LOUISVILLE, Ky. (WDRB) – Louisville-based Kindred Healthcare LLC will cut the wages of many of its employees by 10% until further notice as the coronavirus pandemic squeezes a big portion of the company’s business.
Kindred Healthcare CEO Ben Breier is taking a 15% pay cut while other managers’ pay is cut 10%.
Kindred disclosed the changes in a letter dated Friday to employees in its RehabCare division, which provides physical, speech and occupational therapists to about 1,500 nursing homes, assisted living facilities and outpatient clinics nationwide. WDRB obtained a copy of the letter.
All site-based RehabCare employees will incur a 10% pay cut effective May 1, according to the letter from Jason Zachariah, chief operating officer of Kindred Healthcare and Glenda Mack, the company’s senior vice president of operations and head of RehabCare.
However, salaried workers earning less than $50,000 a year and hourly employees earning the equivalent rate ($24 per hour or less) will be spared from the cuts, according to the letter.
On average, occupational therapists earn $86,210 per year while physical therapists earn $90,170, according to nationwide figures from the U.S. Bureau of Labor Statistics.
It wasn’t immediately clear whether the cuts affect employees in Kindred’s hospital division, which runs inpatient rehabilitation hospitals and provides hospital-based rehab services.
A Kindred spokeswoman declined to comment.
The pay cut doesn't sit well with some workers, who say they risk their own health by continuing to work in places like nursing homes.
"We truly thought the phone call last Friday was to tell us about hazard pay increases," said Michaela Biancardi, a physical therapist who works part-time at a facility in Crown Point, Indiana, in a message to WDRB. "You can imagine our shock when instead it was a 10% cut that none of us expected ... Why us? Why your essential staff?"
The pandemic is weighing on Kindred’s RehabCare business, according to the memo.
“Even though our RehabCare sites of service are playing a key role in caring for patients during this COVID-19 pandemic, we are seeing a substantial negative impact on our operations,” Zachariah and Mack said in the letter.
Group therapy sessions have been curtailed, new rules limit the number of facilities each worker can visit and some assisted living and independent living facilities have not allowed RehabCare personnel into their buildings, they said.
While Medicare will now pay for telehealth visits for some providers, therapists are not eligible for those reimbursements, they said.
Some facilities are not providing personal protective equipment like masks and gloves, and those items are going for four- or five-times their normal cost because of supply shortages, they said.
“While we are confident we will get through this challenging period together and emerge even stronger, we must take necessary steps to manage the short- and long-term financial impact on our company,” Zachariah and Mack said in the letter. “In order to bridge this transition period, we will need to demonstrate a collective sacrifice.”
Once among a handful of Fortune 500 companies headquartered in Louisville, Kindred was taken private in 2018 by Louisville-based Humana Inc. and a pair of private equity firms in a $4 billion deal.
The surviving Kindred Healthcare LLC, which implemented the wage cuts, is owned by the private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe.
Meanwhile, Humana is part-owner, along with the private equity firms, of Kindred’s former At Home division providing in-home and hospice care.
