Amedisys Planning Rapid Growth in Home Care

Amedisys, Inc. is a leading healthcare services company focused on providing care in the home. The company’s operations involve serving patients across the United States through three operating divisions: home health, hospice and personal care.

Amedisys delivers clinically distinct care that best suits its patients’ needs, whether that is home-based recovery and rehabilitation after an operation or injury, care that empowers patients to manage a chronic disease, hospice care at the end of life, or providing assistance with daily activities through its personal care division.

Amedisys is among the largest, pure play providers of home health and hospice care in the United States, with 472 care centers in 38 states. Amedisys’ 21,000 employees deliver the highest quality care making more than ten million visits to more than 376,000 patients annually. Over 3,000 hospitals and 65,000 physicians nationwide have chosen Amedisys as a partner in post-acute care.

Due to the age demographics of its patient base, Amedisys’ services are primarily paid for by Medicare which has represented approximately 73% to 79% of its net service revenue over the last three years. Amedisys also remains focused on maintaining a profitable and strategically important managed care contract portfolio.

Home care has been experiencing a constantly evolving regulatory and legislative scene. CMS released the 2020 home health prospective payment system rate update in July 2019. The proposed rule included as mandated by Congress in the Bipartisan Budget Act of 2018, a plus 1.5% market basket update. CMS also chose to increase the behavioral adjustments from 6.42% to 8.01%.

The remainder of the Patient-Driven Grouping Model (PDGM) portion of the proposed rule was largely unchanged from the previous PDGM proposal released by CMS in late 2018. Amedisys is continuing to prepare its business for continued success under PDGM.

CMS decided to phase out the RAP, Request for Anticipated Payments during 2020. The CMS is phasing out RAPs, home health pre-payments, because of fraud concerns. Currently, many small home health businesses depend on RAPs to pay their employees while waiting on full episodic reimbursement from CMS. Behavioral assumptions, along with the phase out of RAP payments could pose significant financial and operational hurdles for many small to mid-sized home health agencies.

Amedisys, as one of the industry’s leaders, plans to increase its merger and acquisition activities to purchase as many as 2,000 of these small home health agencies to increase its current estimated market share of 4%. There are approximately 11,500 home health agencies in total.

Earlier this year, Amedisys signed an agreement with ClearCare, Inc. to create an opportunity to establish partnerships between Amedisys home health centers and personal care agencies using ClearCare to coordinate the care of patients which fits into the company’s broader strategy long-term into partnering with payers.

Amedisys’ partnering objective is to offer personal care combined with clinical care, combined with palliative and hospice is the care continuum you need to allow people to age in place.

The partnership plans to leverage Amedisys’ home health footprint and ClearCare’s innovative technology platform used by more than 4,000 personal care agencies, effectively connecting high-quality home health care with the growing demand for personal care at scale.

Also, earlier this year, Amedisys, signed a definitive agreement to acquire regulatory assets that allow the company to conduct home health care operations in more counties in New York. Under the terms of the agreement, expected to close early next year, Amedisys will acquire the right to operate certified home health care services from Premier Home Health Care Services, Inc., in Westchester, Bronx and New York counties. The company currently conducts business in the overlapping counties of Kings and Queens.