SecProbe.io

August 16 , 201 3

Via E -mail
Boyd P. Gentry
President and Chief Executive Officer
AdCare Health Systems, Inc.
5057 Troy Rd, Springfield, OH
45502 -9032

Re: AdCare Health Systems, Inc.
 Form 10-K for the fis cal year ended December 31, 2012
Filed July 8, 2013
Form s 10-Q/A for the quarterly period s ended March 31, 2012, June 30, 2012
and September 30, 2012
Filed July 8, 2013
File No. 001-33135

Dear Mr. Gentry :

We have reviewed your  filing s and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing s, by
providing th e requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing s and the information you provide in
response to these  comments, we may have  additional comments.

Form 10 -K for the fiscal year ended December 31, 2012

Financial Statements

Principles of Consolidation, page 72

1. Please give us your SAB 99 analysis and explain for us why inclusion of the Oklahoma
Owners VIEs in the financial statements for the year ended December 31, 2011 was not
material to such financial statements.  Provide us with an analysis of the forgone
adjustments that would have been required to de -consolidate these VIEs at December 31,
2011.

Boyd P. Gentry
AdCare Health Systems, Inc.
August 16 , 2013
Page 2

Item 9, Controls and Procedures

Management’s Report on Internal Control Over Financial Reporting, page 138

2. We note form the final bullet point on page 139 that you have expanded your internal
audit procedures regarding the review of journal entries and non -recurring transactions,
areas that appear underlie restatements made to correct errors in your 2012 Forms 10-Q.
It is unclear to us how these matters were addressed in your disclosure of material
internal control weaknesses in the third paragraph of page control 139.  Please clarify and
revise as necessary in accordance with Item 308(a)(3) of Regulation S -K to disclose each
material weakness in your “internal control over financial reporting that was identified by
management” as of December 31, 2012.

Form 10 -Q/A for the quarterly period ended March 31 , 2012

Item 4, Controls and Procedures, page 35

3. It is unclear to us from the first full and the penultimate paragraph s of page 36 whether
management’s evaluation of  the effectiveness of  disclosure controls and procedures , in
this and subsequent amended filing s, is as of the end of each 34 Act interim repor ting
period  or as of December  31, 2012.  Please clarify.  If management’s evaluation of the
effectiveness of  disclosure controls and procedures was not performed as of the end of
this and each subsequent 34 Act interim reporting period please tell us why.  Address in
your response the numerous accounting and reporting errors affecting those periods.
Item 307 of Regulation S -K requires that management evaluat e the effectiveness of
disclosure controls and procedures “as of the end of the period covered by th e report”.

Note 2. Restatement of Previously Issued Consolidated Financial Statements, page 11

4. We note that your recent reassessment of your previous conclusion regarding the
consolidation of the “Oklahoma Owners” VIEs resulted in restatement of your 201 2
interim financial statements.   Explain for us the basis in ASC 810 for your revised
conclusion.  Identify for us the underlying facts and circumstances that caused you to
come to a conclusion different from your previously held conclusion.  Please also address
the December 20, 2012 subordination of your 5% management fee under the credit
agreement with Gemino Healthcare Finance, LLC in your response.

5. For each balance sheet date; March 31, 2012, June 30, 2012 and September 30, 2012,
please provide us  with debt covenant information that is comparable to the information
provided on pages 61 and 62 of your December 31, 2012 Form 10 -K.  Tell us the impact
the corrected amounts would have had on those debt covenants for each such interim
period.   Specify which , if any, debt covenants would have been violated.

Boyd P. Gentry
AdCare Health Systems, Inc.
August 16 , 2013
Page 3

 Form 10 -Q/A for the quarterly period ended September 30, 2012

Note 2. Restatement of Previously Issued Consolidated Financial Statements , page 11

6. With the exceptions of adjustments related to management  fees charged to certain
variable interest entities and for “changes in accrued performance -based incentive
obligation”, your material “other adjustments” presented on pages 11 through 17 appear
to be related to “timing i ssues” and appear to adversely affect your interim results of
operations.  Please explain.  Identify for us the particular weakness in disclosure controls
and procedures and the changes and weakness in  internal control that allowed such  errors
to go undetected at the original filing dates o f your 2012 interim reports.

7. Explain for us why your “accrued performance -based incentive obligation” needed to be
restated.  Identify for us the classes of employees for whom this incentive obligation was
reduced.

8. Please revise your disclosure of your “ other adjustments” in the June 30, and September
30, 2012 Forms 10 -Q/A to include an explanation of why material corrections were made
to your interest expense line item.

9. Please reconcile the component adjustments to costs of services expenses and general  and
administrative expenses for the nine months ended September 30, 2012 to the respective
$5,656,000 and $(852,000) adjustments presented on page 16.  It is not clear to us
whether the disclosure of adjustments to costs of services expenses and general and
administrative expenses on page 12 includes all material items.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In respo nding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments  do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United Stat es.

Boyd P. Gentry
AdCare Health Systems, Inc.
August 16 , 2013
Page 4

 You may contact Joseph M. Kempf, Senior Staff Accountant , at 202-551-3352  or Carlos
Pacho, Senior Assistant Chief Accountant, at 202 -551-3835  if you have questions regarding
comments on the financial statements and related matters.  Please contact me at (202) 551 -3810
with any other questions.

Sincerely,

 /s/ Carlos Pacho for

 Larry Spirgel
Assistant Director

cc:  Via E -mail
 Lori Gelchion, Esq.
 Rogers & Hardin LLP