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Exhibit 99.1
[Vencor Logo appears here]
Contact: Susan E. Moss
Vice President of Corporate Communications
(502) 596-7296
VENCOR AND OFFICE OF INSPECTOR GENERAL AGREE ON QUALITY
IMPROVEMENT PLAN IN CORPORATE INTEGRITY AGREEMENT
Louisville, KY (August 8, 2000) -- Vencor, Inc. (the "Company")
announced today it has entered into a Corporate Integrity Agreement with the
Office of the Inspector General ("OIG") of the Department of Health and Human
Services. Under the agreement, Vencor will implement a comprehensive internal
quality improvement program in its nursing centers and long-term hospitals and
its regional and corporate offices.
"The agreement reflects our goal to become the nation's leading
provider of long-term nursing and hospital services and to set the benchmark for
professional excellence and commitment to quality care," said Edward L. Kuntz,
chairman, chief executive officer and president of Vencor. "We believe the
agreement marks a significant step forward in the efforts of the government and
private enterprise to collaborate in establishing innovative approaches to
ensuring and enhancing quality care for the long-term care industry."
"We also commend the OIG for its willingness to work with our new
management team," said Kuntz. "We believe what we have developed with the OIG
will be a model for quality care for the long-term care industry."
As part of the agreement, Vencor will retain staff at the University of
Wisconsin's Center for Health Services Research and Analysis (CHSRA), to assist
in developing the internal quality improvement program. The Director of the
Center, David Zimmerman, Ph.D., is a nationally known expert in long-term care
quality, and he and the staff at CHSRA are recognized for their work in
developing quality indicators now widely accepted as the standard in long-term
care. Under Dr. Zimmerman's direction, CHSRA also will monitor and evaluate
Vencor's program and report its findings to the OIG. "Dr. Zimmerman's expertise
will be invaluable to us in designing a quality improvement system and enhancing
our existing training programs," said William Altman, vice president and
corporate compliance officer of Vencor.
As previously announced, Vencor has continued to make progress in its
reorganization. The Company has made substantial progress in its discussions
with Ventas, Inc. (NYSE: VTR), the senior bank lenders, holders of the
Company's $300 million 9 7/8% Guaranteed Senior
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Subordinated Notes due 2005 and the advisors to the official committee of
unsecured creditors toward a consensual plan of reorganization.
The Company also reported that it has continued its conversations with
the Department of Justice (DOJ) regarding a settlement of the ongoing
investigations. The Company believes the Corporate Integrity Agreement will be
part of an overall settlement with the DOJ and is optimistic that it soon will
be in a position to file a consensual plan of reorganization. The Corporate
Integrity Agreement must be approved by the United States Bankruptcy Court for
the District of Delaware (the "Court") and would become effective concurrent
with emergence from Chapter 11. A summary of the terms of the Corporate
Integrity Agreement is attached to this release.
Vencor and its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 with the Court on September 13, 1999.
Vencor, Inc. is a national provider of long-term healthcare services
primarily operating nursing centers and hospitals.
Certain statements set forth above, including, but not limited to,
statements containing words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may" and similar expressions are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are inherently uncertain, and stockholders must
recognize that actual results may differ materially from the Company's
expectations as a result of a variety of factors, including, without limitation,
those discussed below. Such forward-looking statements are based on
management's current expectations and include known and unknown risks,
uncertainties and other factors, many of which the Company is unable to predict
or control, that may cause the Company's actual results or performance to differ
materially from any future results or performance expressed or implied by such
forward-looking statements. These statements involve risks, uncertainties and
other factors detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Factors that may affect the plans or
results of the Company include, without limitation, the ability of the Company
to continue as a going concern; the delays or the inability to complete the
Company's plan of reorganization; the ability of the Company to operate pursuant
to the terms of the DIP Financing; the ability of the Company to operate
successfully under the Chapter 11 cases; risks associated with operating a
business in Chapter 11; adverse actions which may be taken by creditors and the
outcome of various bankruptcy proceedings; adverse developments with respect to
the Company's liquidity or results of operations; the Company's ability to
attract patients given its current financial position; the ability of the
Company to attract and retain key executives and other personnel; the effects of
healthcare reform and legislation on the Company's business strategy and
operations; the Company's ability to control costs, including labor costs, in
response to the prospective payment system, implementation of the Corporate
Integrity Agreement and other regulatory actions; adverse developments with
respect to the Company's settlement discussions with the DOJ concerning ongoing
investigations; and the dramatic increase in the costs of defending and insuring
against alleged patient care liability claims. Many of these factors are beyond
the control of the Company and its management. The
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Company cautions investors that any forward-looking statements made by the
Company are not guarantees of future performance. The Company disclaims any
obligation to update any such factors or to announce publicly the results of any
revisions to any of the forward-looking statements to reflect future events or
developments
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CORPORATE INTEGRITY AGREEMENT
FACT SHEET
The Corporate Integrity Agreement includes six components, many of which
the Company already has in place. The Company's existing program will be
enhanced to conform to the Corporate Integrity Agreement.
. The Company will adopt and implement written standards on federal
healthcare program requirements with respect to financial and quality
of care issues.
. The Company will conduct training each year for all employees to
assure compliance with federal healthcare requirements. Every
employee will undergo a minimum two hours of "general" compliance
training annually. At least two hours of "specific" training,
tailored to issues affecting employees with certain job
responsibilities, will also be provided annually, as will a minimum
of two hours for care-giving employees focused on quality care. In
addition, the Company will continue to operate its internal
Compliance Hotline.
. The Company will put in place a comprehensive internal quality
improvement program, which will include establishing committees at
the facility, regional and corporate levels to review quality-related
data, direct quality improvement activities and implement and monitor
corrective action plans. Dr. David Zimmerman, director of the Center
for Health Services Research and Analysis, will assist in program
development and will evaluate its integrity and effectiveness for the
OIG.
. The Company will enhance its current system of internal financial
controls to promote compliance with federal healthcare program
requirements on billing and related financial issues, including a
variety of internal audits and compliance reviews. An independent
review organization will be retained to evaluate the integrity and
effectiveness of the Company's internal systems and will report
annually its findings to the OIG.
. The Company will submit annual reports to the OIG demonstrating
compliance with the terms of the Corporate Integrity Agreement.
. The Corporate Integrity Agreement contains standard penalty
provisions for breach.
The preceding summary does not purport to be complete and is qualified
in its entirety by reference to all of the provisions of the Corporate Integrity
Agreement.
