Good day, ladies and gentlemen, and welcome to the Sabra Health Care REIT Second Quarter 2020 Earnings Conference Call. I would now like to turn the call over to Michael Costa, EVP, Finance. Please, go ahead, Mr. Costa.

Thank you. Before we begin, I want to remind you that we will be making forward-looking statements in our comments and in response to your questions concerning our expectations regarding our future financial position and results of operations, including the expected impact of the ongoing COVID-19 pandemic, our expectations regarding our tenants and operators and our expectations regarding our acquisition, disposition and investment plans. These forward-looking statements are based on management's current expectations, and are subject to risks and uncertainties that could cause actual results to differ materially, including the risks listed in our Form 10-K for the year ended December 31, 2019 and in our Form 10-Q for the quarter ended March 31, 2020, as well as in our earnings press release included as Exhibit 99.1 to the Form 8-K we furnished to the SEC yesterday. We undertake no obligation to update our forward-looking statements to reflect subsequent events or circumstances, and you should not assume later in the quarter that the comments we make today are still valid. In addition, references will be made on this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures, as well as the explanation and reconciliation of these measures to the comparable GAAP results included on the financials page of the Investors section of our Website at www.sabrahealth.com. Our Form 10-Q, earnings release and supplement, can also be accessed in the Investor section of our Website. Lastly, in addition to Sabra’s management, Lilly Donohue, Chief Executive Officer of Holiday Retirement is joining our call to provide her perspective on operating a senior housing community during the pandemic. Lily's statements are her own and do not necessarily reflect the views of Sabra. And with that, let me turn the call over to Rick Matros, Chairman and CEO of Sabra Health Care REIT.

Thanks, Mike. Good morning and good afternoon, everybody. Thanks for joining the call. After I go through my remarks, I'll turn it over to Lilly and then Lilly will turn it over to Talya. Harold will follow her and do the CFO thing and then we'll go to Q&A. So first, let me comment on the pandemic generally. So, unfortunately, in our country, we never saw a flattening and a decrease in the wave. So it looks like a continuation of the first wave and one of the things I just want to note is and talked about this a little bit on the last call. The staff in our facilities and operating facilities have been just amazing. And this has had -- as long as this has been going on, it just creates further morale issues and further stress on the staff and yet they continue to show up. If any of you know anybody that's in the business that works in facilities, doesn't matter what asset class, obviously, in skilled nursing, assisted living, independent living, and you had the opportunity to pass the kind word on, please do. We are seeing a little bit better media coverage now and hopefully that will continue. We're also seeing better media coverage, just in terms of folks having an official – the leadership having a better understanding that the industry really didn't get the support that it needed and certain segments of the industry still aren't. So all that's been good to see and I think it's also reflective of a pretty Massive PR effort that a lot of us are involved with. So appreciate all your support and also appreciate, in the notes that we've seen, not just this time, but last time, the empathy and understanding for what everybody's…

Thanks, Rick, Talya Nevo-Hacohen for inviting me to join your earnings call. While this pandemic has tested all of us it's also strengthen the core of our mission at Holiday, which is to help older people live better. We are very fortunate to have partners like you who share the same core beliefs and are committed to transparency. We're living through the biggest challenge we faced, and yet we're experiencing the strongest collaboration I've ever seen. Let me share how Holiday has managed. First, for anyone on the call who are not fully familiar with our company, we manage and operate 261 communities in 43 states. We have over 8,000 employees helping 28,000 residents live better in what are predominantly Independent Living communities. So 254 of the 261 communities, we operate IL, Independent Living. Our center team members of Holiday that our actions in response to COVID-19 from the onset of the pandemic to current day have been characterized by a relentless pursuit of solutions, we've been zealous in expanding our use of data and using the data to measure ourselves on a broad range of outcomes. Data is particularly important in times of extended distress like this pandemic, because we're really not very highly emotional business and in these kinds of urgent situations, we really need to drive decisions based on facts, not just emotions. Early on, we set goals on three main priorities and this really has driven our behavior. So, the first is keeping our residents and employees safe, which means keeping our infection rates as low as possible. Second is ensuring our employees felt safe to come to work every day. We need them, we rely on them. Third, we make sure our residents feel safe and are happy. The results have proven to this point…

