National HealthCare Corporation (NHC) operates, manages or provides services to skilled nursing facilities, assisted living facilities, independent living facilities, home health care agencies, hospice agencies, and behavioral health hospitals located in 9 Southeastern and Midwestern states in the United States.
The most significant part of the company’s business relates to skilled and intermediate nursing care settings in which it also provides assisted living and retirement services, rehabili...
National HealthCare Corporation (NHC) operates, manages or provides services to skilled nursing facilities, assisted living facilities, independent living facilities, home health care agencies, hospice agencies, and behavioral health hospitals located in 9 Southeastern and Midwestern states in the United States.
The most significant part of the company’s business relates to skilled and intermediate nursing care settings in which it also provides assisted living and retirement services, rehabilitative therapy services, memory and Alzheimer's care services, home health and hospice services, and behavioral health services. In addition, the company provides insurance services, management and accounting services, and it leases properties to operators of skilled nursing and assisted living facilities. The health care environment has continually undergone changes with regard to federal and state reimbursement programs and other payor sources, compliance regulations, competition among other health care providers and patient care litigation issues. The company continually monitors these industry developments, as well as other factors that affect its business.
The company’s principal business is the operation of skilled nursing facilities, assisted living facilities, independent living facilities, homecare and hospice agencies, and behavioral health hospitals. The company’s 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, the company provides management services, accounting and financial services, as well as insurance services to third party operators of health care facilities. The company also owns the real estate of 10 healthcare properties and leases these properties to third party operators. The company operates in 9 states and its operations are primarily located in the Southeastern and Midwestern parts of the United States.
Net Patient Revenues
The services the company provides include a comprehensive range of health care services. In fiscal 2024, 95.7% of the company’s net operating revenues were derived from such health care services. Highlights of health care services activities during 2024 were as follows:
Skilled Nursing Facilities: The most significant portion of the company’s business and the base for its other health care services is the operation of its skilled nursing facilities (SNFs). In its facilities, experienced medical professionals provide medical services prescribed by physicians. Registered nurses, licensed practical nurses, and certified nursing assistants provide comprehensive, individualized nursing care 24 hours a day. In addition, the company’s facilities provide licensed therapy services, quality nutrition services, social services, activities, and housekeeping and laundry services.
Rehabilitative Services: The company’s 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. The company maintained a rehabilitation staff of over 1,200 highly trained, professional therapists in 2024. Most of the company’s rehabilitative services are for patients in its owned, leased and managed skilled nursing facilities. However, the company also provides services to 50 additional health care providers.
Medical Specialty Units: All its skilled nursing facilities participate in the Medicare program, and the company has expanded its range of offerings by the creation of facility–specific medical specialty units, such as its memory care units and sub-acute nursing units. The company’s trained staff provides care for Alzheimer’s patients in early, middle and advanced stages of the disease. The company provides specialized care and programs for persons with Alzheimer’s or related disorders in dedicated units within many of its skilled nursing facilities. The company develops individualized patient care plans to target appropriate medical and functional planning objectives with a primary goal where feasible for a return to home or a similar environment.
Assisted Living Facilities: The company’s assisted living facilities provide personal care services and assistance with general activities of daily living, such as dressing, bathing, meal preparation and medication management. The company performs resident assessments to determine what services are desired or required and its qualified staff encourages residents to participate in a range of activities.
Independent Living Facilities: The company’s independent living facilities offer specially designed residential units for the active and ambulatory elderly and provides various ancillary services for its residents, including restaurants, activity rooms and social areas. Charges for services are paid from private sources without assistance from governmental programs. Independent living facilities may be licensed and regulated in some states, but do not require the issuance of a CON, such as is required for skilled nursing facilities. The company has in several cases, developed independent living facilities adjacent to its nursing facilities. These units are rented by the month; thus, these facilities offer an expansion of the company’s continuum of care.
Behavioral Health Hospitals: The company’s comprehensive continuum of care includes behavioral health services to both adults and geriatric patients with psychiatric, emotional, and addictive disorders. The company operates three behavioral hospitals for adult and geriatric patients who require inpatient hospitalization due to mental disorders, including cognitive illnesses. The company also offers intensive outpatient programs with individualized treatment plans based on the patient's clinical needs.
Homecare Agencies: The company’s 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. Home health aides may assist with daily activities, such as assistance with walking and getting in and out of bed, personal hygiene, medication assistance, light housekeeping and maintaining a safe environment. Under the Medicare reimbursement payment system, the company receives a prospectively determined amount per patient per 30-day period of care. Under its managed care contracts, the company may receive a period of care payment or be paid by a per-visit payment model. In 2024, the company served an average census of 3,409 patients and provided 311,520 visits.
