SNF Pre-Acquisition Due Diligence & Post-Acquisition

SNF Pre-Acquisition Due Diligence & Post-Acquisition

The skilled nursing facility sector presents unique acquisition risks that standard financial due diligence does not capture. A facility with clean financial statements may have a pending survey revisit that will result in a Civil Money Penalty effective the day of closing. A facility with strong census may have a pattern of MDS coding practices that represent significant RAC audit exposure. A facility with experienced leadership may have a Director of Nursing who plans to leave the moment the transaction closes. A multi-facility portfolio may have one building that is on the verge of Special Focus Facility designation.

These risks are not always visible in the offering documents. They require a clinical and regulatory lens that most financial due diligence processes do not apply. We provide that lens — and we deliver findings in a format that both investment committees and legal teams can act on before the transaction closes.

Pre-Acquisition Due Diligence

Regulatory History Review

• Analysis of the last three years of survey activity, including standard surveys, complaint investigations, and focused surveys, with evaluation of scope and severity trends, repeat deficiencies, and Immediate Jeopardy (IJ) history

• Review of enforcement actions issued by Centers for Medicare & Medicaid Services, including Civil Money Penalties (CMPs), denial of payment, and other remedies, along with status of any pending actions

• Assessment of Special Focus Facility (SFF) and SFF Candidate status

• Review of state survey and licensure history in addition to federal regulatory performance

Clinical and Operational Assessment

• On-site evaluation of nursing documentation, care delivery practices, infection control, and medication management systems

• Review of MDS accuracy and PDPM coding to identify reimbursement and compliance risk

• Staffing pattern analysis utilizing Payroll-Based Journal (PBJ) data and internal staffing records

• Assessment of clinical leadership stability and organizational structure

Billing and Financial Risk Assessment

• Medicare and Medicaid billing compliance review, including claim support, skilled care justification, and overpayment exposure

• Accounts receivable (A/R) analysis, including aging, denial trends, and collection performance

• Cost report review, including identification of open years with audit or recoupment risk

Workforce Assessment

• Evaluation of retention risk for key leadership and critical personnel

• Analysis of CNA and licensed nurse vacancy rates and turnover trends

• Review of union agreements and labor considerations, where applicable

Post-Acquisition Stabilization

The first 90 days following a Skilled Nursing Facility (SNF) acquisition represent a high-risk transition period. Leadership changes, workforce instability, census variability, and payer re-credentialing create operational and regulatory exposure at a time when focus is divided between closing activities and integration.

We provide structured stabilization support that includes:

• Day One Operational Readiness — Coordination of licensure transfer, payer enrollment, payroll transition, and resident/family communication to ensure uninterrupted operations

• Leadership Transition Support — Interim clinical leadership coverage where needed, along with onboarding and operational guidance for incoming Administrators and Directors of Nursing

• Compliance Infrastructure Establishment — Activation of a formal compliance program, policy and procedure review, and immediate remediation of high-risk compliance gaps in alignment with Centers for Medicare & Medicaid Services requirements

• Clinical Quality Stabilization — Rapid assessment of nursing operations, care plan recalibration, and initiation of QAPI program structures to restore clinical consistency

• 90-Day Performance Dashboard — Development of a weekly executive scorecard tracking census, staffing, billing performance, quality measures, and regulatory compliance obligations