office services that enable local leadership teams to focus more of their time and effort on providing quality care to patients.

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We are primarily focused on providing higher value short-term transitional care and believe we are uniquely positioned to capitalize on the current underlying trends within the SNF industry and to capture a growing portion of the expected demand.

We believe that healthcare is local and we operate through a decentralized model, recognizing that each patient, facility, and community is unique.

To that end, we believe that our local leaders and employees understand the distinct needs and priorities of their patients, staff, and facilities and are best positioned to make clinical and operational decisions in order to optimize patient outcomes and experience.

We believe that healthcare is local and we operate through a locally led, centrally supported model, recognizing that each patient, facility, and community is unique.

To that end, we believe that our local leaders and their teams understand the distinct needs and priorities of their patients, staff, and facilities and are best positioned to make clinical and operational decisions in order to optimize patient outcomes and experience.

To facilitate this, each of our facilities operates independently, led by a facility administrator and his or her interdisciplinary team of medical directors, nurses, therapists, specialty consultants, and operators.

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At the facility level, administrators are effectively the chief executive officers, and together with other local licensed professionals, are ultimately responsible for the day-to-day operations of their respective facilities.

We seek to recruit, train, and reward dynamic administrators for our facilities, and rely on them to work with their interdisciplinary teams to implement policies and procedures that are appropriate and effective and result in positive outcomes.

the delivery of excellent care by building excellent teams.

We seek to recruit, train, and reward dynamic administrators for our facilities, and rely on them to work with their interdisciplinary

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teams to implement policies and procedures that are appropriate and effective and result in positive outcomes.

We support the delivery of excellent care by building excellent teams.

We believe our model attracts high caliber, entrepreneurial professionals who value having considerable autonomy, accountability, and aligned incentives.

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We also seek to provide opportunities for upward career mobility, with many of our administrators being promoted from within our company to roles of increasing levels of responsibility.

Our culture of meritocracy and pride of ownership has helped us retain experienced facility administrators as well as RVPs who had a combined average industry experience of 12.2 years as of December 31, 2024.

For the year ended December 31, 2024, we had a voluntary turnover rate of 2.5% among our facility administrators.

Our culture of meritocracy and pride of ownership has helped us retain experienced facility administrators as well as RVPs who had an average industry experience of 12.9 years as of December 31, 2025.

Excellence in clinical quality and experience for our patients is at the forefront of our mission.

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We generally look for similar attributes in new markets that we enter.

As of December 31, 2024 we leased 221 facilities, directly owned the real estate at 44 facilities, and owned partial interests in an additional 49 facilities through joint ventures managed by third parties.

As of December 31, 2025 we leased 219 facilities, directly owned the real estate at 53 facilities, and owned partial interests in an additional 49 facilities through partnerships managed by third parties.

As we continue to grow, we intend to explore additional purchases of real-estate assets, through purchase options or rights-of-first refusal in existing leases, as well as acquisitions and de novo construction of purpose-built facilities.

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For the year ended December 31, 2024, we

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generated total revenue of $4.1 billion, and Medicare and Medicaid accounted for 33.8% and 40.4% of our routine revenue, respectively.

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Adjusted EBITDA is a non-GAAP financial measure.

See the section titled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Key Skilled Services Metrics and Non-GAAP Financial Measures—Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure.

See the section titled “Item 7.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Key Skilled Services Metrics and Non-GAAP Financial Measures—Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure.

As of December 31, 2025, we had total long-term liabilities of $3.6 billion.

Our Operating Model

Decentralized Operations

Our decentralized model is informed by our beliefs that “healthcare is local” and that each patient, facility and community is unique.

Locally Led, Centrally Supported Operations

Our locally led, centrally supported model is informed by our beliefs that “healthcare is local” and that each patient, facility and community is unique.

Our administrators have significant autonomy in the decision-making process, subject to adherence to company policies and procedures, because we believe they know what is best for their community and their markets.

Our 314 post-acute facilities are independently operated by local teams with robust administrative and consulting support from our PACS Services.

Our 321 post-acute facilities are independently operated by interdisciplinary teams with robust administrative and consulting support from PACS Services.

We strive to have each of our facilities led by experienced and highly qualified administrators, who serves in effect as a “local CEO,” alongside an interdisciplinary team of medical directors, clinicians, specialty consultants, and operators.

