As filed with the Securities and Exchange Commission on November 9, 2004October 27, 2006

Registration No. 333-            



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form S-3

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933


Amedisys, Inc.

(Exact name of registrant as specified in its charter)

Delaware 11-3131700
Delaware11-3131700
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)

11100 Mead Road, Suite 300, Baton Rouge, Louisiana 70816 (225) 292-2031 or (800) 467-2662

(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices)

Donald Loverich, Jr.

Principal Financial Officer and Treasurer

Amedisys, Inc.

11100 Mead Road, Suite 300

Baton Rouge, Louisiana 70816

(225) 292-2031 phone

(225) 292-3870 fax

(Name, address, including zip code and telephone number, including area code, of agent for service)


Copies to:

Gary M. Brown, Esq.

Baker, Donelson, Bearman, Caldwell

& Berkowitz, PC

211 Commerce Street, Suite 1000

Nashville, Tennessee 37201

(615) 726-5763 phone

(615) 744-5763 fax

 

11100 Mead Road, Suite 300Mark A. B. Carlson, Esq.

Baker, Donelson, Bearman, Caldwell

& Berkowitz, PC

165 Madison Avenue

Memphis, Tennessee 38103

(901) 577-2274 phone

(901) 577-8163 fax

 

William F. BorneAnna Pinedo, Esq.

Baton Rouge, Louisiana 70816Morrison & Foerster LLP

11100 Mead Road, Suite 300

(225) 292-2031Baton Rouge, Louisiana 70816
(225) 292-2031
(Address, including zip code, and telephone number,(Name, address, including zip code, and telephone number,
including area code,1290 Avenue of registrant’s principal executive offices)the Americas

including area code, of agent for service)New York, New York 10104-0012

(212) 468-8179 phone

(212) 468-7900 fax

With a Copy to:

Anthony J. Correro, III

Correro Fishman Haygood
Phelps Walmsley & Casteix, L.L.P.
201 St. Charles Ave., 46th Floor
New Orleans, Louisiana 70170-4600
(504) 586-5252

Approximate date of commencement of proposed sale to the public: From time to time  As soon as practicable after this registration statement becomes effective.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  o¨

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box.  þ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o¨

If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434, please462(e) under the Securities Act, check the following box.  o¨

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.  ¨

CALCULATION OF REGISTRATION FEE

         


Proposed MaximumProposed MaximumAmount of
Title of Each Class of Securities to beAmount to beOffering PriceAggregateRegistration
RegisteredRegisteredPer ShareOffering PriceFee






Common Stock, par value $.001 per share 50,000(1)(2) $35.21(3) $1,760,500(3) $223.06



 

Title of Class of

Securities to be Registered

 

Number of

Shares to be
Registered (2)

 

Proposed Maximum
Offering Price

Per Share (3)

 

Proposed Maximum
Aggregate Offering

Price (3)

 

Amount of
Registration

Fee

Common stock, $0.001 par value per share (1)

 3,450,000 $43.23 $149,143,500 $15,958
 
(1)
(1) Upon a stock split, stock dividend or similar transaction in the future and during the effectiveness of this Registration Statement involving the registrant’sIncludes associated common stock the totalpurchase rights (“Rights”) to purchase an unspecified number of shares registered shallof common stock with an aggregate market price of twice the exercise price of $15.00, subject to adjustment. Rights initially are attached to, and trade with, the common stock and will not be automatically increasedexercisable until specified events occur. Pursuant to cover the additional shares in accordance with Rule 416(a)416 under the Securities Act of 1933.
(2) The1933, the shares being registered hereunder include such indeterminate number of shares of common stock as may be issuable with respect to the registrant’sshares being registered hereunder as a result of stock splits, stock dividends or similar transactions
(2)Includes 450,000 shares of common stock to be registered hereunder are issuable upon the exercise of a warrant. In additionissued pursuant to the shares set forthunderwriters’ over-allotment option.
(3)Estimated in the table above, the amount to be registered includes an indeterminate number of additional shares which may become issuable by virtueaccordance with Rule 457(c) of the applicationSecurities Act of anti-dilution provisions of the warrant.
(3) Estimated1933, solely for the purpose of calculatingto compute the registration fee, pursuant to Rule 457(c) under the Securities Act, based on the average of the high and low sales prices per share of the registrant’sRegistrant’s common stock on The Nasdaq Nationalthe NASDAQ Global Select Market on November 8, 2004.October 26, 2006.

The Registrantregistrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment that specifically states that this Registration Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statementthe registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.



The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated October 27, 2006

PROSPECTUS

3,000,000 Shares

LOGO

Common Stock


We are selling 3,000,000 shares of our common stock. Our common stock is traded on the NASDAQ Global Select Market with the symbol “AMED.”

On October 26, 2006, the last reported sales price for our common stock on the NASDAQ Global Select Market was $43.05 per share.

Investing in our common stock involves risk. See “Risk Factors” beginning on page 7 of this Prospectus.

 Pursuant to Rule 429 under the Securities Act, the prospectus contained in this registration statement also relates to the registrant’s effective registration statement on Form S-3, Registration No. 333-97625, covering 294,720 shares. As provided by Rule 429(b), this registration statement, upon effectiveness, shall be deemed a post-effective amendment to the earlier registration statement, which shall be considered amended to cover only 173,167 of those shares, and to deregister the remaining 121,553 shares.





The information in this Prospectus is not complete and may be changed. The selling shareholders identified in this Prospectus may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION DATED NOVEMBER 9, 2004

PROSPECTUS

(AMEDISYS LOGO)

Amedisys, Inc.

11100 Mead Road, Suite 300
Baton Rouge, Louisiana 70816
(225) 292-2031

223,167 Shares of Common Stock

Offered by the Selling Shareholders Named Herein

       This prospectus covers up to:

   50,000 shares of our common stock, par value $.001 per share, issuable upon the exercise of a common stock warrant;

Per

Share

Total

Public offering price

$$        

Underwriting discount

  173,167 shares of our common stock that were issued upon the exercise of common stock warrants, or upon the conversion of shares of our preferred stock that were subject to warrants.$$

Proceeds before expenses

$$

 The prospectus also covers any


This is a firm commitment underwriting. We have granted the underwriters a 30-day option to purchase up to an additional 450,000 shares we may have to issue under the terms of the warrant to avoid dilution of the warrant.

     The warrantholder who will acquire the shares from us upon exercise of its common stock warrant and the shareholders who have already acquired shares by exercising their warrants may use this prospectus to resell those shares. We refer to those persons in this prospectus as “selling shareholders.”

     The selling shareholders will receive all of the net proceeds from the sale of shares of common stock under this prospectus, but we will receive any amounts due to us upon exercise of the warrant. We will pay all the expenses of registration in connection with this offering, but the selling shareholders will pay all selling and other expenses.

     Our common stock is listed on The Nasdaq National Market under the symbol “AMED.” On November 8, 2004, the last reported sales price of our common stock on The Nasdaq National Market was $35.45 per share.at the public offering price less the underwriting discount.


Investing in our securities involves certain risks. See “Risk Factors” beginning on page 4 of this prospectus for information that you should consider before purchasing these shares.


Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacydetermined if this prospectus is truthful or accuracy of this prospectus.complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares to purchasers on or about                          , 2006.


RAYMOND JAMES  WACHOVIA SECURITIESUBS INVESTMENT BANK
    CIBC WORLD MARKETSJPMORGAN                             

The date of this prospectus is                          , 2004.2006.


PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. It is not complete and may not contain all of the information that may be important to you in making a decision to purchase our common stock. For a more complete understanding of Amedisys and our offering of common stock, we urge you to read this entire prospectus carefully, including the “Risk Factors” section, the consolidated financial statements and the notes to those statements incorporated herein by reference. Throughout this prospectus (unless the context otherwise requires), when we refer to “Amedisys,” “us,” “we” or “our,” we are describing Amedisys, Inc. together with its subsidiaries. When we refer to an “agency” or “location,” we are describing a licensed home health agency or hospice agency location, which may be either a licensed agency with a Medicare Provider Number or a branch of the agency with the same provider number.

TABLE OF CONTENTSOverview

We are one of the nation’s largest providers of home health services to Medicare beneficiaries. We deliver a wide range of health-related services in the home to individuals who may be recovering from surgery, have a chronic disability or terminal illness, or need assistance with the essential activities of daily living. The services we provide include skilled nursing and home health aide services; physical, occupational and speech therapy; and medically oriented social work to eligible individuals who require ongoing care that cannot be provided effectively by family and friends. In addition, we have developed and offer clinically focused programs for high-cost chronic conditions and disease categories, such as diabetes, coronary artery disease, congestive heart failure, complex wound care, chronic obstructive pulmonary disease, geriatric surgical recovery, behavioral health, stroke recovery and various rehabilitative programs with the focus on improving the functional ability of our geriatric population. As of September 30, 2006, we operated 249 Medicare-certified home health agencies in 17 states primarily in the Southern and Southeastern United States. We believe our services are attractive to payors and physicians because we combine clinical quality with cost-effectiveness and are accessible 24 hours a day, seven days a week. Our objective is to be the leading provider of high-quality, low-cost home health services in each market in which we operate.

