SavaSeniorCare Expects to Cease Operations by Early 2023

After divesting of its sizable portfolio over the course of several years, SavaSeniorCare will cease to exist as a company once its last five nursing homes transition to other operators, which the company expects to occur by the end of January 2023.

The end of Atlanta-based Sava marks another sea change in the skilled nursing landscape, which has seen a number of large providers significantly scale down. As recently as September 2022, Sava was the 11th-largest U.S. nursing home operator, with 92 facilities, according to a Stifel analysis of data compiled by the Centers for Medicare & Medicaid Services (CMS).

In an emailed statement to Skilled Nursing News, Sava said that COVID-related challenges drove the decision to hand off the portfolio to other operators. That statement read:

“The nursing home industry has experienced significant challenges over the past few years due, in large part, to COVID-19. As a result, Sava and its affiliated operating companies have made the decision to transition the portfolio of nursing centers to regional operators. Sava’s operating affiliates currently operate five nursing centers. We anticipate that all transitions will be completed by the end of January 2023.”

In April of this year, Sava’s chief strategy officer Ray Thivierge raised the alarm on occupancy recovery, adding that many in the industry knew occupancy was going to be somewhat diminished during Covid years, but the future looked even more uncertain.

“Now there’s this realization that our long-term care occupancy may never recover,” Thivierge told SNN in April.

Sava first announced its post-pandemic strategic plan in November 2020. The operator set out to transfer operations of 48 SNFs and assisted living properties across eight states by the end of 2021. At the time, Sava operated 169 facilities.

The operator originally wanted to position itself around two divisions with properties concentrated in specific geographic regions.

Sava in September 2021 transitioned 29 more long-term care facilities to four regional operators; the portfolio spanned three states: Colorado, California and Wyoming. Erik Howard, executive managing director of Capital Funding Group, said the deal was a complicated one, with four tenants now under the same underlying real estate portfolio and loan.

“Part of the motivation of the transaction was (a) to allow for the operating company transitions and the new leases and (b) to put in place a more flexible loan that would allow the real estate owner to pursue a HUD exit,” Howard explained at the time the deal closed.

Coupled with its divestitures, Sava was also facing allegations it violated the False Claims Act (FCA), submitting false claims for rehabilitation services between October 2008 and September 2012 in a system-wide effort to boost Medicare billings, according to the Department of Justice (DOJ).

The operator and its related entities in May 2021 agreed to pay $11.2 million to resolve the allegations – without admitting any wrongdoing, the DOJ noted at the time.

Overall, the skilled nursing sector remains highly fragmented, with one-third of SNFs being single-site operations – 53% of the remaining 606 multi-facility providers have less than 10 facilities and 28 have 50 or more buildings, according to ownership data released by the Centers for Medicare & Medicaid Services (CMS) late September.

And the trend of regionalization has led to a reordering of the largest national operators.

Brickyard Healthcare, for one, has rebranded itself as a regional operator “rooted in the Midwest,” while also downsizing operations to 23 locations in Indiana. Formerly known as Golden LivingCenters, the operator once managed one of the largest portfolios in the industry.

Florida-based Consulate Healthcare underwent significant downsizing in December 2021 following a bankruptcy filing and settlement earlier that year. The skilled nursing giant went from 208 buildings across 21 states to 60 centers in five states.

In Florida, Consulate-managed facilities were either sold or moved to different regional providers.

Other multi-state operating giants like The Ensign Group (Nasdaq: ENSG) and Genesis HealthCare have taken a regional approach, supported by centralized resources and pillars of leadership in every market.

More recently, real estate investment trust Welltower (NYSE: WELL) struck a joint venture with Integra Health, under which 147 SNFs formerly operated by ProMedica will transition to regional operators.