Genesis Hands Off 5 Behavioral Health Facilities

Genesis HealthCare (NYSE: GEN) has announced a series of deals that will transition the operational responsibilities for 19 of its West Coast facilities to New Generation Health. Five of those are behavioral health facilities.

As part of the $79 million transaction, Genesis sold the real estate and operations for six skilled nursing facilities and transferred the leasehold rights for 13 skilled nursing, behavioral health and assisted living facilities.

Genesis will continue to provide back-office support and ancillary services and will retain an indirect 50% interest in the facilities, according to a press release announcing the news. It will also continue to offer therapy at the properties, the company said.

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Kennett Square, Pennsylvania-based Genesis is one of the largest post-acute care providers in the country, with more than 400 skilled nursing facilities and assisted/senior living communities across 26 states, where it also operates behavior health centers. Meanwhile, the Los Angeles-based New Generation is a health care consulting firm that specializes in skilled nursing operations in the western U.S.

The deals were effective February 1.

Genesis CEO George Hager called the relationship “another example of the creative models we have employed to execute on our portfolio optimization strategy” in the press release.

“The high-level strategic thinking is: combine the benefits of true local, established operators, with the scale, the purchasing power, the systems, the technology, and the ancillary platform of a large-scale operator in Genesis,” Hager told Behavioral Health Business’s sister publication SNN.

New Generation plans to increase clinical capabilities at the facilities, in addition to improving employee satisfaction and engagement, New Generation CEO Aaron Robin told SNN. 

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