In addition to home health agencies, we also operated 13 Medicare-certified hospice agencies as of September 30, 2006. Our hospice agencies provide palliative care and comfort to terminally ill patients of all age groups and their families. We provide hospice services to each patient using an interdisciplinary care team comprised of a physician, a patient care manager, registered nurses, certified home health aides, social workers, a chaplain, a homemaker and specially trained volunteers to assess the clinical, psychosocial and spiritual needs of the patients and their families and manage that care accordingly. We acquired our first hospice operation in April 2004 and currently operate hospice agencies in four states. Although we expect Medicare home health to remain our primary focus over the near and intermediate term, we believe home health and hospice are complementary services and plan to expand our hospice network through acquisitions and start-up activities.

We have generated significant increases in revenue and earnings by focusing on internal growth and completing acquisitions on a selective basis. For the nine-month period ended September 30, 2006, we reported net service revenue of $397.1 million, net income of $26.9 million and earnings per diluted share of $1.65, compared to net service revenue of $262.7 million, net income of $22.8 million and earnings per diluted share of $1.44 for the same period in 2005. For the year ended December 31, 2005, we reported net service revenue of $381.6 million, net income of $30.1 million and earnings per diluted share of $1.88, compared to net service revenue of $227.1 million, net income of $20.5 million and earnings per diluted share of $1.51 for 2004. Our internal growth rate of Medicare patient admissions for the nine-month period ended September 30, 2006 was approximately 13%.

Our Market and Opportunity

Home health expenditures in the United States were approximately $43.2 billion in 2004, according to National Health Expenditure data. The home health industry is comprised of facility-based and hospital-based agencies owned by publicly traded and privately held companies, visiting nurse associations and nurse registries. The industry remains highly fragmented and we believe it represents an attractive consolidation opportunity. Medicare is the largest single home health payor, accounting for $16.4 billion, or 38%, of total home health spending. These expenditures are expected to increase substantially over the coming years, growing to $27.3 billion by 2010 according to the Office of the Actuary of the Center for Medicare and Medicaid Services, or CMS, the U.S. federal agency that administers Medicare. There are approximately 8,100 Medicare-certified home health agencies currently in operation.

Medicare is also the largest payor in the hospice industry, with an estimated $9.8 billion of expenditures in 2006 according to CMS. We believe many of the same growth dynamics in the home health sector are driving growth in the hospice industry. According to the Medicare Payment Advisory Commission, or MedPAC, between 2000 and 2004 the number of Medicare beneficiaries utilizing hospice increased 49% and the share of Medicare decedents in hospice increased from 22% to 31%. The hospice industry is similar to home health in that it is a highly fragmented market and has a relatively small number of companies of significant size. We believe it represents an attractive growth opportunity.

Our Strategy

Our objective is to be the leading provider of high-quality, low-cost home health services in each market in which we operate. To achieve this objective, we intend to:

  Focus on Medicare-Eligible Patients.The rapidly growing population of Medicare beneficiaries represents a compelling market for home health and hospice providers. Implementation of the Prospective Payment System, or PPS, in the home health industry has created a relatively stable reimbursement environment favoring companies such as ours that focus on providing high-quality, low-cost home health and hospice services.

 
Page

 Emphasize Internal Growth. We emphasize the internal growth of Medicare patient admissions, which increased approximately 13% for the nine-month period ended September 30, 2006. We drive internal growth by: (1) maintaining an emphasis on high-quality care; (2) expanding and enhancing referral relationships in our local and regional markets; (3) continuing to educate referral sources regarding our specialized programs that focus on high-cost chronic conditions and diseases; (4) developing strategic partnerships with large hospital systems to increase admission volume; (5) expanding our service coverage areas by developing new locations; and (6) attracting and retaining highly skilled and experienced employees through communication, education, empowerment and competitive benefits.

 i
 Grow Through Strategic Acquisitions.We believe our focus on Medicare beneficiaries and our size and national reputation provides us with a strategic advantage when assessing potential acquisitions. The majority of home health agencies and hospice programs are owned either by hospitals or independent operators. We employ a disciplined acquisition strategy based on defined acquisition criteria, including high-quality service, a strong referral base and compatible payor mix.

 1
 

Leverage our Cost-Efficient Operating Structure. We believe the size and scale of our infrastructure and operating systems offer the opportunity to achieve operating leverage at both the agency and corporate level. At the agency level, we have developed a cost-efficient operating model that focuses on productivity, per episode utilization and clinical outcomes, among other measures. To manage our diverse network of locations, we use a proprietary information system that reduces administrative and operating costs through the integration of clinical, financial and operating functions. We manage all patient care and utilization on a real-time basis from both a clinical and financial perspective through a

 2

system of exception reporting. At the corporate level, our geographic focus and investment in infrastructure and information systems enable us to leverage regional and senior management resources and add new locations without proportionate increases in corporate expense.

 
 4
13
14
14
16
18
18
19
19
20
OpinionContinue to Develop and Deploy Specialized Programs for Chronic Diseases and Conditions.We have developed specialized services that focus on high-cost diseases and chronic conditions and have successfully launched programs for diabetes, coronary artery disease, congestive heart failure, orthopedics, complex wound care, geriatric surgical recovery and behavioral health, among others. Our specialty programs represent an attractive growth opportunity because they combine clinical quality and 24-hour access, seven days a week, which is appealing to patients and physicians, with cost-effective delivery of Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P.
Consent of KPMG LLP
Consent of KPMG LLP
Consent of KPMG LLPhigh-quality nursing care to patients who have high-cost or chronic conditions.

Recent Developments

You should rely onlyOn October 24, 2006, our Board of Directors declared a four-for-three split of our common stock, effective November 27, 2006. Each shareholder of record at the close of business on November 27, 2006 will receive one additional share for every three outstanding shares held on the record date. As of the effective date, disclosures regarding issued and outstanding shares along with earnings per share amounts will be determined utilizing actual shares outstanding subsequent to the stock split.

On October 23, 2006, John F. Giblin joined our management team as Chief Financial Officer.

Corporate Information

Amedisys, Inc. is a Delaware corporation. Our principal executive office is located at 11100 Mead Road, Suite 300, Baton Rouge, Louisiana 70816 and our telephone number is (225) 292-2031. Our website can be found atwww.amedisys.com. Information contained on our website is not deemed to be part of this prospectus.

Risk Factors

Investing in our common stock involves risk. See “Risk Factors” beginning on page 7 of this Prospectus.

The Offering

The following information assumes that the underwriters will not purchase additional shares of common stock to cover over-allotments. Please read “Underwriting” for additional information.

Common stock offered by us:

3,000,000 shares

Common stock to be outstanding immediately after this offering:

19,252,039 shares

Use of proceeds:

We estimate that our net proceeds from this offering will be approximately $122.3 million, after deducting estimated underwriting discounts and offering expenses. We plan to use approximately $43.1 million of the proceeds to pay down and extinguish the term loan portion of our senior secured credit facility with Wachovia Bank, N.A. We plan to use the remaining proceeds for general corporate purposes, including working capital and possible acquisitions.

Ticker symbol:

“AMED”

The number of shares of common stock to be outstanding immediately after this offering does not take into account:

866,189 shares of our common stock issuable as of September 30, 2006, upon exercise of options previously granted to employees and non-employee directors;

1,239,014 options and 168,600 options available for future stock option grants to employees and directors under existing plans, respectively, as of September 30, 2006; and 38,000 shares issuable as of September 30, 2006, upon the exercise of outstanding warrants; and

up to 450,000 shares of common stock issuable upon exercise of the underwriters’ over-allotment option.

Summary Financial Information

The following table presents our summary financial information, which you should read in conjunction with, and is containedqualified in this prospectus or isits entirety by reference to, our historical consolidated financial statements, the notes to those financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the documents incorporated by reference in this prospectus. We have not authorized anyone to provide you withThe summary financial information different from that contained in or incorporated by reference in this prospectus or any prospectus supplement. The selling shareholders are offering shares of our common stock and seeking offers to buy such securities only in jurisdictions where such offers and sales are permitted. The information contained in this prospectus is accurate onlyset forth below as of and for the dateyears ended December 31, 2003, 2004 and 2005 has been derived from our audited consolidated financial statements. The summary financial information as of this prospectus, regardlessand for the nine-month periods ended September 30, 2005 and 2006 has been derived from our unaudited consolidated financial statements, which include all adjustments consisting of normal recurring accruals that we consider necessary for a fair presentation of the time of delivery of this prospectus or of any sale of our common stock.

