Nature of Business	6 Months Ended
Jun. 30, 2012
Notes to Financial Statements [Abstract]
Nature of Business	Nature of Business References throughout this document to the Company include Sun Healthcare Group, Inc. and our consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s “Plain English” guidelines, this report has been written in the first person. In this document, the words “we,” “our” and “us” refer to Sun Healthcare Group, Inc. and its direct and indirect consolidated subsidiaries and not any other person. Business Our subsidiaries provide long-term, post-acute and related specialty healthcare in the United States. We operate through three principal business segments: (i) inpatient services, (ii) rehabilitation therapy services, and (iii) medical staffing services. Inpatient services represent the most significant portion of our business. Our continuing operations include 190 healthcare centers in 23 states as of June 30, 2012. Pending Merger with Genesis HealthCare LLC On June 20, 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Genesis HealthCare LLC, a Delaware limited liability company (“Genesis”), and Jam Acquisition LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of Genesis (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into us, with us continuing as the surviving corporation and an indirect wholly owned subsidiary of Genesis (the “Merger”). Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of our common stock, other than treasury shares, shares held by us (other than shares held in a fiduciary capacity that are beneficially owned by third parties), Genesis, Merger Sub or any wholly owned subsidiary of Genesis or us and shares held by stockholders who perfect their appraisal rights under Delaware law, will be converted into the right to receive $8.50 in cash, without interest (the “Merger Consideration”). At the effective time of the Merger, outstanding equity awards with respect to shares of our common stock (whether vested or unvested) will be canceled and converted into the right to receive a cash amount equal to the difference between the Merger Consideration and the exercise price, if any, of such awards. We anticipate that the total amount of funds necessary to pay the aggregate Merger Consideration will be approximately $230 million, not including refinancing of our existing indebtedness or payment of related transaction fees and expenses. We have commenced mailing the proxy statement to our stockholders and will hold a special stockholders meeting concerning the transaction on September 5, 2012. The transaction is expected to close in the fall of 2012 subject to the satisfaction of customary closing conditions, including, among other things, (i) the affirmative vote of a majority of the outstanding shares of our common stock in favor of the adoption of the Merger Agreement, (ii) the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt of other required governmental approvals, (iv) the absence of any law or order prohibiting the consummation of the Merger, (v) subject to certain materiality exceptions, the accuracy of our representations and warranties in the Merger Agreement, (vi) the performance in all material respects of our covenants in the Merger Agreement, (vii) the absence of any material adverse effect on us between June 20, 2012 and consummation of the Merger and (viii) compliance by us with our obligations under certain third party contracts. Transaction Costs During the three and six months ended June 30, 2012, we incurred $1.8 million of transaction costs in connection with the pending merger with Genesis. These costs consist primarily of legal fees and financial advisory fees. Other Information The accompanying unaudited consolidated financial statements have been prepared in accordance with our customary accounting practices and accounting principles generally accepted in the United States (“GAAP”) for interim financial statements. In our opinion, the accompanying interim consolidated financial statements are a fair statement of our financial position at June 30, 2012, and our consolidated results of operations and cash flows for the three- and six-month periods ended June 30, 2012 and 2011. These statements are unaudited, and certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted, as permitted under the applicable rules and regulations of the Securities and Exchange Commission. The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items. Readers of these statements should refer to our audited consolidated financial statements and notes thereto for the year ended December 31, 2011, which are included in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of significant contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include determination of impairment for goodwill and other long-lived assets, third-party payor settlements, allowances for doubtful accounts, self-insurance obligations, loss accruals and income taxes. Actual results could differ from those estimates. Recent Accounting Pronouncements The FASB issued an Accounting Standards Update in June 2011 regarding the presentation of comprehensive income within financial statements. GAAP now requires that comprehensive income and its components of net income and other comprehensive income be presented in either (1) a single continuous statement of comprehensive income or (2) two separate but consecutive statements. This new guidance is now effective for us and our accompanying consolidated financial statements have been presented with one single continuous statement of comprehensive income. Reclassifications Certain reclassifications have been made to the prior period financial statements to conform to the 2012 financial statement presentation. We have reclassified the results of operations of nine skilled nursing centers of our Inpatient Services segment (see Note 4 – “Discontinued Operations”) for all periods presented to discontinued operations within the income statement, in accordance with GAAP.

