If there are challenges in either industry, the organization that hurdles them quickly and efficiently will ultimately have the upper hand. Amedisys Inc. (Nasdaq: AMED) feels that way.
Headquartered in Baton Rouge, Louisiana, after a census bounce from COVID-19, a successful transition to a patient-driven grouping model (PDGM), and identification of new ways to accelerate home health services in the coming years The company that puts it is optimistic about its position.
“Third quarter performance is with in-house modeling [Wall Street] In a third-quarter earnings call on Thursday, Amedisys CEO Paul Kusserow disappointed and emphasized how important and resilient home care, hospice and personal care are to healthcare delivery systems.
Amedisys is a provider of home health care, hospice and personal care services. There are well over 500 care centers in 39 states and Washington, DC. Net service revenue for the third quarter of 2020 was $ 544 million, ahead of the $ 494 million posted in the third quarter of 2019.
According to Kusserow, COVID-19 still has operational problems, but it has become a “normal business” for Amedisys. The company also feels that its value proposition has been strengthened last year as its service lines have been set up to benefit from a significant tailwind.
In home care, total Amedisys hospitalizations increased 5% year-on-year and overall volume increased 6% in the third quarter of 2020. Operating income increased from $ 211 million in the third quarter of 2019 to over $ 222 million in the third quarter of this year.
“It just showed how strong and fast the business recovered from the initial impact of COVID-19,” Kusserow said. “We expect these trends to strengthen throughout the fourth quarter and be ready for strong growth in 2021.”
Trick or Treat
The final payment rules for home health care in 2021 were announced Thursday, hours after the announcement of Amedisys Q3’s financial results. Amedisys’ leadership said he hopes to bring welcome news.
“Rules traditionally come out before and after Halloween,” Kusserow said, referring to the relatively modest changes contained in the rules. “I don’t think I’m scared this year. It’s a snack, not a trick.”
Between the final rule and the telemedicine payment bill proposed for home health care, Amedisys believes potential reimbursement changes will result in an increase of approximately $ 40 million next year.
National demographics are on the side of the entire home health industry, including Amedisys. But so is psychographics, said Kuserou. Nine out of ten baby boomers want to get older at home.
“Home care is what people want, so add economics to it,” Kusserow said. “This is the cheapest type of care and is best suited for the type of long-term chronic illness that will be treated in the future.”
Even COVID-19 (at least for Amedisys) has changed direction and is a tailwind for the company. This is especially true when diverting patients and residents from a collective care environment to home care.
At the end of that, Amedisys is already trying to conquer the ground lost by other providers during a public health emergency.
“We continue to innovate to meet this demand,” says Kusserow. “We are not only working to improve our ability to care for more traditional patients, but we are also scaling up our eyesight to focus on patients with new illnesses who had no other choice. I will. [in the past].. “
The agency has already received 1,700 new home care referrals from sources in the third quarter, which it had not received since last year.
In addition, Amedisys is working to show patients and referral sources that they can create an SNF-like environment in their homes. The company says it has been developing SNF-at-home with a focus on packaged services combined with traditional home care to treat more sensitive patients at home.
The National Association for Home Care & Hospice (NAHC) is one of the organizations competing for formal home SNF benefits under Medicare.
“SNF-at-home is an interesting new growth tool for the company and will be an opportunity for growth beyond the pandemic,” said Kusserow. “It’s time to work with the referral source to accept more sensitive patients — and we’re using it.”
Amedisys credits PDGM’s success to its preparation. We set up tests and pilots in-house as if a new payment system was underway in the fall of 2019.
The company’s success in addressing changes in the home healthcare environment is another reason why it is bullish on expanding its brand in the future. It’s worked well with PDGM, but I’m not sure if others haven’t shown it yet.
“Once the current temporary COVID subsidy that powers the home healthcare market is lifted, the true impact of PDGM will finally be felt within our industry,” Kusserow said. “We are ready to continue our organic and inorganic expansion in home health care … to gain more and more market share in the still highly fragmented market.”
PDGM is expected to be budget-neutral under the 2018 Bipartisan Budget Act, but spending on home health care is 21.6% less than expected, according to an analysis by health economics and policy consulting firm Dobson DaVanzo & Associates.
If that data is retained throughout the year, Amedisys believes it means an increase in rate returns or payment rate updates in 2022. This is good news for providers, especially those who survived the PDGM storm in 2020.
“We are thriving with PDGM and have been very enthusiastic about turning headwinds into tailwinds,” said Kusserow. “The growth algorithms we have developed for Amedisys since 2021 are really exciting, and we believe we are in the best position to fully capture every opportunity that comes.”