Muddy Waters Short Ensign, Accuses of Fraud Scheme

In a recently published report, Muddy Waters said it is short Ensign as it concluded that the company engages in "a systematic scheme at an estimated 20% of Skilled Nursing Facilities to rent the licenses of Administrators who are not generally present at, nor actually managing, the facilities. Ensign enters into consulting agreements with these nominal Administrators that appear to cause Ensign to state the facilities have licensed Administrators when in fact these administrators are seldom on premise and do not substantively manage facilities. We believe this scheme, which could amount to fraud against states, Medicare, and Medicaid, is the pillar upon which Ensign's acquisition strategy and margins is built." Muddy Waters further states that, "Unfortunately, we believe Ensign's margin premium comes at the expense of resident care, as Ensign facilities received 85% more severe-harm citations per occupied bed than PACS over the last three years." Shares of Ensign are down more than 2% at $148.38 in Thursday trading.