Shares of The Ensign Group (NASDAQ:ENSG) slid about 5% on Monday following publication of a short seller report that accuses the nation’s largest skilled nursing operator of operating with inadequate staffing and of engineering metrics to obscure quality problems.
The report, released by Hunterbrook - which disclosed it holds a short position in Ensign - summarizes the findings of a five-month probe. Hunterbrook says it analyzed millions of data points from the Centers for Medicare & Medicaid Services, reviewed thousands of documents and conducted interviews with dozens of people, including attorneys, healthcare professionals and former Ensign employees.
Central to the report is an estimate that Ensign facilities provided roughly 5 million fewer nursing care hours than were needed during the period from July through November 2024. Hunterbrook calculates that closing that gap would have cost about $161 million for that interval, or roughly $386 million on an annualized basis - an amount the report notes would exceed Ensign’s reported net income of $298 million for the year.
Hunterbrook further alleges that, based on its analysis of CMS records, Ensign facilities fell below state legal staffing minimums in California, Washington, Tennessee and Kansas on more than 18,000 days in total between 2020 and 2025. The report states that patients suffered and in some cases died as a result of the company’s alleged staffing practices.
On the financial flows front, Hunterbrook claims Ensign paid more than $339 million to its own affiliates in 2024, representing roughly 8% of the company’s revenue that year, according to the report.
The Ensign Group operates 334 nursing facilities across 17 states and, according to a March filing, offers more than 38,000 skilled nursing beds - a footprint the report describes as making Ensign the largest operator of skilled nursing facilities in the United States.
According to Hunterbrook, Ensign did not respond to multiple detailed requests for comment. The report was followed by the stock reaction on Monday.
This article presents the details of the Hunterbrook report and the market reaction to it. The findings reported by Hunterbrook are described as allegations in the report; the company’s response to those specific claims was not provided to the short seller, according to the report.