Hospice Agencies: The company provides hospice care through Caris Healthcare, (Caris), a wholly owned subsidiary of NHC. Caris specializes in providing hospice and palliative care to over 1,514 patients per day in 33 locations in Georgia, Missouri, South Carolina, Tennessee, and Virginia. 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: As of December 31, 2024, the company operated five regional pharmacy locations (two locations each in Tennessee and South Carolina and one location in Missouri). These pharmacies primarily service its patients that are in an inpatient setting using a central location to deliver pharmaceutical supplies. The company’s 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): The company’s 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. The I-SNP receives a per member, per month premium from Medicare which covers the members same health care benefits as original Medicare, as well as additional benefits, including preventive screenings and routine vision coverage. At December 31, 2024, the I-SNP operated in the states of Tennessee, Missouri, and South Carolina with approximately 1,200 members enrolled in the plan.
Other Revenues: The company generates revenues from management, accounting and financial services to third party operators of healthcare facilities, from insurance services to its managed healthcare facilities, and from rental income. In the year ended December 31, 2024 (fiscal 2024), 3.5% of the company’s net operating revenues were derived from such sources.
Management, Accounting and Financial Services: The company provides management services to skilled nursing facilities, assisted living facilities and independent living facilities operated by third party operators. Additionally, the company provides accounting and financial services to other healthcare operators. As of December 31, 2024, the company performed management services for eleven healthcare facilities and accounting and financial services for 15 healthcare facilities.
Insurance Services: 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 one assisted living community.
Government Grant Income. The company received government grant funds as part of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES ACT"). The Employee Retention Credit (“ERC”) was established by the CARES Act and intended to help businesses retain their workforce and avoid layoffs during the pandemic. The ERC provided a per employee credit to eligible businesses based on a percentage of qualified wages and health insurance benefits paid to employees. The qualified wages and health insurance benefits paid by the company were related to the second, third, and fourth quarters of 2020. All conditions related to the ERC were met during 2024.
Non–Operating Income. The company generates 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.
Quality of Patient Care
The Centers for Medicare and Medicaid Services (‘CMS’) introduced the Five-Star Quality Rating System to help consumers, their families and caregivers compare skilled nursing facilities more easily. The Five-Star Quality Rating System gives each skilled nursing operation a rating ranging between one and five stars in various categories (five stars being the best).
Development and Growth
The company is undertaking to expand its post–acute and senior health care operations while protecting its existing operations and markets.
On August 1, 2024, the company purchased the White Oak portfolio, including its long-term care pharmacy. The White Oak portfolio consists of 15 skilled nursing facilities, two assisted living facilities, and four independent living facilities. The White Oak operations have 1,928 licensed skilled nursing beds, 48 assisted living units, and 302 independent living units in the states of South Carolina and North Carolina.
Business Segments
The company has two reportable operating segments: inpatient services, which includes the operation of skilled nursing facilities, assisted and independent living facilities, and behavioral health hospitals and homecare and hospice services.
Customers
The company attempts 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.
Medicare is a health insurance program for the aged and certain other chronically disabled individuals operated by the federal government. Medicare covers skilled nursing services for beneficiaries who require nursing care and/or rehabilitation services following a discharge from an acute care hospital. 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. Medicaid may supplement Medicare benefits for the disabled and for persons aged 65 and older meeting financial eligibility requirements. Medicaid reimbursement formulas are established by each state with the approval of the federal government in accordance with federal guidelines. Seniors who enter skilled nursing facilities as private pay patients can become eligible for Medicaid once they have substantially depleted their assets. Medicaid typically covers patients that require standard room and board services and provides reimbursement rates that are generally lower than rates earned from other sources.
Medicaid reimbursement varies from state to state and is based upon a number of different systems. The states in which the company operates primarily use a cost–based reimbursement system. Rates are subject to a state's annual budgetary requirements and funding, statutory and regulatory changes, and interpretations and rulings by individual state agencies, and state plan amendments approved by CMS.
Private pay, managed care, and other payment sources include commercial insurance, individual patient funds, managed care plans and the Veterans Administration. Although payment rates vary among these sources, market forces and costs largely determine these rates. Private paying patients, private insurance carriers and the Veterans Administration generally pay based on the center's charges or specifically negotiated contracts.
The company contracts with managed care organizations (MCO's) and insurance carriers for the provision of healthcare services by its owned, leased and managed healthcare facilities.
Government Regulation
The company is subject to laws and regulations enacted to protect the confidentiality of patient health information. The U.S. Department of Health and Human Services has issued rules that govern the company’s use and disclosure of protected health information. The company has established policies and procedures to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) privacy and security requirements. Its operations are also subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA.
History
National HealthCare Corporation was founded in 1971. The company was incorporated in 1997. The company, formerly known as National HealthCare L.P.