Nature of Business

References throughout this document to the Company include Sun Healthcare Group, Inc. and our consolidated subsidiaries. In accordance with the Securities and Exchange Commission’s “Plain English” guidelines, this report has been written in the first person. In this document, the words “we,” “our” and “us” refer to Sun Healthcare Group, Inc. and its direct and indirect consolidated subsidiaries and not any other person.

Business

Our subsidiaries provide long-term, post-acute and related specialty healthcare in the United States. We operate through three principal business segments: (i) inpatient services, (ii) rehabilitation therapy services, and (iii) medical staffing services. Inpatient services represent the most significant portion of our business. Our continuing operations include 190 healthcare centers in 23 states as of June 30, 2012.

Pending Merger with Genesis HealthCare LLC

On June 20, 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Genesis HealthCare LLC, a Delaware limited liability company (“Genesis”), and Jam Acquisition LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of Genesis (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into us, with us continuing as the surviving corporation and an indirect wholly owned subsidiary of Genesis (the “Merger”). Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of our common stock, other than treasury shares, shares held by us (other than shares held in a fiduciary capacity that are beneficially owned by third parties), Genesis, Merger Sub or any wholly owned subsidiary of Genesis or us and shares held by stockholders who perfect their appraisal rights under Delaware law, will be converted into the right to receive $8.50 in cash, without interest (the “Merger Consideration”). At the effective time of the Merger, outstanding equity awards with respect to shares of our common stock (whether vested or unvested) will be canceled and converted into the right to receive a cash amount equal to the difference between the Merger Consideration and the exercise price, if any, of such awards. We anticipate that the total amount of funds necessary to pay the aggregate Merger Consideration will be approximately $230 million, not including refinancing of our existing indebtedness or payment of related transaction fees and expenses.

We have commenced mailing the proxy statement to our stockholders and will hold a special stockholders meeting concerning the transaction on September 5, 2012. The transaction is expected to close in the fall of 2012 subject to the satisfaction of customary closing conditions, including, among other things, (i) the affirmative vote of a majority of the outstanding shares of our common stock in favor of the adoption of the Merger Agreement, (ii) the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) the receipt of other required governmental approvals, (iv) the absence of any law or order prohibiting the consummation of the Merger, (v) subject to certain materiality exceptions, the accuracy of our representations and warranties in the Merger Agreement, (vi) the performance in all material respects of our covenants in the Merger Agreement, (vii) the absence of any material adverse effect on us between June 20, 2012 and consummation of the Merger and (viii) compliance by us with our obligations under certain third party contracts.

Transaction Costs

During the three and six months ended June 30, 2012, we incurred $1.8 million of transaction costs in connection with the pending merger with Genesis. These costs consist primarily of legal fees and financial advisory fees.

Other Information

The accompanying unaudited consolidated financial statements have been prepared in accordance with our customary accounting practices and accounting principles generally accepted in the United States (“GAAP”) for interim financial statements. In our opinion, the accompanying interim consolidated financial statements are a fair statement of our financial position at June 30, 2012, and our consolidated results of operations and cash flows for the three- and six-month periods ended June 30, 2012 and 2011. These statements are unaudited, and certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted, as permitted under the applicable rules and regulations of the Securities and Exchange Commission. The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items. Readers of these statements should refer to our audited consolidated financial statements and notes thereto for the year ended December 31, 2011, which are included in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of significant contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include determination of impairment for goodwill and other long-lived assets, third-party payor settlements, allowances for doubtful accounts, self-insurance obligations, loss accruals and income taxes. Actual results could differ from those estimates.

Recent Accounting Pronouncements

The FASB issued an Accounting Standards Update in June 2011 regarding the presentation of comprehensive income within financial statements. GAAP now requires that comprehensive income and its components of net income and other comprehensive income be presented in either (1) a single continuous statement of comprehensive income or (2) two separate but consecutive statements. This new guidance is now effective for us and our accompanying consolidated financial statements have been presented with one single continuous statement of comprehensive income.

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the 2012 financial statement presentation. We have reclassified the results of operations of nine skilled nursing centers of our Inpatient Services segment (see Note 4 – “Discontinued Operations”) for all periods presented to discontinued operations within the income statement, in accordance with GAAP.