Brookdale Still Deciding How to Use Its $29M in Cares Act Relief Funding

Brookdale Senior Living Inc. (NYSE: BKD) is still recovering from COVID-19 headwinds that have negatively impacted its home health service line.

Brookdale is one of the largest senior living owners and operators in the country, with nearly 750 retirement communities that serve roughly 65,000 residents. Its health care services department includes hospice and home health care.

One of the main drivers behind the public health emergency’s negative impact on Brookdale was the suspension of elective procedures, which reduced the Brentwood, Tennessee-based company’s home health admissions.


“It’s unfortunate that just as we were starting to see sequential census progress in January and February, the COVID pandemic hit,” Brookdale President and CEO Lucinda M. Baier said Wednesday during a presentation at RBC’s 2020 Global Healthcare Conference. “COVID-19 had a significant impact on our health care services business, as medical referrals dropped significantly [and] as medical procedures were suspended.”

In March, the Centers for Medicare & Medicaid Services (CMS) issued guidance around lowering the amount of “non-essential” medical and surgical procedures in order to maintain personal protective equipment (PPE), beds and ventilators during the public health emergency.

Like Brookdale, many home health providers experienced lower patient volumes and saw its bottom line take a hit.


Home health providers often care for patients who have had elective procedures, such as joint replacements. With surgeries being postponed, in turn, some reported reductions in revenue exceeding 25%, industry leaders previously told Home Health Care News.

In April, CMS issued a set of guidelines for health systems that outlined the return of elective procedures, which could mean a possible bottom-line boost for Brookdale and other home health companies moving forward.

During Brookdale’s recent 2020 first-quarter earnings call, the company touched on another COVID-related challenge. Some of Brookdale’s patients canceled home health appointments due to fear of exposure to the virus, which also impacted the company’s patient volume.

For Brookdale, it’s still too early to tell how things will ultimately shake out, according to Baier.

In the meantime, the company has rolled out a number of COVID-19 related measures, including shifting some of its home health staff to its senior living segment.

“When work slowed down for certain positions in our corporate office and our health care services business, we pursued opportunities for associates to fill positions in our senior housing communities,” Baier said. “This minimized the negative consequences of the impact of COVID-19 on our business.”

On the recruitment front, the company announced in April that it is was hiring over 4,500 health care workers for additional support. Home health hires will make up about 10% of those positions, according to the company.

“Our average daily application volume is up 26% compared to March,” Baier said during the RBC presentation. “We’ll continue to work hard to ensure that we’re continuing to pay our people appropriately for the work that they do.”

During the call, Brookdale also addressed the emergency provider relief funds the company received from the Department of Health and Human Services (HHS) as part of the CARES Act.

“As you would expect, we’ve thought a lot about it,” Baier said. “It’s too soon to have a final determination on what will happen with the funds, but, needless to say, it’s something that we are studying very carefully. [We’re] making sure that we will make the best decision for our shareholders.”

Overall, Brookdale received $29 million from the federal Public Health and Social Services Emergency Fund.

Since the distribution of funds began, many home health providers have taken a “wait and see” approach in regard to the actual deployment of that money.

During its 2020 Q1 earnings call, for example, Amedisys Inc. (Nasdaq: AMED) leadership said that, though the company received $100 million in emergency funding, they would wait for written clarification and guidance before acting on it.

“At this time, we have fully segregated these funds into their own account and will not be utilizing them until final written guidance is received from HHS,” Amedisys President and CEO Paul Kusserow said.

Meanwhile, Encompass Health Corporation (NYSE: EHC), on the other hand, has returned the $237 million in funding it received through the CARES Act. Generally, Encompass Health leadership suggested there are still too many unknowns for the relief funds to make sense for the well-capitalized company.

“At the end of the day, we just felt, as a well-capitalized company, we had access to a variety of funding resources,” Encompass Health CEO Mark Tarr said Tuesday during the UBS Virtual Global Healthcare Conference. “We just thought it was the best decision for Encompass Health to return the funds.”

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