LHC (LHCG) 11 Aug 192019 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the LHC Group Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to introduce your host for today's conference, Mr. Eric Elliott, Senior Vice President of Finance.

You may begin, sir.

I'd call welcome ended for XXXX. and Group's to July Norma, conference earnings the you, like everyone to LHC XX, Thank second quarter should earnings of Everyone a night. last our received have release copy information Results like also for we some and highlight I our on the Investor would quarter Quarterly to the on of have that posted supplemental section XXXX page. year-to-date Relations can XX-Q, a be and as deck our of supplemental call, page. copy when on well this found as available, a this ultimately release, The transcript of the earnings

deck includes adjustments. supplemental all Our and of breakdown our of reconciliations

during We will refer our to call these non-GAAP measures today.

In Officer; comments from Josh moment, Chief Don Keith Executive Financial have Chief and Chief and Officer; and a some Proffitt, Stelly, we'll Myers, Officer. prepared President Chairman Operating

materially would in statements results Act. differ to Actual statements events. quarterly to meaning which of within Group our to, comments have I discussed that of financial regarding factors uncertainties, subsequent and those our projected in because the beyond. a and statements update results provided no Private risk like and could forward-looking SEC this Reform are call release number may Securities everyone included call annual financial These and press in the include, information our limited reflect our the to information filings. for and in but supplemental are remind of this in LHC XXXX obligation Before statements not we shall forward-looking conference from constitute start, Litigation on

Keith and of Group, the Myers. Chairman introduce to pleased CEO I'm Now, LHC

morning's call. in dialing everyone, this Eric, in and you, Thank you, participating for thank and

moment members XX,XXX around at I the nation. I serving a to thank directly our to team Before begin, want locations take

our and our Group providing Your LHC true unwavering service family. of hallmark commitment quality of collective our industry, efforts a in highest the reflect

your and efforts us. never who Collectively, a that our XXX greatly and appreciated. Please trust place are their in you there sleeps healthcare organization to those commitment always know is XX/X, fulfill that being noticed for

that a as LHC Tricia For addition commitment our with XX to Chief has driven years, July clinically been us Dr. Officer. Medical a reinforced strong in when we Group Nguyen joined and company team

physician a already we an earnings. our think other ACO have care, business how and and experience managed care business systems health in initiatives, is that As influencing models, and revenue about she impact with our leader and on should

people as our satisfaction LHC greatest along value We the rate. shows intentionally have It industry. the stands has level patient record another rate it outpaced quality high our here legacy us. Group culture shows low in XX.X%, turnover voluntary at the consistently with created. asset, and And of turnover for at we in LHC that at The

on integration work quarter and Our clinicians, XXXX. continue out other and team third in very managed second story and and strong successful a reputation in exceptionally to we for about organic the did in the M&A, sets thriving us care initiatives. for The date and in year up XXXX operators is the quarter to an of and on execute deep mainly quality go who professionals, growth, clinical building

novo the Columbia, capture to a many now share that XX of of states organic reaching market With XX national through platform had opportunities over, and and across growth, extends we XX% acquisitions. population aged the de District and

be growth organic the targets, we performing believe will we able With annual drive to with Homecare organic Almost as Family of usual conversion, LHC we growth in Homebase legacy our past once well. ahead are

million care fill Nurse markets, $XX of in Association acquisition of more with our we million. tri-level for Visiting that joint To $XXX strategy ventures, million Maryland existing of volume several six approximately These strategic date, and total in for and annual out acquisitions million $XX has annualized $XXX hospital Our target XXXX revenue. approximately transactions, include announced have which between in revenue. M&A tuck-in a transactions

We of health Maryland VNA of included venture have transaction the New Jersey. two-phase and Almost phase Home We Integration Family in locations with in acquisitions, Health joint close announced and on the and completion expect hospice to and following our which accelerated and late this the home June, pace Pennsylvania both Geisinger Xst. final of July in September April of

August we several made On Xst, more announcements.

Mexico purchase the Health SSM home hospice in with health Medical joint City and and three First, venture closed Regional we announced assets Jefferson from of previously Capital the Center and locations Missouri. to

and Union a three health from in revenue. West Home million represented completed we to Hospital And $X.X Ohio with purchased Comfort Atmore Atmore, Community provider Care. community-based home- JV home purchase approximately and in Second, in Waverly, a locations these we two annual Alabama. lastly, Together,

corporate opportunity pipeline, managed remains team, our development in-house by robust. Our