ABOUT THIS PROSPECTUS

     This prospectus is part of a registration statement we filed with the SEC. It is a type of registration statement that is commonly called a “shelf registration” because it permits securities to be offered on a delayed or continuing basis. The selling shareholders can resell the common stock covered by this prospectus at various times determined by each of them as more fully explained in this prospectus. We call these transactions by the selling shareholders resales, because the common stock they may sell under this prospectus was or will be first sold by us to them. We will not receive any proceeds from any of these resales. This prospectus omits some of the information contained in the registration statement, and reference is made to the registration statement for further information about usfinancial position and the common stock being offered by the selling shareholders. Any statement contained in this prospectus concerning the provisionsresults of any document filed as an exhibit to the registration statement or otherwise filed with the SEC isoperations for these periods. Historical results are not necessarily complete,indicative of future performance and in each case reference is made to the copypartial year results are not necessarily indicative of the document filed. You should read both this prospectus and the additional information described under the headings “Where You Can Find More Information” and “Incorporation By Reference.”full year results.

iSummary Historical Statements of Operations

  Year ended December 31,  

Nine-month periods

ended September 30,

 
  2003  2004  2005  2005  2006 
  (In thousands, except per share amounts and operational data) 

Net service revenue

 $142,473  $227,089  $381,558  $262,665  $397,138 

Cost of service revenue (excluding depreciation and amortization)

  58,554   96,078   163,032   110,517   172,311 

General and administrative and other expenses

  69,581   97,633   168,424   113,886   178,253 
                    

Operating income

  14,338   33,378   50,102   38,262   46,574 

Other (expense) income, net

  (711)  (19)  (1,362)  (638)  (2,626)

Income tax (expense) benefit

  (5,220)  (12,855)  (18,638)  (14,824)  (17,052)
                    

Net income

 $8,407  $20,504  $30,102  $22,800  $26,896 
                    

Earnings Per Share

        

Basic

 $0.86  $1.57  $1.93  $1.46  $1.68 
                    

Diluted

 $0.83  $1.51  $1.88  $1.44  $1.65 
                    

Summary Balance Sheet Data

        

Cash and cash equivalents

 $29,229  $57,679  $17,231  $20,750  $9,855 

Total current assets

  49,596   118,890   92,340   92,030   97,010 

Total assets

  92,473   199,733   339,997   330,605   370,188 

Total current liabilities

  34,018   41,976   99,955   87,115   92,124 
 

Long-term obligations, less current portions

  3,087   1,709   43,063   55,208   36,513 

Total stockholders’ equity

  51,399   148,473   192,599   182,446   231,754 
 

Operational Data

          
 

General

          

States

  11   13   16   15   17 

Locations

  79   110   221   212   264 
 

Home Health

          

Locations

  79   108   208   199   249 

Medicare admissions(1)

  43,008   51,400   99,642   56,972   78,491 

Completed episodes(2)

  51,078   75,510   120,987   84,665   126,214 

Medicare visits(3)

  913,726   1,349,936   2,089,524   1,477,597   2,233,952 

Total visits(4)

  1,052,391   1,514,000   2,364,887   1,625,152   2,533,298 

Medicare visits per episode(5)

  17.0   16.8   16.3   16.1   16.9 
 

Hospice

          

Locations

  n/a   2   13   13   13 

Average Daily Census(6)

  n/a   98   461   348   807 


THE OFFERING

(1)
Securities Offered byMedicare admissions are defined as the Selling ShareholdersUp to 223,167 shares of our common stock. Up to 50,000 of the shares are issuable by us upon the exercise of a warrant to purchase our common stock. Up to an additional 173,167 shares are currently outstanding.
The number of shares coveredpatients admitted to our agencies during the period for the first time where payment for services by this prospectusMedicare is subject to adjustment to avoid dilutionanticipated.
(2)Completed episodes are the number of Medicare patients that have either reached the warrant.
The selling shareholders may use this prospectus to resell the shares of our common stock that they have acquired from us or will acquire from us upon exerciseend of their warrants.
Use of ProceedsWe will not receive any proceeds from sales by60-day eligibility period or terminated their service before the selling shareholders of the shares covered by this prospectus, but we will receive any amounts due to us upon exercise of the warrant.
Our Nasdaq National Market SymbolAMED
Risk FactorsBefore investing in our common stock by purchasing shares from a selling shareholder, you should carefully read and consider the information in “Risk Factors” beginning on page 4 of this prospectus and all other information appearing elsewhere and incorporated by reference in this prospectus and any accompanying prospectus supplement.60-day eligibility period has lapsed.

1


OUR BUSINESS

The Securities and Exchange Commission (the “SEC”) allows us to “incorporate by reference” certain information that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will update automatically, supplement and/or supersede this information. Any statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any other document which also is or is deemed to be incorporated by reference in this prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. You should read the following summary together with the more detailed information regarding our company, our common stock and our financial statements and notes to those statements appearing elsewhere in this prospectus or incorporated herein by reference. References in this prospectus to “our company,” “we,” “our,” and “us” refer to Amedisys, Inc. and its subsidiaries.

     We are a Delaware corporation providing home health care nursing services in the southern and southeastern United States. At July 31, 2004, we operated 94 home care nursing offices and our corporate office is located in Baton Rouge, Louisiana. We provide a wide variety of home health care related services, including the following:

(3)
• general skilled nursing care provided byMedicare visits are the number of times during the period that our registered nurses, and licensed practical nurses, who assess the appropriateness ofphysical therapists, speech therapists, occupational therapists, medical social workers and home health aides visit Medicare eligible patients in their residence.
(4)Total visits are the number of times during the period that our registered nurses, licensed practical nurses, physical therapists, speech therapists, occupational therapists, medical social workers and home health aides visit all eligible patients in their residence.
(5)Medicare visits per episode is calculated by dividing the total number of Medicare visits on completed episodes in the period by the total number of Medicare episodes completed in the period.
(6)Average Daily Census is calculated by dividing the total number of days that hospice care and instructis provided by the patient and family regarding necessary treatments;
• specialty services such as wound care, skilled monitoring, assessments and patient education;
• technical procedures such as medication administration and surgical dressing replacement;
• physical and occupational therapy to strengthen muscles, restore rangetotal number of motion and help patients perform daily activities;
• speech therapy to restore communication and oral skills; and
• counseling and assistance services to help families addressdays in the problems associated with acute and chronic illnesses.period.

     In 1999, we introduced disease management programs for wound care, cardiovascular disease, and diabetes. In 2000, we introduced other disease management programs, such as pulmonary/respiratory care, pneumonia, and cancer. Our disease management programs coordinate care with other medical professionals involved in treating the patient and include frequent patient monitoring along with patient and family education and empowerment.

     All of our licensed, certified agencies are either accredited by the Joint Commission on Accreditation of Health Care Organizations or are in the accreditation application process, with the exception of five agencies which are accredited by the Community Health Accreditation Program.

     We use an internally developed software system to manage and integrate a number of financial and operating functions into a single entry system. In 1998, we sold our software system to an affiliate of CareSouth Home Health Services, Inc. (“CareSouth”) and since October 2001, we have been using the software pursuant to a licensing agreement which expired in May 2004. The agreement contains a bargain purchase option which we exercised upon expiration of the agreement. We have enhanced the software extensively, particularly with respect to clinical management, and have supplemented it with other externally sourced software.

     Revenues generated from our home health care services are paid primarily by Medicare but also by Medicaid, private insurance carriers, managed care organizations, individuals and other local health insurance programs. Medicare is a federally funded program available to persons with certain disabilities

2


and persons aged 65 or older. Medicaid, a program jointly funded by federal, state, and local governmental health care programs, is designed to pay for certain health care and medical services provided to low income individuals without regard to age. We have several contracts for negotiated fees with insurers and managed care organizations. We submit all Medicare home health claims to a single fiscal intermediary for the federal government.

     Traditionally, the home health care industry has been highly fragmented, primarily comprised of smaller local home health agencies offering limited services. These local providers often do not have the necessary capital to expand their operations or services and are often not able to achieve the efficiencies needed to compete effectively. Since implementation of the Balanced Budget Act of 1997 and other legislation, the home health care industry experienced major consolidation for the first time in its history, with industry reports suggesting a reduction from approximately 11,000 agencies in 1997 to approximately 7,000 in 2002.

