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Beverly Reference Pages
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The many extracts on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of the allegations made.

Beverly Enterprises in the Marketplace


I have taken out a number of extracts which describe Beverly's history and its market place activities. Beverly was founded in 1963 but most of my material starts in 1998. The article "The Shame of Our Nursing Homes" gives a concise review of Beverly's early period. In the 1970's it indulged in its own buying frenzy accumulating 1000 homes by the end of the 1970's. It was overextended and unable to digest all this. It was forced to sell off to a manageable 600 facilities. The company's conduct during the 1980's, as described in this article suggests that Beverly was as ruthless in cutting staff, in exploiting the vulnerability of its charges and in dealing with the nurses who complained as any of the modern companies. That it suffered from debt associated with excessive expansion is clear from one earlier article desscribing deals to sell homes which a judge called "unconsciobnable".

That Beverly exploited the Medicare and Medicaid systems to the limits and beyond is clear from its recent conviction for fraud and the "cease and desist" order placed on it for breechinbg labour laws. This meant that by 1997 Beverly had paid much of its debt and was on a far sounder financial footing when the government turned off the Medicare gravy train in 1997. As a result to the market it appears to be behaving more responsibly financially. To everyone else itappears to be an arch villian.

CLICK HERE:- to go to the section dealing with Beverly's early years in "The Shame of Our Nursing Homes"


THE SHAME OF OUR NURSING HOMES; nursing homes allegedly treat patients poorly
The Nation March 29, 1999

Beverly Enterprises provides post-acute healthcare nationwide. Founded in 1963, the company has grown from a small group of California nursing homes into nursing and rehabilitation facilities, transitional acute-care hospitals, institutional and mail-service pharmacies, assisted living centers, and hospice and home health centers.

COMMENT:- Beverly moved to Arkansas in the 1980's. It grew to 1000 homes and built up debt. When a cut in Medicare reimbursements occured it was in trouble. governments in Iowa and Arkansas were most helpful.

A Rose Law Firm Deal, Revisited
The Wall Street Journal PAGE A20 03/15/1994
(Copyright (c) 1994, Dow Jones & Co., Inc.)

William H. Kennedy III, a partner in the Rose Law Firm of Little Rock and now associate counsel to President Clinton, shepherded the deal for Beverly Enterprises, a giant nursing-home company that paired up with a Texas banker to sell its Iowa and Arkansas nursing homes.

Forty-one Iowa homes were acquired four years ago by a nonprofit corporation, now known as Care Initiatives, that was effectively controlled by the banker, Bruce Whitehead. The deal was financed by $86 million in tax-exempt revenue bonds.

Whitehead and the bond underwriters took up-front profits exceeding $15 million.

Beverly, which needed cash to reduce its crippling debt, made about $10 million.
"There was absolutely no way that these people didn't know what was going on," said Roy Drew, a former Stephens broker and an independent investment adviser whose criticism of a similar nursing-home transaction in Arkansas involving Beverly, Whitehead and a nonprofit corporation helped touch off a political furor that scuttled the deal.
Said Drew: " Rose Law Firm made it legal, but it didn't have anything to do with what was right or fair to taxpayers or people in nursing homes. It had only to do with getting Beverly and Stephens Inc. off the hook."
Said Needles, "Care Initiatives is a `shell' nonprofit corporation used by Bruce H. Whitehead and the bond underwriters to obtain the financing necessary to enable them to make millions of dollars of excessive profits."
Whitehead testified that the nation's largest operator of nursing homes "was having severe financial difficulty. They needed to raise cash desperately because of the financial problems they were having."

In 1988, Beverly sought to sell off its nursing homes in Iowa, South Dakota, Nebraska and Arkansas. But finding a buyer and conventional financing for the sale would be difficult.
The Iowa portion of the deal was sealed in the summer of 1989. Whitehead's Ventana Investments bought the Iowa nursing homes for $57 million as part of a two-step transaction that left Whitehead a hefty profit. The homes were then sold to nonprofit Care Initiatives (known then as Mercy Health Initiatives) for $63.5 million.

The money was borrowed through the sale of $86 million in tax-exempt revenue bonds that the Iowa Finance Authority, a public agency, agreed to issue.
"There was the belief that there was a danger that some of those {nursing homes} could have closed," said Ted Chapler, executive director of the Iowa Finance Authority.
The Arkansas Development Finance Authority, which had become an important economic tool for then-Gov. Bill Clinton, initially supported the proposed bond sale but backed away as criticism of the deal mounted.

Click Here to go to a full copy of the article, which explores the political ramifications

Modern Healthcare May 25, 1998
Bruce Japsen

Beverly Enterprises, Fort Smith, Ark., continues to control the most skilled-nursing beds, ending 1997 with 63,552. By far, Beverly remains the largest skilled-nursing provider even though its bed count decreased 11% from71,204 in 1996.

The company continues to divest its skilled-nursing business to focus on its more profitable ventures, such as assisted living. It ended the year with 567skilled-nursing centers, a 10% decrease from 630 in 1996.

In the past three years, Beverly has divested more than 130 skilled-nursing centers.
Assisted-living explosion. The boom in the assisted-living industry helped boost the number of continuing-care retirement communities by 39%. Fifteen assisted-living companies have made initial public offerings in the past five years. The total number of CCRCs rose 38% to 662 from 478 in 1996.

The growth rate of assisted-living apartments was nearly triple that of independent-living apartments in those CCRCs. The number of assisted-living apartments rose 11% to 19,201 in 1997 from 17,317 in 1996, while the number of independent-living apartments grew 4% to 50,535 in 1997 from 48,529.

Boosters cite promising demographics as a key contributor to future development. Companies are banking on the assisted-living industry to grow along with the nation's elderly population. The number of people age 65 and older is expected to be about 80 million in 2010 compared with 34 million today, according to U.S. Census Bureau statistics.

The assisted-living sector is particularly attractive because nearly all its residents are private payers, while long-term-care facilities receive most of their funding from Medicaid.

Although systems didn't provide financial performance information for assisted- and independent-living operations, the industry has struggled to turn a profit. Overall in 1997, 15 publicly traded companies lost $14.9 million despite a 78% increase in revenues to $908 million, according to WDI Capital Markets, a Hilton Head, S.C.-based research and consulting firm.

Sun revolves around health care's changes
Albuquerque Tribune October 08, 1998, Thursday
Leanne Potts and Macario Juarez Jr. TRIBUNE REPORTERS

Beverly Enterprises, the biggest long-term care company in the United States, takes in annual pre-tax revenues totaling 4.3 times the amount of the company's annual debt costs.

Beverly Earns 22 Cents Per Share in Third Quarter Before Year 2000 Remediation Costs
Business Wire October 22, 1998

Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned 22 cents per share diluted in the third quarter of 1998, before costs associated with remediating the Year 2000 issue. After remediation costs of $ 2,041,000 (one cent per share diluted), net income for the third quarter of 1998 totaled $ 21,335,000 (21 cents per share diluted), compared to $27,133,000 (26 cents per share diluted) for the same period in 1997.
"Our third quarter operating results are particularly satisfying because we also dedicated significant resources during this period to prepare for the new Medicare Prospective Payment System (PPS)," said DavidR. Banks, Chairman of the Board and Chief Executive Officer.

Nursing-home chain says 3rd-quarter earnings dropped 21 percent
The Associated Press State & Local Wire October 23, 1998

Nursing-home giant Beverly Enterprises says its third-quarter earnings dropped 21 percent this year, compared to the same period a year ago.

Beverly also cautioned Thursday in releasing its results for the quarter that its final-quarter earnings will be affected by costly preparations for Medicare changes and by an internal reorganization. But the company didn't estimate the size of a charge it expects against fourth-quarter earnings.

Revenue for the three-month period was $ 700 million, Beverly said, down $107 million from $ 807 million a year ago.

