Q1 2020 Earnings Call
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Our next earnings call.
At this time, all participants are in listen only mode.
After the speakers presentation, there will be a question answer session.
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Lori you there.
Jim.
Go ahead.
Good morning, and thank you for joining us today.
We issued our press release earlier today, it's an outspend is available in the Investor Relations section of our web site at Genesis H.C.C. Dotcom a replay of this call will also be available on our website for one year.
Before we begin I would like to quickly review a few housekeeping matters first any forward looking statements made today are based on management's current expectations assumptions and beliefs.
Better business in the environment in which we operate including statements about the impact of the Cobot 19 pandemic. These statements are subject to risks and uncertainties that could cause actual results could differ materially from those expressed or implied on today's call Mr. should not place undue reliance on forward looking statements encouraged to review.
Our FCC filings for more worried more complete discussion of factors that could impact our results.
Except as required by federal Securities laws, Genesis healthcare and its affiliates does not undertake to publicly update or revise any forward looking statements or changes that arise as a result, you as a nation weaker than amazing circumstances over any other reasons.
In addition, any operationally mentioned today exasperated by separate independent operating subsidiary that is Oh.
Sorry that has its own management employees and assets references to the consolidated company and its assets in a city as well as the use of the turned to be Oh, It's in Myrtle Beach and Jones why the Genesis healthcare has less free assets we revenue.
Any of the various operations are operated by the same answer.
Our discussion today and information in our earnings release and in our public filings include references to adjusted EBITDA EBITDA adjusted EBITDA, which are not which are non-GAAP financial measures. We believe the presentation of non-GAAP financial measures provides useful information to investors regarding our results because these financial measures are useful.
We're trending analyzing and benchmarking to performance to fiber of our business.
But such non-GAAP financial measures should not be relied upon at the exclusion of Yep financial measures.
Support to the company's reasons for non-GAAP financial disclosure and its GAAP non-GAAP reconciliations contained in today's earnings.
With that I'd like to turn the call over the George Hager Yale Jen.
Thank you Laurie.
Good morning, and thank you for joining us today.
I have a number of members of the Genesis Senior management team on the call today.
Including Dr., Richard flight for Genesis healthcare as Chief Medical Officer.
Dr. Joanne Reifsnyder.
John It's chief Nursing officer, as well as Tom Deep trio, our Chief Financial Officer.
Given the unprecedented nature gravity cobot 19 pandemic.
We're going to focus our formal comments this morning on the pandemic.
Dr., Richard fiber will address the impact of coping 19 on our operations.
And our continued for spot.
Oh focus his comments on our very strong first quarter results.
More importantly.
The oldest Scott financial implications of a pandemic.
But before and after the first quarter.
Including the impact of government sponsored funny I truly commitments.
Programs, we have access to date.
Before I turn the call or dark fiber I would like to make a few opening remarks.
The last time, we spoke to the investment community March 17th.
20 Twond.
When we reported our results for the fourth quarter fiscal year ended 2019.
Even before that earnings call.
We learned that we had a single confirm case of cobot 19.
One of our facilities.
Our focus living up to that day at our focus now.
It's concentrated on protecting the health and safety or the patients and residents and our care.
Well, the staff who care for that.
Since the first case 71 days ago.
187.
Genesis is 361 facilities I reported one or more positive cases of covert 19 among patients in residents.
Many of these Phil so what do you have cleared or outbreaks and are now accepting new admission.
Over 84%.
Our positive cobot 19 cases, among patients and residents.
Occurred and just by the 25 inpatient states, where we operate.
New Jersey, Connecticut, Massachusetts, Pennsylvania, and Maryland.
Clearly.
Some of the hardest hit community outbreak arrogance across the entire country.
Since our first case, we have witnessed the incredible heroism resolve and sacrifice of our front line care givers and workers fighting the pandemic.
We have theater extraordinary leadership.
Ingenuity creativity.
Teamwork, among our reach on corporate staff <unk>.
For supporting me up for Tom the graph.
Most importantly, we have and will continue uphold our greatest responsibility.
The provision of compassionate care through our patients.
Fellow employees and their respective fab.
I'm extremely proud and hopefully by the way.
These have risen to the occasion.
On the leadership role Genesis is playing a partnership with the President's administration.
Public health officials at the federal state and local levels.
Our peers and partners in the industry.
As well as the academic community.
Now I'll turn the call over to dock.