     In August 2003, we acquired for $8,000,000 two home health care agencies in southwest Louisiana. On March 3, 2004, we announced a definitive agreement to acquire eleven home care agencies, together with two associated hospice operations, from Tenet Healthcare Corporation (“Tenet”). We purchased these entities for approximately $19.1 million in cash. We expect these entities to contribute approximately $26.7 million in annualized revenue. They operate in our target markets of Texas, Louisiana, Mississippi, Tennessee, Alabama, Georgia, and Florida. We closed the acquisition in three stages, with the first four agencies acquired on March 1, 2004, the second five acquired on April 1, 2004, and the final group of three acquired on May 1, 2004. The parties agreed to exclude one agency from the acquisition.

     On April 28, 2004, we entered into a four-year credit agreement with General Electric Capital Corporation pursuant to which we will obtain a senior secured revolving credit facility in the amount of $15.0 million, which can be increased in $5.0 million increments to $25.0 million (our “Senior Credit Facility”). We plan to use this facility for general corporate purposes and acquisitions. Funding will become available upon our repayment of a $2.5 million note.

3


RISK FACTORS

Investing in our common stock involves a degree of risk.risk, including the risks we describe below. You should consider carefully the following risks, as well as other information in this prospectus and the incorporated documents, before investing in our common stock. If any of the following risks occurs, our results of operations, financial condition and business could be harmed materially and the trading price of our common stock could decline.

Risks Related to Our Industry

Our profitability depends principally on the level of government-mandated payment rates. Reductions in rates or rate increases that do not cover cost increases may adversely affect our business.

Our revenue is substantially derived from Medicare. Reductions in Medicare rates, rate increases that do not cover cost increases and/or significant changes to the current Medicare reimbursement methodology may adversely affect our business.

We generally receive fixed payments from Medicare for our home health services based on the level of care that we provide patients. Consequently,Reductions to Medicare rates and/or changes in Medicare reimbursement methodology could have an adverse impact on our profitability largely depends upon our abilityrevenues and profitability. Medicare payments could be reduced as a result of:

administrative or legislative changes to manage the costbase episode rate;

administrative or legislative changes in the reimbursement rate for patients in designated rural areas;

the elimination or reduction of providing services. annual rate increases based on medical inflation;

adjustments to the relative components of the wage index used in determining reimbursement rates;

the imposition by Medicare of co-payments or other mechanisms shifting responsibility for a portion of payment to beneficiaries;

the reclassification of home health resource groups;

changes in the way Medicare pays providers that provide significant therapy services to beneficiaries; or

other adverse changes to payment rates or payment methodologies.

Although current Medicare currentlylegislation provides for an annual adjustment of the various payment rates based on the increase or decrease of the medical care expenditure category of the Consumer Price Index, these Medicare payment rate increasesthis adjustment may be less than actual inflation in any given year or could be eliminatedreduced or reducedeliminated in any given year. Alternatively,In February 2006, Congress passed a bill freezing home care reimbursement rates for 2006. The freeze is effective through December 31, 2006. While a 3.1% rate increase for home health services is scheduled to go into effect on January 1, 2007, there is no assurance that Congress will allow the increase. In fact, MedPAC has recommended that Congress not increase home health reimbursement rates in 2007. We cannot assure you that we will be able to operate profitably in the event there are significant changes in Medicare rates or changes in the methodology used to determine those rates.

Additionally, MedPAC has recently recommended implementation of a pay-for-performance initiative in home health care. If implemented, Medicare will begin to differentiate reimbursement rates for Medicare home health service providers based on quality measures. Of the 3.1% increase to Medicare home health rates scheduled to go into effect on January 1, 2007, 2.0% of the proposed 3.1% increase would be contingent upon home health providers reporting ten clinical quality measures through the Outcome and Assessment Information Set, or OASIS. Under such a system, a modest portion of total payments would be redistributed, or increased slightly for providers with above-average outcomes scores and decreased slightly for providers with below-average scores in their respective service areas or regions. We cannot assure you that a pay-for-performance reimbursement system will not adversely affect our Medicare reimbursement rates and, consequently, our results of operations.

Overall payments made by Medicare to us for hospice services are subject to two payment limitations, known as hospice caps, calculated by the Medicare fiscal intermediary on an annual basis. Under the first limitation, total Medicare payments to us per provider number are compared to a hospice cap amount that is calculated by multiplying the number of Medicare beneficiaries under that provider number electing hospice care for the first time during the cap period by a statutory amount that is indexed for inflation. The cap amount per Medicare beneficiary for the twelve-month period ending October 31, 2006 is $20,585. We must return any payments in excess of the cap amount to Medicare. The second hospice cap, which is also calculated on a per provider number basis, provides that reimbursement for any in-patient days that exceed 20% of the total in-service days for the particular provider number shall be reimbursed at a lower rate. Our ability to avoid these limitations depends on a number of factors, each determined on a provider-number basis, including the average length of stay and mix in level of care. Our revenue and profitability associated with our hospice operations may be materially reduced if we are unable to avoid triggering these and other Medicare payment limitations. As we expand our cost of providing services, which consists primarily of labor costs, increases more thanhospice operations, we cannot be certain that we will not exceed the annual Medicare price adjustment,cap amounts in the future. Thus, we cannot assure you that these limitations will not negatively affect our profitability on a company-wide basis in the future.

Further, for our hospice patients receiving nursing home care under certain state Medicaid programs who elect hospice care under Medicare or Medicaid, the state must pay us, in addition to the applicable Medicare or Medicaid hospice per diem rate, an amount equal to at least 95% of the Medicaid per diem nursing home rate for “room and board” furnished to the patient by the nursing home. We contract with various nursing homes for the nursing homes’ provision of certain “room and board” services that the nursing homes would otherwise provide Medicaid nursing home patients. We bill and must collect from the applicable state Medicaid program an amount equal to at least 95% of the amount that would otherwise have been paid directly to the nursing home under the state’s Medicaid plan. Under our standard nursing home contracts, we generally pay the nursing home for these “room and board” services in advance of reimbursement from Medicaid at 100% of the Medicaid per diem nursing home rate. Approximately 40% of our hospice patients reside in nursing homes. Consequently, the reduction or elimination of Medicare payments for hospice patients residing in nursing homes, our ability to collect for these services or any change in our ability to provide service to such patients would significantly reduce the net patient service revenue and profitability related to our hospice operations or may have an adverse effect on our bad debt expense.

If any of our agencies fail to comply with the conditions of participation in the Medicare program, that agency could be impacted negatively.terminated from the Medicare program, which would adversely affect our net patient service revenue and profitability.

If any of our agencies fails to comply with the conditions of participation in the Medicare program, that agency could be terminated from the Medicare program, which would adversely affect our net patient service revenue and profitability.

Each of our home carehealth and hospice agencies must comply with the extensive conditions required of participation in the Medicare program. If any of our agencies fails to meet any of the Medicare conditions of participation, that agency may receive a notice of deficiency from the applicable state surveyor. If that agency then fails to institute a plan of correction to correctremediate the deficiency within the correction period provided by the state surveyor, that agency could be terminated from the Medicare program. Any termination of one or more of our home carehealth agencies from the Medicare program for failure to satisfy the program’s conditions of participation could adversely affect adversely our net service revenue and profitability.

We are subject to extensive government regulation. Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations, could cause us to modify our operations and could negatively impact our operating results.

     Our industry CMS has recently announced that it is regulated extensively bycurrently revising the federal government andMedicare conditions of participation for home health, with publication expected no earlier than the states in which we operate. The laws and regulations governingsecond half of 2007. We do not know at this time what effect the revisions will have on our operations, along withand there can be no assurances that the terms of participation in various government programs, regulate how we do business, the services we offer, and our interactions with patients and the public. These laws and regulations, and their interpretations, are subject to frequent change. Changes in existing laws or regulations, or their interpretations, or the enactment of new laws or regulations could reduce our profitability by:

• increasing our liability;
• increasing our administrative and other costs;
• increasing or decreasing mandated services;
• forcing us to restructure our relationships with referral sources and providers; or
• requiring us to implement additional or different programs and systems.

     For example, Congress enacted the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which mandates that provider organizations enhance privacy protections for patient health information. This requires companies like us to add new administrative, information, and security systems to prevent inappropriate release of protected health information. Compliance with this law has added, andrevisions will continue to add, costs thatnot negatively affect our profitability.

4


In addition, we are subject to various routine and non-routine governmental reviews, audits and investigations.investigations by the Medicare and Medicaid programs and other federal and state governmental agencies. Violation of the laws governing our operations, or changes in interpretations of those laws, could result in the imposition of fines, civil or criminal penalties, the termination of our rights to participate in federal and state-sponsored programs andand/or the suspension or revocation of our licenses. If we become subject to material fines or if other sanctions or other corrective actions are imposed on us, we might suffer a substantial reduction in profitability.

We are subject to extensive government regulation. Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations, could cause us to modify our operations and could negatively impact our operating results.

