Shares of Irvine nursing home operator Sun Healthcare Group Inc. rose Friday, likely on news that the government is hiking Medicare payments to it and its competitors next year.
Sun shares were up as high as 11% in early afternoon New York trading with a market value of about $680 million.
The Centers for Medicare and Medicaid Services said Friday that Medicare payments for nursing homes would go up by $780 million in 2009.
In a release, the government said it was boosting payments based on the cost of goods and services included in a skilled nursing facility stay.
Sun, which operates some 213 nursing homes in 25 states, gets about 30% of its revenue from Medicare.
The company is set to report its second-quarter financial results Thursday.
Other nursing home operators also rose Friday, including Skilled Healthcare Group Inc. of Foothill Ranch, whose shares were up 5% with a market value of $566 million, and Mission Viejo-based Ensign Group Inc., which was up 8% with a market value of about $267 million.