Dev We on in be in-house of months among of capitalize providers, to to on Corp in experience take able this the have the consolidation importance industry likely could on story XXXX. the greater smaller potentially come. growth increased component infrastructure the to horizon our Particularly

into some time, it repeating will the expect content, winner PDGM, value any focus any care for that saying been but and home shift be a net models have payment We Group. delivering bears the on believe of the we on in for and LHC built

residence, care high-quality and most the setting. and the home, is comfort our the privacy most Delivering primary of efficient of in place appropriate

we seen business, the analyze claims payers as and directly partners, manage makers patient recognize in policy populations We've this. it our large data. and ACO Our

recognize delivery increase. with DC. as Our many makers home and do Washington continue at policy many this, a in hospital moving and to service that payers work care again, the the health pace Health is to we system partners will

partners they've or as plan, different strategy, venture before. we're we're Whether are to, partners environment models When are vastly that headed we connect such more we health strategic with solutions place value-based capitations payer are such have that as conversations full been. the than it's a Ochsner the in on joint than and own and organizing are their new Geisinger the ever we the new the presenting our

known the ED usage focused the hospitalizations, unnecessary and look Where recertification care and total relationships conversations how of very excited These those quality for savings value upside future we more us cost in been our are in the bonus sit this proposition. in scores and create leading highest scale, in we quality. form and payments. these national we of going on about where differentiated level and at always sharing with is environment for We've are of

Now, turning to PDGM.

health to of year. know, model XXXX, set next the you January many As in of new home for Medicare payment Congress is PDGM, Xst enacted which begin services,

change of Our this and well way under preparations schedule. for are ahead

of dialogue specifically, unintended to settings be to in a the to home PDGM in at cost forcing higher consequence same the patients beneficiaries; avoid constructive continues with At of back CMS could provided ways our its Medicare to of more our access the fraction care develop that improve form with for the benefit the call. Congress time, work to and in current

proposal based increasing In July, X.XX%, payment this behavior. implementing Its assumed proposed on CMS budget-neutral adjustments model to issued provider upon its rule

well and While for opposed adjust not use evidence and do this the prospective of payment. agree Group, the prepared assumptions we are positioned as LHC cuts well with change at we to to

and have Partnership lobbying for a industry's As active the for Founder and Home of former Chairman been National long-standing Member and of Hospice, Care member Association Quality as I Home efforts. Health and involved the Board heavily the in Care,

PDGM PDGM generating are behind say, in priority bipartisan add were refine and houses. some efforts. lockstep, I'd both NAHC support collective on were our and more like I to legislation and Both in commentary Partnership should to strong and the

and Leading - support The losses jurisdiction. into members Senate committees from close co-sponsors XX there are House the and building. the XX of crucial resource momentum Among HR and significant are Bill recess, respectively. constituencies XXXX co-sponsors many key is and bill's for XXX of

The the community. is for statements are home for personal about home health. knowledge PDGM a and support positioned health the Stabenow, is This the home to with by well who The bill; lead track sponsors, with evidenced motivated record deliver bill. strong are sponsors Collins, Sewell bill Buchanan health of their and and champions

strategy as and data simple, approach likely of component PDGM, the brought for onerous our Our use share to and legislative all vehicle it of a develops. be industry support most PDGM, ready collaboratively, Bill the in legislative on congressional of the the consequences of eliminate position muscle potential impacts is for targeted

the rural effort that suburban, HSGM to redoing state its all non-profits, reform national investor-owned, in agencies for is every urban, together association and associations in of are working resulted successful home are collaboratively with bill. speaking voice. This Again, slowing support with working the the mirrors effort nation health home CMS and The the entire community for plan down payment build health. PDGM one original

which that includes of had the leaders make especially bill, The needed to at barriers a remove the a passage would to a all legislation. a to secure the have already fiscal that & push Healthcare PQHH heightened of determines CBO affect enable to NAHC committed technical sponsors refinements any ensure process of accelerate advocacy which the intensity assured remove levels any to pressure impact bill. to score, quickly Congressional can bill, neutrality. analysis significant budget obstacle been to pivot of

meetings to of effort town make of forums personal and an social district Congress, home. to community power invite experience August by the recess members health hall addition, and communicate grassroots In members to attend visits extensive on of and to the advocacy email in care media their offices, during Congress visits lawmakers home in the

social field letters independent voices and editor to grassroots write by continue use also encouraging build other Both the the the for means media support bill. to their Partnership and NAHC strategy the media in to

While recess immediately events likely the will be the PDGM dominated days. address of focus decisions after tracked by recent bill of is well Congress to positioned, policy

other continuation the of the Congress of fiscal on budget of However, fall concluded the incorporate business initiatives that must action year. many must-pass end also in provisions, the at items

before is the to PDGM December. or the certainly of potential Congress adjourns in it very that ride along have vehicle before on reason, this will which year end likely fiscal For

would HealthSTAT Medicare of PDGM for the vehicle be have deflation. forecast bill fall, a that also availability this the a

legislative and process opportunities, chance series action or summer budget passing or Congress resolution a can, on legislative the offer appropriations a this earlier months. the our limits, bipartisan the be delay continuing other the as may there budget extender action. bill debt these by it past, Despite for in expenditures that flat-lining temporarily vehicles for in healthcare opportunities has Given of

Should good our bill. this advance may provide vehicles space happen, still in to other legislation healthcare the

unified policy line cause and a bottom our have is, strong support, strong the engaged So, health momentum, growing and home we community. for data and arguments bipartisan

of more firms success on efforts. with policy one industry industry. be not by future party and the reasonable majority our is could recommendations behalf from advocacy together the assets third coming recipe for reputable and pleased current policy I a supported our the evidence-based unified data our with believe I that in in as supporting providers voice industry of

color results to some here's And Josh? provide our Josh guidance. on financial now, XXXX and

call. our Keith, good and Thank you you, all joining Thank everyone. morning for

you begin how to like others. service I'd serve home prepared my professionals as always, of teams, is our the serve saying each like to commitment also field the and country across and thank privilege would I remarks to all clinical appreciate whose It I do of tirelessly As our every a they by appreciated. and much office greatly level is you what support day. to

proud we again, are able and your of you am alongside quarter of I is strong and to support hard to, It once because another all that so work report of work results. all. execution

and information supplemental detail more performance, breakdown guidance website financial posted provides assumptions. among on on Our the sector the

this will supplemental summary remarks my in deck I reference that morning.