Thank you George.
It goes without saying that the safety and well being of our patients residents and employees is our highest priority.
We are learning as a nation, how incredibly challenging it is to prevent the spread of cobot 19, particularly once it enters a nursing home environment, regardless of how restrictive and rigorous the prevention efforts have been.
Even before the pandemic became apparent our medical and clinical teams implemented enhanced infection can infection precautions that our centers.
We've been following recommended protocols and guidelines from the CDC and CMS.
And in some cases getting out in front of them and in many cases, we have instituted even more stringent infection practices then recommended.
Quite often we have suggested protocols that were leader adopted by public health officials.
Despite the inconceivable challenges facing our centers Dr. Reifsnyder and I are pleased to report that up at 224 focused infection control surveys conducted during the pandemic by state and federal officials at our centers nationwide, 95% achieved a zero.
Deficiency rate.
That is an incredible statistic and I want to commend the entire interdisciplinary team across the Genesis family for their diligence and success.
You may ask how do these impressive infection control scores correlate to having so many of our centers report at least one positive case of krona buyers.
Well. Unfortunately this virus does not discriminate it has impacted five star and one star centers are like.
In fact, new research out of Brown University, Harvard University, and the University of Chicago show that there are actually only two key factors that determine whether the virus interest and spreads in nursing home first is the size of that facility. The larger it is the more traffic in and out no better.
How many restrictions are in place.
And second dislocation whether the surrounding community is a high density area heavily affected by told at 19.
These two factors correspond to our experience.
In addition, recent research five university exit or in England, and the University of Connecticut underscores the difficulty in managing an outbreak in buildings with dementia patients.
Cancer patients are among the most vulnerable to infection and precautions and restrictions are very difficult to enforce it sometimes not possible to can find patients who are cognitively impaired to their rooms as they are prone to wondering.
They are also often frightened by the personal protective equipment like masks, hey, shields, and goggles and often to move them.
Around the globe. We've learned that opened 19 is a complex virus that it's hard to detect I can take weeks to presents itself by the time you have a positive test result.
Many may have already been exposed.
When the White house calls on seat Governors earlier this month to test all nursing home residents and staff for cold, but 19. It was welcome news we had been advocating for this stuff since the start of the pandemic.
Governors in public health officials in Massachusetts, Rhode Island, and New Hampshire to name a few should be praised for leading the charge and we have been grateful for the support we've received from these states.
Then the other states are further be tying in implementing a clear testing plan and some states had planned just one round of testing which is completely insufficient.
At the return this testing challenge is the continued shortage of testing availability, specifically swabs and a lack of sufficient lab capacity to quickly process. The current volume of tests, let alone. The staggering number of tests that will be needed to run nationwide every couple of weeks.
The importance of regular and repeated testing with quick turnaround times cannot be underestimated. It allows us to separate those who are positive from those were negative saving lives. It is one of the best weapons to manage and limit the virus is spread which is why we continue to advocate aggressively for a sensible nationally directed and funded.
I wish to frequent universal testing in nursing homes.
In coordination with public health officials and local hospitals and often at the urging we will continue to be resourceful and created and adapting our operating model to combat the pandemic market to market.
In April we worked with local and state officials to develop our first quarter, but only dedicated facility at our Powerback rehabilitation facility in Piscataway, New Jersey.
Since that time, we've established eat additional covert 19 dedicated facilities located in Colorado, Connecticut Nest, Maryland, New Jersey, New Mexico and Pennsylvania.
As we turn the corner toward recovery. We are also adapting our operating model to function for the long term cobot environment.
In April we established admission quarantine units in order for admission and readmissions to be under infection control precautions and observation for 14 days prior to being transitioned to the general population, we didnt have facility.
Patients requiring medically necessary transfers out of the center for outpatient procedures, such as dialysis and chemotherapy are also placed on the admission quarantine unit.
Finally, I'd like to say that although we're not out of the woods. So to speak we have seen across your flattening of the curve over the past two weeks.
Despite increased dressing and therefore, an expectation of more reported positive cases, the number of our centers reporting new cases of Koby 19, among patients residents and employees is decelerating.
While we are encouraged by this trend we are in no way letting our guard down.
Due to the vulnerable nature of our patients in residence.
Many of the current restrictions must continue at our facilities, even as federal state and local stay at home and social distancing orders and recommendations are relax.
