Home Health & Hospice Week

Home care providers need all the help they can get when it comes to stocking their toolboxes for coping with the coronavirus — even as the pandemic stretches into fall.

The exact statistics of diversion are tricky, however. “We’re getting some SNF patients that we wouldn’t have otherwise gotten, particularly directly from physicians,” Encompass Health Corp. home health and hospice CEO April Anthony said in the Birmingham, Alabama-based company’s July 29 earnings call. “But it’s a hard thing to prove what could have, might have, should have happened or would have happened in the prior world.” Despite the gray area, “we do feel encouraged that even with a significant drop in our [assisted living, independent living,] and SNF discharge -based volumes that we’re seeing overall return to volume. And we think that’s because of displacement.”

3. Restructured pay. Home care providers have had to make the often painful decision to cut or otherwise revise compensation.

As elective surgeries dropped and assisted living facilities started “locking people out of the building,” Encompass Health reevaluated its therapist pay, Anthony noted. “We had [a] significant excess of therapist capacity relative to our needs,” she said. “In early May, we made a shift in our reimbursement structure for therapists, lowering each therapist-based pay by 20 percent and in turn lowering their productivity expectations for the pay period by the same 20 percent factor.”

The result: “That proved to be a really successful stra-tegy for us both in the near term and … ultimately in the long term,” Anthony said. Therapists could “earn back their extra work if they could actually complete it, if their region wasn’t as heavily affected, by paying them over-productivity points,” she explains. As a result, Encompass saw “about a $20 per visit improvement in our cost per visit.”

The restructuring “also gave us the opportunity to maintain 100 percent of our therapy staff. We didn’t have to furlough anyone with that approach,” Anthony added. Encompass plans to keep the structure going forward.

Multiple companies mentioned adjusting productivity goals upward. Amedisys has used contract staffing when needed, noted Ginn. And “we turned some folks from salaried into per visit,” Kusserow noted.

4. Government relief. Medicare and other federal agencies offered various financial relief mechanisms including a suspension of the 2 percent sequestration payment cut, CARES Act grants and loans under the Provider Relief Fund and Paycheck Protection Program, liberalized accelerated payments, payroll tax relief, and more.

For example: LHC Group had $310.7 million in accelerated payments it will start paying back later this month, CFO Joshua Proffitt said in its call. And the sequestration suspension translates to $5 million in additional revenue in the second quarter for the company. “We estimate this to be an approximately $15 million to $20 million positive impact for revenue for us during 2020,” Proffitt added.

The Pennant Group Inc. gained about $600,000 in the quarter from the sequestration holiday, CEO Daniel Walker said in its Aug. 12 earnings call.

Some companies kept and are using their Provider Relief Fund payments, while others returned them (see story, p. 242).

5. Serving COVID-positive patients. Both Amedisys and LHC Group said they had benefitted from accepting COVID-19-positive patients early on, earning loyalty — and further business — from referral sources.

“We have provided care for 4,700 confirmed COVID-19 patients, and have an additional 882 COVID-19 suspected patients currently on service,” LHC’s Proffitt said.

6. Reducing turnover. Five years ago, Amedisys had a 40 percent turnover rate for staff, Kusserow shared. Now that’s down to 16.8 percent. Less turnover means less training and ramp-up, etc. Amedisys hopes to get turnover below 15 percent ultimately, Kusserow added.

7. Tackling accounts receivable. Getting cash in the door is still a priority. For LHC, days sales outstanding “improved to 61 days in the second quarter compared to 62 days in the first quarter,” Proffitt noted. “We continue to expect this to settle into a new normal rate of 55 to 60 days in the remainder of 2020.”

Acquisitions can slow down DSO progress, noted Amedisys’ Ginn. Amedisys saw a three-day increase to its DSO, to 41.2 days, after acquiring Compassionate Care Hospice last year, he said.