For are results, big the takeaways. the quarter financial here second

track midpoint the it's of our and That's XX.X% adjusted significant the year, EPS from the quarter. the that for in up outlook year-over-year with growth First, X.X% XX% within on $X.XX in adjusted at and second quarter. a also first for of sequentially per improvement earnings we are guidance share

in annual $X.X realized synergies Second, the Almost quarter, cost we million to realized in run of acquisition. approximately rate $XX.X which synergies million brings a Family the an now of total pre-tax the second from cost

our has year-over-year of improvement on quarter-over-quarter segments a continued Next, sequential and incremental basis. margin across all

revenue we exceeded Fourth, our and the expectations. with in again, or and in X.X% organic industry-leading for both all for health of across health hospice growth as our our patient maintained satisfaction quarter met organic lastly, in hospice and And the segments yet home X.X% quality scores. growth quarter, home strong was

XXX Turning to quarter. XX basis supplemental deck. of adjusted Page X and over I XX.X% year-over-year margin would of the was improvement point a note point improvement a in basis our first consolidated gross the that QX

year of as expense Consolidated was in ago second basis points adjusted G&A a XX.X% same first the which quarter, revenue in the percent the XX this from of quarter down XX.X% period year. was in and a

basis consolidated which up from adjusted was Our XXX EBITDA year. this basis and XX.X%, is QX of points XXX points year-over-year

represented that optimize to the ongoing XX total in a annual closed strategy also our portfolio, of part we revenue. of As locations million $XX.X

and closures. we In addition, costs lease incurred costs, to fees related severance these impairment termination some

All of supplemental The on adjustments details our Page of adjustments. costs those for in of were these the are deck. accounted XX

portfolio also joint planning through growth described, and same-store closures, also but and in growth However, only additional optimizing Keith addition opening not strategic we the certain through the to through novos ventures continue and efforts acquisitions organic de our new portfolio. opening for that across the

de have three So five to HCBS health, as of into opened novo novos, process head year balance And additional far, evaluating an we year-to-date, we and under de we in segment. currently in this two are the locations way in or XX open throughout home XXXX.

segment. highlight Pages XX the all be and broad across X the supplemental stats deck notes by metrics results, continues to X based. the improvement Our Page through of key

our deck. the for the was June liquidity XX, of to six ended the XXXX. free debt of months that Turning million XX fact and cash adjusted number We've flow outlined including a metrics, $XX.X Page supplemental

to have DSOs we are XX days, XXXX, range, expecting collections Recall from not managed close we slightly below remain to for XX in care and the XXXX. of to that quarter improved receivables the days DSOs if the Almost from improve this to on acquisition. down Family of as balance receivables continue second our

Our balance times an facility of at estimated With EBITDA available $XXX adjusted our XXXX. million with provide feature are a and that XXX net we sheet strong accordion leverage can credit additional an for remains million the capacity, to on growth advantage the front our have are and pipeline. of we joint year-to-date and M&A in remain take acquisition for the and to positioned currently future we on foreseeable opportunities the momentum evaluating well mode X.XX in venture

this XXXX. this revenue of adjusted expecting service Page XX growth and are EPS XX.X% EBITDA the We XX% issued growth of as are net May, of we're guidance reaffirming on of our range, Xth. midpoint details guidance of to on deck. At the supplemental The growth XX.X%, adjusted of the compared

additional to thesis quarter's M&A organic disruption will we momentum Homebase patient and built year-end, the and reinforce front. results providers share, cost market margin to a in and ability the satisfaction both growth synergies Almost pulled there move growth, levers be yet improvement with revenue our the to incremental gain PDGM significant XXXX, smaller be we on Should complete as summary, by organically quality In integration on scores, due inorganically. to among positioned in Family the differentiation Homecare with to be from strong well

concludes during and any That prepared to my to now happy I'm Don. to I'm over remarks pleased the answer further questions the Q&A call section. turn

good Thank you, Josh, everyone. and morning,

are too, every both As patients of the care team; we you. and work because alluded, that a and privileged team truly from today Keith are and I, serve for commitment to our that hard Josh are and day. sincerely we where thank each we families

Family prepared this the I how do PDGM. quality Almost time morning on our quick to want we focus growth, and scores updates my for some integration, on

Family. Almost on First,

trend up, in we and pace to ratings Homecare going round the conversion star right to the further will of are our which agencies the quality out improvement margin Almost KPIs accelerate increases the contribution by of is While Family past continue and happen modeling, year-end. when our of both direction, the Homebase