Before I hand, the call back to George I Wonder what sure sure all of our stakeholders that we have been and we'll continue to work round the clock to protect the health and safety of our patients residence and employees.
Thank you rich.
Genesis is truly fortunate to have Dr., Pfeiffer and Dr. reifsnyder, leaving her efforts protect up.
Residents and caregivers at the bedside during this time of unprecedented risk exposure.
We have shown tremendous skill and leadership throughout this crisis.
We are grateful for their valuable collaboration with CDC and CMS officials.
And everything they are doing.
For seniors in pure workers are cross that bridge.
We're also type one appreciative of the Swift.
And significant financial support provided to our industry <unk> President and his administration as long as many state governments.
In particular I like to thank health and human services sector is our.
Deputy Secretary target.
For engaging with industry leaders to better understand our needs on the ground.
As we fight this deadly viruses together.
It's no secret that this industry has been chronically under funded for decades.
I wasn't a frail financial state before the onset of kroner box.
Largely through programs created for expanded under the care.
We have received.
I'd had been able to access to resources needed to pay for the escalating costs and war revenue caused by the pandemic.
As the effect of the pandemic involved in the coming but.
We will continue to work closely with our industry advocates elected officials.
The Presidents administration.
Thoughtfully articulate the resource needs of our industry.
Some of that collectively we can continue our fight against Cobot 19.
Okay and continue to Phil.
Our responsibility to our seniors and our healthcare workers.
Before I hand, the call off the Tom I'd like to make a few brief comments about the first quarter.
Despite the challenges of preparation and response to the pandemic.
We reported very solid performance this quarter.
Even in the face of cobot pressures.
Same store occupancy continued to show strike.
Growing 30 basis points as compared to the first quarter last year.
Marking the sixth consecutive quarter of same store occupancy growth.
We estimate.
Pandemic negatively impacted earnings by.
By approximately $8 million in the quarter.
Excluding the impact of covert 19 same store net revenue same store adjusted EBIT door.
<unk> five per se.
And 3.2% respectively over.
Over the first quarter of 2019.
Our ancillary businesses also showed resilience in the face of Cobot 19.
In particular I would like to highlight.
The strategic value of our staffing subsidiary.
Career still on limit.
In deploying critical caregiving resources.
Through our affiliated Genesis facilities, and third party staffing cut customers during its been done it.
Looking ahead obviously.
Second quarter is going to be significantly impacted by both the ongoing effect of the pandemic.
I'm going to find out relief extended through the end of the quarter.
As we round out the month of May.
I am encouraged by a flattening of our overall occupancy.
Approvement.
The availability of critical step.
We are hopeful to see a steady rebuilding of occupancy.
Pent up demand.
And our ability to adapt to this new environment.
I don't quote me my comments this morning I.
I would like to move away from numbers.
Bases points and financial results.
I would like to focus on something far more important.
Our frontline caregivers.
I'd like to express my sincere admiration.
Gratitude.
To the 60000, plus Genesis frontline caregivers.
As well as there are 1.4 million colleagues across the nation, serving in our nursing homes.
They are the true heroes.
They are providing compassionate care.
Through our rail and vulnerable seniors.
Well good isolated from their family I loved ones.
They have improved hundreds of thousands of lots.
In ways that could never be measured by numbers and statistics.
They had valiantly bought.
I continue to fight this deadly viruses.
They have earned our respect.
We cannot lose sight of their enormous personal soccer player.
Please except it's heartfelt. Thank you for your selfless socs the care and compassion.
As was the case for the pandemic.
The 15000, plus nursing facilities across the country provide a vital service to our nation.
More than ever we see the skilled nursing industry.
Offering important solutions to this nation population health needs and strategy.
Well now turn the call over to Tom do Bitauto, our Chief Financial Officer.
Thank you George.
I will provide a few additional highlights on the first quarter.
Then I'll provide more detail around the financial impact of Cobot 19 on our business first on the first quarter and then its impact thus far on the second quarter.
I'll also outlined the various government sponsored financial release commitments and programs, we have access to date.
Finally, I will provide an update on liquidity.
As George mentioned, despite the impact of Cobot 19 same store occupancy grew 30 basis points in the first quarter of 2020 as compared to the first quarter 2019.
We estimate that the same store occupancy growth was tracking at approximately 60 basis points over the prior year before cobot 19 began impacting new admissions.
