Deadline Given for PACS, a Troubled Nursing Home Giant, to Address Delisting Warning

PACS Group is currently facing a critical situation as the New York Stock Exchange has issued a final deadline for the company to rectify reporting compliance issues or risk being delisted. The group, strongly established in the healthcare sector, operates 314 post-acute care facilities and stands as one of the leading skilled nursing companies in the United States.

About a year ago, PACS generated buzz by going public with an impressive initial public offering that raised over $400 million. However, this enthusiasm quickly dissipated when claims surfaced, alleging that the company exploited a COVID-era waiver to overcharge Medicare for specific patients, thereby boosting its revenue figures.

Following these allegations and internally driven examinations, PACS has abstained from reporting its financial results for the previous quarters, a transgression that breaches stock exchange regulations. In response to this lapse, the NYSE imposed a series of sanctions to compel the company to comply with reporting standards. PACS recently altered its credit agreement with Truist Bank, the lender, to maintain $100 million in liquid assets until providing audited financial statements for 2024.

An impending delisting from the NYSE could prove detrimental to PACS, subsequently halting public trading of its shares. Delisting is a penalizing process executed for various reasons such as financial non-compliance by the designated exchange, voluntary privatization, or corporate insolvency. Companies like Sunrise Senior Living and Genesis have previous experiences with delisting due to a multitude of reasons.

In light of these ongoing developments, a PACS spokesperson has remained silent following the recent incident. In a previous statement released after the initial allegations, PACS CEO Jason Murray dismissed the claims as “misleading.” He affirmed that the organization was under scrutiny due to regular governmental surveys and audits but remained confident in its compliance record. To date, PACS has not provided any concrete timeline or assurances about resolving its impending delisting status.

As the impending cutoff date from the NYSE draws nearer, PACS must take swift corrective measures to rectify its internal financial reporting discrepancies and pending audits. The heightened scrutiny poses a significant challenge to PACS, potentially reshaping the future of the once-promising skilled nursing industry player.