Home Health & Hospice Week

Virtual visits keep in-person utilization in check at one national chain.

Like for about everyone, 2021 was a hard year for home health and hospice companies. But that doesn’t mean it was an unprofitable one, earnings reports from publicly traded companies show.

Four of five publicly traded companies with major home health and hospice business reported higher income in 2020 than in 2019, say the reports for years ending Dec. 31, 2020. And three out of five had higher revenues.

The two companies that had both higher income and revenues include Amedisys Inc. with a $185.2 million profit on $2.07 billion in revenues for 2020, compared to $127.9 million in net income on revenues of $1.96 billion for 2019; and VITAS Healthcare Corp. with $238.8 million in net profit on revenues of $1.33 billion for 2020, up from a $155.8 million profit on $1.28 billion in revenues for the previous year.

“Considering all of the challenges 2020 threw our way, our performance has been nothing short of spectacular,” enthused Amedisys CEO Paul Kusserow in the company’s Feb. 25 earnings call. “I could not be prouder of our over 21,000 employees that have worked tirelessly to overcome the obstacles presented by a historic pandemic and a first in 20 years regulatory payment reform, providing the highest quality care to our over 418,000 patients,” he said. Kusserow also called the company’s performance “superlative” and “tremendous” in the call.

Kevin McNamara, the CEO of VITAS parent Chemed Corp. praised the company for its “incredible speed, flexibility, and focus to remain completely open and operate safely for the benefit of our patients, customers and employees” in its Feb. 24 earnings call. McNamara also cited “the federal government, specifically HHS and CMS” as being “very supportive in terms of relaxing regulations, allowing the use of telehealth where appropriate and providing pragmatic flexibility in caring for our entire patient census.”

Executives at the five companies cited a number of favorable factors for 2020 earnings in their calls, including:

• Suspended sequestration. Congress has voted to put a moratorium on the 2 percent sequestration reduction to Medicare payment rates, with the latest suspension set to expire March 31. “The suspension of sequestration added $23 million to our revenue and gross margin for the year,” noted Amedisys CFO Scott Ginn in the Baton Rouge, Louisiana-based chain’s call.
• Federal financial relief. From deferred payroll taxes to CARES Act funding to accelerated payments from Medicare, the feds were quick to lend a helping monetary hand. For example, LHC Group Inc. has had $318 million in accelerated payments and $93.3 million in Provider Relief Fund assistance, the company says in its earnings release. But LHC plans to return the PRF funds to the government, it adds. Amedisys has “utilized $33 million of the CARES Act funds received,” although it has “chosen to apply our CARES Act funds only to direct cost associated with COVID-19,” Ginn pointed out in the company’s call.
• Regulatory flexibility. Amedisys CEO Keith Myers praised “innovative waivers from CMS regarding the homebound requirement [and] flexibilities for remote certification of home care” in its earnings call.
• Legislative changes. Myers also lauded enactment of legislation “allowing nurse practitioners to certify home care for the first time” as one of 2020’s “significant policy improvements.”
• Virtual visits. While Congress did not grant home health agencies’ wish to receive direct payment for telehealth visits, proposed changes to the Home Health Conditions of Participation make clear that HHAs can provide patient monitoring and other services via telecommunications as long as it’s on the plan of care. Virtual visits have helped LHC Group keep its utilization in check. The company has “added approximately three virtual visits per episode,” putting LHC’s in-person visits as “just under 13” per episode, said LHC Group President Joshua Proffitt in the company’s Feb. 27 earnings call.
• Site preference. Increased risk of acquiring COVID-19 plus restricted access for visitors has led many patients and their caregivers to choose home and hospice care. The pandemic has highlighted “the advantages of home care over more costly and potentially higher-risk settings,” Myers said.
• Compensation changes. Encompass Health implemented therapist compensation changes, said CEO Mark Tarr in its call. Those changes helped the company counterbalance the COVID impact.