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The team also includes regional clinical support personnel (such as directors of therapy, quality assurance, medical records, and clinical services personnel) as well as non-clinical personnel such as regional directors of recruitment and accounts receivable and accounts payable, reimbursement, and risk and compliance personnel.

As of December 31, 2024, we had 22 RVPs overseeing each regional teams, covering an average of 14.3 facilities within a region and have an intimate understanding of the intricacies and challenges of the post-acute industry.

As of December 31, 2025, we had 21 RVPs overseeing each regional team, covering an average of 14 facilities within a region and having an intimate understanding of the intricacies and challenges of the post-acute industry.

We place the utmost importance on clinical quality, and as a result, many employees that provide PACS Services are clinicians by trade.

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With this readily-available, real-time data, our local leaders are able to more easily assess what works well in their facilities and can appropriately manage their operations and share best practices with their colleagues within the company.

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This data also facilitates greater risk management and compliance efforts, as financial and clinical information can be analyzed, which we believe helps promote accountability across the company.

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Our remaining facilities are either wholly-owned

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or partially-owned through joint ventures managed by third parties.

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Skilled mix by revenue 56 % 42 % 38 %

As of December 31, 2024, our facilities had an average QM Star rating of 3.9 Stars compared to the industry average of 3.4 Stars, and an average occupancy rate of 90% compared to the industry average occupancy rate of 77%.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Skilled Services Metrics and Non-GAAP Financial Measures.” We believe our strategy drives these results and is central to our ability to develop acquired facilities into higher performing facilities over time.

For example, based on an analysis of the 91 facilities that we have acquired since 2018 and that have developed into Mature facilities as of December 31, 2024, we estimate that we were able to increase the occupancy rate and QM Star rating for acquired facilities by an average of 13% and 0.2 stars, respectively, as they progressed from New facilities to Mature facilities.

As of December 31, 2025, our full portfolio had an average QM Star rating of 4.1 Stars compared to the industry average of 3.5 Stars, and an average occupancy rate of 89% compared to the industry average occupancy rate of 79%.

See the section titled “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Skilled Services Metrics and Non-GAAP Financial Measures.” We believe our strategy drives these results and is central to our ability to develop acquired facilities into higher performing facilities over time.

We believe the success of our strategy is further exemplified by our historical ability establish and maintain a QM Star rating for our Mature facilities that is higher than the industry average, The graphic below sets forth our QM Star rating

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over time for our Mature facilities, as well as the industry average QM Star rating for buildings of all maturities, for the periods indicated.

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QM Star Ratings Over Time for PACS Facilities (1)

(1) Facility count shown excludes facilities with unreported QM star rating for period and excludes ALF facilities with no QM Star ratings.

Our Value Proposition

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We often upgrade facility infrastructure shortly after acquisition and perform periodic refreshes, to ensure our

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facilities are comfortable and well-equipped to serve patients across a wide range of acuities with a primary focus on high acuity patients.

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This dedicated focus by our administrators and their local teams on patient outcomes drives demand for our services and can ultimately result in higher patient census and profitability.

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• Robust technology enabled operating infrastructure.

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We believe we deliver superior overall quality that has contributed to our reputation as a provider-of-choice in our communities, driving greater referral volumes from referring providers who value our high standards.

Decentralized Market-Driven Operating Model

Our decentralized model emphasizes local operational autonomy.

Locally Led Market-Driven Operating Model

Our locally led, centrally supported model is decentralized and emphasizes local operational autonomy.

We believe that placing decision-making power at the local level with teams who understand the needs of their patients and their communities facilitates responsiveness and adaptability to evolving patient needs and facility and community factors.

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We believe this

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directly aligned incentive model has played a critical role in successfully attracting, incentivizing, and retaining our industry veterans.

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While services may overlap

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across each distinct post-acute offering, post-acute rehab or SNFs provide the most comprehensive array of services.

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Despite the wide array of services and variety of needs addressed, MedPAC reports that SNFs are the lowest cost facility-based post-acute healthcare, costing on average $577 per covered day compared to $1,957 and $1,788 per covered day for inpatient rehabilitation facilities and long-term acute care hospitals, respectively.