Several Nursing Home Companies Placed on S&P CreditWatch Negative
PR Newswire November 3, 1998

Standard & Poor's today placed its ratings for several nursing homecompanies on CreditWatch with negative implications (see list below). TheCreditWatch listings affect over $8 billion in rated debt.
OUTLOOK ( Beverly Enterprises Inc.): STABLE
Standard & Poor's expects Beverly to sustain its operating performanceduring the transition to the new Medicare PPS. The ratings and outlook donot factor in the unclear impact, if any, of a government investigation onthe way the company allocates labor costs for Medicare reimbursement.
Beverly Enterprises Inc.

Corporate credit rating - - BB-
Senior debt - - - - - - - - B+
Shelf debt (prelim)- - - - B+/B

SOURCE Standard & Poor's CreditWire

COMMENT:- Beverly and HRC Manor care are the only two of the larger chains which are not in Chapter 11 bankruptcy. The next article also shows how board rooms decisions tweeked by political funding decisions, and not the needs of the elderly determine what care will be given. If there is no home help then many people who needed it will be institutionalised. This is how Australia's Mrs Bishop (Minister for Aged Care) plans to address our aged care problems

Modern Healthcare November 09, 1998

Even the big dogs are starting to whimper.

Hit by lower Medicare reimbursement rates under a transitional payment system implemented in October 1997, Medicare-certified home health agencies are leaving the business in droves.

More than 1,200 have closed this year, according to the National Association for Home Care.
Some long-term-care chains, however, are staying with home health. Beverly Enterprises, a Fort Smith, Ark.-based nursing-home chain, has 52 home health agencies. HCR Manor Care, a Toledo, Ohio-based long-term-care company, runs 33. Neither company said it plans to abandon its home health businesses.

Modern Healthcare November 09, 1998

Two other national chains, HCR Manor Care and Beverly, escaped placement on CreditWatch because they are protected by a ''financial cushion,'' according to S&P analysts.

COMMENT:- The next article gives some insight into corporate thinking. It is no different to that in the other corporate chains.

Profits can come at high costs
The Tampa Tribune November 15, 1998

In 1995, Beverly Enterprises came under scrutiny after some high-priced purchases.

"We have been concerned for some time about the prices (the company) paid for the recent pharmacy acquisitions and the company's ability to cut costs quickly enough to achieve a reasonable and timely return on these investments," wrote two stock analysts in a 1995 news release.

Ten months later, Beverly boasted to business reporters it would bring in its highest nursing home profits in years, crediting an increase in high-cost treatments and "tight internal cost controls."

From 1995 to 1996, the number of Beverly homes cited for harming or endangering patients in Florida doubled from 13 to 27.

Industry Buzz
Forbes January 11, 1999

* Earnings uncertainties will plague the longterm-care sector as it continues to adapt to lump-sum Medicare reimbursement. Expect more mergers in this sector. Beverly Enterprises and Genesis Health Ventures are possible takeover candidates.

Beverly Earns 20 Cents Per Share in Fourth Quarter Before Charges, Other Specific Costs
Business Wire February 4, 1999

Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned 20 cents per share diluted in the fourth quarter of 1998, before previously announced charges and before costs associated with Year 2000 remediation and with an on-going government investigation of cost-allocation practices within the Medicare program.

COMMENT:- The next article describes the way corporations deal with problems when they threaten their profits. The other alternative would be to do something about the problem. How many ordinary citizens would have any impact if they challenged government findings of fraud and the neglect of citizens? With big money and corporate presence these groups can get away with it. Ît is not only the obviously bad companies but the whole industry which is adopting this approach.

Nursing homes to spend up to $ 20 million to improve image
The Arkansas Democrat-Gazette February 07, 1999

WASHINGTON -- Nursing homes plan to spend as much as $ 20 million annually to improve an industry image battered by reports of poor-quality care and federal fraud investigations.

The American Health Care Association, representing nursing homes such as Beverly Enterprises Inc. and Vencor Inc., has asked public relations agencies to submit proposals for its campaign, which would begin in the year 2000. "AHCA is considering launching a multimillion dollar image campaign in the year 2000 which will improve the public's image and understanding of the nursing-home component of the long-term care industry," the trade association says in a letter to public relations agencies.
Plans for an image improvement campaign come at a time when the industry is under siege. Both Beverly and Vencor face investigations by the U.S. Justice Department into whether they overbilled Medicare, the government health insurance program for the elderly. The level of spending being considered for the campaign is unprecedented at the trade association, which last year began a $ 4-million-a-year program to influence the debate over how best to pay for nursing home care.
The nursing home trade association's documents discuss how to minimize any negative publicity that may be generated by the reports. "First, try to mitigate the report's findings, possibly by conducting our own study or calling on an academic institution to conduct one for us -- with the hope of challenging the content of the report and having in place a credible third party to challenge the government's quality finding," the health trade group's documents say. "Those [government] reports focus on the minority [of nursing homes] not the majority," Keegan said.

Modern Healthcare March 01, 1999
Ann Saphir

* Beverly Enterprises, which cut 1,000 therapist positions in the second half of last year, reported a $92 million loss, or 90 cents per share, for the fourth quarter ended Dec. 31, 1998. For the year, the nursing home company lost $31 million, or 30 cents per share, compared with net income of $58.6 million for 1997.

5 Healthcare Firms Ratings Cut By S&P Over Medicare Changes
Dow Jones Newswires March 3, 1999

The ratings and outlooks for the other major nursing home industry participants, including HCR Manor Care Inc., Beverly Enterprises Inc., and Fountain View Inc., remain unchanged, S&P said.

Sun Healthcare Is Hit Hard By Medicare Payment Cuts
The New York Times April 10, 1999

"Everybody is hurting badly," Mr. Villwock said. He said Sun and Vencor, - - - - were "closer to the brink" than most nursing home chains. He said that Mariner still owned its facilities and had a stronger cash flow.

Beverly Enterprises, the biggest chain, has less debt, Mr. Mains said.

Beverly Earns 9 Cents Per Share From Operations in First Quarter
Business Wire April 22, 1999

April 22, 1999-- Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned nine cents per share diluted in the first quarter of 1999 from operations, before costs associated with Year 2000 remediation and with an on-going government investigation of cost-allocation practices within the Medicare program.

After pre-tax remediation costs of $ 2,986,000 and investigation costs of $ 1,905,000, Beverly's first quarter net income per share diluted was six cents in 1999, compared to 13 cents in the prior year's first quarter.

Nursing home chain says first-quarter earnings down 57 percent
The Associated Press State & Local Wire April 23, 1999

Declining occupancy rates and Medicare revenue helped drop first-quarter earnings at nursing-home giant Beverly Enterprises Inc. by 57 percent, the company says.

For the three-month period that ended March 31, net income totaled $ 5.9 million, or 6 cents a diluted share, the company said Thursday.

COMMENT:- to examine the consequence of the leaner operations go to Beverly's care page.

Outcry Grows Over Nursing Home PPS Losses, But Some Are Doing Fine.
Medicine & Health April 26, 1999

But even with Medicare business, many of what Greub calls "plain vanilla" nursing home firms are doing okay with PPS. The new payments for their patients are lower than before, but not precipitously so. Where Medicare may be paying $ 250 a day for a patient now, that represents a halving of the rates Sun had been receiving, but a drop in the $ 50-75 range for Beverly Enterprises or HCR Manor Care. Moreover, those chains have been operating relatively efficiently - an attribute that was not rewarded in the cost-plus system of compensation. They now can reap the benefits of their leaner operations.

In addition, one expert in the field notes, the winners and loser under the new system "sort of has to do with how much you gamed the system in the first place." Those who didn't let the reimbursement system become the basis of their treatment strategy now are doing better than those who depended on finding techniques to wring every last dollar out of Medicare.