In to organic the we X.X% and Turning admissions hospice, and from last health operational target home benefit above we year. changes clearly up we range admissions X.X%. the for and sales particular, X% made well to discussed hospice growth X% seeing usual our leadership with are up that annual were the quarter, in

quarter. home- segment community-based in Page see vein, the EBITDA In basis that was that the service from a From home- the the basis results our benefits in made margin and see year on and XXX services our from structure XX from can adjusted last up you changes community-based similar can first of our segment we quarter. you deck, points and supplemental up last the XXX points early

efficiency. margin more business improvement expect and We progresses, the G&A year both this gross drive we in as as

improved which quality Page in of scores, quality compared quality the a as up we Our X.XX in see X.XX in to with XX well, Almost to in July same-store X.XX scores LHC Family improvement of July from X.XX as April. continue with outlined April. supplemental, score from are on

CMS to reminder, industry continue April scores satisfaction outpace patient did from those to but a the As as for we, July calculation again, the change on release, the well.

balance the the staffing clinical to work the the reviews. our center to course, operating At XXXX, have year-end reimbursement LHC ahead of and is models of Looking and Group, front in everyone's we mind. model incorporated new PDGM streams, on fully

We also pilots ultimately operationally are us are offset the we allowed assumptions with we higher adjustments assume we remain, have to we're and the cuts. pleased with several ready Even test going to are, behavioral responses. on, that these if have which which reimbursement

from patient think believe they offset at assumptions manageable, firmly these could don't seen PDGM we I anyone just believes the we've other on that day care. behavioral who point, all industry heard us. one. reimbursement our fully Now, you've That changes, as can business this give is impact But adversely

there can delivery a are such efficiently. where do unlike industry seen has more And mix modifications achieve use we've that recent clinicians any we skill we as instance, memory. the providers that an consolidation, different to us, of accelerate in believe the patients, PDGM we field like For potential to the care make larger more in could to

We will be ready.

all to colleagues for you our my on this country and in of today. company, call Thank you again listening thank fellow around and

now Operator, the floor open ready Q&A. we're to for

Brian first comes Jefferies. Our from question Tanquilut [Operator Instructions] of

open. Your line is

ask, the on side all thanks Don, operations. first. to for the on and AFAM color the Keith I Don, wanted

some us portfolio think the the where roll-out that's the assets clinician actually color same-store Homecare mean the for then growth agencies, more and that of do I inflects? and give to just doing you turnover about what think we disruption, can you Homebase As if of on

is little mainstay, are the just a all, let things First are there the even tangential in the before for And give on where but me color on of instance, conversion, Homecare completion. that, we one Homebase happened. that really

we're we actually the had example, putting payroll in with XX% time complete, complete, coordinate attendance. Lawson processes and portfolio; in one track XX% the For put and with instance that the

to So it, thing disruption. or talk to it for example running parallel I new first use just the you're a word But research. the in color you giving be how is affects that the when admits disruption about and all essentially wanted

going clinician that So that two systems. takes into

you win a candidly, and this parameters annual look as this with we So at sounds STI when are - a of would a one considering on lot that where out to of plan; I because quite very really the back We with into it it route that disruption, see maybe other AFAM the growing pre-merger some all, we building same X% also out pleased come growth model place look to we year. of to you incentives, we And at get of are we're flatness putting little the this that. with are short-term how It's number next - with oxymoronic, that X% a

the going I'm right budget, of That's being right what to that's we're of what to team on next extremely to we're XXXX LHC now. to going call. and inside color would that for. seeing going in the We're what middle look at in half accountable our budget process of I Group we're hold last But similar now.

example, of with progressive be out guessing systems. about or talked innovative hospitalization of there. will Ochsner, that these partner you I'm had is Keith, guys partnerships saw then, some the hospital you rolling for home you program. And the very I

or with in out what talking you us to partners So see going do that forward? mind ability just going does other that don't about if your where that you to roll

with Ochsner. start let's So

developmental that a year. with I in been very would much involved this probably I for mean initiative say, stage, a little over So in them the is we've

the initiative Don, to but as the home Now, the is. can specific, really probably refer give of more what nurse quicker it and you whole They home. incorporating a practitioners patients is little into out hospital at moving hospital

to We're determine we now. as the that model So step the next is like, out share piloting savings how economic in before to what roll those creating look we Obviously, the us are their do for we value. doing going partner. is the

go piloting and And move payers to we a provide several can maybe we it little we the that going Don, as I and you beyond obviously, determining years are savings that's I or score and traditional far can those there bit telemonitoring by value-based model that's think that Because our created. then in with home to a next how well share and then how the type we health, be mean that, with and and a expand are, that specific practitioners, additional And things. be replicated hospitals. determining nurse care product reality i.e. in documented that. above costs on what for

sporadically you up framed you it The the that because You of if don't and is know, because candidly homebound important meet of Brian, take is benefit nurse care or Keith, I away the inside reason are drive the the that well. can add-on they the think then A exactly so necessity practitioners there, patient Part criteria. hospitals burden don't medical

