Home Health & Hospice Week

Home health and hospice providers are compensating for decreased institutional referrals.

Publicly reported companies are celebrating their swift — if not total — recoveries from COVID-19 impacts. And they are pointing to a number of reasons for a conservative but sunny outlook for the remainder of the year:

• 2021 Medicare rules. The Centers for Medicare & Medicaid Services finalized a 2.4 percent pay increase for hospices starting Oct. 1 (see Eli’s HCW, Vol. XXIX, No. 29) and proposed a 2.6 percent pay increase for home health agencies starting Jan. 1 (see Eli’s HCW, Vol. XXIX, No. 25-26). The home health rule also includes a permanent expansion of telehealth flexibilities, Amedisys Inc. CEO Paul Kusserow noted in the company’s July 29 Q2 earnings call.

“We consider this a win for the industry,” LHC Group Inc. CEO Keith Myers said of the rules. The “regulatory outlook … has become considerably even more favorable for the home health industry,” Myers said in the chain’s Aug. 6 call.

• Referrals. Referrals from institutions took a sharp nosedive when COVID-19 hit, but now those numbers are coming back up. Encompass Health Corp. has seen its referrals for therapy-related cases, particularly joint replacements, return to “about 90 percent to 95 percent of that pre-COVID level,” reported Encompass Home Health and Hospice CEO April Anthony in the company’s July 28 call.

While Amedisys has seen hospital referrals return close to normal, “our elective procedures only got back to about 75 percent of pre-COVID level,” detailed Amedisys COO Chris Gerard. “That will suggest we’re getting a little bit of a different type of referral from the hospital in the institutional referrals.”

Physician referrals “came back quicker” compared to institutional referrals, “which really … helped with our recovery and our rebound. And in fact, we actually added 1,490 new physician referrals sources in Q2 from Q1, sequen­tially,” Gerard added. Referrals from skilled nursing facilities still are down, though, he pointed out.

Encompass’ Anthony echoed that trend. “We see a pretty significant decline in patients that are coming to us from assisted living, independent living and SNF environments,” she said in the call. “That’s only recovered to about 70 percent of its pre-COVID level in the last few weeks.”

In contrast, Encompass’ physician and short-term acute hospital referrals have risen above historic levels, Anthony said.

VITAS Healthcare’s hospital referrals took a hit, but physician referrals remained fairly steady, VITAS Healthcare CEO Nick Westfall said in the company’s July 30 call.

• Learning curve. Scrambling to secure solid personal protective equipment supply lines, juggle staff scheduling, implement COVID-19 infection protocols, and much more consumed a lot of resources in the first half of 2020. Now companies are poised to benefit from the hard work they put in, whether they are in areas with high or low rates of COVID, company leaders said.

• COVID-19 relief funds. A number of the publicly reporting companies noted accepting CARES Act and other relief funds. For example, LHC received $88.7 million in Provider Relief Fund payments and has recognized using $44.4 million, it says.

Amedisys CFO Scott Ginn noted the company is taking advantage of “$60 million in deferred payroll tax” under the CARES Act. The company’s earnings report details $27.8 million in CARES Act and state grants for the second quarter.

VITAS received $80.2 million from the CARES Act Provider Relief Fund, although the company is unsure how much it will be able to retain and use, parent Chemed Corp. CEO Kevin McNamara said in its call.

The Pennant Group received about $10 million in PRF payments and saw about $8.1 million in COVID-19 losses in the quarter, CEO Daniel Walker said in its Aug. 12 earnings call. It will delay about $7.3 million in payroll taxes.

LHC returned its PRF funds, it noted earlier.

• Demographics. “Macro trends are very much in our favor,” Kusserow maintained. “As the baby boomers age, they’re now between 56 and 76,” he said. “More people are turning 65 years old than ever before — over 10,000 a day. The aging population coupled with ever increasing healthcare costs put us in a very advantageous position as an aging in place company, delivering the highest quality care at the lowest cost to seniors, wherever they call home. Nine out of 10 boomers want to age and die [at] home.”