Pacs Group, Inc. has established itself as the dominant player in California’s skilled nursing facility (SNF) landscape, operating 118 facilities across the state according to the most recent CMS data from January 2025. Beyond California, the company has strategically expanded into eight additional states, with significant presence in Colorado and South Carolina (19 facilities each), and smaller footprints in Kentucky (7), Ohio (6), Arizona (4), Nevada (4), Missouri (2), and Texas (2). Founded in 2013, Pacs Group has grown into one of the largest post-acute care platforms in the United States, now serving over 22,000 patients daily across 218 healthcare facilities with approximately 34,000 employees. Some of these facilities also include senior living operations.
Analysis of quality metrics reveals that Pacs Group facilities average a 2.92 overall CMS rating compared to California’s 3.24 state average, with particular underperformance in staffing ratings (2.31 vs. 3.08 state average), according to CMS data. The company operates larger facilities than the state average, with Pacs Group facilities averaging 117.6 beds compared to California’s average of 102.8 beds per facility.
Company Leadership and Structure
Key executives at Pacs Group include co-founders Jason Murray (CEO and Chairman), who has over 20 years of experience in acute and post-acute healthcare settings and is a licensed nursing home administrator, and Mark Hancock (Executive Vice Chairman), who previously served as CFO. Other key leadership includes Josh Jergensen (President and COO), Derick Apt (CFO), and John Mitchell (Chief Legal Officer and Secretary).
The company maintains a consistent ownership approach, with 100% indirect ownership interest in 180 of its 181 skilled nursing facilities. Pacs Holdings, LLC is affiliated with Pacs Group, Inc., as both entities are listed as owning the same 118 facilities in California.
Market Position and Competition
Quality performance data reveals areas for potential improvement. Pacs Group’s facilities average a 2.92 overall CMS rating compared to California’s 3.24 state average. This underperformance extends across health inspection ratings (2.55 vs. 2.75) and staffing ratings (2.31 vs. 3.08), though they perform relatively well in quality measures (4.29 vs. 4.40). In California’s competitive skilled nursing landscape, Pacs Group significantly outpaces its nearest competitors. While Pacs Group operates 118 facilities, The Ensign Group Inc. and Providence Group NH, LLC each operate 67 facilities, followed by Providence Group Inc. with 55 facilities.
California Regulatory Environment
California has implemented new laws and oversight bodies that are increasing the scrutiny of healthcare transactions, including those involving SNFs. The Skilled Nursing Facility Ownership and Management Reform Act of 2022 (AB 1502), effective July 1, 2023, significantly altered the Change of Ownership (CHOW) and Change of Information (CHOI) processes for freestanding SNFs. Applicants must now submit a license application to the California Department of Public Health (CDPH) at least 120 days prior to acquiring, operating, establishing, or managing an SNF. This law also largely curtails or eliminates interim management agreements, which were previously common. CDPH has greater authority to prohibit unqualified or unethical owners and operators.
The Office of Health Care Affordability (OHCA), established by Senate Bill 184, began operating in 2023 with the goal of controlling healthcare costs while maintaining quality and access. Effective April 1, 2024, healthcare entities, including SNFs, must provide written notice to OHCA of transactions involving a material amount of assets or a change in control. OHCA will review these transactions for potential impacts on market competition and healthcare affordability. This adds another layer of review that could delay or complicate M&A deals.
Reimbursement Environment
Medi-Cal is a significant payer for SNF services in California, covering two-thirds of nursing facility residents. Assembly Bill 186 (Chapter 46, Statutes of 2022) reformed the Medi-Cal long-term care reimbursement methodology for freestanding SNFs, effective January 1, 2023, through December 31, 2026. This bill authorized the Department of Health Care Services (DHCS) to implement new programs including the Workforce & Quality Incentive Program (WQIP) and the Workforce Standards Program (WSP).
For Fiscal Year (FY) 2025, CMS finalized a net increase of 4.2% (approximately $1.4 billion) in Medicare Part A payments to SNFs nationally. This increase includes a 3.0% market basket update, a 1.7 percentage point forecast error adjustment, and a 0.5 percentage point productivity reduction.