But little a whole is later, really in I because That's more I quote-unquote, can tell a economics echo B build that. why the offset cost to alluding think cost. but Keith the you, bit our complex, to, how work in only are and does get starting partners huge to is would there got Part Josh you doesn’t it that,

out And so, laid well. very you Keith, it

then just for question Josh. last And quickly, me really

notable sequential in call revenue. drop about the and anything a there we As modeling there there going was forward. should Innovations that Is how I to business, be think out

Brian. Yes, this up thanks point. question the to and questions Great for

the revenue HCI, is formerly the On was to around that asset as reduction referred closure of the really Ingenios. the

from were acquired books business. completely different really separate Family, of we four that segment HCI Almost the in recall, you If there

so the explain and got that it. practitioner Imperium, long-term Ingenios companies a you've earlier nurse got does business asset this We the would sold back then had which assessment care business; long-term primarily year, ACO business; you is You've the that insurance got Ingenios. you've for

same we side would saw from in this have on as for would and Medicare in MSSP, a the are quarter new go-forward I revenue you will some in PMPM Imperium basis bit for run bringing Imperium we the of more in with third the few little the rate the be far that a out quarter as on growth goes, norm factor LTS But bit incremental that we that don't because then the And opportunities a Savings of Shared give run QX, little the business. new with forget, give Payment, the rate. revenue a

comes And from Gajuk America. of Bank Joanna our next of question

Your line is open.

Thank you for taking the questions here.

you're So kind how are But you you you terms started not a and your guess, - your of little I ability PDGM avenues But assets quite in to I of in terms bit understand the the about the maybe saying that saying of of also terms confident know to other, those? AFAM just in can growth in the can the all guess, talking flush and I in PDGM, you and - offset different these year quickly you terms that it. avenues specialties. next act of of ability, grow X% of I that can of out in upon attack in

want Don, to you Sure. that? do take

QX into explain got briefly. we've first do it and year, the talk quite let QX comments as my Yes, But, specifically it good that way me initial very about quarter that of at also Joanna, next differently out would a toward to and prepared and alluded in Josh specifically the it's Keith. about then I'll look take over in the we the it Remembering to question. to numbers. going to turn model part first

and skill Of take how providing you course, work component services in PDGM diagnosis mix. biggest the through do a the therapy-type different is restorative with

switch flip November You just and December. a between can't going

steam again that the think first can and that quarter course, that and can't we're way as we QX little fully which be offset Josh? Xst. go we talk would the QX, year, but the fully go model, So pushed away to way Josh in our have into through effects out through being by of about those in the less and I QX January we just fully on expect move a would the QX that of any - financials, deployed expect near because modeled.

financial frame-up, more to the Don. Joanne, get And Yes. implication. details of Great the into

previously, think is to I by a reduction we've as said which almost market Group, entirely So, PDGM offset has LHC base X.X% reground the basket just adjustment. about everyone,

XXXX. referred refer to I that opportunity as to would just us terms, you've take in to to. flat mentioned it the adjustment into and behavioral PDGM describe I Don want Keith maybe got that Then, don't for a So, going period X% look episode which XX-day represents at when XX-day per rates I payment done X%, apply we've about the is you period. think within and before, that XX-day you the the new for new $XXX dollar XX-day

that's the So get place the think all that into frames efforts our that pilots, and confidence, of about Don when Joanna. you preparedness we just put the and the we've where some described we'll operational learning's that already through obtained

next the XX-day and that we every mitigate should throughout able $XXX balance the be period. majority to of like year, feel of We offset

side So, you therein it, lies kind of of will. the if financial

diagnostic need if what think groups, doubt the And before population flip could we of but I our this Joanna, different mirroring I patient I said the in I course, population, the to, of patient mitigate effect. you. just year's in I told have aggregate alluded, Remember, were preparedness no XXX color not able of that we to the that next switch,

pilots into expect give get through, you the I now, a as year would those to fully further us predict the is end pilots, is which But next we'll matured. lot our have this what we rehospitalization clarity what I so until the on and I even quality on is more alluded, cannot effect because right also call,

those on pilots. So

are what some of out. things So the testing you're

in you're of testing centers first in versus color But adjustments the watching what making of or labor you a mentioned to some Any still kind it kind terms guys you're are to the you of, visits out board, guess changes say, things already across per rehospitalization you like you the So I can make? quality you episode? Are out calculate see trying there payment and how payment? rates. utilization and these of testing current PDGM the

my It sounds Absolutely. meetings, like been Joanne. you've in

like. financial you different We are look to by if would. We're we SHP. if as also confidence, see the us just of got we brand, right And exactly it started quality kind gives the episode looking the at And it. PDGM We're outlaying build would on skill we're now that's BPE our the to that what well mix pertaining on actually doing. aspect that what as

in been visit rates we're and how really have XX full our LUPA see a into product and the we're to because greater quality and that through clinicians starting than to greater made But patterns would a yet. to rule. touches, to into haven't financial satisfaction, looking we takes satisfaction different is So they've going that it provide a new break be that on quality, parameters the employee our based got understand XX really honestly, also and greater affected product