If we are unable to maintain relationships with existing patient referral sources or to establish new referral sources, our growth and profitability could be affected adversely.

The federal government and the states in which we operate regulate our industry extensively. The laws and regulations governing our operations, along with the terms of participation in various government programs, regulate how we do business, the services we offer and our interactions with patients and the public and impose certain requirements on us relating to, among other things:

 

licensure and certification;

adequacy and quality of health care services;

qualifications of health care and support personnel;

quality of medical equipment;

confidentiality, maintenance and security issues associated with medical records and claims processing;

relationships with physicians and other referral sources;

operating policies and procedures;

addition of facilities and services; and

billing for services.

These laws and regulations, and their interpretations, are subject to frequent change. Changes in existing laws and regulations, or their interpretations, or the enactment of new laws or regulations could reduce our profitability by:

increasing our liability;

increasing our administrative and other costs;

increasing or decreasing mandated services;

forcing us to restructure our relationships with referral sources and providers; or

requiring us to implement additional or different programs and systems.

For example, Congress enacted the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which mandates that provider organizations enhance privacy protections for patient health information. This requires companies like us to develop, maintain and monitor administrative, information and security systems to prevent inappropriate release of protected health information. Compliance with this law has added, and will continue to add, costs that affect our profitability. Failure to comply with HIPAA’s privacy and security requirements could result in substantial fines and penalties.

If we are unable to maintain relationships with existing patient referral sources or to establish new referral sources, our growth and profitability could be adversely affected.

Our success depends significantly on referrals from physicians, hospitals and other patient referral sources in the communities that our home care agencies serve, as well as on our ability to maintain good relationships with these referral sources. Our referral sources are not contractually obligated to refer home carehealth or hospice patients to us and may refer their patients to other home care providers. Our growth and profitability depend on our ability to establish and maintain close working relationships with these patient referral sources and to increase awareness and acceptance of the benefits of home health and hospice care benefit by our referral sources and their patients. We cannot assure you that we willmay not be able to maintain our existing referral source relationships or that we will be able to develop and maintain new relationships in existing or new markets. Our loss of, or failure to maintain, existing relationships or our failure to develop new referral relationships could adversely affect adversely our ability to expand our operations and operate profitably.

We may be subject to substantial malpractice or other similar claims.

We are subject to federal and state laws that govern our financial relationships with physicians and other health care providers, including potential or current referral sources.

We are required to comply with federal and state laws, generally referred to as “anti-kickback laws,” that prohibit certain direct and indirect payments or other financial arrangements between health care providers that are designed to encourage the referral of patients to a particular provider for medical services. In addition to these anti-kickback laws, the Federal government has enacted specific regulations, commonly known as the “Stark law”, that prohibit certain financial relationships, specifically including ownership interests and compensation arrangements, between physicians and providers of designated health services, such as home health agencies, to whom said physicians refer patients. Some of these same financial relationships are subject to regulation by the individual states as well. Under both the anti-kickback law and Stark law, there are a number of safe harbors that permit certain, carefully constrained relationships. Amedisys avails itself of these safe harbors in several instances. For example, we currently have contractual relationships with certain physicians who provide consulting services to our company. Many of these physicians are current or potential referral sources. In addition, in some of our local markets, we lease office space from physicians who may also be referral sources. We cannot assure you that courts or regulatory agencies will not interpret state and federal anti-kickback laws and state laws regulating relationships between health care providers in ways that will implicate our practices. Violations of these laws could lead to fines or sanctions that may have a material adverse effect on our results of operations.

We may be subject to substantial malpractice or other similar claims.

The services we offer involve an inherent risk of professional liability and related substantial damage awards. As of September 30, 2006, we had over 4,000 direct care employees working for our home health agencies and over 250 direct care employees working for our hospice agencies. In addition, we have had up to as many as 500 direct care workers on contract. On any given day, we have several hundredthe majority of these nurses, therapists and other direct care personnel are driving to and from patients’ homes where they deliver medical and other care. Due to the nature of our business, we and the nursescaregivers who provide services on our behalf may be the subject of medical malpractice claims. These nursescaregivers could be considered our agents, in the practice of nursing and, as a result, we could be held liable for their medical negligence. We cannot predict the effect that any claims of this nature, regardless of their ultimate outcome, could have on our business or reputation or on our ability to attract and retain patients and employees. We maintain malpractice liability insurance and are responsible for amounts in excess of the limits of our coverage.

Delays in reimbursement may cause liquidity problems.

Our business is characterizedAn economic downturn, continued deficit spending by delaysthe federal government and state budget pressures in states in which we operate could result in a reduction in reimbursement fromand covered services.

The existing federal deficit, as well as deficit spending by the timegovernment as the result of adverse developments in the economy or other reasons, could lead to increased pressure to reduce government expenditures for other purposes, including governmentally funded programs in which we provide services to the time we receive reimbursement or payment for these services. If we have information system problems or issues that arise withparticipate, such as Medicare we may encounter delaysand Medicaid. Such actions in our payment cycle. Such a timing delay may cause working capital shortages. As a result, working capital management, including prompt and diligent billing and collection, is an important factor inturn could adversely affect our results of operations and liquidity. We cannot assure youoperations.

An economic downturn could have a detrimental effect on our revenues. Historically, state budget pressures have translated into reductions in state spending. Given that Medicaid outlays are a significant component of state budgets, we can expect continuing cost containment pressures on Medicaid outlays for our services in the states in which we operate. In addition, an economic downturn may also affect the number of enrollees in managed care programs as well as the profitability of managed care companies, which could result in reduced reimbursement rates.

Our industry trends will not extend our collection period, adversely impact our working capital, or that our working capital management procedures will successfully negate this risk.is highly competitive, with relatively few barriers to entry in some markets.

Our industry is highly competitive.

     WeOur home health agencies compete with local and regional home health care companies, hospitals, nursing homes and other businesses that provide home nursinghealth services, some of which are large established companies that have significantly greater resources than we do. In addition, there are relatively few barriers to entry in some

of the home health services markets in which we operate. Our primary competition comes from local companies in each of our markets and these privately-ownedprivately owned or hospital-owned health care providers vary by region and market. We compete based on the availability of personnel; the quality, expertise and value of our services; and in select instances, on the price of our services. Increased competition in the future from existing competitors or new entrants may limit our ability to maintain or increase our market share. We cannot assure you that we will be able to compete successfully against current or future competitors or that competitive pressures will not have a material adverse impact on our business, financial condition, or results of operations.

5


Some of our existing and potential new competitors may enjoy greater name recognition and greater financial, technical and marketing resources than we do. This may permit our competitors to devote greater resources than we can to the development and promotion of services. These competitors may undertake more far-reaching and effective marketing campaigns and may offer more attractive opportunities to existing and potential employees and services to referral sources.

We expect our competitors to develop new strategic relationships with providers, referral sources and payors, which could result in increased competition. The introduction of new and enhanced service offerings, in combination with industry consolidation and the development of strategic relationships by our competitors, could cause a decline in revenue or loss of market acceptance of our services or make our services less attractive. Additionally, we compete with a number of non-profit organizations that can finance acquisitions and capital expenditures on a tax-exempt basis or receive charitable contributions that are unavailable to us.

Managed care organizations and other third-party payors have continued to consolidate in order to enhance their ability to influence the delivery of health care services. Consequently, the health care needs of a large percentage of the United States population are increasingly served by a smaller number of managed care organizations. These organizations generally enter into service agreements with a limited number of providers for needed services. To the extent that such organizations terminate us as a provider and/or engage our competitors as a preferred or exclusive provider, our business could be adversely affected. In addition, private payors, including managed care payors, could seek to negotiate additional discounted fee structures or the assumption by health care providers of all or a portion of the financial risk through prepaid capitation arrangements, thereby potentially reducing our profitability.

We expect that industry forces will continue to have an impact on our business and that of our competitors. In recent years, the health care industry has undergone significant changes driven by efforts to reduce costs. For example, the Medicare Modernization Act of December 2003 (“MMA”) allocated significant additional fundscosts and we expect these cost containment measures to Medicare managed care providers in order to promote greater participation in those plans by Medicare beneficiaries. If these increased funding levels have the intended result, the rate of growthcontinue in the Medicare fee-for-service market, where we have generated the majority of our historical revenue, could decline. The frequentfuture. Frequent regulatory changes in our industry, including reductions in reimbursement rates and changes in services covered, have increased competition among home health care providers. If we are unable to react competitively to new developments, our operating results may suffer. We cannot assure you that we will be able to compete successfully against current or future competitors or that competitive pressures will not have a material adverse impact on our business, financial condition, or results of operations.

State efforts to regulate the establishment or expansion of health care providers could impair our ability to expand our operations.