Thank you, Lilly. That was very moving. In my remarks, I will provide you with second quarter operating results of our managed portfolio. The second quarter reflects operations in the context of the spreading pandemic. The severity has varied geographically. I will also provide you with some performance statistics for July. As of the end of the second quarter of 2020, approximately 16% of Sabra’s annualized cash net operating income was generated by our managed senior housing portfolio. Approximately 53% of that relates to communities that are managed by Enlivant, and 34% relates to our Holiday managed communities. The balance includes our Canadian portfolio and five assisted living and memory care communities in the U.S. The managed portfolios, operating results for the second quarter reflect, residents desire to stay in their community and across that operators incurred to keep residents and employees safe during this period, I will provide highlights of the operating results of our managed portfolio on a same store quarter over quarter basis, excluding two recent acquisitions in one transition community in our wholly owned portfolio, consistent with a presentation in our supplemental information package. While revenue decreased by 3.7% in the second quarter compared with the first quarter of 2020, revenue per occupied room or RevPOR excluding the non stabilized assets barely moved, declining by 0.6%, while occupancy also excluding the non stabilized assets declined to 82% from 84.5% in the first quarter. Cash net operating income decreased by 90.2% to $16.3 million from $20.1 million, about 69% of this decline is due to lower revenue and the balance due to additional expenses incurred by our operators managing switch pandemic. Cash NOI margins declined to 23.1% from 27.6% in the preceding quarter. We see no apparent differences in the pandemic's impact on the financial results of…

Thank you, Talya. We are pleased to announce that we have not needed to provide COVID-19 related rent relief to any of our tenants to-date. We you collected all of our forecast rent, without the use of deposits or other credit enhancements through the end of July. We're on track for normal collections to the first few days of August. As Talya shared detail, our managed portfolio experience declines in occupancy and increased costs related to COVID-19, which negatively impacted the financial results for our managed portfolio. We provided normalized FFO and normalized AFFO numbers, we excluded just under $4 million of COVID-19 related expenses in the managed portfolio. As Talya noted, we expect these incremental costs to continue for the near-term do not currently have insight into the ultimate length of time or magnitude of such costs for the long-term. Nor do we have enough information to assess future occupancy expectations in the managed portfolio or the potential need for rent relief in the triple net portfolio in the coming quarters. As such, we are not providing an outlook for future performance at this time. Now getting into the numbers. In the three months ended June 30 2020, recorded revenues in NOI of $153.9 million and $126.9 million respectively, as compared to $149.3 million and $125.6 million for the first quarter of 2020, representing increases of $4.6 million and $1.3 million respectively. Increases in revenue and NOI, primarily due to prior quarter write offs of, straight line rent receivables and above market lease intangibles totaling $6.1 million associated with four operators, who removed the cash basis accounting in the first quarter, partially offset by $1.4 million decrease in residency income during the current quarter due to the decrease occupancy in our wholly owned managed portfolio. NOI was further impacted…

Thank you. [Operator Instructions] Our first question comes from Nick Joseph with Citi. Your line is now open.

Thanks. Rick, I appreciate the color on all the government support. How much that government support or loans that need to be repaid versus how much is Korea. I'm just trying to get a better understanding of what operators balance sheets may look like at the end of the year, once the government support diminishes.

Very little, Nick. The big loan was for those that took advantage of the advanced Medicare payment. And we only had a handful of operators that took advantage of that. And for a couple of reasons, one, there are number of ABL lenders that for those that took advantage of that just started off that money to paydown their AR lines. But I would also note that there are some ABL lenders because they're so well secured, chose not to do that. So most of our operators chose not to take advantage of that and that would have been the biggest seller for everything else. There's really not much there. You've got sequestration, three day hospital stay waiver, you've got the defer Harold tax piece. So we don't see much there. That's going to have an impact on our operators.

