What should I review when buying a skilled nursing facility?
Direct answer
Skilled nursing acquisition diligence should examine operating cash flow and payer mix, staffing and turnover, surveys and enforcement, clinical quality, physical plant, reimbursement liabilities, and the proposed operator transition. Review CMS enrollment and ownership/CHOW records alongside state licensing requirements. Public CMS data is a screening tool, not confirmation of current facility condition or transaction approval.
What to know
Reconcile financial statements with census, reimbursement records, receivables, labor expense and capital needs. Request survey reports, plans of correction, litigation, insurance claims, contracts and any outstanding repayment or enforcement matters.
CMS publishes inspection, quality and staffing information, including Payroll-Based Journal measures. Confirm reporting periods and limitations against current facility records. CMS ownership information is self-reported and should be corroborated.
Medicare enrollment and provider-agreement decisions require specialist review. State licensure, any certificate-of-need requirements, and change-of-ownership approvals are separate; do not assume the existing license transfers at closing.
- Compare public CMS records with source documents and current staffing rosters.
- Review physical plant, life safety, deferred maintenance and planned capital expenditure.
- Engage experienced healthcare counsel, reimbursement specialists and a qualified operator.
- Agree a transition plan for residents, employees, records and payer contracts before closing.
This is general information, not tax, legal or investment advice. Talk to your CPA and attorney about your situation.
Sources
By Haven Senior Investments
How Haven helps
Haven coordinates transaction diligence with the buyer, operator and specialist advisors; legal and regulatory determinations remain with qualified professionals. Use the multi-state senior housing due diligence checklist.