According to CMS MedPAC data, SNFs accounted for approximately 45% of the total post-acute care continuum spend.

According to MedPAC data, SNFs accounted for approximately 50% of the total post-acute care continuum spend in 2023.

According to CMS Inpatient Hospital discharge data, in the first half of 2023, approximately 24% of Medicare patients over 65 years old were

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discharged to SNFs, representing more than any other facility type, including inpatient rehabilitation facilities and long-term acute care hospitals (approximately 6%), and more than home health nursing care (22%) or hospice (5%).

As reimbursement and coverage continues to shift toward value-based models with greater emphasis on controlling costs, SNFs are integral to post-acute care and can continue to drive high-quality outcomes in low-cost settings.

Furthermore, during the COVID-19 pandemic, SNFs were widely utilized to treat medically fragile patients, reinforcing the importance of SNFs to the healthcare ecosystem.

The skilled nursing industry can be classified into two main sub verticals:

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Favorable Reimbursement Environment

According to CMS, approximately 72% of SNF revenue in 2022 was derived from government sources, including Medicaid and Medicare.

Medicaid represents 51% of industry revenue, while Medicare represents approximately 21%.

According to CMS, approximately 72% of SNF revenue in 2022 was derived from government sources, including Medicare and Medicaid.

Medicare represents 21% of industry revenue, while Medicaid represents approximately 51%.

The remainder comprises managed care, private pay, and other payors.

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Medicare reimbursement per patient day increased at a CAGR of approximately 3.4% from 2012 to 2023, while Medicaid reimbursement per patient day increased at a CAGR of approximately 1.9% from 2012 to 2021.

During that time, the industry experienced over 9 years of growth in reimbursement rates.

The following charts depict the increase in Medicaid and Medicare Fee for Service reimbursement per patient day from 2015 through 2021 as reported by CMS.

Medicaid and Medicare Reimbursement Per Patient Day

During that time, the industry experienced continued growth in reimbursement rates.

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The following charts depict the increase in Medicare Fee for Service reimbursement per patient day from 2015 through 2023 and the increase in Medicaid Fee for Service reimbursement per patient day from 2015 through 2021, as reported by CMS.

Medicare and Medicaid Reimbursement Per Patient Day

Regulatory Environment

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We are focused on driving higher occupancy and increasing skilled mix in an effort to fill unused capacity with higher acuity patients, which can improve our revenue per patient day and our profitability, which in turn drive growth.

Historically, we have found that it takes up to 3 years for a New facility to scale to performance similar to that of a Mature facility.

As of December 31, 2024, we had 126 New

and 50 Ramping facilities, which we believe provides us some degree of near-term visibility into expected organic growth within our footprint.

Historically, we have found that it takes up to 3 years for a New facility

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to scale to performance similar to that of a Mature facility.

As of December 31, 2025, we had 69 New and 102 Ramping facilities, which we believe provides us some degree of near-term visibility into expected organic growth within our footprint.

• Continue to grow our pipeline of leaders.

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We plan to continue to evaluate our real estate purchase options in an effort to reduce our rent burden and grow the underlying earnings of our business.

We have executed 24 purchase options since 2013 and had 37 additional options available to us as of December 31, 2024.

Throughout the history of the Company, we have selectively exercised various purchase options, and had 37 additional options available to us as of December 31, 2025.

We intend to continue to selectively exercise purchase options and continue structuring additional purchase options to provide an additional lever to grow net margins and enhance stockholder value.

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We believe that our proven operational playbook and focus on delivering high-quality care have the potential to be utilized in additional post-acute sites of care, including home health and hospice as well as within broader senior living communities.

As of December 31, 2024, we had one independent living facility and 26 assisted living facilities which provide a foundation for further expansion.

As of December 31, 2025, we had two independent living facilities and 28 assisted living facilities which provide a foundation for further expansion.

Human Capital Resources

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We are committed to providing exemplary, compassionate care to our residents and patients, and finding joy and satisfaction in our work as a team.

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Our Employees

As of December 31, 2024, we had 45,680 employees working across 314 post-acute care facilities in 17 states and at our corporate headquarters in Farmington, Utah.

As of December 31, 2025, we had 47,455 employees working across 321 post-acute care facilities in 17 states and at our corporate headquarters in Salt Lake City, Utah.