Nick to tell, I would just add, if you look on page seven of our supplemental, we do a breakdown of those and we identify those. It may require payback. And as Rick pointed out, it's about $120 million on your gas, Medicare payment. And about 40 million from the employee payroll tax delay. And then certainly, the PPP from Cares Act mainly to be repaid or may not, but that was about 50 million. These are some details and descriptions on page seven.

Thanks. That's helpful. And then just on the acquisition pipeline, I think you called it dynamic and completely understand kind of the liquidity, desire and the balance sheet and Michael also stated you've worked hard to achieve and then also the cost of capital. So when you think about the pipeline today if, your cost of capital changes, it sounds like you're ready to execute. And there'll be plenty of opportunities. So it's solely right now, based off of the cost of capital, not from a lack of opportunities. Is it fair way to think about it?

I think correctly where I'm looking at everything, I think from a pricing perspective, we definitely see ourselves getting some skilled nursing done, even a current stock prices. We can do recruited skilled nursing deals. Whether we want to use the ATM to raise money at those prices is a different issue, so that we can maintain leverage. So that's really the primary consideration. On the senior housing side, we're just not seeing real pricing out there for the most part at this point. So, that's a nice skilled nursing that's really going to be functioning on our cost to capital improving and also expectations becoming, a little bit more realistic. Talya, is there anything that you want to add to that?

I guess hopefully one thing we are seeing some decent quality assets on the senior housing side. And they tend, they fall in the basket of that Rick, just described. And then we continue to see, what I call, the retreads and the deals that seem to never get done. And that we still don't like has been like the last year or the year before and assets being sold by other REITs, because they're cleaning out their bottom drawer. And many of those are not of interest, sometimes there could be opportunity. So we look at them, but often not.

Thank you.

Thank you. Our next question comes from Rich Anderson with SMBC. Your line is now open.

Hi Rich.

Hi Good morning. How are you doing? So, sorry, I want to go back to -- I might have mixed up your numbers, but you said 70% of cases in primary markets, what was the timeframe of comment?

That was in -- I think that was in July.

Okay. But then you said 20 in secondary and 24 in tertiary.

I'm sorry, let me correct that. That was the end of May and then my current numbers are as of end of July.

Okay, so the 20 in secondary, 24, tertiary, July -- end of July. Is that right?

End of July. Yes.

Okay. That's what I need to know to ask the question. So, you've had some pretty good success from an occupancy standpoint on your senior housing portfolio, as you described up to this point, but it seems as though you're seeing a spread now to some of the markets that you traffic in. So, what level of risk -- or what concerned you have a risk that you could start to see sort of a second way to use that term of occupancy loss in your senior housing, which is to this point been someone a relative success.

So, I'll take that Rich. We don't have a high level of concern and the reason is that people have been getting treated as if they have had COVID in the facilities. So, really all the comments you heard from Lily is happening -- has been happening across our operator base. So, where we're seeing -- so increased testing, for example, Kentucky mandated increase testing. And so as you know, signature health is a big operator for us and Kentucky. And so they had a number of buildings that tested positive because of all the increased testing but very few residents in the buildings have tested positive, because they'd already received the care, and as I stated sort of in my opening remarks, probably a lot of folks have had it and gotten through it. But we just don't know because there hasn't been enough antibody testing. So, I think certainly there's some risk that we're going to have more facilities test positive, but we're not concerned with having facilities at big breakouts to the point where you're going to have to shut down occupancy and things like that. The facilities that have had breakouts, the numbers have been so small, they've been able to isolate people and still have admission. So, I think Lily could have -- made comments similar to this. We just want to see some normalization in terms of visitation for our residents and patients. And so if you've got more breakouts, you can have to hold off on that kind of stuff. But generally, we don't have a high level of concern. I'll also point out in livens, and this is actually an interesting statistic. About 8% of the assisted-living industry has had breakouts that are -- that have been defined as larger breakouts, more than 10 residents per building and live in it's been three. And everything that you heard Lily talk about relative to how they just jumped on everything onto a protocol to minimize the impact of the low infection rate was mirrored atomizing as well. So, I think combination of all those factors gives us a comfort level, Rich.

Okay. Do you know to what degree you get no symptom positive cases in a skilled nursing or senior housing facility? Does it usually come with symptoms? I'm just curious.