A shortage of qualified registered nursing staff and other caregivers could affect adversely our ability to attract, train and retain qualified personnel and could increase operating costs.

Some states require health care providers (including skilled nursing facilities, hospices, home health agencies and assisted living facilities) to obtain prior approval, known as a certificate of need, or CON, or as it is referred to in some states, a permit of approval, or POA, for:

 

the purchase, establishment or expansion of health care facilities;

capital expenditures exceeding a prescribed amount; or

changes in services or bed capacity.

To the extent that we require a CON, POA or other similar approvals to expand our operations, either by acquiring facilities or expanding or providing new services or other changes, our expansion could be adversely affected by the failure or inability to obtain the necessary approvals, changes in the standards applicable to those approvals and possible delays and expenses associated with obtaining those approvals. We cannot assure you that we will be able to obtain a CON or POA for all future projects requiring that approval.

Additionally, our ability to expand operations in a state will depend on our ability to obtain a state license to operate. States may have a limit on the number of licenses they issue. For example, as of September 30, 2006, we operated 11 home health agencies and one hospice agency in Louisiana. Louisiana currently has a moratorium on the issuance of new home health agency licenses through July 1, 2008. We cannot predict whether this moratorium will be extended beyond this date or whether any other states in which we currently operate, or may wish to operate in the future, may adopt a similar moratorium. Our failure to obtain any license, CON or POA could impair our ability to operate or expand our business.

A shortage of qualified registered nursing staff and other caregivers could adversely affect our ability to attract, train and retain qualified personnel and could increase operating costs.

We rely significantly on our ability to attract and retain caregivers who possess the skills, experience and licenses necessary to meet the requirements of our patients. We compete for home health care personnel with other providers of home nursinghealth and hospice services. Our ability to attract and retain caregivers depends on several factors, including our ability to provide these caregivers with attractive assignments and competitive benefits and salaries. We cannot assure you that we will succeed in any of these areas. The costIn addition, there are occasional shortages of qualified health care personnel in some of the markets in which we operate. As a result, we may face higher costs of attracting caregivers and providing them with attractive benefit packages may be higher than we originally anticipated, and, if that occurs, our profitability could decline. IfFinally, although this is currently not a significant factor in our existing markets, if we expand our operations into geographic areas where health care providers historically have unionized, we cannot assure you that negotiating collective bargaining agreements will not have a negative effect on our ability to timely and successfully recruit qualified personnel. Generally, if we are unable to attract and retain caregivers, the quality of our services may decline and we could lose patients and referral sources.

Risks Related to Our Business

We depend on Medicare for substantially all of our revenues.

Our revenue is substantially derived from Medicare. Reductions in Medicare rates, rate increases that do not cover cost increases and/or significant changes to the current Medicare reimbursement methodology may adversely affect our business.

For the years ended December 31, 2001, 20022003, 2004 and 2003, and for the six-month period ended June 30, 2004,2005, we received 88%91%, 88%, 91%93% and 92%93%, respectively, of our revenue from Medicare. Reductions inFor each of the nine-month periods ended September 30, 2005 and September 30, 2006, we received approximately 93% of our revenue from Medicare. We generally receive fixed payments from Medicare reimbursement would have an adverse impactfor our home health services based on the level of care that we provide patients. Consequently, our profitability. Such reductions in paymentsprofitability largely depends upon our ability to us could be caused by:manage the cost of providing those services.

• administrative or legislative changes to the base episode rate;
• the elimination or reduction of annual rate increases based on medical inflation;
• the imposition by Medicare of co-payments or other mechanisms shifting responsibility for a portion of payment to beneficiaries;
• adjustments to the relative components of the wage index;
• changes to our case mix or therapy thresholds; or
• other adverse changes to the way we are paid for delivering our services.
Future cost containment initiatives undertaken by private third-party payors may limit our future revenues and profitability.

6


Our non-Medicare revenues and profitability also are affected by the continuing efforts of third-party payors to contain or reduce the costs of health care by lowering reimbursement rates, narrowing the scope of covered services, increasing case management review of services and negotiating reduced contract pricing. Any changes in reimbursement levels from these third-party payor sources and any changes in applicable government regulations could have a material adverse effect on our revenues and profitability. There is no guarantee that third-party payors will provide us with timely payments for our services. We can provide no assurance that we will continue to maintain theour current payor or revenue mix.

We are operating under a Corporate Integrity Agreement. Violations to that agreement could result in penalties or exclusion from participation in the Medicare program.

     In 1999Migration of our Medicare beneficiary patients to Medicare managed care providers could negatively impact our operating results.

Historically, we uncovered certain improprieties stemminghave generated the majority of our revenue from the unauthorized conductMedicare fee-for-service market. Under the Medicare Prescription Drug Improvement and Modernization Act of December 2003, however,

Congress allocated significant additional funds and other incentives to Medicare managed care providers in order to promote greater participation in those plans by Medicare beneficiaries. If these increased funding levels have the intended result, the size of the potential Medicare fee-for-service market could decline, thereby reducing the size of our potential patient population, which could cause our operating results to suffer.

Our allowance for doubtful accounts may not be sufficient to cover uncollectible accounts.

On an agency directorongoing basis, we estimate the amount of Medicare, Medicaid and private insurance receivables that we will not be able to collect. This allows us to calculate the expected loss on our receivables for the period we are reporting. Our allowance for doubtful accounts may underestimate actual unpaid receivables for various reasons, including:

adverse changes in our Monroe, Louisiana location, an agencyestimates as a result of our classification of payors and related payor history;

inability to collect funds due to missed filing deadlines or inability to prove that timely filings were made;

adverse changes in the economy generally exceeding our expectations; or

unanticipated changes in Medicare, Medicaid and private insurance companies.

If our allowance for doubtful accounts is insufficient to cover losses on our receivables, our business, financial position or results of operations could be materially adversely affected.

Delays in reimbursement may cause liquidity problems.

Our business is characterized by delays in reimbursement from the time we had acquired previously. We disclosed these improprietiesprovide services to the Officetime we receive reimbursement or payment for these services. If we have difficulty in obtaining documentation, such as physician orders, information system problems or issues that arise with Medicare or other providers, we may encounter additional delays in our payment cycle. Timing delays may cause working capital shortages. Working capital management, including prompt and diligent billing and collection, is an important factor in achieving our financial results and maintaining liquidity. It is possible that documentation support, system problems, Medicare or other provider issues or industry trends may extend our collection period, adversely impact our working capital, and that our working capital management procedures may not successfully negate this risk.

A provision in the Deficit Reduction Act of 2005, which was passed by Congress earlier this year, caused a brief delay in reimbursement to our home health agencies by Medicare. The provision stipulated that CMS make no payments on Medicare home health claims during the last nine days of the Inspector General (“OIG”). Following an extensive seriesfederal fiscal year, which ended September 30, 2006. No interest was accrued or paid by CMS; and no late penalties were paid to providers for delays in payment due to this hold. As a result of audits,the hold, the timing of our cash flows was negatively impacted and $13.6 million of payments we and the OIG reached a settlement in August 2003, whereby we agreed to repay approximately $1.2 million to the government in three annual payments,would have received over the last nine days of which we will makeSeptember were delayed until October 2, 2006. We may experience delays in 2005. As part ofreimbursement in the settlement, wefuture that may cause us liquidity problems.

Our hospice operations may also executed a three-year Corporate Integrity Agreement (“CIA”) which requires that we:

• maintain our current compliance program;
• specify additional training requirements;
• conduct annual, independent audits of the agency; and
• make timely disclosure of, and repay, overpayments resulting from any potential fraud or abuse of which we become aware.

     There are stipulated penaltiesexperience reimbursement delays. Our hospice operations bill various state Medicaid programs for violations of the CIA. Egregious violations of the CIA could result“room and board” associated with hospice patients residing in our exclusion from further participation in government-funded health programs. We have designated a Chief Compliance Officer to ensure ongoing compliance with the terms and conditions of the CIA as well as compliance with all other applicable laws, rules, and regulations. Any acquired businesses will be subject to the provisions of the CIA.

     We believenursing homes that we areroutinely pay in compliance with alladvance of receipt of payment from the provider. In addition, we have experienced timing delays when attempting to collect funds from state and federal fraud and abuse provisions and all other applicable government laws and regulations. Medicaid programs in certain instances. Delays in receiving reimbursement or payments from these programs may adversely impact our working capital.

Our compliance with these laws and regulations may be subject to future government review and interpretation and possible regulatory actions currently unknown or unasserted. If we are found to be in violation of any of these provisions, it could have a material adverse effectgrowth strategy depends on our business.ability to manage growing and changing operations.

