Kindred Healthcare has completed the sale of two of its transitional care hospitals, licensed as long-term acute care hospitals, to Select Medical Holdings Corp., while also selling four hospital the Select, the companies announced on Wednesday.
Under terms of the deal, Kindred acquired leased hospitals in Indianapolis, Houston, Denver and Colorado Springs, Colorado, and sold one owned and one leased hospital in Cleveland to Select.
In connection with these transactions, Kindred paid approximately $800,000 in additional cash consideration to Select. The transaction did not include Kindred's leased hospitals in Atlanta, northern Indiana or San Antonio.
The companies said they are still in the process of closing on the Atlanta and San Antonio hospitals.
Kindred announces it intentions earlier this year, signing a definitive agreement in February.
Benjamin Breier, Kindred's president and CEO, said in a statement that the transaction will create new value for patients and shareholders, as well as speed up the transition of patients to lower acuity care settings.
In February, Breier said the move was in anticipation of new long-term acute care patient criteria being released by the Centers for Medicare and Medicaid Services.
The CMS rule will provide reimbursement at the full payment rate if a patient has spent at least three days in an intensive-care unit or at least 96 hours on a ventilator. Hospital stays that don't meet this criteria would receive a per diem, site-neutral payment rate.
Kindred executives said last year they viewed the site-neutral payments as an opportunity.
Based in Louisville, Kentucky, Kindred Healthcare has annual revenue of approximately $7.2 billion. It operates or has healthcare services through subsidiaries in 47 states, including 95 transitional care hospitals, 18 inpatient rehabilitation hospitals, 90 nursing centers, 101 hospital-based inpatient rehabilitation units, and a contract rehabilitation services business, RehabCare.