Modern Healthcare July 26, 1999

But other large companies-most notably Beverly Enterprises, Fort Smith, Ark., and HCR Manor Care, Toledo, Ohio-are finding the new system to their liking. Both companies saw positive earnings in the quarter ended March 31, when most of the other publicly held companies were foundering because of huge losses.
Before the PPS, companies such as Mariner, Sun and Vencor borrowed heavily to pay for acquisitions and other expansions. They also had historically high per-day Medicare revenues because they actively sought patients who were more difficult to treat and who could generate higher reimbursement, and they contracted to provide plenty of therapy to outside nursing homes. As long as Medicare revenues stayed high and contract therapy remained profitable, those companies could make good on their steep loan repayments.

But the PPS cut Medicare payments sharply and brought contract therapy to a near standstill. These companies can look forward to several more years of cuts as PPS rates are phased in.

HCR Manor Care and Beverly, on the other hand, were managed more conservatively and were thus shaken less when the Medicare cash cow died.

Neither was heavily involved in contract rehabilitation, which was devastated by the PPS because Medicare no longer paid separately for therapy.

Both companies borrowed far less than their competitors, and both own most of their real estate.

COMMENT:- Note the fraud settlement

DCR Downgrades Beverly Enterprises
PR Newswire July 27, 1999, Tuesday

Duff & Phelps Credit Rating Co. (DCR) has downgraded Beverly Enterprises' (NYSE: BEV) first mortgage bonds to 'BB-' (Double-B-Minus) from 'BB' (Double-B) and senior unsecured notes to 'BB-' (Double-B-Minus) from 'BB' (Double-B).

The rating action reflects a generally weakened credit profile and the announcement that the company has reached a tentative understanding with the U.S. Department of Justice on potential settlements of the previously announced federal investigations into the allocation of nursing labor hours to the Medicare Program. Beverly plans to record special pre-tax charges in second quarter 1999 for the potential settlements and related matters totaling between $175 million and $225 million.

Beverly to Take Big Charge Before Settling Investigation
The New York Times July 28, 1999

Beverly Enterprises, the nation's largest nursing home chain, said today that it would take a second-quarter pretax charge of $175 million to $225 million in anticipation of settling a Medicare fraud investigation.

The charge, which could equal Beverly's earnings for the last eight years, indicates the company expects to pay the largest financial penalty ever against a nursing home company for health care fraud.

Beverly estimates Medicare fraud penalty at $ 225 million
The Associated Press State & Local Wire July 28, 1999

Last April, the company cited declining occupancy rates and a drop in Medicare revenue as reasons for a plunge in its first-quarter earnings, which fell 57 percent. For the three-month period ending March 31, Beverly had net income of $ 5.9 million on revenues of $ 694.4 million.

The company says it needs to fill beds faster to turn around its earnings.

"If occupancy does not improve, efficiencies alone will not produce operating earnings ... in the third and fourth quarters above second-quarter levels," Beverly chairman and chief executive officer David R. Banks said.

Inquiry outlook pulls bond rating for Beverly down
The Arkansas Democrat-Gazette July 29, 1999, Thursday

FORT SMITH -- One bond rating agency downgraded the debt of Beverly Enterprises Inc. and two others might follow suit after the nursing home chain's announcement that federal Medicare investigations may cost it $ 225 million.
All three cited Beverly's announcement Tuesday that it would take a pretax charge to earnings of $ 175 million to $ 225 million to settle federal inquiries into its Medicare billing practices. "Obviously, it's going to hurt their cash flow a little bit," said Luke Coha, a Duff & Phelps analyst.
By downgrading Beverly's debt or reviewing its status, the ratings agencies are telling investors of significant concerns about the company's future, said Gene Lynch, a retired University of Arkansas finance professor. "When a ratings agency looks at that, they question whether or not the company can afford to pay the interest and principal on its debt," Lynch said.

Awash In Red Ink Troubled Times in Nursing Homes
Albuquerque Journal August 3, 1999, Tuesday
Third of a four-day series

Industry Blames Medicare Cuts; Critics Say Bad Business Decisions Played Role

The nation's large nursing-home companies took a financial beating in 1998 after the government slashed Medicare payments, but some chains are weathering the cuts much better than others.

Beverly Enterprises of Fort Smith, Ark., made money in the first three months of this year. So did HCR Manor Care of Toledo, Ohio. -
So why are some nursing-home chains doing better than Sun Healthcare Group?

In the case of HCR Manor Care, it is partly because it has a relatively high percentage of nursing-home residents whose stays are covered by private insurance or other private-pay sources.

Executives for Beverly Enterprises said in its annual report that the company began preparing in 1994 for the eventual shift to Medicare fixed rates and the efficiencies that would be demanded.

"We deliberately rejected opportunities to use nursing homes as a platform to sell expensive ancillary services to the government and to exploit the Medicare-reimbursement system," the report said.

"We decided to discontinue a practice that was common throughout our industry at the time the use of expensive rehabilitative services provided by outside contractors."

After Beverly posted a profit for the first three months of the year, David Banks, chairman and chief executive officer, said, "We're very encouraged by the initial results we've achieved under" the fixed rates.

Healthcare Sector Now The Patient Nursing homes continue to take it on the chin.
High Yield Report August 09, 1999

Beverly Enterprises, the largest nursing-home chain in the country, has seen its stock drop off 24% this year to $5.125. Genesis is down about 65% to $2.5625, a 52-week low. Hospitals in the junk bond sector also are under pressure, such as Columbia/HCA and Tenet.

For Beverly Enterprises, - - - - it would take a pre-tax charge against earnings in the second quarter of $175 million to $225 million - - - fraud investigation. The amount nearly equaled the chain's earnings for the previous eight years. The charge itself was not all that surprising to the rest of the industry, but one analyst said it was not expected to be as big as it was.

Beverly Records Special Charges Totaling $ 199 Million; Posts Second Quarter Loss
Business Wire August 20, 1999, Friday

0, 1999-- Beverly Enterprises, Inc. (NYSE:BEV) today announced that it recorded a loss for the second quarter of $ 115,857,000 or $ 1.13 per share diluted. The loss primarily reflects special pre-tax charges totaling $ 199,043,000 or $ 1.22 per share diluted related to previously announced tentative settlements of Federal investigations - - -
The decline is primarily the result of the June 1998 sale of Beverly's transitional hospital business, the operation of 13 fewer nursing homes and the adverse impact of the Medicare Prospective Payment System (PPS), which became effective for Beverly nursing homes on January 1, 1999.

State stock index tracks 16 health care companies;
The Tampa Tribune September 8, 1999, Wednesday, FINAL EDITION

A stock index of 16 large health care companies doing business in Florida was created by an unusual source - a state agency using the data to monitor financial problems that might affect patients.

The Florida Health Care Index was launched Tuesday at stockson the Internet by the Florida Agency for Health Care Administration.
The nursing home companies are Beverly, Genesis Health, HCR Manor Care, Mariner Post Acute Network and National Home Health.

Beverly says it's also been hurt by factors that got Vencor in trouble
The Associated Press State & Local Wire September 14, 1999

A spokesman for Beverly Enterprises Inc. said the company has been affected by the same Medicare reimbursement changes which caused a competitor to file Monday for federal bankruptcy protection.
Springer said Beverly took some measures early on to prepare for the changes.

"The impact has been less ... but quite significant," he said.

He said Beverly has no plans to shut down nursing homes as a result of the changes.
Congress is entertaining a bill that will take some of the heat off providers."

Beverly Enterprises builds new facility
The Associated Press State & Local Wire October 26, 1999,

Beverly Enterprises' $ 40 million, 318,000-square foot building on a mountain top should squelch any rumors that the company plans to move its corporate headquarters.
Coming off a losing quarter, facing stiff penalties resulting from a federal investigation of Medicare violations and suffering with other medical service providers the consequences of the federal Balanced Budget Act of 1997, Banks said, "this probably isn't the best time to do this."