We operate our agencies under licenses issued and regulated by the respective states in which they are located. Each agency is subject to periodic surveys and complaint-based surveys. If a survey identifies violations of state standards, the agency typically is afforded a grace period in which to comply or otherwise lose its license to operate. We use a Clinical Operations Department, staffed by regional personnel, to prepare each agency for these surveys and respond when those surveys identify potential problems or when plans-of-correction are required to bring the agency back into compliance. If we are found to be in violation of any of these state standards, it could have a material adverse effect on our business.

Our growth strategy depends on our ability to manage growing and changing operations.

Our business has grown significantly in size and complexity in recent years. Our internal growth rate for Medicare patient admissions was approximately 8% for 2003, 28% for the first six months of 2004 and 8%18% for calendar year 2003.2005, 14% and 11% for the three-month periods ended June 30, 2006 and September 30, 2006, respectively. This growth has placed, and

will continue to place, significant demands on our management systems, internal controls and financial and professional resources. In addition, we will need to further develop further our financial controls and reporting systems to accommodate future growth. This could require us to incur expenses for hiring additional qualified personnel, retaining professionals to assist in developing the appropriate control systems and expanding our information technology infrastructure. Our inability to manage growth effectively could have a material adverse effect on our financial results.

7Our growth strategy depends on our ability to open agencies, acquire additional agencies on favorable terms and integrate and operate these agencies effectively. If our growth strategy is unsuccessful or we are not able to successfully integrate newly acquired or opened agencies into our existing operations, our future results could be adversely impacted.


Our growth strategy depends on our ability to develop and to acquire additional home care agencies on favorable terms and to integrate and operate such agencies effectively. If we are unable to do so, our future growth and operating results could be negatively impacted.

Developments.We expect to continue to open agencies in our existing and new markets. Our new agency growth, however, will depend on several factors, including our ability to:

• obtain desirable locations for agencies in suitable markets;
• identify and hire a sufficient number of appropriately trained home care and other health care professionals;
• obtain adequate financing to fund growth; and
• operate successfully under applicable government regulations.

 Acquisitions.

obtain locations for agencies in markets where need exists;

identify and hire a sufficient number of appropriately trained home health and other health care professionals;

obtain adequate financing to fund growth; and

operate successfully under applicable government regulations.

We are focusing moresignificant time and resources on the acquisition of small to medium-sized home health providers,and hospice agencies, or of certain of their assets, in targeted markets. WeNot only do we face competition for acquisition candidates, which may limit the number of acquisition opportunities available to us and may lead to higher acquisition prices, but we may also be unable to identify, negotiate and complete suitable acquisition opportunities on reasonable terms. Additionally, acquisitions involve significant risks and uncertainties, including difficulties in recouping partial episode payments and other types of misdirected payments for services from the previous owners, difficulties integrating acquired personnel and business practices into our business, the potential loss of key employees or patients of acquired agencies, and the assumption of liabilities and exposure to unforeseen liabilities of acquired agencies. We may incur future liabilities relatednot be able to acquisitions. Shouldfully integrate the operations of the acquired businesses with our current business structure in an efficient and cost-effective manner. The failure to effectively integrate any of the following problems, or others, occur asthese businesses could have a result ofmaterial adverse effect on our acquisition strategy, the impact could be material:operations.

Our acquisitions may impose strains on our existing resources.

• difficulties integrating acquired personnel and other corporate cultures into our business;
• difficulties integrating information systems;
• the potential loss of key employees or referral sources of acquired companies or a reduction in patient referrals by hospitals from which we have acquired home health care agencies;
• the assumption of liabilities and exposure to undisclosed liabilities of acquired companies;
• the acquisition of an agency with undisclosed compliance problems;
• the diversion of management attention from existing operations; or
• an unsuccessful claim for indemnification rights from previous owners for acts or omissions arising prior to the date of acquisition.

Our acquisitions may impose strains on our existing resources.

As a result of our past and current acquisition strategy, we have grown significantly over the last two years. As we continue to add acquisition-related revenue and expand our markets, our growth could strain our resources, including management, information systems, regulatory compliance, logistics and other controls. We cannot assure you that our resources will keep pace with our anticipated growth. If we do not manage our expected growth effectively, our future prospectsresults could be affected adversely.

We may face increasing competition for acquisition candidates.
adversely affected.

We intendmay require additional capital to grow significantly through the continuedpursue our acquisition strategy.

As of additional home nursing agencies. We face competition for acquisition candidates, which may limit the number of acquisition opportunities available to us and may lead to higher acquisition prices. Recently, we have observed an increase in acquisition prices for mid-sized and larger regional home health care companies. We cannot assure you that we will be able to identify suitable acquisitions in the future or that any such opportunities, if identified, will be consummated on favorable terms, if at all. In the absence of completing successful acquisitions, our future growth rate would decline. In addition, we cannot assure you that any future acquisitions, if consummated, will result in further growth.

We may require additional capital to pursue our acquisition strategy.

     At JuneSeptember 30, 2004,2006, we had cash and cash equivalents of $22.3approximately $9.9 million. Based onThis amount may not be sufficient to support our current plan of operations including acquisitions,and growth strategies. In addition, we cannot assure you that this amount will be sufficient.plan to use a portion of the offering to pay down and extinguish the term loan portion of our credit facility. We cannot

8


readily predict the timing, size and success of our acquisition efforts and the associated capital commitments. If we do not have sufficient cash resources, our growth could be limited unless we obtain additional equity or debt financing. Effectivefinancing beyond the capabilities of our revolver, which limits capital expenditures for acquisitions to $25.0 million for any single acquisition and the aggregate amount of acquisitions made during the term of the senior credit facility to $60.0 million.

We may be unable to repay our senior credit facility or be unable to comply with the restrictive covenants of our senior credit facility.

Our senior credit facility is collateralized by our existing and after-acquired personal and real property. The senior credit facility matures in June 2010 and bears interest at an amount that depends on the overall leverage ratio, as of April 28, 2004, we entered into adefined in the credit agreement, with General Electric Capital Corporation forinclusive of amendments. As amended, the interest rate on the outstanding portion of the term loan is LIBOR plus 1.75% based on our current leverage and the interest rate on the outstanding portion of the revolver is prime plus 0.75%. We are obligated to pay a revolvingcommitment fee of 0.375% on the unused portion of the revolver. Unanticipated changes in our business may result in our inability to make timely payments and cause us to default on our obligation.

Our senior credit facility of upcontains certain covenants regarding our leverage ratio, fixed charges and capital expenditures. Unanticipated changes to $25.0 million. Funding will become available upon our repayment of a $2.5 million note.

Our business depends on our information systems. Our inability to effectively integrate, manage, and keep secure our information systems could disrupt our operations.
business may result in our inability to comply with these covenants.

Further, our senior credit facility requires that we provide certain information to the lenders before an acquisition. We may be unable to use the funds raised from this offering for acquisitions that do not satisfy these criteria under our senior credit facility.

Our inability to effectively integrate, manage and keep secure our information systems could disrupt our operations.

Our business depends on effective and secure information systems that assist us in, among other things, monitoring utilization and other cost factors, processing claims, reporting financial results, measuring outcomes and quality of care, managing regulatory compliance controls and maintaining operational efficiencies. These systems include software developed in-house and systems provided by external contractors and other service providers. To the extent that these external contractors or other service providers become insolvent or fail to support the software or systems, our operations could be affected negatively.negatively affected. Our agencies also depend upon our information systems for accounting, billing, collections, risk management, quality assurance, payroll and other information. If we experience a reduction in the performance, reliability, or availability of our information systems, our operations and ability to produce timely and accurate reports could be affected adversely.adversely affected.

Our information systems and applications require continual maintenance, upgrading and enhancement to meet our operational needs. Our acquisition activity requires transitions and integration of various information systems. We regularly upgrade and expand our information systemssystems’ capabilities. If we experience difficulties with the transition and integration of information systems or are unable to implement, maintain, or expand our systems properly, we could suffer from, among other things, operational disruptions, regulatory problems and increases in administrative expenses.

Our business requires the secure transmission of confidential information over public networks. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments could result in compromises or breaches of our security systems and patient data stored in our information systems. Anyone who circumvents our security measures could misappropriate our confidential information or cause interruptions in our services or operations. The Internet is a public network, and data is sent over this network from many sources. In the past, computer viruses or software programs that disable or impair computers have been distributed and have rapidly spread over the Internet. Computer viruses could be introduced into our systems, or those of our providers or regulators, which could disrupt our operations or make our systems inaccessible to our providers or regulators. We may be required to expend significant capital and other resources to protect against the threat of security breaches or to alleviate problems caused by breaches. Becausebreaches, including unauthorized access to patient data stored in our information systems, and the introduction of the confidential health information we store and transmit, security breaches could expose uscomputer viruses to a risk of regulatory action, litigation, possible liability and loss.our systems. Our security measures may be inadequate to prevent security breaches and our business operations would be negatively impacted by cancellation of contracts and loss of patients if security breaches are not prevented.