I don't have good stats on that. We know that a lot of the positive tests that we've had in facilities have been the people that are a asymptomatic with employees, obviously, as well as residents and patients. But I don't have -- I haven't seen any good statistics that out there that allow us to say, X percent of the positive tests for people that are symptomatic and X percent aren't. And certainly, nothing that tells us the degree of which people are feeling symptoms.

Right. Last question for me, is COVID care how much of it falls into Medicare coverage, versus private insurance and Medicaid or whatever?

Well, in skilled nursing, it's all going to be covered by Medicare. And one of the benefits including a hospital stay waiver is that, if a person conditions condition changes, whether it's COVID or not, under normal circumstances, they would have to be shift back to the hospital in order to qualify for that Medicare benefit that they already had. Now you can skip it in place. So let's say they've been in a facility for 90 days, the first 25 days they were covered on Medicare, the remainder of the time they converted to their secondary payer status, which is typically Medicaid with Medicare Part B support. And then on day 90, they [Indiscernible] had some other kinds of symptoms, and maybe it was COVID. As long as the facility is able to provide the care there, then they're able to reclassify that patient for Medicaid back to Medicare without discharging them. So that's actually been one of the benefits of COVID.

Yes. Just thinking more broadly about the portfolio. How -- I meaning breaking down skills and senior housing?

Yeah. So on the housing sides the care is just -- insurance coverage for testing. That's the actual care. Most people don't have insurance that go to senior housing. No, it's just, it's out of pocket.

Yeah. Okay. All right. That's all I got. Thanks.

Thank you. Our next question comes from John Kim with BMO Capital Markets. Your line is open.

Good morning. So I am just going to read that slowly the question if that’s okay. I was wondering if the pandemic had changed your views at all on how you think your communities or senior care should look like. Whether you're looking at micro homes or active adults or maybe doing home health?

Well, home health, that's not a physical asset, so we're not going to get into the home health visit. Home Health is already been a player in Independent Living. Most every independent living facility has arranged for their residents to have access to home health. So I think that kind of is what it is. Micro stuff I don't know, I've kind of mixed feelings about it in terms of how the pandemic could affect it whether that's a negative or positive, so actually don't really have a firm opinion on that. What was your other question?

The home outlook, I realized it's not going to fit in to leagues -- microphones, adults, active adults, if that was something that you're looking at as well?

Yeah. I thought you may have a different point of view. We've never seen that as a particularly good margin business. And so I don't see I just don't see that changing. Talya, do you want to..

So we haven't looked at it a little bit because we were trying to figure out there was an -- there was a way to play in that sector in a manner that actually made economic sense to Sabra. And the reality is that we couldn't, we couldn't get that to work. It is pretty much -- trades at a pretty darn close to multi-families its not -- on top of multifamily. And there's really -- there's no way for us to figure out a way to do something creative in there, at least not right now.

Yeah. So with the adult daycare business, before and aside from valuation, it's just a tough business to make work from a profitability perspective, that's a little bit dating me a little bit, so maybe it's gotten somewhat better, but just not that attractive. Q – John Kim: That's interesting. Okay. And then the 73 basis points documents you lost, you had in July and your senior housing. We don’t know if that was a good runway for monthly net attrition for the third quarter, or the year?

Talya?

Moving in a way, you be think prognosticator.

Yeah. I mean, there's really no -- there's no way to know. I mean, everything's flattened out after Rich's question you're maybe you have a little bit more deterioration depending on what happens with what breakouts, as I said, we don't think it'd be much there. So it feels like we've kind of been through the worst of it. But there could be, there could be a little bit more, but we don't think that it's going to be a material. That's pretty hard to prognosticate. No, one's going to be right. Q – John Kim: Thanks.

Thank you. Our next question comes from Daniel Bernstein with Capital One. Your line is now open.

Hi. I guess it's interesting to me is, you know, we're coming up on flu season and some point here and the symptoms are very similar to COVID. So how, how are operators preparing for flu season? Do you think there's some additional expenses, maybe worse than normal seasonality that's going to be associated with Amie. It seems like it's going to be difficult. Maybe there's some benefits as well, but how are operators preparing for flu season in addition to COVID?