But he said the move "is one of the better things we have done."

Medicare cuts: Industry taking a big hit; Home health care agencies, hospitals and nursing homes are still reeling
The Atlanta Journal and Constitution October 31, 1999


Selected Public Companies:...1/2/98............. Now...............Pct.change
Manor Care. ................... ....... $40 ..……........$15.75........... -60.9%
Beverly Enterprises. .......$ 13.06 1/4.......$ 3.93 3/4........-69.9%

Beverly Earns 10 Cents Per Share Diluted in Third Quarter Before Y2K Costs of $ 3.4 Million
Business Wire November 2, 1999, Tuesday

Nov. 2, 1999-- Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned ten cents per share diluted in the third quarter of 1999, before costs associated with remediating the year 2000 issue.

Beverly reports lower earnings
The Associated Press State & Local Wire November 3, 1999, Wednesday, BC cycle

Beverly Enterprises says its earnings fell 63 percent during its third quarter because of lower Medicare revenues and rising labor costs.

Chief operating officer out at Beverly
The Associated Press November 16, 1999, Tuesday, BC cycle

The president and chief operating officer at the nation's largest nursing home company has resigned, effective immediately, Beverly Enterprises Inc. announced Tuesday.

Boyd W. Hendrickson also resigned from the company's board of directors.
Hendrickson's resignation had "nothing to do with the government investigation of the Medicare situation. None of the agreements we had with the government involved any individual culpability," Beverly spokesman Jim Griffith said Tuesday evening.
No reason was given for Hendrickson's resignation in a Beverly news release.

COMMENT:- Note the fraud mentioned in the next article. Whose health suffered when Beverly doctored its books to suggest that it was employing more nurses than it actually did? -- the patients who did not get the care those nurses should have been providing. The fine Beverly has to pay for doing this " - - is no real threat to its health". Brave new corporate world!

FORBES November 29, 1999

Amid the carnage, Theodore Bernstein, fixed-income analyst at Grantchester Securities (a unit of Wasserstein Perella), sees value in Beverly Enterprises' junk bonds. Beverly's stock (NYSE: BEV) is down 50% over the past 12 months, a recent $4. Bernstein recommends investing in Beverly's $180 million of 9% senior unsecured notes due 2006. - - - -
Unlike many of its peers, Fort Smith, Ark.-based Beverly, the nation's largest nursing-home operator with 63,000 beds across 29 states, isn't saddled with a heavy debt load from acquisition sprees.
Beverly is better able to adapt to the government's new Medicare payment system than many of its competitors, says Bernstein. Just 28% of last year's $2.8 billion in revenue came from Medicare, and another 46% from Medicaid. While the per-diem payments from Medicaid are lower than those of Medicare, Medicaid reimbursements haven't been affected by the new system.

Beverly's biggest black eye is no real threat to its health. In July it agreed to settle government charges that it defrauded Medicare by inflating the number of hours that its nurses worked caring for patients. The company has agreed to pay $30 million in fines and forgo $145 million in Medicare reimbursements. But it can draw out the $145 million over eight years.

Beverly Earns Six Cents Per Share Diluted in Fourth Quarter, Before Special Charges/Unusual Items
Business Wire February 22, 2000, Tuesday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned six cents per share diluted in the fourth quarter of 1999, before special charges and other unusual items, compared on a similar basis to 20 cents per share diluted in the fourth quarter of 1998.

Beverly loses $32.6 million for quarter
The Associated Press State & Local Wire February 23, 2000

Nursing home chain Beverly Enterprises Inc., beset by rising litigation and labor costs, has reported a net loss of $32.6 million for its fourth quarter.

COMMENT:- The next 3 articles suggests the recipe for success in the health care marketplace is - expertise in franchisees and building brands -- also in hotels, fried chicken and trains!

Nursing home chain names new president
The Associated Press State & Local Wire March 23, 2000, Thursday, PM cycle

Nursing home giant Beverly Enterprises Inc. picked an executive from the hospitality industry as its new president and chief of operations.

Fort Smith-based Beverly announced Wednesday that William R. Floyd is to take the post on April 10.

Floyd served for 18 months as chief executive of Choice Hotels, the nation's second-largest hotel franchiser with 3,800 properties in 30 countries. The group includes Comfort Inn, Quality Inn and Clarion. Floyd resigned in June 1998.
Floyd previously worked as PepsiCo Inc.'s chief of operations for Taco Bell and had held a similar position with Kentucky Fried Chicken. Beverly said Floyd has also held senior management positions with Pillsbury Co. and Gillette Co.
Beverly said one reason Floyd was hired was because of his skill in working with franchisees and building brands.

Beverly hires ex-executive of Texas RR
The Arkansas Democrat-Gazette April 04, 2000

Beverly Enterprises Inc. hired a former railroad executive as general counsel on Monday -- the second top official it's plucked from outside the nursing-home industry this year. Douglas J. Babb, who started work as executive vice president, general counsel and corporate secretary Monday, reports to Chief Executive David Banks, who is also chairman.
"We're delighted to have him aboard," Beverly spokesman Dan Springer said, citing Babb's experience in the highly regulated railroad industry as a strength. "He seemed like the right fit for the company."

COMMENT:- There is ample evidence of what has happened to care when staff are cut. Imagine what will happen with the incentives proposed below. Note the totally different world these people live in.

Beverly Enterprises hires railroad executive
The Arkansas Democrat-Gazette April 09, 2000, Sunday

Editorial Comment: According to a presentation made 4/11/00 at a Merrill Lynch Healthcare Investors Conference by Beverly's founder, David Banks, Beverly is actually very excited about the appointment of William Floyd. Floyd was chosen for his franchise experience (Taco Bell, Kentucky Fried Chicken, etc.) Banks sees franchising as the future of nursing homes. He believes that giving administrators a 25% share in profits will give them added "efficiency" incentives.

Seniors in Japan access new services ; Under program, private companies can provide care
Modern Healthcare April 24, 2000, Monday
Ann Saphir

Japan's eldercare market took off this month when private organizations and government agencies began providing services to senior citizens under the government's new long-term-care insurance program.
Under the new system, private companies can provide that care and bill the government for the services. Until now, all welfare services financed by government funds have been administered by government agencies.
At least two U.S. companies--Emeritus Corp., a Seattle-based assisted-living company, and Beverly Enterprises, a Fort Smith, Ark.-based nursing home chain--have entered joint ventures that allow them to tap into the new funding stream (Nov. 15, 1999, p. 46).

Beverly First Quarter Earnings On Plan At Six Cents Per Share Diluted
Business Wire May 2, 2000, Tuesday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that net income for the first quarter of 2000 totaled $6,261,000, up six percent from$5,907,000 reported for the same quarter of 1999. Earnings per share diluted totaled six cents for each period.

Industry in turmoil, but Beverly spurns bankruptcy, buyout

FORT SMITH -- Despite turmoil in the nursing home industry, Beverly Enterprises Inc. isn't contemplating either a bankruptcy-law filing or a leveraged buyout to take the company private, the company's chairman and chief executive said Tuesday.

David Banks ruled out the options during a conference call with securities analysts and investors in which he discussed Beverly's latest quarterly financial results. Beverly reported a 6 percent increase in first-quarter earnings on a 2 percent revenue increase.
Among the most significant pressures on Beverly's bottom line are labor costs, changing Medicare payments, and occupancy rates.

Beverly's earnings rose a bit in quarter
Modern Healthcare May 8, 2000, Monday

Beverly Enterprises, the largest nursing home operator in the U.S., reported earnings in the first quarter ended March 31 rose 6% to $6.3 million, or 6 cents per share, from $5.9 million, or 6 cents per share, in the year-ago quarter. Revenue rose 2% to $646.9 million.