This occupancy trend along with strong reimbursement rate growth across all payers and good expense control fueled same store revenue and adjusted EBITDAR growth, 5% and 3.2% respectively.
Starting in late February our occupancy began to decline in response to efforts by referring hospitals to cancel or reschedule elective procedures in anticipation of cobot 19 cases in their communities.
Beginning in March occupancy was further impacted by implementation of self imposed admission bands in those facilities, having exposure to positive cases of cobot 19, among patients residents and or employees.
These self imposed restrictions on admission ban on admissions were instituted to limit the risk of potential spread of the virus in the facilities.
Overall, we estimate that the net revenues in the first quarter of 2020, we're not materially impacted by the pandemic because revenue lost from the decrease in occupancy was offset by changes in payer mix and the recognition of approximately $6 million of cobot 19 related Medicaid relief from.
Bided by several states.
We did not recognize any revenue in the first quarter of 2020 from the federal relief programs.
With respect to operating expenses beginning in March we began to incur incremental costs as a result of the pandemic with more dramatic increases occurring at facilities with positive Covance 19 cases.
During the March quarter, we incurred approximately $8 million of operating expenses to prepare for and respond to the pandemic.
Increases in cost primarily stems from elevated labor costs, including increased use of overtime and bonus paid as well as significant increases in both the cost and usage of personal protective equipment.
Food service supplies for stuff.
Enhanced cleaning and environmental sanitation costs and the impact of utilizing less efficient modes of providing therapy in order to avoid the grouping of patients.
Moving now to the second quarter.
The decline in occupancy continued through late May 2020.
Resulting in our skilled nursing facility occupancy decreasing from 88.2% in the first quarter to 81.9% for the month ended April 2020.
We estimate occupancy for the month ended May 2020 will be approximately 76%.
As George mentioned, we're very encouraged by a flattening of occupancy as we end the month of May.
Incremental operating expenses from the pandemic also escalated in April and May 2020.
In April we estimate that our operating expenses grew on a net basis approximately $21 million as result of the pandemic.
We expect at least this level of elevated costs in the month of May 2020.
Now moving to the federal and state release programs.
In March 2020, a number of legislative actions were taken by the federal government to provide regulatory and financial relief to the health care to health care providers impacted by the pandemic.
Several of these actions have and are expected to continue to provide the financial support necessary to address the escalating costs and lost revenue caused by the pandemic.
These actions include temporary suspension of the three day qualifying hospital stay.
Various elements of the cares act and accelerated and advanced payment program for Medicare.
In addition provisions in the families first Corona virus response act provide a temporary 6.2% increase to each qualifying state Medicaids federal medical assistance percentage, often referred to as F. map.
A number of states in which we operate have extended incremental f. map related funding and other forms of support two skilled nursing providers.
Through yesterday, the company received approximately $180 million a federal relief grants from the cares Act.
In addition, the cures act temporarily suspends, the 2% reduction of Medicare reimbursement often referred to a sequestration.
From May one 2020 to December 31, 2020.
We estimate the suspension of sequestration will have a positive impact on our revenue of approximately $8 million in 2020.
To date, the states in which we operate have committed.
Approximately $27 million of incremental F map funding.
$6 million of which was recognized in the first quarter of 2020.
In total today. The three previously noted grant programs have provided approximately $215 million financial commitments.
In addition to these important commitments the company has access to additional sources of relief capital in the form of government sponsored advances and loans specifically during April 2020, we requested and received $158 million under the Medicare accelerated and advance.
It's payment program administered by CMS.
The advances, which will which will be recorded as a liability or interest free.
Repayment will begin in August 2020, and the advances will be completely repaid before the end of 2020.
In addition to these advances and pursuant to the cares Act, we have elected to defer payment of the employer portion of social security taxes incurred for March 27th 2020 to December 31 2020.
We estimate this deferral will preserve approximately $90 million of cash in 2020 also on an interest free basis.
The deferred payroll tax amount will be classified as a liability.
One half of the payroll tax deferral will become due on each of December 31, 2021, and December 31 2022.
The payroll tax deferral election, and the extended repayment term provides us with a significant source of no cost liquid capital to further backstop any near term shortfalls that may occur between government sponsored relief funds and the impact of the pandemic on our business.
The company's liquidity position at March 31, 2020 was $94.4 million.
With the inclusion of the relief funds advances and payroll tax deferrals received to date.
Offset by the impact of the pandemic, thus far the company's current liquidity position is approximately $320 million.