Kevin question of from And next comes Craig-Hallum. Ellich our

line open. is Your

Thanks for questions. the taking

Just wanted PDGM. Two to questions here. continue on

and part, to hurt extenders think And health and you your on wrap I'm sort much Keith then what much that using think savings to is like of maybe gone do and with how could opportunities have will As you coders? the from will that your drive the might PTAs home you you've payments, be do you impact from it for do changes business pilots, the preparation Don, of what smaller providers? able cost through second your wondering attain how or some

questions. two That's good

the wrap should piece. actually part. take And first you think, Don, I Josh, the take you I think

will so in. I jump Kevin,

What that's looked done for that in a specifically group analyzing actual what a teaching I'm PTA the could and done of deeper. was to going diagnostic it, do first did what that the what the You roughly procedure, over what in that take that second, and and XXX. - We've one mentioned by to discipline said-- who prescriptive coders. been and just intervention, forget episodes now, world, what training it? step new very XXX,XXX and we was on maps extenders, in patient at actually person

by can CNAs. some those done be be some And of by nurses, done can

to added that of was disciplines in it's PTAs Of and pilots course, doing. I use to as I these cost to what lower Joanna the are we coders. just kind want that what on about, talking described But scenario,

no quality, at real So, the extender your big testing to I based use lever it pull. the am to a right now we what the and with we again, interventions to which But the that's and has practicing doubt on it no type teams of will lead doubt pilots. JP? see call be be license, these our

Kevin, for helpful. I has Don be what of described might around maybe to pick some you, take some Yes. numbers it that and want

visits. out a you around call take, or a runs of $XX And PTA of make just in anywhere, know Don's environment, to those the costs just an give labor, that visit, PTAs $XX when therapy physical and a and techs. use providing home therapist So current you've current because physical and I'll parameters send think got a right? regulatory visit about can the therapy referred a assistant I - around health either In therapy or to somewhere the as somewhere example PT, you it direct to a to the is $XX

lot allowed new provide the and from are you're or therapy pilots and again are Tricia services lower a a a models ensuring higher equal working and the the clinical now and under through on cost perspective or of outcomes tech quality a In team delivery, the and that patient much environment, Don satisfaction. PDGM, to

therapy a likely cost of PTA, hourly those for be would the example. But techs half

just days you able really might How represent. you the the the still roughly direct on to from generate cost that a I that reduce level see a $XXX a tech that visits or infrastructure. even that outcomes when be PT per-visit on a to PTA per to average and X% the can would modify refer XX many So

wanted that to you give framework. of kind So

to that more I I we everybody put expectations all have for And to trying this I'm out would hope thing know framework shareholders still one That But that just do sees, we you of in beginning and the alluded that date. to for Kevin, is January. Josh our year.

those how have that done. short XX,XXX environment you've about, they operate we to talked then got people this window we've So got this within make to and sure get that to a understand got to you've

I'm of the why we've the to across to sure because United all this trying QX a you like effect full cascaded get got wave QX really - late next will around that's consummate QX/early somewhere year, make States. And product all begin almost to grasp

the And what about RAP payment?

Yes, Josh, the RAP.

it's an issue. Yes. big I guess, from of perspective, not that Kevin, our

slower next our themselves way then some flows You'll correct of referred already way for and March slowdown the have under to from we're Don process cash doing will flows cash modeling, cash budget flow April-May. our kind year. January The from through

any for we've won't you the So see of experienced kind historically. of really than year, rest it what call the difference forward, June

is providers going to we that will the larger smaller, is the that And have in I've why when hard, more just ourselves situation folks are refer RAP dramatic. the disruption. in one hiding size player flow reasons and smaller, cash consolidation, of impact be burden to so that that's described, more although I more But opportunities a like it more caused industry the on to regional those going market say, because the the the a much regional of are much by are

deal just M&A does Keith, further of and their network side then, open for you size kind the wondering announced that back of to presence maybe the nationwide? of And and door given guys of just more VNA, opportunities that the discussions going

Sure.

Hello?

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you. lost we've Keith,

Now, I'm here.

I'm back the of almost opens certainly hit agencies. VNAs movement. when was group VNA, to for-profit started XXXX civic when business and community sorry between regard provide in referred the - with it this There got we there to So to a leaders this for on back With and the this no I a And me. of VNA connection mute, was that's VNA to and started as, started we started in door. what needs as VNA, that aware, a Everyone's I was together regard quote-unquote, were - was was what whole Association separate think

Now, and becomes lines and for history us. pretty and non-profit have venturing many with that our systems, with of LHC so all changes, of culture blurred. joint health the seamless hospitals Especially with our the been

an to of amazing yes. excited and for answer rest team ago integration, have it. their the the culturally when is the and mean, between it announcement how so, And was the short about the team I was fit immediate I'd and So was initial say that team there of weeks much our a there with I of really couple

lives worth - was in The other inherited that and think, custodian him VNA Barry is had XX the incredible there the was thing its XX no it mentioning of the that's, here current VNA process - was transaction. Chicago, of I that's an been shepherd he like name The and And in felt to agency he that had for the years Ray. owner the years. he worthy He where in of owned mission but gentleman mattered it for last went.

us So selected and the transaction. to negotiate us he had to with table came a

surprise others middlemen was market, in no process a quite or the was it of bankers there no So to because involved.

