Home Health & Hospice Week

Reimbursement cuts, face-to-face write-offs mar chains' profits.

The Medicare reimbursement climate is getting rougher, and that's showing up in publicly traded companies' earnings reports.

Of the four publicly traded chains, two saw modest revenue increases but profit decreases. Baton Rouge, La.-based Amedisys Inc. recorded $5.5 million in net income on $370.8 million in profits for the first quarter of 2012, compared to a $15.3 million profit on $359.3 million in revenues for the same period last year. Louisville, Ky.-based Almost Family Inc. reported $4.9 million in net income on revenues of $90.0 million, compared to a a $5.7 million profit on $82.6 million in revenues for the same quarter in 2011.

The other two publicly traded home care chains saw falls in both revenues and net income. Atlanta-based Gentiva Health Services Inc. recorded $5.1 million in net income on $435.7 million in revenues, down from a $13.6 million profit on $451.1 million in revenues for the first quarter of 2011. Lafayette, La.-based LHC Group Inc. reported the highest profit at $9.7 million on $158.8 million in revenues, compared to $10.1 million in net income on revenues of $161.8 million for the year-ago quarter.

"Home health experienced substantial Med-icare reimbursement cuts in 2011 and 2012, and will continue to face reimbursement pressure in 2013 and beyond," Amedisys CEO Bill Borne said on a conference call with analysts, according to press reports. Face-to-face write-offs were another factor, Amedisys CFO Ron LaBorde added.

Gentiva's earnings were impacted by $5 million that it put into reserves to settle a Wage and Hour lawsuit, the company notes in its release.