As George said, we're very appreciative of the significant support provided to date through the cares Act and other programs.
These programs are providing us the resources and visibility we need over the next number of months.
As you can imagine given the unprecedented nature of the cobot 19 pandemic. It is very difficult to predict with high confidence the longer term financial impact of the virus on our business.
The outcome will depend on a number of factors, including the number of impacted facilities located in hard hit geographies.
The pace of recovery in those in other markets.
The cost of frequent universal testing in all of our centers.
As well as future support from public and private entities.
We will continue to evaluate the impact of the pandemic on our business and work closely with industry advocates elected officials and the President's administration to articulate resource needs as we fight this deadly virus together.
With that operator, I'd like to open the line for any questions.
At this time, if he would like classic question. Please press star one on your telephone keypad.
Again that a star one than your telephone keypad.
Phil Foster just a moment ticking time, if you have any roster. Thank you.
Your first question comes from the line AJ Rice. Your line is open you may ask your question.
Hi, guys. This is Kayla Harris on for AJ.
Thanks for all the comments just to start on the grant funding.
Some post acute providers have sort of indicated that.
They're not 100% confident that they'll be able to keep all of the grant funds on that they've received based on the out that stations that are required and so forth.
Do you have any thoughts on that.
Okay look good morning. This is Tom.
The way, we're looking at it and quite frankly, the way the revenue recognition principles worked with US as well is we see the cares act several funding as the true backstop here. It's meant for one purpose and one purpose only to help fight the pandemic.
And so to the extent that we can demonstrate that we have incurred the costs and we have the lost revenue.
We fully expect that we'll be able to keep every dollar of the cares that funding that we receive.
To the extent when the dust settles.
However, many many months from now.
That we ended up receiving more funds than what was necessary.
Yes, those escalating costs in the lost revenue than I think there is.
Certainly the expectation that those those moneys would be return.
Okay that makes sense. So have you gotten any any sort of assurance from.
From the administration or regulators in terms of how long of a period of time you have to incur the costs and before you have to do some sort of true up and decide we owe X dollars back.
Okay, let's not at this stage.
The cap I think you're still a long way to go or would it go here in fighting.
Pandemic.
Even though we're.
You know, obviously hype and see some stabilization and some flattening of the curve and stabilization of census.
But no still the cost of of the continue flight.
Well as I think growth in cost around things like Universal testing programs are still to be to book be borne by by the industry. So.
We have a long way to go in this flight.
Clearly not.
We're not in the eight or nine sitting at this point that's for sure.
Sure that's fair.
Just some occupancy trends I know you said that.
Since you obviously was lower in May at 76% and you said that started to stabilize I know the commentary from hospitals in recent weeks has been that elective procedures are starting to come back at least to some extent.
So just as you look at at occupancy or admissions trends towards the back half as May are you are you seeing more than just a stabilization are you seeing that start to improve at all or just any color you can out there.
Yeah, Caillat, we're definitely in the past two weeks beginning to see in certain markets that haven't been nearly as impacted we're seeing some I would say more routine.
Mission flow that we might not have seen in the earlier parts of May and certainly in in April.
Fact that we have established coated dedicated buildings.
Also is counterbalancing.
Some of the previous decline in admissions and an occupancy so thats been stabilizing force and we expect it will continue to be.
And look as we've.
Adapted our operating model to function in a cobot environment and we've developed.
These these admission quarantine units to.
That gives us a real opportunity to begin accepting mission admissions on one or on a routine basis as well.
Cabot also add them pick about dentist trends.
We continue to have significant number buildings.
So with still operating under self imposed admission beds.
We will continue to be very conservative.
With regard to where do we open centered is up four four new admissions when there is an outbreak in the virus.
We will ensure that not outbreak has been control.
Confide.
Two hour satisfaction before we open facilities up toward mission. So we're still operating with a significant number of centers as you can tell by the stocks weak throughout over half of our buildings have been impacted by the virus.
It's still a substantial number of them or operating with self imposed admission beds.
Sure No makes sense.
And then flipping over to the therapy.
Under PDP M. One of the one of the sort of benefits was the the amount of group therapy that you might be able to do with the Medicare fee for service population.
Obviously, an ACO bid environment, that's more difficult and there's there's probably a lot more one on one therapy and you sort of alluded to that in the prepared remarks can you just speak a little bit to that how the therapy environment is different.