credit I to have and of organization So think I to entire think a that's us. it our lot we a have closed that doors would previously thought may opens been do

comes Matt William And our Blair. next question from of Larew

Your line open. is

how you as and versus I shakeout terms for targets. services, the half XX comments terms for as how And planned mentioned maybe health, these timing, of year. co-location give of any many those ask terms progress just a novos. opening? home- Josh, back of are de the about on wanted sense the you to in might for of in then think I us hospice all the community-based sense home in Could

question. Great Matt. Thanks, absolutely. Yes,

are in-process go legal then XX and in gone I XX, live; HCBS. evaluation. of are So of road would we When home obtaining - truly to live refer in put are down with about I two seeking mentioned, XX whatever category and we've the in the process And that for would refer three five; I are as to and our pipeline or regulatory another approvals currently needed to health, the

say we've of over this to I activity around And developed matured real portfolio. we've XX de try novo really a continued would the and as XX optimize to growth last pipeline months that to

spread, those three. way are The all across across Matt, the segments

is it on So aspect to or are and share that this four, HCBS. are I health; XX of about maybe XX believe, those, we've are real The the in bi-level or in about of the strategy. home lion delivering XX been hospice; around to call so at and XX, those, XX exciting discussing I'd three what tri-level probably

the are lion hospice continue that effort. So, of tri-located put as or and share markets in we to gas to co- build-outs HCBS the

of the Almost Josh, closures. Family just in then, And terms

closing I you think money. that if you weren't mentioned they making past in facilities the were

closures to little And a these have a start formally to to now, from then So I you that more a guess on do EBITDA? as the were sense is year facility than the out number now also deal, down? closing going you're a whether of slow drag

Matt. and answers, the yes yes And are

your they a first were on drag. So piece around

if represented we've For will. the in locations year-to-date million that XXXX, drag around closed $X they of dollar, million/$X.X you

see you that in manifesting So quarter-over-quarter our margin improvement.

the second a this I'll to on then But been you'll couple and see good number pretty which is, tell continue significantly of had see will a in quarter We closing, I we've probably, here The And year-to-date. there. piece. pace think closures what decelerate. you you and

process say more. varying fourth lot a may that budget see that's course. ordinary Family And the just every the say quarter, left there the the I then you Almost But would a few I acquisition; year, and through in as is from we wouldn't do

overlapping The $X.X other overlapping several those are the thing, dragging highlight Matt, as is but closures and we've do or I'd IPUs like just on closures markets, almost several hospice not closed were home markets and that to of million. health

legacy the for up that amount a we closed years significant We was that of holdover in West had dollars. asset Virginia DME dragging had

we've deliver been So, us we've candidly consolidated and helping EBITDA XX.X% margin. that real closing that's been in targeted what

what home, could a terms maybe healthcare then. you the rule. it there move you've is Keith, disconnect in some just of then that support space a seems the frankly last just be CMS maybe the address CMS here here had final And of and their between the just all, possibility the a in within throughout and to change one if Keith care is into for from Congress makes broader

the the and your behavioral given do process terms PDGM Just industry, cuts? is thought they're in CMS the position where dialogue sense you in throughout of the way handling and with

question. great Sure. It's a

information. the in and a going little maybe lead bit with start me Let with recent

a that So, but is don't the this were couple our Executive of recently, CMS. for at Director her was we is meeting of Joanne Partnership all others. and others remember Cunningham There the I with last weeks. the within

have move very several they sit conversations. years great time, more in unwilling very But I'm It's and we the are impression. in just and they so relationship. We there seem We most my to great positions the of last the a entrenched than past. in - the across have table. policy their periodically

was that PDGM. meeting confident to present implement last the I they at team of in granted in they the that CMS that made were that. Baltimore prepared to I manage not - this implementation the is But they're weren't by there saying at, July comments said were that they that

be So January. that think necessarily by won't ready doesn't they'll mean that they don't - they

But the been there there, Board was bit team And has significant. comments that the discussion of about quite as those among viewed a that.

just back a want I anyone to So reported that I take don't means and that don't to - I don't know me. that really was further what to than want comment

Washington, far when what than is distance to offices. But greater have The conversations drive Baltimore the distance visit me between the we HHS two in conversations DC. countries. we It's the as is you're talking is the if noticeable two have in to between and we the for distance foreign

the that isn't The just current in career let's doesn't policies develop people in alignment to say. seem Baltimore with, administration -

a they're the opens there it bad and they for view. that questions. job a helps And door people people; us I also think our on think have they with open us Hill, so just a And that don't have career arguments to I are

informed by how are to a work, you practically generate it. they actuarial model contract and they do implement understanding with of And views parties their mathematical no would with outside

get that comments accept to to them industry and I down leaders. to hard constructive they and produce up just very it's it they're and comes anything criticisms, open think - from