Got it. Sure. I'm going to take advantage of having Lily on the call. And then I may add a couple of comments, Lily.

Yeah, sure. So on the aisle side, I don't think it's going to complicate things at holiday. We're actually tracking all infectious disease symptoms now. So we have it on a realtime basis. I think there was an earlier question about asymptomatic, symptomatic. This is just holidays experience, but our COVID positive residents tend to be more symptomatic. So over 60%, while our employee base is about 30%. So more asymptomatic among employees than our customers. So we do track it. We're going to continue to track it. I think one of the issues that will come up and we have protocols in place for this is to the extent that the symptoms are similar. There are physicians will recommend that they get COVID testing. So my guess is that will increase and it's okay if it increases because we have a great process to go through someone who's being tested for COVID, what happens in a community. And then obviously what happens when they test positive. So I don’t think for us, it's not going to be any additional cost. It's the same thing. And again we're tracking this on a day to day, real time basis among all of our residents, it gets put into a portal and I can tell you how many symptoms are in our winter village community right now.

Okay.

I’m sorry. Go ahead, Rick

The other thing I would say is, I read a really interesting analysis the other day that talked about potentially a milder flu season, because of all the adherence to protocols as it relates to COVID, including at least for a lot of people that actually care about wearing masks and social distancing, that that's actually going to help, have an impact on the severity of flu season. So, I intuitively found that that made sense to me. We'll see what happens out there that was interesting.

I was going to kind of ask the infection protocols for COVID are very different. Today, the infection protocols generally right now are very different than what they would be for the flu season normally, for seniors housing and school nursing, right. I mean, they're just more robust.

Yeah, much more. You don't have all -- everything that's driving a lot of the expenses in the facilities roll over one activity. You don't normally see that happen during a regular flu season.

Okay. And then, I just want to go back to the acquisitions real quick. It sounds like for higher quality, seniors housing assets, pricing hasn't moved that much. But are you starting to sense that there's some more distress out there? I mean, obviously, the fundamentals have not been great. There's not a lot of government support. So, I would think relative to a skilled nursing, you would see maybe more opportunities on the senior side, but doesn't sound like that's quite materialize. That's the right way to put it.

Yeah, Talya.

Sure. So, I think we will eventually see distress. I will tell you that so far, the amount of forbearance and denial of acknowledging what maybe a decline in value or, an impairment to value on a market-to-market is still out there. So, we haven't seen a sense of distress. What we have seen and what we're starting to -- we've seen and we think will be a really interesting opportunity is issues on refinancing, and whether there'll be enough to payoff existing debt and refi, and we think that's an opportunity for us to play in interesting way in structure deal. But that is the opportunity. I mean, you know all the lenders. They're all talking for Barron's right. This is not a product finance galleon CMBS world, so it's not part of what's going on there on with special servicing?

Okay. That's all I have. Thank you.

Thanks, Dan.

Thank you. Our next question comes from Lukas Hartwich with Green Street Advisors. Your line is now open.

Thanks. Good morning.

Good morning, Lukas.

Good morning.

Good morning. So it must be really challenging underwriting acquisition today. I'm just curious, how are you factoring COVID into the underwriting into NOI forecast and whatnot?

It's a really good question on. So on senior housing we're actually looking at how groups are doing right now. And there are definitely buildings that are -- have performed well and are not -- have not been deeply affected, and we're not looking at large portfolios. So, we're not having, to juggle dealing with assets that are deeply affected and assets that are largely unaffected. So that kind of isolates it, and they're not getting any stimulus funds. So there's no – there's some noise in terms of on the revenue side. Still nursing it's harder, it's much harder, you kind of have – you have to peel out and this, it becomes really challenging to do this. You have to, you have to peel out the stimulus money, so that you can see what the real underlying economics are as opposed to numbers that are offsetting losses and occupancy and you have to make an assessment of the fundamentals of what we have – of the fundamentals of the location and that particular building or build those particular buildings, of how they'll recoup occupancy and normalize, it's hard. So you look back historically, and you try to project forward, but it's definitely more challenging in the skill side.