Given co bid.
And whether or how much that can set you back in terms of the.
The PDP and plans around group therapy.
No no question that.
The rules around the provision of therapy of Shane dramatically.
Obviously, all group and concurrent modes of therapy have been completely eliminated.
Not only that use up.
Card.
RP gymnasium.
In the center.
He is also no longer available for use.
Most therapy today is being provided.
One on one typically in a patient true.
To preserve.
The appropriate isolation protocols that we are operating either so the productivity of the rehab.
Function, that's clearly been impacted it is no incremental cost part of your credit costs to Tom.
Scott.
I do think though once we.
Our comfortable that we are you know operating as a safer environment without.
Presence of the virus.
We will be able returned to.
Normal operating practice.
In time.
For the for the therapy Division I will say Genesis rehab services boat.
To their internal customers on their external customers have been an invaluable resource.
This industry have suffered.
With what we're staffing.
Levels because of the number up.
Healthcare workers have also impacted by the virus.
The therapist kind of work outside scope of practice and appropriate ways, where they can assist our nursing staff and other clinical staff.
To provide you know necessary services to to our patients, including you know dining feeding.
Other activities, where they can be helpful and working out of scope of practice so.
They've been a very valuable part of.
Interdisciplinary care team at ourselves.
Okay. Thanks, a lot of thanks for all you guys are down and then to the front line care workers as well.
Thanks Kim.
Your next question comes from the line of Frank Morgan. Your line is open you may ask your question.
Good morning, George I'd like to go back to your the self imposed.
Admission holes.
Is it fair to say that roughly half those buildings, if your entire portfolio would be under a a self imposed mission ban said.
Well, you know, what you're saying how of the of the buildings affected.
Right just half of your portfolio because you had if you've got Covidien basically half your building either you know testing positive or staff is testing positive I was just I was just trying to get a context about how big of.
Have a.
Polio would be affected by this mission band so in over extrapolating there to say it would be as much as half looks up it's not quite yet it's not quite half todobebe exact numbers, but it's a substantial portion still operating under under self imposed admission bet.
Got you average FICO correct answer with more specificity if you'd like I'm. Currently we have 133 of our 361 centers that have an admission band and each day, we're learning that others can come off of that selectively so that trend is actually improving.
Good that was actually my next question, which was what is the criteria for.
On the buildings that you cleared what what is that what gives you the the the competence to clear the building for emissions.
Well in initially during the pendency mix, we would look for a total clearance of the virus. So that there were no new cases in the center that was being very conservative as we still had a lot to learn about the virus and the pandemic as time has gone along and we've learned that it is possible in many cases to actually control the spread within one of our centers what we look for.
And then is that the virus is confined to either one or just a few units within the center and that can find that is limited to not too. Many cases, and we look for no further spread in those cases, where things are very stabilized and controlled then we will look to open up admissions to the naive unit. So that there is no exposure of new admission.
To that coded positive cases. This is done on a case by case a center by center basis. Each one has decided separately based upon the individual risk to the center.
And what are the referral sources say when I mean I mean.
Maybe they don't have a problem now since the code the cases didn't really fill up the the acute care hospitals, but.
What's the reaction from your referral sources when they when these admission bands come into place and what's their lifted or your cleared how long does it take to really start to see some patient flow back into your building.
Well I continue with that this is rich Pfeiffer again.
I'd say that thats its variable initially in the pandemic early on when hospitals surge was one of the greatest concerns for the health care system and for hospitals.
There were some tough discussions over the need to offload hospitals as well as the need to protect the kobin naive residents of nursing homes, we found solutions like creating dedicated facilities and dedicated units as we spoke about earlier, but overtime and as that surge in most markets has not materialized hospitals have been very understanding as a public health officials and so we've been.
Well to work with them to find solutions in some cases those solutions have led to referral patterns that are a little bit different from normal scenarios. For example, there might be one of our centers in a market that is in a better position to accept referrals than the usual centre and so the referral screen might go to a different centre and because of are geographically.
In addition, we've been able to be nimble in that regard working with the hospitals.
Got you and maybe a Tom questioned the dimension of the 21 million of incremental costs. I think was was in a for April sort of like your full fully loaded quarter.
Just to be clear that 21 million, you're saying that the 21 million an incremental cost is going to stay in place. There's not if it's not another 21 or not incremental dollars that the 21 incremental but you're selling in April that's the run rate up higher costs is that clear.
