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The Ensign Group Successfully Graduates Troubled Nursing Home from CMS Special Focus Facility Program
Date:2/19/2008

MISSION VIEJO, Calif., Feb. 19 /PRNewswire-FirstCall/ -- The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign(TM) group of skilled nursing, rehabilitative care services and assisted living companies, announced that its Waverly Park skilled nursing facility in Tucson, Arizona has successfully graduated from the Special Focus Facility Program established by the Centers for Medicare and Medicaid Services ("CMS").

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An Ensign team recently completed the challenging clinical turnaround at Waverly Park, a 200-bed skilled nursing facility that was placed on Special Focus status by CMS in 2005 based largely on events that occurred prior to Ensign's acquisition of the facility. The facility passed its final inspection in November 2007, and recently received official notice from CMS that it had graduated from the Special Focus Facility program.

Theresa Linnane, a 14-year veteran of the Arizona Department of Health, where she worked as a Survey Program Team Leader, and now an Ensign Administrator and Executive Director of Waverly Park, explained the process. "We had to start from scratch with this facility. It had no systems, a negative reputation and had been in bankruptcy. We first rebuilt its clinical systems and its reputation for quality, and we are currently rebuilding its financial foundation -- all one step at a time," she said.

Ensign has long pursued "turnaround" opportunities like Waverly Park, and continues to seek similar opportunities for its growing portfolio of long-term care facilities.

"We founded this company to bring a new level of quality to long-term care, and we have built our business largely by turning around struggling nursing facilities similar to Waverly and other facilities on CMS' Special Focus Facility list," said Ensign President and CEO Christopher Christensen.

"Troubled facilities that others had given up on have been our bread and butter," he added, explaining that Ensign's turnaround program targets poorly-operated and undervalued acquisitions, and then attempts to transform them to produce outstanding clinical and financial improvements over time.

Ensign now has two additional facilities that have been named to the Special Focus Facility list. CMS and state regulators selected the two based on their last three years of regulatory history, even though Ensign acquired them much more recently. One of the facilities, Mt. Ogden Rehab & Care Center in Ogden, Utah, has already been surveyed once by state regulators since Ensign took it over. The facility passed that survey; however it still fell within CMS' Special Focus criteria based on several serious incidents that occurred prior to Ensign's arrival, including the drowning of a patient.

"Although problems that were created over long periods of time obviously do not get fixed overnight, we are proud of the sweeping and meaningful changes we've made at Waverly Park and Mt. Ogden, and we are continuing these efforts across all of our turnaround projects," said Christensen.

Noting that not all of Ensign's facilities were troubled at the time of acquisition, Christensen added that, in addition to improving care, Ensign has historically been able to create tremendous value by pursuing this opportunistic business model over the majority of its portfolio. He pointed to Ensign's industry-leading EBITDAR margins and return on assets as indicators of the program's success.

He also noted that Ensign had been tapped by the California Department of Health Services in 2001 to rescue three troubled facilities that the State had taken over because they were in "immediate jeopardy" status, meaning that patients were in imminent danger of harm. "We want to become the answer for CMS and state regulators in every state where we operate when they encounter especially troubled facilities," said Christensen.

About The Ensign Group, Inc.

The Ensign Group, Inc.'s operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, and other rehabilitative and healthcare services for both long-term residents and short-stay rehabilitation patients, at 61 separate operating locations in California, Arizona, Texas, Washington, Utah and Idaho. More information about Ensign is available at http://www.ensigngroup.net.


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SOURCE The Ensign Group, Inc.
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