Home Health & Hospice Week

Take a page from publicly traded chains’ playbooks.

In their latest earnings reports and calls, publicly traded home care companies revealed steps they’ve taken to deal with COVID-19 and its financial fallout.

Consider whether these techniques may help your agency:

1. Tapping funding. The CARES Act approved two types of funding health care pro­viders can access — Provider Relief Fund grants and Paycheck Protection Act loans. Much of the Provider Relief Fund monies were deposited di­rectly into providers’ bank accounts in April based on a Department of Health and Human Services formula. Some companies, like Encompass Health Corp., have announced they are giving back the funds, while others are keeping them. Whether you should keep your Provider Relief Funds depends on whether you meet the terms and conditions set forth for them, including that the funds “only be used to prevent, prepare for, and respond to coronavirus, and that the Payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus” (see Eli’s HCW, Vol. XXIX, Nos. 16 and 17).

The Centers for Medicare & Medicaid Services also liberalized access to accelerated and advanced payments when the pandemic first appeared, granting providers up to a three-month advance with few restrictions.LHC Group Inc. received about $307.6 million that way, CFO Josh Proffitt said in the Lafayette, Louisiana-based chain’s May 8 earnings conference call for the first quarter of 2020. The Pennant Group Inc. received about $28 million in advanced payments, CFO Jennifer Freeman said in the Eagle, Idaho-based chain’s May 14 earnings call. Pennant spun off from The Ensign Group last year.

2. CARES Act benefits. The CARES Act also carried a lift of the 2 percent sequestration reduction from May 1 through the end of the calendar year. That gains Amedisys Inc. about $20 million, CEO Paul Kusserow said in the Baton Rouge, Louisiana-based chain’s May 8 call.LHC expects a “$15 million to $20 million positive impact” for 2020, Proffitt noted. Pennant predicts a $2.5 million bump.

The CARES Act also includes a refundable payroll tax credit for certain wages paid to employees from March 13 to Dec.31 and allows employers to defer the deposit of certain employment taxes for as much as two years.“These provisions provide significant relief for employers and are designed to encourage employers to continue paying wages to employees during these unprecedented times,” tax advisory firm BDO says in online analysis.

LHC saw a $2.2 million benefit in the first quarter, Proffitt noted. Pennant plans to defer about $7.2 million in payroll taxes in 2020, Freeman said.

3. Cost cuts. While the CARES Act and other funding certainly are helping providers survive the pandemic, they aren’t enough. Multiple companies mentioned other cuts they are making to stay in the black.

Salaries and compensation headed up the cost-cutting list. At Pennant, “our Board of Directors, Executive Team and other senior leaders throughout the organization have voluntarily reduced their base salaries, while the pandemic pressure persists,” CEO Daniel H. Walker said in the company’s call. At LHC, “our executive team, all other members of our leadership team and all home office leaders are flexing a minimum of 10 percent and up to 30 percent of their salary during this time,” Proffitt detailed.

Execs weren’t the only one to see salary hits, however. Pennant has implemented “flex schedules and furloughs of select non-clinical employees,” Walker reported.LHC has “enacted select employee furloughs while also moving to increased flex time throughout our home office staff and throughout our G&A support positions,” Proffitt noted.

The Encompass home care division, which uses a mix of salary and per-visit staff, “offload(ed) per visit staff and begin to align more of the visits with our full-time staff members,” Home Health and Hospice CEO April Anthony noted in the Birmingham, Alabama-based company’s call.

Other places the publicly traded companies cut costs included nonessential travel and nonessential supplies, they said. Encompass, which also includes a rehab facility division, put in place “a reduction of $100 million to $150 million in 2020 planned capital expenditures, largely based on project pacing,” CFO Douglas Coltharp noted in the call.

4. Telehealth. Moving at least some visits to telemedicine has a double benefit, companies noted — lowering costs and limiting potential COVID-19 spread. Encompass has been “supporting our in-person care with telephonic visits when possible,” CEO Mark Tarr said in the earnings call.

“A televisit also requires no PPE,” Kusserow pointed out. That “allows us to maximize the use of our current and future inventory,” he noted.

“While nothing can take the place of hands-on care that our clinicians excel at providing, there are numerous benefits to utilizing telehealth, including lessening of patient anxiety as no one has to physically enter their home, protecting both the patient and our clinicians,” lauded Amedisys CFO Scott Ginn.

With Medicare Advantage payers, Amedisys has “arrangements to get paid for these visits today that’s really kind of formed over the last six weeks or so,” noted Kusserow in the call earlier this month.“But there’s now dialogue around how do we … start thinking about using this in a more … longitudinal look at the patients.I think that will be a slow process, but opportunity nonetheless,” he said.

“Many managed care organizations have waived preauthorization requirements for post-acute care, and a few are permitting and paying for home health televisits,” Tarr said.

When home health agencies start using telemedicine visits, however, they run a greater risk of Low Utilization Payment Adjustment episodes.

“LUPAs are going to drive down … visits per episode,” Ginn explained.

“There is still no reimbursement for telehealth,” Kusserow noted.“And therefore, these visits do not count toward reaching home health LUPA thresholds.”

Telehealth coupled with missed visits, whether due to patient refusal, staffing issues, or something else, has caused LUPAs to surge in the first quarter of 2020, company says (see Eli’s HCW, Vol. XXIX, No. 19).

5. Staffing mix. Multiple companies pointed out staffing mix changes that were already underway in light of the Patient-Driven Groupings Model that took effect Jan.1.They are aiming to increase LPN and decrease RN utilization, and the same with PTAs and PTs.

Amedisys is shooting to “get to the 50-50 mark by the end of the year, maybe even surpass it,” when it comes to LPNs and PTAs, Kusserow noted in the call.“Our LPN ratio is 45 percent and PTAs [are] at 46.3 percent,” he said.

When LHC acquired Almost Family Inc. in April 2018, Almost Family’s LPN ratio was signifi­cantly lower than that of LHC.“They started out at 30 percent LPN utilization,” Proffitt pointed out in the call. Now they are at about 40 percent LPN utilization, and still aim to “get it up to LHC 50 percent to 55 percent LPN percentage,” he reported.