Of our 47,455 employees, 27,696 are clinicians, including approximately 3,750 RNs including DONs, approximately 6,806 LPNs, and approximately 17,140 CNAs.

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Other competitors may have lower expenses or other competitive advantages than us and, therefore, provide services at lower prices than we offer.

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Regulatory Matters

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These include statutory and regulatory changes, rate adjustments (including retroactive adjustments), administrative or executive orders and government funding restrictions, all of which may materially adversely affect the rates at which Medicare and state Medicaid programs reimburse us for our services.

Budget pressures often lead the federal government to reduce or place limits on reimbursement rates under Medicare and Medicaid.

We cannot predict the extent to which such proposals will be

adopted or, if adopted and implemented, what effect, if any, such proposals and legislation will have on us.

Budget pressures often lead the federal government to reduce or place

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limits on reimbursement rates under Medicare and Medicaid.

We cannot predict the extent to which such proposals will be adopted or, if adopted and implemented, what effect, if any, such proposals and legislation will have on us.

Historically, adjustments to reimbursement under Medicare and Medicaid programs, due to such changes or government actions, have had a significant effect on our revenue.

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CMS is required to calculate an annual Medicare market-basket update to the payment rates, which is an inflation measure of SNF input prices.

On July 31, 2024, CMS issued a final rule for Fiscal Year (FY) 2025 that updated Medicare payment rates for skilled nursing facilities under the SNF PPS.

For FY 2025, SNF PPS rates under Medicare Part A increased by 4.2%.

This estimate reflects a 3.0% SNF market basket increase plus a 1.7 percentage point forecast error adjustment and a negative 0.5 percentage point productivity adjustment.

The FY 2025 final rule also included significant enhancements to CMS’ enforcement capabilities within nursing homes, aiming to reinforce the safety and quality of care.

On July 31, 2025, CMS issued the final rule for Fiscal Year (FY) 2026, which is in effect from October 1, 2025 through September 30, 2026.

The SNF PPS FY 20206 Final Rule updates SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment.

This increase does not include the SNF Value-Based Purchasing (VBP) Program reductions for certain SNFs subject to the net reduction in payments under the SNF VBP.

In addition to updating payment rates, the FY 2026 SNF PPS Final Rule also included updates to ICD-10 code mapping, the VBP program, and quality reporting program.

The SNF PPS FY 2025 Final Rule included significant enhancements to CMS’ enforcement capabilities within nursing homes, aiming to reinforce the safety and quality of care.

The final rule broadened CMS’s ability to levy financial penalties as a means to ensure sustained remediation of health and safety infractions.

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The expanded enforcement policies became effective on October 1, 2024, and operationalized beginning March 3, 2025.

On July 31, 2025, CMS issued the final rule for FY 2026, which updates SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment.

This increase does not include the SNF Value-Based Purchasing (VBP) Program reductions for certain SNFs subject to the net reduction in payments under the SNF VBP.

In addition to updating payment rates, the FY 2026 SNF PPS Final Rule also included updates to ICD-10 code mapping, the VBP program, and quality reporting program.

Patient-Driven Payment Model (PDPM) - The PDPM, a case-mix classification model used in the SNF PPS for classifying SNF patients in a stay covered under Medicare Part A, became effective October 1, 2019.

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In FY 2028, the measures will be expanded to include

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Skilled Nursing Facility Within-Stay Potentially Preventable Readmission.

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CMS conducts a comprehensive annual review of the PACE organization's operation of the PACE program during a 3-year trial period to

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assure compliance with all significant requirements.

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We believe that delays in confirming

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eligibility or coverage under these provisions can create the conditions for coverage interruptions, potential delays or denied payments.

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In connection with improvements to its data infrastructure, CMS temporarily paused monthly updates to the Nursing Home Care Compare

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Five Star Rating System as of July 30, 2025.

Although CMS started to update certain limited information as of September 24, 2025, all other information available on the Care Compare website will remain static until data refreshes resume, which was anticipated to occur in October 2025, but is delayed in light of the government shutdown.

Although CMS started to update certain limited information as of September 24, 2025, the government shutdown delayed updates to the Care Compare website until late November of 2025.

CMS’ January 2026 refresh was delayed and is expected to be published on or around February 5, 2026.