to providing Chairman a those to on was walls the are of like Director, Independent immediate in by XXs wanted In said tearing results DC I'll would especially my couldn't make in I when honest, - would even third-party I advocacy progress data with get world, accurate and down I when phone that started I'd started and results frustrated working see we year, efforts, But I was is our slowly I of and when to us, on quarter we're a think push to tend way. close a many and honest. this Tauzin, trip there, me back it this. quarter decades. where going marathon. have sometimes we Lead up survive their I says, to assumptions. in in And that think this you measure he I'd you're accept success if to game, he you be said-- to need not just

is conversation home and - It's between XX, definite I but And at when where I'm hear truth. not to it the there and disconnect two. very suggesting health but that that's and will I us true. I'd mean, move that's the to that is today, had CMS, the is take the where when industry something 'XXs look the decades like we come was to I from a

comes And Gillmor Matthew question of Baird. our next from

open. is line Your

Thanks question. side. ask wanted the health on the to for volume about the performance I home

made? of bit fee-for-service sort a were color recent are fee-for-service, So divergence. you versus all were non the provide And what's overall quite terms of fee-for-service you indifferent some view can driving in changes the little again volumes Medicare given increasingly and or The trends. some some volumes strong secondarily, have you the again. of between softer recent And of

Keith, ahead. Go it. start I'll So I'm sorry.

Yes.

tag. let’s Now

reimbursement expectations for by and for today mean have certain of episodically XX-day off start to depends visit; get have period hit. for fee-for-service a amount we saying reimbursement per the it model. are a just health we Today, paid home we set doesn't and me outcome we Let managing on patients

very in we're that comfortable So model.

visit, patients We provide inefficient they model, to historical G&A which on incredibly and not managed out care ties are pre-approved go without preferred less to model of to companies where our pay want it's from a comfortable in to really a mention to make perspective. hands the a per-visit service getting

addition you are other could your Don, maybe to comments. And my in So that those elaborate on comments.

been actually - we've Yes. I long. We so together guess

alluded with going to that okay been take You these we've team it able where has that. to Josh contracts, what I to that becomes marginalize with the it with has and and was already done Certainly, said he exactly in different and twice note.

we But environment in all this the shifting. as fee-for-service fact traditional is, know that industry, is Medicare

quarter-over-quarter. factored That number growth. that You Group's we X% we what Year-over-year, LHC is been leading couple inorganic in. have with

to to So that that continue that quarter. add seeing that's when that at Josh? clip, XX% we grow those contracts, you're X% this

reason is been But side. with growth Don said. my think experienced. our doubt, don't agree the incremental the on for in I rate. calls non-Medicare No year, and managed growth everything on saying that the I'd the add healthiest improvements I've over is we've that Yes. making non-Medicare And just last One the shared we've - Keith care

rate increased yes, we level. of And due a to and home through per rates indifferent. with not X% a our we're office not hard the team our get to but So work on at our prefer the that does by almost effort new just lot we visit, here yes, the combat rate-per-visit do payers hand-to-hand per-visit, the contracts, have

points. our a XXX of things in reduce as our revenue expense both cost lot basis our about otherwise, the reduced by to back-office, and we've debt the also in We've bad done in per well visit cycle as where management field

door, get the the we're got door. a and the and hunkered we few not getting past seen the admissions rigorous as more shift on make So laser-focused us. really but we've over years, before more down admissions this, We've in only opportunity here in those lot right as

you the more performance. ask if Josh, And on revenue one could I

could I are for the so us from we with give for And that you that Did bit the in closed? then little think a a can impact model mention sense you mentioned are revenue just you you revenue results agencies dollars better. AFAM, line expectations. that also where

Yes, sure.

about ones year-to-date. revenue. on that $XX.X closed health, have In home million So in annual that the represents

million head, HCI, quarter; by about segment, trying was that just quarter; call million, annual had $X earlier most million $X referred - where and on to million the $X $X.XX in so in So off annualized. LTACHs, per is which Ingenios, in my so then or per what run closures, revenue I'm I the the down to it, - go and in we is, then the rate about

home in health, facility-based $X it LTACH in million So $XX.X million the division. call HCI and million another and $X in division the another

was second you and would divide If What quarterly give you those numbers by impact. it X, question? your take that your

I follow I are I can modeling we in sort up guess Yes, where ask revenue quarterly as have or that - think annual. Maybe of a just And the handy, Almost curious the don't number if keeps bit - agencies little too terms that Family high. I but you guess Street I number of the probably

Almost asset could better. Family model is, might So us if where level-set you help us on that

Well, I got you.

Almost it basis or in hospice healthcare quarterly $XXX and health, with around it million is about in to to consolidated call million in on million in in $X right $XX of $XXX a $XXX the segment. that call about So at revenue Family million so innovation million million CVS, $X million the $XX home

to the call back over turn like for showing Myers to Keith other Mr. no currently queue. I'm in the And I closing questions would comments.

Okay. everyone Thanks, and in morning for the operator, to call. thanks dialing this

always, available make want As ourselves to to you. we

any us to speak reach you. will if reach will If to out have make assist team, ourselves for and you please you we - follow-up Eric need need earnings calls, or Elliott, questions between any you. to And to either Eric the available of on us management

support your and Group family. Thank for LHC our us, thanks you of again for joining

your and gentlemen, you thank participation conference. for in Ladies today's

now may disconnect. Everyone have You wonderful day. a