I think part of it – another way is how well you know the operator, how you're going to look at other facilities and see how they handle that. So a lot of that helps. It's just, it's a good data point to have, in terms of – they are all going to project somewhat of a hockey stick recovery So doing enough diligence to make sure you understand who that operator is. And you may know who that operator is and how they handle all their other buildings on those factoring.

That's helpful. And then my other question is just going through this experience, does it change your view at all the relative attractiveness of IO versus AL verses Memory Care on the senior housing side?

It doesn't I think, look the long term benefits still exist. I think generally and profit that just a little bit before, I think the space is there that we are in have always been neglected by the healthcare systems generally. And certainly the government, we we're all caught out of Obamacare and I think all that's going to change. I think that from skilled nursing to independent living, and everything else in between, we are now going to be recognized. And I think the recognition has been happening in integral part of the healthcare system. There's an awful lot of conversation now about the inadequacy of Medicaid rates. And, and so the whole narrative is shifting from sort of the far of all these headlines and how many people are dying facilities to hey, wait a second. What's wrong with the system and look at the system do differently and what could we do differently because we weren't there to support these facilities to begin with. You know, I think I mentioned in the last call, it was almost, it was nine to 10 weeks into the pandemic before PPE to nursing homes, and maybe as much as half of it was flawed, you know, so I actually think – I think the value equation gets better as a result of this. And obviously, the demographics don't change. And you heard from Lilly and we've been seeing throughout the pandemic with the backdoor slowing down, the operators have done a really good job has made their residents feel safe. And so when it comes out to all the individual communities and markets, which is where these decisions are made, I think just like a lot of other businesses, how things were handled during the pandemic a lot later reputation. And look, the fact of the matter is, people don't have the support systems and infrastructure just not to go in. And then finally, you know, as you know, because assisted living becomes such a news based model that changes the equation anyway and that has been acuity creeping Independent Living as well. And I think some of the things that we've seen Independent Living and Holidays been a leader in that it is introducing access to health care that they didn't have before, through telehealth, for example, and with Holidays, down there, they were – they were, a company that sort of forging new paths with that. And I think that's going to help to continue to entice people to come into the communities. Lilly, I don't know, if there's anything that you want to add to that.

Yeah, I think that's exactly right. I mean, all of those things are made to provide more access. I think, you know, just even talking about the flu. We're not just focused on COVID. We know that there's an end date, there maybe a new COVID. And so we are trying to think about kind of the business in the new normal sense. And when we have telehealth, just prevention is so important and the telehealth will give us opportunities to provide vaccines, flu vaccines to our residents, and we are actually having all of our employees have flu vaccines that the company's cost again, making sure that what we know is going to be potentially challenging as we go through the flu season and COVID together, there's certainly things that we can do from a preventative side.

Great. Thank you.

Thank you. Our next question comes from Omotayo Okusanya with Mizuho. Your line is now open.

Hey, Omotayo. Are you there Omotayo?

If your line is muted, please unmute. And our next question comes from Steve Valiquette with Barclays. Your line is now open.

Hi. This is Morgan McCarthy on for Steve. Sorry, if I missed this earlier. But I guess I was wondering, if you could talk a little bit more about the impact of the resurgence of COVID cases and states like California or Florida on shot operators? Are you actually seeing those facilities be forced to reshot their doors to new admissions, or maybe even delay lifting any of the admission bans already in place or other, more strict regulations that might be preventing, you know, tours or move-in?

Yeah. The impact on shop has been pretty minimal. And, you know, some of the reasons that we talked about earlier, we have more facilities on the AL side that have tested positive, but the breakouts with the facilities are pretty – are minor or to make light of it even if one person has COVID. But we're just not having big breakouts because so much cares already been provided and all the one on one activities and the restricting of non-essential visitors and the screening of essential visitors has really helped, so that so occupancy through time period has actually been pretty flat. Folks can still admit it, people when they get admitted, that just means that some of the normalization that we want to get back to you in some of these markets, in terms of having visitors come in because the whole social component of isolation for our patients and residents has been really tough. So it just slow that kind of stuff down, but in terms of having any sort of material impact on occupancy and therefore the bottom line, we're not really seeing that.

