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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2000
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VENCOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-14057 61-1323993
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
One Vencor Place
680 South Fourth Street
Louisville, Kentucky
(Address of principal executive offices)
40202-2412
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7300
Not Applicable
(Former name or former address, if changed since last report.)
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Items 1-4. Not Applicable.
Item 5. Other Information.
Vencor, Inc. (the "Company") announced that it has entered into a
Corporate Integrity Agreement (the "Corporate Integrity Agreement") with the
Office of the Inspector General ("OIG") of the Department of Health and Human
Services. Under the Corporate Integrity Agreement, the Company will implement a
comprehensive internal quality improvement program in its nursing centers and
long-term hospitals and its regional and corporate offices.
As part of the Corporate Integrity Agreement, the Company 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 CHSRA, 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 the Company's program and report its findings to the OIG.
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 CHSRA, 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
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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.
As previously announced, the Company 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 Subordinated Notes due 2005
and the advisors to the official committee of unsecured creditors toward a
consensual plan of reorganization.
The Company also 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 copy of the Company's press release announcing the Corporate
Integrity Agreement is included as an exhibit to this filing.
Vencor and its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 with the Court on September 13, 1999.
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
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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 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
Item 6. Not Applicable.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 Press release dated August 8, 2000.
Items 8-9. Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VENCOR, INC.
Dated: August 9, 2000 By: /s/ Richard A. Lechleiter
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Richard A. Lechleiter
Vice President, Finance
Corporate Controller and
Treasurer
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