COMMENT:- The next article takes a very pro-corporate position describing their difficulties and problems. There is not a word about fraud, substandard care or disputes with nurses - or the ruthless exploitation of Medicare by these corporations. This is what forced government to change a system which had depended on integrity, to one which was more difficult to defraud.

Aid cuts create nursing home ills; Low wages, rivalry add to woes
TELEGRAM & GAZETTE May 19, 2000 Friday

Representatives of the nursing home's owner, Beverly Enterprises, which touts itself as the country's biggest nursing home company, say they have worked hard to overcome the predicament facing many other players in the industry.

Three or four years ago, our company began planning for the Medicaid and Medicare cuts,'' said Dan Springer, a Beverly spokesman. We began training to operate under a new payment system; we paid down debt, and we purchased rather than leased equipment.

Today, we are in a sounder position than anyone,'' he continued. Does that mean we are singing in the streets? No. We are still facing challenges. This is a tough market.''

Meanwhile, advocates for nursing home residents are concerned about the welfare of senior citizens displaced when a nursing home shuts down.

Sun-Sentinel (Fort Lauderdale, FL) July 31, 2000

Earlier this year, for example, Beverly Enterprises, a publicly traded chain that operates more than 60 homes in Florida, pleaded guilty to fraud and agreed to pay a settlement of $ 175 million after the government claimed that it stole more than $ 460 million.

Unfortunately, the Beverly case is not unique: Charges of corruption, false claims and Medicare fraud continue to surface throughout the country.

The U.S. Congress attempted to slow runaway spending and industry-wide malfeasance by changing the method of reimbursement with the infamous Balanced Budget Act (BBA) of 1997. The new rules -- written with significant industry input -- were set up to pay homes a fair wage for care they were to provide while making it more difficult for homes to systematically charge for unnecessary or overpriced care.

The BBA failed, however, to account for the overwhelming debt of the for-profit chains. According to virtually every health policy analyst, the 1990swas a period of unchecked growth and a disregard for sound money management policies. (For example, Integrated Health Services, which operates over 40 homes in Florida, was $ 3 billion in debt prior to declaring bankruptcy earlier this year and its CEO, Robert Elkins of Naples Florida, was cited by Forbes magazine as the most overpaid executive in America.).

Top 15 nursing home chains
Modern Healthcare By the Numbers Supplement July 31, 2000

Table ranks top 15 nursing home chains by number of beds as of 1/99 Beverly Enterprises had 62,293 beds
Rank ............... Company ............................................... Beds

1 Beverly Enterprises Fort Smith, Ark. .................. 62,293
2 Mariner Post -Acute Network Atlanta ................... 49,656
3 HCR Manor Care Toledo, Ohio ................................. 47,138
4 Sun Healthcare Group Albuquerque ........................ 44,941
5 Integrated Health Services Owings Mills, Md ........ 44,302
6 Vencor Louisville, Ky. ............................................ 38,362
7 Genesis Health Venturers Kennett Square, Pa. ....... 35,016

Beverly Earnings Continue On Plan at Eight Cents Per Share Diluted in Second Quarter
Business Wire August 1, 2000, Tuesday

Beverly Enterprises, Inc. (NYSE: BEV) today announced that net income for the second quarter of 2000 totaled $8,522,000 (eight cents per share diluted), compared to a net loss of $115,857,000 ($1.13 per share diluted) in the same quarter of the prior year.

BondWeek August 7, 2000

Bonds issued by Beverly Enterprises have not yet reflected the fact they it is one of the few publicly traded long term care companies that is likely to rebound from the stringent 1998 Congressional cuts into Medicare reimbursements, according to a pair of analysts. Beverly didn't drown with other nursing home credits because of its historically lower emphasis on sub-acute care and the fact it is conservatively capitalized.

Nursing homes may see more Medicare funds
Reuters .. October 8, 2000
William Borden

Shares in the two remaining publicly traded nursing home operators that are not in bankruptcy reorganization, Manor Care Inc. (NYSE:HCR - news) and Beverly Enterprises Inc. (NYSE:BEV - news), have climbed in anticipation of more money from Washington.

Business Wire October 31, 2000, Tuesday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned 10 cents per share diluted in the third quarter of 2000, before a previously announced charge primarily related to increased reserves for patient care liability costs in Florida. After the special pre-tax non-cash charge of $49,043,000, there was a net loss for the 2000 third quarter of $22,471,000 (22 cents per share diluted). This compares to net income in the 1999 third of $7,897,000 (eight cents per share diluted), after Year 2000 (Y2K) remediation costs of $3,423,000.

MARKET INSIGHT :: Nursing Homes, Stung by Politics
New York Times November 5, 2000

Beverly Enterprises is the other company that has positioned itself to survive. They have a very broad portfolio; in the last year they have strengthened their management team and are talking about looking at restructuring options. That stock is now trading at less than $5 a share. It peaked at $17.50 in November 1997.

Beverly Enterprises chief hands reins to president

David R. Banks, longtime chief executive of Beverly Enterprises Inc., will step down and company President William R. Floyd will take the helm of the nation's largest operator of nursing homes after 10 months with the company, the company said Tuesday.

Banks, who turns 64 in February, will continue as board chairman of the Fort Smith-based company and plans to retire at the year's end after 30 years with the company and 12 years as chief executive. Banks' retirement is part of a carefully planned succession, Beverly spokesman Dan Springer said.

"David [Banks] made it clear he was grooming Mr. Floyd in potentially succeeding him in the CEO role," Springer said. "He is the one who recommended Mr. Floyd and is fully in support of the board's appointment." Analysts agreed the transition is no surprise.
Floyd succeeded Boyd Hendrickson, who resigned abruptly in November 1999, as the company finalized its Medicare fraud settlement with federal prosecutors, in which Beverly pleaded guilty last February to criminal charges as part of a $175 million settlement.

COMMENT:- Note Beverly's willingness to leave Florida - many will sigh in relief and hopefully the buyers will be totally independent of Beverly. Could it be that Beverly's finances are much worse than they have ever admitted. Note that they are renegotiating loans.

The other point is the way in which profit potential i.e. state funding determines whether citizens will be fortunate or unfortunate enough to be offered care by Beverly. Its got everything to do with potential profit and nothing whatever to do with the needs of the citizens.

Beverly CEO expects to dispose of Florida operations
The Associated Press State & Local Wire February 6, 2001, Tuesday, BC cycle

The president of the nation's largest nursing home operator said Tuesday he is optimistic that the company will dispose of its Florida operations by the end of the year.

The company also announced Tuesday that its net profits dropped during the quarter due to an unusual pre-tax charge.

William R. Floyd, president and CEO of Beverly Enterprises Inc., said that proceeds from the sale of more than 70 facilities in Florida would be used primarily to reduce debt. The company announced previously that it had experienced a sharp increase in patient-care liability costs in Florida in recent years and had been exploring alternatives in that state.

Floyd said that three potential buyers for all of Beverly's Florida operations are performing "due diligence" research. Others have expressed interest in acquiring portions of Beverly's Florida portfolio.
"The primary differences between the 'best' and the 'most challenged' homes can be found in state-specific characteristics - including demographics, Medicaid rates and local occupancy levels," he said. "As a result of that analysis, we're realigning our nursing home operations into two divisions that reflect key differences in the ways various states support and fund eldercare.

"In those areas more favorable to eldercare, we plan to use our nursing homes as a base to expand our service businesses, such as Beverly Rehabilitation and Beverly Home Care. In the more challenged markets, we will work to improve the overall operating environment and increase the effectiveness of our facilities in those areas - or, if appropriate, selectively divest operations that demonstrate little chance of earning a fair return on our investment," he said.

Beverly Enterprises and its subsidiaries operate 534 skilled nursing facilities, as well as 34 assisted living centers, 165 outpatient therapy clinics, and 58 home care and hospice agencies.
He also said the company is discussing new credit arrangements with its banking group and expects to have new credit facilities finalized during the second quarter.

