Jefferies Discusses Health Care Facilities

Jefferies & Co. is out with a research report on health care facilities, and includes Five Star Quality Care, Inc. FVE in the report. In the note, Jefferies writes, "In a letter dated June 24, 2011 to CMS Administrator Don Berwick, House Representatives Tom Latham (R-IA) and Richard Neal (D-MA) expressed concern that the 12.8% cut included in the Medicare skilled nursing facility (SNF) proposed rule was "not based on accurate data" and encouraged CMS to use a "more measured approach" by delaying "any proposed cuts pending a review of data from a full year". The letter goes on to recommend that adjustments to SNF payments, if necessary, be implemented "over a period of two or three years". Last Wednesday, the Alliance for Quality Nursing Home Care, a lobbying group for nursing facility chains, urged CMS to move more slowly in recovering Medicare overpayments and suggested implementing a 3% cut for one year while more data can be reviewed. Should CMS heed this advice, FVE, KND, SKH and SUNH should respond favorably." Shares of FVE gained 12 cents on Friday to close at $5.93, a gain of 2.07%.