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LHC Group sees progress in ACO, direct contract entity

LHC Group Inc. (Nasdaq: LHCG) continues to develop relationships with accountable care organizations (ACOs) while building relationships with direct contractors (DCEs), the company’s leadership said Thursday. It was. At the same time, home healthcare giants based in Lafayette, Louisiana are building more new referral channels.

These and other home-based tailwinds will make the LHC Group’s leadership team bullish on future business.

“We really feel like we’ve gained a lot of good tailoring momentum in every channel of growth.”

Joshua Profit, president of the LHC Group, spoke at the London Healthcare Conference of investment banking firm Jeffreys. “Our organic growth has historically been 6% to 8% year-on-year. I’m pretty bullish now. [it] It can be 8% to 10% over the next 3 years. “

The LHC Group is a provider of home health care, hospice and personal care services.Its 32,000 employees provide care in 35 states and Washington, DC

While the home healthcare segment represents a major service line, the company has highlighted the growth of its home and community-based services sector over the past few years.

Keith Myers, CEO of the LHC Group, spoke at the conference that this is an effort to reach “three levels of care” at home. The three levels represent home care, hospice, and personal care.

“We are really trying to create a healthcare ecosystem in our home environment,” Myers said. “In contrast to the medical system in the four walls, it’s like a home medical system.”

Reaching that three levels of care has become an industry trend. For example, Frisco, Texas-based Addus, traditionally a powerhouse of personal care services, is now investing heavily in home health and hospice in existing markets.

On the LHC Group’s side, Profit said the organic growth of hospitalization continued through the COVID-19 crisis.

“Once we got past the first real drop in the April and May timeframes… we outperformed our peers in terms of enrollment growth,” says Profit.

The company recorded 36,786 admissions in October, up from the 27,984 recorded in April.

The LHC Group believes that 2020 would have been a historic year of integration, with the implementation of the Patient-Driven Grouping Model (PDGM) in the absence of COVID-19. Myers believes that the relief from a public health emergency has disguised a struggling provider who may have been looking for a buyer.

Proffitt repeated that idea.

“The market share gained by market turmoil is huge,” Profit said. “We will see more acquisition growth than we have seen in the last few years just because the dynamics of all markets are working.”

However, the lessons learned from COVID-19 were also beneficial to the LHC group.

Internal learning is not the only area in areas such as infectious disease protocols. It is also about external learning and external sources that realize the value of home care, which leads to more referral sources.

Elsewhere, Profit also expressed excitement for the new contracting entities being formed, especially on the Medicare side.

“Historically, there was this discussion about Medicare Advantage (MA). [plans] … and how you’re doing with those contracts, “Profit said. “But what I mean is that even becoming a preferred provider on the Medicare side of the business has more and more contracting capabilities, which is really exciting right now.”

Most notably, these contract opportunities include DCE, an area in which the LHC Group is very involved.

“These are actually directly narrowing the network and contracting for the Medicare business,” Profit said. “And they make performance measurements that allow you to earn even higher than the Medicare rate if you achieve certain quality results.”

In addition to DCE, Proffitt said the amount of ACO involving the LHC group is steadily increasing.

When the LHC Group acquired Almost Family in 2018, it also acquired Imperium Health Management, one of the largest ACO management companies in the country.

“In general, I think the increase in home infections due to the coronavirus pandemic is accelerating over the years,” Profit said. “That’s why all the macrodynamics that lead to this true bullish outlook for growth are working.”

LHC Group sees progress in ACO, direct contract entity

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