Vikram Malhotra: Got it. Okay. And then just sorry one last just to clarify. Any sense of the final the Medicare ruling that I think comes out when in June or July from the initial proposal? Any sense if the comments how the kind of push together number higher or how that plays out?
Rick Matros: We’re still in the comment period and it will come out until August usually in the first week of August. So we’ll see but I would anticipate it to be where it is now. I don’t anticipate it being lower but I think the odds are greater that it stays where it is as opposed to going higher but not lower.
Vikram Malhotra: Got it. Okay. Thank you.
Operator: Your next question comes from the line of Rich Anderson of Wedbush. Please go ahead.
Rich Anderson: Hey, thanks. Good morning, everyone. So about to minimum staffing you had 46,000 comments CMS said thanks for that and went ahead with it anyway. I know a lot of your peers in the REITs and operators are saying we hope that they’ll come to their senses and we can all agree it’s crazy what the requests are here what the mandate would be. But what could possibly change CMS’ direction now another 1,000 comments? I mean I don’t want to understand what more the industry could do to change the direction? Or does it is it more of a political thing where if we have a change of administration maybe that incites a change. But separate from that how does this not go through as it stands today?
Rick Matro: We believe we can successfully address the issue legislatively. You’re right they essentially ignored all the comments and they rush to get this out because there’s no way even 40,000 to 50,000 comments that they could have thoughtfully reviewed all of those and not as far little out, what they did. So it’s left the industry with no position — with no option rather than to take legislative action and potentially legal action as well.
Rich Anderson: Okay. And then as it relates to your portfolio have you done any work to say well this percentage is subject to the three-year phase in this is five years and this — this percentage might actually be exempt from the legislation as it currently stands. Have you done that work yet? Do you have an idea of what it might be from a geographic standpoint?
Rick Matro: No I think it’s premature to do that work Rich not just because people are still recovering. But the impact of this if it doesn’t go away is two year to five years out. So we’ve got some time right now to see if the remedies if you will that the industry is going to undertake to get rid of this mandate takes hold. I think there’ll be plenty of time. If we succeed in that great. If we don’t succeed in that effort we’ll still have plenty of time to do as you suggest.
Rich Anderson: Okay. And then last for me switching to SHOP same-store. I understand comps in February and March and all that. But you said off to a good start in the first quarter going to take a look at guidance next quarter. It does SHOP figure into that as well? Is that outperforming? And I think you said in the line.
Rick Matro: Our SHOP is somewhat ahead of our internal forecast guidelines.
Rich Anderson: Okay. And your internal forecast guidance are for what on a same-store if you can remind me I just don’t remember.
Michael Costa: Sorry, you’re asking what our same-store NOI growth assumption in our guidance is?
Rich Anderson: Yes for SHOP.
Michael Costa: Yes. I mean like I answered it earlier on the call Rich, what we have talked about on previous calls was we didn’t put that number out right? But what other folks are saying is mid-teens growth on an NOI basis year-over-year and that feels reasonable given our portfolio.
Rich Anderson: Okay. I’m sorry I missed that part of it. Thanks very much.
Operator: Your next question comes from the line of Alex Mejia [ph] of Baird. Your line is now open.
Unidentified Analyst: Thank you for taking my question. First one for me. Can you talk a little bit – give some color on maybe the NOI growth between IL and AL and where that’s been trending?
Rick Matros: Well we’re not going to give the specific numbers that I would say as we’ve talked about in the past. They are fundamentally different businesses. So the AL growth is going to be stronger than the IL growth simply because you’ve got more tools to impact the revenue line than you do in IL, which effectively isn’t really a healthcare facility even though there’s been Acuity clinic, which is why we got the PLR letter back in 2020. So – and the other point I would make is that the IO portfolio never got hit this hard during the pandemic as the AL, so there’s less recovery to be had there.
Unidentified Analyst: Got it. And we noticed you combined the two and that occupancy was down quarter-over-quarter. Was that driven by any one of them more or less?
Michael Costa: No I think that was really just – we go through all of our disclosures periodically and especially in our supplement. And what we saw was that we were an outlier and given that level of granular detail. So we basically made our disclosures conform to what our peers show.
Unidentified Analyst: Got it. That’s it for me. Thank you.
Operator: Your next question comes from the line of Michael Stroyeck of Green Street. Please go ahead.
Michael Stroyeck: Thanks and good morning. Could you just share where spot occupancy and coverage levels for the SNF portfolio sit today? And then just assuming the company can get spot occupancy back to pre-COVID levels in that call it 82% range. How sizable of an impact would you expect for that to have on coverages?
Rick Matros: It’s going to be pretty sizable. On the last call on our year-end call Rich Anderson asked it. Given that dynamic that you’re talking about is it possibly going to get a consolidated two times coverage. And I’m not going to say as soon as we get there but it’s clearly going to have a material impact on coverage with coverage higher now than pre-pandemic occupancy, our margins are back to where they were pre-pandemic occupancy, which means the pull-through of that operational leverage is actually settled in at a lower occupancy level. So that’s all positive for us. So it’s hard to sit here and say this is what the exact impact is going to be on coverage near two years from now of occupancy is 300 basis points higher but it’s clearly going to have a material impact.