Okay. And then just one more question on the shop portfolio, I guess, not necessarily related to occupancy, but how are you thinking about moving trends moving into the second half of the year? Are you seeing any pent up demand or receiving any actual deposits from new residents and they're just choosing to delay to move in? Or is this -- while even though there's been an improvement in move ins, it is down just because of an overall function of leads and towards the end down as well?

Talya?

Sure. So move ins are trending up, so that the whole sequence of leads towards leases and move ins is trending up and we're seeing that uniformly in the shop portfolio. It is not yet at the level it was on a year-over-year comparison. So it's not yet "normal", but nothing right now is quite normal. And so the good news is the trajectory is headed the right way. I think a big factor in this kind of want to go back to what Rick was saying, a big factor today is that we know a lot more the protocols are in place, they're their processes, people in communities and the leadership and at our operators have -- have had months now to figure out how to manage through this the current environment. So it's one thing to have had a big drop in April when this was all very fresh. And even though the pandemic continues to affect a tremendous number of people in this country and it's inescapable. The good news is as Lilly described, they have worked very hard to figure out how to run their business model in an environment where this is happening. So to your comments about move in, to the extent that municipality has determined that no admissions are allowed, then that's one thing, because you -- the all of our operators have to comply with the local health department and other regulatory bodies, but to the extent that they're able to have to win test before move in, and if they test negative move in without any issues or comfort or self isolate once they've moved in, they figured out ways protocols for -- to allow people to move in. And have the kind of safety and eventually the socialization that they desire.

Okay. Thank you.

Thank you. Our next question comes from Tayo Okusanya with Mizuho. Your line is open.

Hi. Hello everyone. Can you hear me?

This is your last chance Tayo.

I’m going to be kick out. The commentary just about the regulatory environment was helpful. I was hoping could you comment specifically on what's happening at the state level, we're kind of in August now, states are setting their budget. How are -- what are you kind of seeing from a Medicaid perspective, just kind of giving a lot of state budgets are to be challenged right now, because the COVID?

Yes. We're not really seeing much different at a state level. The states that have provided temporary increases, which are still in place because of COVID have kind of left them in place for now. So I think they're trying to try to figure out, I think -- I don't see things being any different than they normally are which is pretty low Medicaid rate increases per state anyway, 1.5% to 2%. So, just fight the stress on the state budgets. I don't think that piece of its going to get worse just because in large part because the federal match. They don't reverse that federal match. And one of my main data points, they're always tile is great recession, which obviously was much different, but that was a lot of ways a much bigger deal financially in some respects for the state and our Medicaid rates in the aggregate were held steady there for nursing homes, not for other seconds, but for nursing homes. So I think the federal matches important to keep things in place.

Great. That’s helpful. And then just one other question in regards to just for stimulus four, are there specific things that the industries lobby for in stimulus four for example, kind of having a blanket limited liability because of COVID? I'm just kind of curious, what was the industry lobbying from getting some of those requests?

That's the big issue. It’s the liability issue. And despite what, a person can say, we have industry is no issue and is not lobbying for blanket immunity, recall this real negligence and things like that those people should always be taken to task. But just the mere fact that you have COVID in a facility doesn't mean that you should get sued. And so that's really what the focus is. There's also been a lot of state logging and I think actually haven't seen an FDA trial in a little bit over a week. I think there were about 31 states. Or actually, maybe I think it's more than -- yeah, 29 states have some form of limitations on liability. So, that's going to be helpful going forward. But having started at the federal levels, what we really want. So that's the big issue. Other than that, I think that the dialogue has always been really productive. And so, I think we feel pretty comfortable with getting stimulus dollars otherwise.

Great. Thank you.

Thank you. I'm not showing any further questions at this time. And I like to turn the call back over to Rick Matros for closing remarks.

Thank you all for calling in. We appreciate it. As always, we're available for any additional questions. Thank you really for being on the call. I think it really provided some value input to our investors and everyone be safe out there.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.