The $21 million in April is specific to April and I would describe it as incremental costs that we wouldn't have incurred were it not for the pandemic.
And our expectation is to see a similar level of elevated costs in the month of May.
Okay. So the 21 million an extra called state continues into made.
Correct, yes, okay, and maybe for George.
Are there any you mentioned that you have some of your key states have actually thanks to F. map have provided some additional funding dollars to you are there any states that you're waiting on it perhaps have not.
Given an indication yet of what you're going to do with that f. map or or any other kind of funding.
Yes, there is still I mean, there's still some activity that we are up.
Expecting in number of states and some of our Big States. There is pending legislation in the state of Pennsylvania, I think it's been passed bye bye.
One body of the.
Of the.
Governance in Pennsylvania, not passed by the second body worked side by the Governor at this point.
New Jersey at State also we are hopeful that we will see some support from from the state of the New Jersey go forward. There are number of other states also Frank that.
We do not had any commitments at this point and Congress not included in did.
The information is provided as far as committed incremental funding at the state level.
In the states that you've gotten the funding or if he does permanent or those temporary or is it kind of like the sequester, where it's like Meda maybe December.
Frank third third third generally temporary they each one has its own flavor of timeline, but it's generally tied to states of emergency in those various states.
Got you and we'll see.
Oh, you mentioned several times the positive either by patients or employees and I'm just curious how big a deal is that I mean like no.
When you talk about employees what in the in a building thats more about you know more of a problem facility how big of an issue is it is actually keeping the employees healthy and what kind of positive 'cause a great have you seen there.
Rich you want to take out what.
Ill add to that.
Sure I'd be glad to you know over the over the entire organization over the over those.
100, plus facility that we described as having cases we've had.
We've had.
Several thousand over over 2500 employees and clinical staff who've had killed. It. So this is a very serious and common issue and that's because those employees in the community surrounding the centers and they catch cobot in the surrounding community as to the percent of staff that are affected and actually varies widely.
And we're learning more and more about that everyday as we're doing wide scale screening test even for asymptomatic staff in some cases, even in a community where its prevalent and even where we have patients who might be affected in some cases, we had very few staff who turned out to be positive in other cases are the percent positive Ken can be even higher in the 20% range.
So this is why variability and all of those cases as we're doing those tests, we need to develop and go into that testing strategy with a replacement staffing plan and and so that's why it's so important as was alluded to earlier that we have backup plans like yourself on limited and others to ensure that we have saved and its understaffing.
Got you, Okay last one of them up.
Speaking of test and I wish it that cost I mean in is that something to that you would expect to get some federal funds to help.
Hey for so I mean, if you could do everything exactly what the way you wanted to do it with testing.
Like how much is that cost in 100 bed building.
Oh, Frac will give you sort of.
Well go to do the math I mean.
You know 100 patients at 150, no to keep the Nazis. The 100 100 4700.
Staff that theoretically should be tested.
At a minimum every other week.
So thats you know 400 test then.
Take a round number of $75 Seth.
No.
The issue cost of testing it's been handled.
It's very different ways.
State level.
So I missed some of those cost and funded by the state.
You know in some cases they brought in.
The National Guard at other.
Resources to test.
And they have covered those costs when I think.
The availability as rich said in his formal comments have adequate.
City and testing supply sequel continued to be an issue as we significantly increased.
The number of tests I mean, the guidelines to open up nursing homes.
The University of proactively test residence Inn staff, I think there's still and the cost of that I believe we'll continue to be one of the ongoing issues that we discussed both with state and local.
Legislators' as well as with the with the administration.
Okay. Thank you.
Excuse me for centers there are no more phone questions you may continue.
Well, we'd like to express our appreciation to everyone, who got on the call touch this morning.
We apologize for the delay at our reporting this quarter.
I think everyone understand.
Our reasoning behind that.
Sure we assure you that.
We're continuing to do everything humanly possible to.
Pretax.
Our residents are patients.
And our caregivers.
And hopefully.
All of our constituents and all of our stakeholders appreciate the efforts of the frontline staff.
Genesis and the entirety of industry generally appreciate.
Your time with US this morning, and will be available even though we are all in separate locations to respond to any questions you might have their call.
Thank you very much they stay safe and.
Hopefully, we'll see the end of this.
And under relatively soon thank you everyone.
This concludes today's conference call you may now disconnect.
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