Home Health & Hospice Week

Enhabit Inc. is navigating some rough financial waters, with a possible sale its ultimate destination.

“The Enhabit board, with the assistance of independent advisors, intends to launch a strategic alternatives process,” the Dallas-based company says in its release covering its second quarter results. “The board expects it would consider a wide range of options for the company including, among other things, a potential sale, merger or other strategic transaction,” the release says.

Enhabit reported a $74.1 million loss on revenues of $213.8 million for the quarter ended June 30. That compares to a $20.8 million profit on $220.2 million in revenues for the year-ago quarter.

“The year-over-year decrease in revenue was due primarily to the continued payor mix shift to more non-episodic admissions and the resumption of sequestration,” Enhabit notes in the release. “Revenue per episode decreased year over year primarily due to the resumption of sequestration and patient mix,” it adds.

“The market is shifting rapidly to Medicare Advantage,” Enhabit CEO Barb Jacobsmeyer said in the company’s Aug. 10 earnings call. “Last summer, CMS data pointed to 50 percent of Medicare eligibles enrolling in a Medicare Advantage plan by 2030. We reached the 50 percent mark in January 2023. CMS data now points to 70 percent of Medicare eligibles enrolling in a Medicare Advantage plan by 2030,” Jacobsmeyer told analysts.

“While we can’t slow the transition of Medicare eligibles to Medicare Advantage, we can strategically target referral sources who have strong Medicare fee-for-service market share and those we know send both Medicare fee-for-service and Medicare Advantage patients to us,” Jacobsmeyer said.

Enhabit operates 255 home health locations and 108 hospice locations across 34 states, it says.

How Long Will Antitrust Scrutiny Mire Optum-Amedisys Deal?

Meanwhile, UnitedHealth Group Inc. and Amedisys Inc. may see a delay to UnitedHealth’s acquisition of the national home health and hospice chain.

UnitedHealth and Baton Rouge, La.-based Amedisys “received a request for additional information (a ‘second request’) under the [Hart-Scott-Rodino Antitrust Improvements Act of 1976] from the U.S. Department of Justice relating to the Merger on August 4, 2023, extending the HSR Act waiting period until the parties have substan­tially complied with the second request, unless the period is extended voluntarily by the parties or terminated sooner by the U.S. Department of Justice,” Amedisys reveals in its Aug. 10 filing with the Securities and Exchange Commission.

UnitedHealth’s Optum division snatched Amedisys away from an acquisition by Option Care Inc. earlier this summer with a massive $3.3 billion cash offer (see HHHW by AAPC, Vol. XXXII, No. 23).

Reminder: When UnitedHealth Group/Optum acquired Lafayette, Louisiana-based LHC Group Inc. for a whopping $5.4 billion earlier this year, the deal was significantly delayed by federal scrutiny of antitrust issues.

Amedisys shareholders will vote on the deal at a Sept. 8 Special Meeting, says the SEC notice at https://investors.amedisys.com/filings-financials/sec-filings/sec-filings-details/default.aspx?FilingId=16853427.