Beverly Earns 11 Cents Per Share Diluted in Fourth Quarter, Before Special Charges/Unusual Items
Business Wire February 6, 2001, Tuesday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that it earned 11 cents per share diluted in the fourth quarter of 2000, before special charges and other unusual items, compared on a similar basis to 6 cents per share diluted in the fourth quarter of 1999.

After unusual pre-tax charges of $85,563,000 (discussed below), there was a net loss for the 2000 fourth quarter of $46,814,000 (45 cents per share diluted), compared to a net loss of $32,594,000 (32 cents per share diluted) in the year-earlier period.
The sale of Beverly's Florida operations could result in a reported loss for the company, but it would be accretive to operating earnings. Proceeds from such a sale would be used primarily to reduce debt.

COMMENT:- Integration is still seen to be the way to generate money by securing referalls and providing sevices - something which does not work in the marketplace.

Building home equity; Beverly, Manor Care expanding their home-care presence
Modern Healthcare February 12, 2001, Monday

Nursing home heavyweights Beverly Enterprises and Manor Care both told analysts last week that they are putting more eggs in their home healthcare basket.

Both companies won plaudits from analysts last week after releasing their fourth-quarter and fiscal 2000 earnings reports.
William Floyd, Beverly's new chief executive officer, said rehabilitation and home health services would be his company's biggest growth area in the next three years. Those services now account for 13% of revenue, but Floyd said the goal is for them to represent one-third of the company's business by 2003.
Like a lot of post-acute providers, Beverly and Manor Care see synergies between home health and their core business, said A.J. Rice, healthcare services analyst for New York -based Merrill Lynch & Co. ''A lot of the long-term-care companies see the opportunity to follow the patients home after they leave the facility, or to get to know the elderly before they become nursing home patients,'' Rice said.


Beverly Previews On-Target First Quarter Operating Earnings
Business Wire March 30, 2001, Friday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that preliminary operating results for the 2001 first quarter are on-target, and that - as planned - they should equal or slightly exceed the six cents per share earned during the first quarter of 2000.

Increased rates for Medicare become effective April 1, 2001, which are expected to enable Beverly to achieve operating earnings for the remaining three quarters of 2001 that slightly exceed year-earlier levels.


Beverly Previews On-Target First Quarter Operating Earnings
Business Wire March 30, 2001, Friday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that preliminary operating results for the 2001 first quarter are on-target, and that - as planned - they should equal or slightly exceed the six cents per share earned during the first quarter of 2000.

Increased rates for Medicare become effective April 1, 2001, which are expected to enable Beverly to achieve operating earnings for the remaining three quarters of 2001 that slightly exceed year-earlier levels.

Comment:- Below is a long article about understaffing and care in Florida. The allegations made by James Page who has commenced a court action against a Beverly nursing home are used to illustrate the concerns.

Nursing home quality declines Facing a tide of lawsuits and horror stories, the industry says it is working to improve, but the Florida Legislature may not wait
The Florida Times-Union (Jacksonville, FL) April 1, 2001
Marcia Mattson, Times-Union staff writer

The percentage of Florida homes caught violating the state's minimum staffing requirements more than doubled from 1993 to 1999, according to a federal study. Violations of several other nursing home regulations increased.
James Page, 45, of North Jacksonville, says he didn't even get what the government paid for when he went to Paradise Pines on Sept. 19 for two weeks of rehabilitation after he had a stroke four days earlier.
Page said workers would tell him there wasn't anyone available to give him therapy on days when he received none. He also became ill, vomiting when he ate. The home put him on a special diet, but it didn't help, Page said.

On Oct. 22, his family had him sent to a hospital. He was treated for dehydration and received therapy and was discharged Nov. 1 to a rehabilitation center for daily therapy. Now he is home and goes to outpatient therapy.
'I feel like I missed out because the earlier you get help, the better the recovery is,' Page said. 'I feel like I got cheated out there.'
The percentage of Florida nursing homes found in inspections to be providing deficient services increased during the 1990s, during the same period in which the percentage of homes violating staffing requirements doubled.


Comment:- Firms with a bad name change their names and hope that citizens' memories are short.

AEGIS Therapies New Name for Beverly Rehabilitation
Business Wire April 4, 2001, Wednesday

Beverly Rehabilitation (NYSE:BEV), one of the largest contract rehabilitation companies in the United States, today announced that it has changed its name to AEGIS Therapies.

"This name change is part and parcel of the company's strategic growth plan coupled with the launch of a new, exciting marketing campaign designed to increase our market share," said Cindy Susienka, president of AEGIS Therapies.
AEGIS spun off from Beverly Healthcare, the nation's leading nursing home company, more than two years ago and became a separate operating unit of Beverly Enterprises.

Comment:- Note that Small has been cashing in his Beverly shares. Six weeks after this he left Beverly and joined Extendicare.

CFO Scott Tabakin to Leave Beverly; Phil Small Named Interim CFO
Business Wire April 5, 2001, Thursday

Beverly Enterprises, Inc. (NYSE: BEV) announced today that Scott M. Tabakin, Chief Financial Officer, intends to leave the company on April 30 to assume a similar position at AMERIGROUP Corporation, a multi-state managed healthcare company headquartered in Virginia Beach, Virginia.

Philip W. Small, Executive Vice President - Operational Finance, will assume additional responsibilities as interim Chief Financial Officer until a permanent replacement is named.
Small, 44, joined Beverly in 1986 as reimbursement manager, following a variety of public accounting assignments with Ernst & Young. After a series of promotions within Beverly's nursing home finance operations, he was elected Vice President-Reimbursement in 1990, Senior Vice President-Finance in 1995, Executive Vice President-Strategic Planning and Operations Support in 1998 and named head of Operational Finance earlier this year. Small is widely regarded within the long-term care industry as one of the leading experts in Medicare reimbursement, and has served as a key resource for business and government groups.

Beverly Announces Offering of $200 Million of Senior Notes
Business Wire April 9, 2001, Monday

Beverly Enterprises, Inc. (NYSE:BEV) announced today that it plans to issue $200 million aggregate principal amount of Senior Notes due in 2009.

First Call/Thomson Financial Insiders' Chronicle April 9, 2001

After several rough years, healthcare earnings improved nearly across the board last year and stock prices in the group rebounded sharply. Nursing home operator Beverly Enterprises, Inc. was no exception, appreciating more than 160% over the past year. Recently, the company lowered its fiscal outlook for this year, citing patient liability accruals, sustained labor pressures, and higher utility costs.

- - - - - - -- From February 9 through February 21, seven insiders sold 239,150 shares at $7.21 to S7.78 per share.

Analysts insist that valuation rests on the success of the strategic restructuring, which has been in the works for about six months. The most significant aspect will be the sale of the Florida operations. Given the state's arduous patient liability laws, the company's Florida-based nursing homes have suffered extraordinarily high patient liability and insurance costs.

Against this backdrop, insiders are selling at levels not seen since back in '92. Even more discouraging, all this has occurred at prices 50% off the stock's all-time highs.
Insider Shares

Chairman David Banks 93,625
Officer Eugene Clark 23,000
EVP, Pres.-BEV Healthcare William Mathies 25,114
EVP, Planning & Ops. Philip Small 18,173
EVP Thomas Moore 59,900

Chairman sees his compensation triple at Beverly
The Arkansas Democrat-Gazette April 10, 2001

Beverly Enterprises Inc. Chairman David Banks received total compensation of about $ 2.6 million last year -- more than three times the amount he compiled a year earlier -- according to the company's proxy statement filed Monday with the Securities and Exchange Commission.
Beverly, the nation's largest nursing-home operator, said it authorized the exchange to certain executives and other employees "to provide enhanced motivation" to them and "to reduce the number of stock options outstanding." Banks, whose total compensation in 1999 was about $ 825,000, has spent 30 years at Beverly, including 12 as chief executive.
Each of Beverly's three other highest-paid officers -- executive vice presidents William Mathies, T. Jerald Moore and Scott Tabakin -- received about $ 1 million in total compensation last year. Each also received options to purchase 87,400 shares of Beverly stock. The company said last week that Tabakin has resigned as chief financial officer effective April 30 to accept a similar position at Amerigroup Corp., a managed health-care company.