Proposed and Enacted Federal and State Legislation - The U.S.

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Quality of Care Initiatives - on April 22, 2024, CMS issued a final rule that creates minimum staffing standards for skilled nursing facilities and nursing facilities and requirements for states to report the percent of Medicaid payments spent on compensation to direct care workers and support staff at each nursing facility and each intermediate care facility for individuals with intellectual disabilities.

Certain provisions of the staffing requirements have been subject to legislative and judicial challenges and were repealed in December 2025.

For further discussion, see the section titled “CMS Minimum Staffing Standards and Final Rule.” Although there has been a trend in recent years of administrative, regulatory, and legislative efforts at the federal and state level to monitor and regulate LTC facilities, we are not able to predict whether the current administration will prioritize regulation applicable to LTCs.

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In addition to the federal requirements, certain states have also adopted laws requiring disclosure of ownership information and other financial and ownership transparency requirements for SNFs.

CMS Minimum Staffing Standards Final Rule - On April 22, 2024, CMS issued a final rule establishing new federal minimum staffing standards for skilled nursing facilities (SNFs) (Staffing Rule).

The Staffing Rule provides for a staggered implementation for these staffing requirements over a three-year period for non-rural facilities, with longer implementation timeframe for rural facilities.

The Staffing Rule has been met with significant opposition and legislation to halt its implementation.

For example, on April 7, 2025, the U.S.

District Court for the Northern District of Texas issued a ruling vacating portions of the Staffing Rule on the basis that CMS exceed its statutory authority in violation of the Administrative Procedure Act.

CMS Minimum Staffing Standards Final Rule Repeal & Reinstatement of Pre-2024 Staffing Requirements - On April 22, 2024, CMS issued a final rule establishing new federal minimum staffing standards for skilled nursing facilities (SNFs) (2024 Staffing Rule).

On July 4, 2025, the OBBBA was signed into law, which prohibits HHS from implementing, administering, or enforcing the Staffing Rule until October 1, 2034.

Although implementation of the Staffing Rule has been delayed under the OBBBA, future Presidential Administrations and HHS and CMS, under new leadership, could impose more stringent requirements for staffing.

On December 2, 2025, HHS issued an interim final rule repealing provisions of the Staffing Rule (Interim Final Rule).

The Interim Final Rule repealed the requirement for nursing homes to provide certain minimum numbers of hours of nursing care per resident day and have a registered nurse (RN) onsite 24/7.

In addition, CMS reinstated the minimum RN staffing requirement that were in existence prior to the 2024 Staffing Rule for facilities to use the services of an RN for at least eight consecutive hours a day, seven days a week and to designate an RN to serve as the director of nursing on a full-time basis except when waived.

The repeal and reinstatement were effective on February 2, 2026.

Although implementation of the 2024 Staffing Rule has been delayed under the OBBBA and some staffing requirements have been modified through the Interim Final Rule, future Presidential Administrations and HHS and CMS, under new leadership, could impose more stringent requirements for staffing.

Medicare and Medicaid Enrollment and Participation Requirements - Healthcare providers, including SNFs and other LTC facilities, must comply with certain requirements in order to participate in the Medicare and Medicaid Programs.

Examples include requirements related to resident rights, admission, transfer and discharge, resident assessments, care planning, availability of certain services, administration and governance, emergency preparedness, quality assurance and performance improvement programs, infection control, compliance and ethics programs, physical environment, and training requirements.

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performance improvement programs, infection control, compliance and ethics programs, physical environment, and training requirements.

Compliance with these requirements can be burdensome and costly.

One such requirement of participation in the Medicare and Medicaid programs involves limitations around the use of pre-dispute, binding arbitration agreements by LTC facilities.

CMS has issued guidance and direction around arbitration, to

CMS has issued guidance and direction around arbitration, to include:

the facility must not require signing of an arbitration agreement as a condition of admission or a requirement to continue to receive care at the facility, and the agreement must expressly contain language to this effect;

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Certain states in which we operate have certificate of need or similar programs regulating the establishment or expansion of healthcare facilities.

The initial and continued licensure of our facilities and certification to participate in government healthcare programs depends upon many factors including various state licensure regulations relating to quality of care, environment of care, equipment, services, minimum staffing requirements, staff training, administrators, personnel, and the existence of adequate policies, procedures, and controls.