Harris Diamond Elected Beverly Director
Business Wire April 10, 2001, Tuesday

Beverly Enterprises, Inc. (NYSE: BEV) today announced that Harris Diamond has been elected to fill an additional seat on the company's Board of Directors. Diamond, 48, is president and chief executive officer of BSMG Worldwide, one of the largest and fastest-growing international public affairs and communications firms.
Diamond is also a Director of Caremark RX (NYSE:CMX), a leading prescription benefits manager in the United States. Diamond holds both MBA and JD degrees and is a member of the New York State Bar.

Market Stays Busy With Mix of Issuers
High Yield Report April 16, 2001
Rick Appin & Sarah Husband

The primary market continued on a busy trek last week, with seven new issues scheduled to price in the U.S…

…On the agenda for this week, nursing home giant Beverly Enterprises is expected to easily price a $200 million deal of 10-year senior notes under rule 144a via Credit Suisse First Boston.

Beverly Sets May 8 for First Quarter Earnings Announcement, Update on Planned Sale of Florida SNF Operations
Business Wire April 23, 2001, Monday

Beverly Enterprises, Inc. (NYSE:BEV) today announced that it will release financial and operating results for the quarter ended March 31 on Tuesday, May 8, before trading begins on the New York Stock Exchange.

At that same time, Beverly intends to update investors on the progress of its planned sale of skilled nursing facilities and assisted living centers in Florida.

Comment:- To obtain higher Medicaid entitlements many nursing homes in Florida are doing nominal sales to secure new owner entitlements. It is not clear if this is what Beverly plans to do.

The Palm Beach Post April 24, 2001
Mary Ellen Klas, Palm Beach Post Capital Bureau

As the House budget committee meets today to discuss whether it can afford to increase the staffing levels at nursing homes, companies across the state are using a loophole in the law to do what the legislature has refused to do -raise the Medicaid reimbursement rate for nursing homes.
If the new owner can prove it is not related to the previous owner, the nursing home is eligible for an automatic increase in its Medicaid reimbursement rate, drawing down more state and federal money to pay for the poorest residents, whose care the industry claims the state has chronically underfunded.
But others are going to extraordinary means to take advantage of the law.
AHCA officials oppose the effort and have included language in both the House and Senate budget proposals to prevent companies from using ownership changes to raise their rates.

But their proposal wouldn't take effect until January - enough time for bankrupt nursing home companies such as Beverly, which is planning to sell off more than 60 homes in Florida, or National Healthcare, to use the existing law.

Canterbury Village nursing home to close in May Medicaid payments too low, say owners of facility, the 12th in state to call it quits this year.

An Indianapolis nursing home that will close next month will be the 12th nursing facility in the state to shut down this year, compared to about the same number in all of 2000.
But Beverly Healthcare, which announced Tuesday that it will close Canterbury Village, 5353 E. Raymond St., cited low Medicaid reimbursement levels as a key reason for its decision.

PharMerica Signs Five Year Contract With Beverly Enterprises, Nation's Largest Nursing Home Chain; Agreement Extends Relationship Through March 2006
Business Wire May 7, 2001, Monday

PharMerica, a Bergen Brunswig subsidiary (NYSE:BBC), and leading provider of pharmacy products and services to the long-term care industry, today announced a five-year, $1.05 billion agreement with Beverly Enterprises (NYSE:BEV), the nation's largest nursing home chain, which operates over 500 skilled nursing facilities nationwide.

Beverly Earns 8 Cents Per Share Diluted in First Quarter, Before Special Charges
Business Wire May 8, 2001, Tuesday

Beverly Enterprises, Inc. (NYSE: BEV) today announced that strong business unit operating results enabled it to earn eight cents per share diluted in the first quarter of 2001, before previously announced special charges related to the planned sale of Florida nursing operations ($86,066,000) and for workforce reductions, reorganization costs and other unusual items ($21,623,000).
Beverly's nursing home and AEGIS Therapies businesses each exceeded operating profit objectives for the first quarter, and - on a same-facility basis - also improved over 2000 first-quarter performance levels.
Planned Sale of Florida Operations.

As previously announced, Beverly intends to sell its skilled nursing facilities, assisted living centers and certain other assets in Florida. Management formally adopted this plan during the first quarter of 2001,------
Beverly currently is negotiating with a potential purchaser of its Florida operations. Other potential purchasers have expressed interest in acquiring all or portions of Beverly's Florida portfolio.
Comment:- Note the reference to manipulating payor mix below. This means the sort of insurance patients hold. In other words either favouring the admission of better insured patients or else giving different services depending on insurance -- hardly equitable.

The Medicare share of total patient days rose to 10.43 percent, the highest level since the second quarter of 1998. This improved payor mix reflects better coordination among admissions, nursing and rehabilitative support functions, as well as improved documentation practices. Utilization of rehabilitation therapy services for Medicare patients increased nearly 10 percent, and average length of stay increased nearly one day since the 2000 first quarter. (A one-day increase in average length of stay for Medicare patients would generate annualized incremental revenue totaling about $15 million.)
A key element of the company's three-year Strategic Plan is accelerating the internal growth of existing services businesses - primarily rehabilitation services through AEGIS Therapies and Beverly Home Care. Both units outperformed internal expectations during the 2001 first quarter.
Comment:- Note the increased patient care liability costs below.

We're encouraged by our strong operating results during the first quarter, and look forward to continued performance improvements during the balance of the year. The operating gains we've already achieved should help offset significant cost increases we're experiencing for patient care liability and for employee medical benefits, - - - - -

Comment:- Citizens and lawyers have targeted poor quality homes in Florida and secured large settlements. Beverly confirms that this has eaten into profits and is forcing them out of Florida.

Beverly profits up 29 percent for period Results exclude one-time charges
The Arkansas Democrat-Gazette May 09, 2001

Beverly Enterprises Inc. said Tuesday that first-quarter profits rose 29 percent before deducting one-time items as the company benefited from higher reimbursement rates for nursing-home residents on Medicare and Medicaid.

The bulk of the charges -- $ 86 million -- is for the planned sale of the Florida operations. Including the nonrecurring items, Beverly reported a net loss of $ 52.3 million, or 50 cents a share.

- - - the company's shares rose 10 percent Tuesday in heavy trading on the New York Stock Exchange. Shares rose 84 cents to $ 9.40 and at one point hit a 52-week high of $ 9.50.
Long-term health-care stocks have performed well this year, he said, because of the federal government's effort to restore billions of dollars in Medicare funding cuts. Nursing home stocks also have rallied in recent days because the Florida Legislature passed a bill that would cap punitive damages against nursing homes while also providing millions in taxpayer dollars to improve staffing. The legislation improves Beverly's prospects for selling its properties in Florida, where litigation has eaten into profits.

BYLINE: By Greg Groeller, Sentinel Staff Writer

Beverly Enterprises Inc. is forging ahead with plans to sell its Florida nursing homes, despite a new state law that limits the size of lawsuits against long-term care facilities.

Beverly Announces Results of Annual Meeting of Stockholders; Sets Date for 2002 Annual Meeting
Business Wire May 29, 2001, Tuesday

Beverly Enterprises, Inc. (NYSE:BEV) reported that, at its annual meeting held on May 24, 2001, stockholders elected all nominees to the Company's Board of Directors, - - - - - -

Extendicare Announces Senior Executive Appointment
Business Wire May 31, 2001, Thursday

The Board of Directors of Extendicare Inc. (NYSE:EXE.A)(TSE:EXE.)(TSE:EXE.A.) is pleased to announce the appointment of Philip Small as Senior Vice-President Strategic Planning and Development, Extendicare Inc, effective June 1, 2001.
Mr. Small comes to Extendicare from a 15-year career at Beverly Enterprises Corporation, Fort Smith, Arkansas.