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In addition to facility licensure requirements, states also impose licensing requirements on the healthcare professionals who provide services at our facilities.

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These measures included increasing penalties for SFFs that fail to improve their performance upon further inspection by CMS, increasing the standards SFFs must meet to graduate from the SFF program, maintaining heightened oversight of any SFF for a period of three years after it graduates and increasing the technical assistance CMS provides to SFFs.

In June 2024, the OIG added the SFF program to its work plan to evaluate implementation of the SFF Program, including the October 2022 updates to the program.

In October 2025, the OIG issued a report reviewing the SFF program and concluded that the SFF program has not yielded lasting improvements because nursing homes that graduate from the program do not maintain the improvements over time.

The OIG stated that the SFF program relies too heavily on financial penalties that do not require changes in nursing home operations, and recommended that CMS (1) impose more nonfinancial enforcement remedies that encourage sustained compliance;

(2) assess the extent to which it took enhanced enforcement actions for SFF graduates and the effectiveness of those actions, particularly for graduates that received a deficiency for staffing;

and (3) incorporate nursing home ownership information into the SFF program, such as in selecting SFFs and identifying patterns of poor performance.

CMS concurred with OIG’s second recommendation and did not concur with the first and third recommendations, noting that actions have already been taken to address those recommendations.

CMS has undertaken several initiatives to increase or intensify Medicaid and Medicare survey and enforcement activities, including federal oversight of state actions.

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The AKS includes statutory exceptions and regulatory safe harbors that protect certain arrangements.

Failure to meet the requirements of the safe harbor, however, does not render an arrangement illegal.

Failure to meet the requirements of the safe

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harbor, however, does not render an arrangement illegal.

Rather, the government may evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and may be subject to greater scrutiny by enforcement agencies.

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Hospitals violating this policy transferred patients to certain post-acute care settings, such as SNFs, but claimed the higher reimbursements associated with discharges to homes.

A similar OIG audit report released in September 2023 identified over $563 million in overpayments to hospitals that did not comply with Medicare’s post-acute care transfer policy.

A similar OIG audit report released in September 2023 identified over $563 million in overpayments to hospitals that did not comply with Medicare’s post-acute

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care transfer policy.

Another similar OIG audit report, released in February 2019, focused on improper payments for SNF services when the Medicare three-day inpatient hospital stay requirement was not met.

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In 2022, the OIG released an audit revealing that CMS had not collected $226 million, or 45%, of identified overpayments within that period, potentially affecting SNFs.

Other ongoing OIG audits include an a review of nursing homes’ nurse staffing hours reported in CMS's payroll‐based journal, a review of whether and how states used Medicaid supplemental payments for use in satisfying the state’s obligations to pay nursing facilities any amounts due under the state’s nursing facility upper payment limit, a review of Medicare Advantage Organizations’ use of prior authorization for post-acute care, and a review of the implementation of the SFF program.

Other ongoing OIG audits include an a review of nursing homes’ nurse staffing hours reported in CMS's payroll‐based journal, a review of whether and how states used Medicaid supplemental payments for use in satisfying the state’s obligations to pay nursing facilities any amounts due under the state’s nursing facility upper payment limit, and a review of Medicare Advantage Organizations’ use of prior authorization for post-acute care.

The OIG continues to increase its oversight of skilled nursing facility operations through its active Work Plan, with several new audits and studies that may impact SNFs.

In June 2025, OIG announced a new evaluation of whether SNFs are properly engaging medical directors and accurately reporting medical directors’ hours of service in CMS's Payroll-Based

Journal (PBJ) reporting system.

In June 2025, OIG announced a new evaluation of whether SNFs are properly engaging medical directors and accurately reporting medical directors’ hours of service in CMS's Payroll-Based Journal (PBJ) reporting system.

This review will examine whether medical directors are meeting regulatory expectations and whether reported hours reflect actual services provided, with potential implications for regulatory compliance and reimbursement oversight.

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We expect for regulators to continue to focus on post-hospital SNF care, which may result in additional oversight or stricter compliance standards.

Data Privacy and Security Laws

In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Additional Information and Website Disclosure

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The information found on our website is not part of this or any other report that we file with, or furnish to, the SEC.

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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