Beverly Updates Plans, Performance
Business Wire June 12, 2001, Tuesday

Beverly Enterprises, Inc. (NYSE:BEV) today provided the following updates on its plans and performance to investors at the Goldman Sachs Health Care Conference in Dana Point, CA:

-- William R. Floyd, President and Chief Executive Officer, reiterated the company's plan to sell its nursing home operations and assisted living facilities in Florida.


Beverly Enterprises Inc., a U.S. nursing home operator, Tuesday reiterated its second-quarter and 2001 earnings estimates of 9 cents a share and 40 cents a share, respectively. The company, which operates more than 500 facilities in 30 states, said it still plans to sell its nursing home operations and assisted living facilities in Florida. Its shares closed up 44 cents at $10.04 on Tuesday on the New York Stock Exchange.

Comment:- Floyd makes a lot of noise about putting patients first, linking incentives to care but given the ongoing problems in care one wonders if this is still hot air. One wonders if the sort of business people Floyd has brought with him are the best for aged care, or only for the bottom line.

Bringing Discipline (and Scorecards) to Nursing Homes
New York Times July 7, 2002

Recruited to Beverly in April 2000, he (Floyd) was appointed chief executive 10 months later and has spent the last year and a half working to turn around the beleaguered company.

Beverly, which had revenue of $2.71 billion last year, operates multiple units, just as a chain of restaurants does, he said. The company also relies heavily on low-wage employees - nursing assistants - to provide care. "Taco Bell competes with Beverly for these people," Mr. Floyd said.
Mr. Floyd brings a keen emphasis on accountability and is experimenting with more than a dozen new, potentially more profitable health care services.

By setting clear financial goals for his managers and by linking their pay to the quality of care, he has already improved the company's profitability and says it is providing better care.
When Mr. Floyd arrived two years ago, Beverly was close to bankruptcy. That February, it had agreed to pay the federal government $175 million to settle the industry's largest allegation of Medicare fraud. The company's stock, which traded as high as $17.50 in late 1997, had plummeted to a low of $2.50.
Mr. Floyd said he found a company with no clear direction and with a management team that was badly demoralized. He quickly replaced many of Beverly's senior managers. Blaise J. Mercadante, a marketing colleague from Taco Bell who also spent some time as a senior marketing executive at Universal Studios, now oversees marketing and business innovation. Jeffrey P. Freimark, who had run the Grand Union supermarket chain while it tried to reorganize under bankruptcy laws, was recruited as chief financial officer.

Mr. Floyd also introduced Beverly to the kind of accountability found at companies like PepsiCo, where managers must deliver results, said Kevin Jones, a portfolio manager at ICM Asset Management, which has invested in Beverly stock. Before Mr. Floyd arrived, "there wasn't a whole lot of focus on execution," Mr. Jones said.
The new chief executive has been relentless in demanding performance from individual facilities, one-fifth of which he identified as poor performers in early 2001. Each is judged by a scorecard, on which factors like pretax income, employee turnover, occupancy, bad debt and quality of care are measured. Many have improved, and 14 were closed or sold last year.

Because Florida accounted for most of Beverly's liability costs and just 10 percent of revenue, the company also simply left that market, selling about 50 nursing homes early this year.
"Beverly's facilities are now under much tighter corporate control, and Mr. Floyd has replaced one-third of the local managers.

Beverly Enterprises Charge Leads to Loss
Reuters July 30, 2002

Nursing home operator Beverly Enterprises Inc. on Tuesday said an increase in reserves for lawsuits led to a second-quarter loss, and an investigation of one of its California operations could adversely impact future earnings.
Beverly reported a loss of $14 million, or 13 cents per share, after a $43.3 million increase in patient care liability reserves. In last year's second quarter, the operator of 462 nursing homes and 29 assisted-living centers earned $5.6 million, or 5 cents a share, after charges from the sale of its Florida nursing home operations.

Inadequate Medicaid payments squeeze homes' level of care
St. Louis Post-Dispatch October 14, 2002

Beverly Enterprises Inc., which operates 500 homes in 30 states, agreed last year to repay the government $175 million for fraudulent billings.
Beverly Enterprises, which has the largest number of beds, last year reported a net loss of $301 million (including the $175 million in criminal penalties and civil fines) on revenue of $2.7 billion.
Regardless of performance, many executives do well.
Beverly's CEO, William Floyd, got $1.3 million plus stock options worth $2.3 million more.


Nursing homes' donations bought favor, critics allege
The Clarion-Ledger November 17, 2002

Days before calling a special session that would benefit nursing homes, Gov. Ronnie Musgrove received $92,400 in contributions from the homes. He wasn't the only one. Overall, Caregivers for Patients' Rights - a political action committee funded by the Arkansas-based Beverly Enterprises and dozens of Mississippi nursing homes - spent $289,812, nearly all of it in contributions to Musgrove and 73 lawmakers.

Beverly's troubles mirror industry's
Ft. Smith Times Record February10, 2003

The move is part of an across-the-board, belt-tightening, revenue-growing effort not only aimed at ensuring Beverly's survival but also at strengthening its position in what has been a challenging market environment - and none of the job cuts have come from the bedside care level, Chairman and CEO William R. "Bill" Floyd said last week.
On Tuesday, Floyd said Beverly faces about a $100 million gap in cash flow between where it was in 2002 and where it wanted to be in 2003.
Beverly won't be among the companies that go belly up, Floyd said. "The wolves are not at Beverly's door. Bankruptcy court is not a factor," Floyd said.
Beverly has some significant debt obligations that must be paid in August and more maturities coming due in 2006, Floyd said. Beverly's plan to reduce that debt includes divesting underperforming nursing facilities, focusing on its eldercare services and selling off non-core assets, resulting in a smaller nursing home portfolio but a stronger, more profitable company, Floyd said.

Beverly to settle 42 neglect cases : Fort Smith-based owner of nursing homes to pay $1.5 million

News of the settlement comes weeks after Beverly recorded a $91 million loss during the fourth quarter of 2002 and a $146.1 million loss for the year.

 Beverly Reports $12 Million Profit for First Quarter Daily Report -May 13, 2003

Beverly reported a profit of $12.2 million, or 12 cents per share diluted, for the first quarter in 2003, compared with a $56.7 million loss, or 54 cents per share diluted, in the same period in 2002, according to a company news release.

Beverly to ease cost-cutting tactics

Nursing home operator Beverly Enterprises Inc. plans to roll back some cost-reduction measures after revenue for the first quarter jumped and federal and state governments appear poised to increase medical spending on the poor and elderly.
The company's stock plumbed the depths at a year’s low of $1.66 on February 16. Floyd said that the stock has the potential to trade between $12 and $15 per share.
Beverly had been tangled in a cash-sapping web of lawsuits and costs related to Medicaid over billing that toppled the company's finances.

Beverly reports quarterly profit rise

 Beverly Enterprises Inc., the country's largest nursing home operator, recorded a profit in the second quarter, reflecting the sale of facilities and new business at its hospice and therapy units.

Tuesday, the Fort Smith-based company said net income in the second quarter rose to $17.5 million, or 16 cents a share, versus a loss of $14 million, or 13 cents a share, a year earlier.
Since late June, the company sold 20 licensed home-care agencies in North Carolina that provide personal-care services and private-duty nursing to Maxim Healthcare Services Inc., based in Columbia, Md. Beverly also exited 18 skilled nursing facilities and two assisted living centers in the Southeast region.

 Beverly Enterprises sells 20 home-care agencies

(The sales)- - - will allow the company to use the $73.5 million it netted to pay facility-related debt.

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