Our clinical software system has been developed in-house. Failure of, or problems with, our system could harm our business and operating results.

We are implementing a new Point of Care, or PoC, system initiative in 2006 that includes providing laptop computers to our staff. We anticipate that all the visiting nurses in our home health agencies will be accumulating information on laptop computers by mid-2007. We have installed privacy protection systems and devices on our network and the PoC laptops in an attempt to prevent unauthorized access to information in our database. However, our technology may fail to adequately secure the confidential health information we maintain in our databases and protect it from theft or inadvertent leakage. In such circumstances, we may be held liable to our patients and regulators, which could result in litigation or adverse publicity that could have a material adverse effect on our business. Even if we are not held liable, any resulting negative publicity could harm our business and distract the attention of management.

Further, our information systems are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, break-ins and similar events. A failure to restore our information systems after the occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations. Because of the confidential health information we store and transmit, loss of electronically stored information for any reason could expose us to a risk of regulatory action, litigation, possible liability and loss.

Failure of, or problems with, our clinical software system could harm our business and operating results.

We have developed and utilize a proprietary Windows-based clinical software system to collect assessment data, schedule and log patient visits, generate medical orders and monitor treatments and outcomes in accordance with established medical standards. The system integrates billing and collections functionality as well as accounting, human resource, payroll and employee benefits programs provided by third parties. Problems with, or the failure of, our technology and systems could negatively impact data capture, billing, collections, assessment of internal controls and management and reporting capabilities. Any such problems or failures could adversely affect adversely our operations and reputation, result in significant costs to us and impair our ability to provide our services in the future. The costs incurred in correcting any errors or problems may be substantial and could adversely affect our profitability.

9We depend on outside software providers.


We may experience difficulties implementing a new information system.

We are in the process of consolidating our various agency databases into an enterprise-wide system to improve the accuracy, reliability, and efficiency of processing and management reporting. We are engaged in parallel testing to ensure a seamless transition from our current database system to the enterprise-wide system. However, if any problems emerge in connection with this transition, our ability to manage our operations would be impaired from both a clinical and financial perspective, which could have a material adverse effect on our business.

We depend on outside software providers.

We depend on the proper functioning and availability of our information systems in operating our business, some of which are provided by outside software providers. These information systems and applications require continual maintenance, upgrading and enhancement to meet our operational needs. If our providers are unable to maintain or expand our information systems properly, we could suffer from operational disruptions and an increase in administrative expenses, among other things.

Our insurance liability coverage may not be sufficient for our business needs.

We are operating under a Corporate Integrity Agreement. Violations of that agreement could result in penalties or exclusion from participation in the Medicare program.

In 1999, we uncovered certain improprieties stemming from the unauthorized conduct of an agency director in an agency we had acquired in Monroe, Louisiana. We self-reported these improprieties to the Office of the Inspector General, or OIG. Following an extensive series of audits, we reached a settlement with the federal government in August 2003, whereby we agreed to repay approximately $1.2 million to the government in three annual payments, the last of which we made in August 2005. As part of the settlement, we also executed a three-year Corporate Integrity Agreement, or CIA, which required, among other things, that we (1) maintain our training and compliance programs; (2) provide additional, specific training in certain areas; (3) conduct annual, independent audits of the Monroe agency; and (4) make timely disclosure of, and repay, overpayments resulting from any potential fraud or abuse of which we became aware.

The term of the CIA expired on August 11, 2006. Notwithstanding this expiration, we have continuing obligations under the CIA. For example, we are required to submit final annual reports and audits, must grant the OIG inspection and review rights for 120 days post-filing of the final annual report, and must retain records of our compliance with the CIA through August 2010. We may become subject to other such settlements or agreements in the future.

Our compliance with state and federal fraud and abuse provisions and regulations may be subject to future government review and interpretation and possible regulatory actions currently unknown or unasserted. If we are found to be in violation of any of these provisions, it could have a material adverse effect on our business.

We also operate our agencies under licenses issued and regulated by the respective states in which they are located. Each agency is subject to periodic surveys and complaint-based surveys. If a survey identifies violations of state standards, the agency typically is afforded a grace period in which to comply or otherwise lose its license to operate. If we are found to be in violation of any of these state standards, it could have a material adverse effect on our business.

Our insurance liability coverage may not be sufficient for our business needs.

We maintain professional liability insurance for Amedisysus and our subsidiaries. However, we cannot assure you that claims will not be made in the future in excess of the limits of such insurance, if any, nor can we assure you that any such claims, if successful and in excess of such limits, will not have a material adverse effect on our ability to conduct business or on our assets. Our insurance coverage also includes fire, property damage and general liability with varying limits. Although we maintain insurance consistent with industry practice, weWe cannot assure you that the insurance we maintain will satisfy claims made against us. In addition, weas a result of operating in the home health industry, our business entails an inherent risk of claims, losses and potential lawsuits alleging incidents involving our employees that are likely to occur in a patient’s home. We cannot assure you that insurance coverage will continue to be available to us at commercially reasonable rates, in adequate amounts or on satisfactory terms.

Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business. From December 31, 1998 to November 9, 2000, we were insured for risks associated with professional and general liability by an insurance company that currently is in liquidation under federal bankruptcy laws and may not be able to pay or defend claims incurred by us during this period, and our current insurance does not cover any such claims. We do not, however, believe that the ultimate resolution of current claims will be materially different from reserves established for them or that any material claims will be made in the future based on occurrences during that period.

We are self-insured against certain potential liabilities and our insurance reserves may be inadequate if unexpected losses occur.

We are self-insured for health insurance and workers’ compensation claims up to $150,000 and $250,000, respectively, per incident and maintain appropriate reserves to cover anticipated payments. Insurance reserves are recorded based on estimates made by management and validated by third party actuaries on a quarterly basis to ensure such estimates are within acceptable ranges. Actuarial estimates are based on detailed analyses of health care cost trends, mortality rates, claims history, demographics, industry trends and federal and state law. As a result, the amount of reserve and related expense may be significantly affected by the outcome of these studies. Calculation of the estimated accrued liability for self-insured claims remains subject to inherent liability and significant and adverse changes in the experience of claims settlement and other underlying assumptions could negatively impact operating results.

We have established reserves for Medicare liabilities that may be payable by us in the future. These liabilities may be subject to audit or further review, and we may owe additional amounts beyond what we expect and have reserved for.

     As of June 30, 2004, we have estimated an aggregate payable to Medicare of $9.3 million, all of which is reflected as a current liability in our consolidated balance sheets incorporated by reference in this prospectus. The $9.3 million liability has two components: a cost report adjustments reserve ($6.8 million), and a prospective payment system (“PPS”) payment adjustments reserve ($2.5 million). If actual amounts exceed our reserves, we may incurowe additional costs that may affect adversely our results of operations. We describe these adjustments below.amounts beyond what we expect and have reserved for.

Cost Report Adjustments Reserve.Prior to the implementation of the PPS on October 1, 2000, we recorded Medicare revenue at the lower ofof: (1) actual costs, (2) the per-visit cost limit, or (3) a per-beneficiary cost limit on an individual provider basis. We determined ultimate reimbursement upon review of annual cost reports.

     The recorded $6.8 million payable includes a $3.7 million reserve for open cost reports through October 2000. At the time when these audits are completed and final assessments are issued, As of September 30, 2006, we may apply to Medicare for repayment over a 36-month period, although there is no assurance that this application will be accepted by Medicare. These amounts relate to the Medicare payment system in effect

10


until October 2000, under which Medicare provided us with periodic interim payments, subject tohave estimated an audit of cost reports submitted by us and repayment of any overpayments by Medicare to us. The fiscal intermediary, acting on behalf of the Centers for Medicare and Medicaid Services (“CMS”), has not yet issued finalized audits with respect to 1999 and 2000, and is entitled to reopen settled cost reports for up to three years after issuing final assessments.

     Theaggregate payable to Medicare alsoof $6.1 million, all of which is reflected as a current liability in our consolidated financial statements. The $6.1 million liability has two components: a cost report adjustments reserve ($5.1 million) and PPS payment adjustments reserve ($1.0 million). If actual amounts exceed our reserves, we may incur additional costs that may adversely affect our results of operations.

Cost Report Adjustments Reserve. The recorded $5.1 million cost report adjustments reserve relates to cost report reserves filed prior to the implementation of the PPS. The reserve includes a (1) $3.1 million reserve related to amounts owed to Medicare as overpayments for Alliance Home Health, Inc. (“Alliance”),obligation of a wholly owned subsidiary that is currently in bankruptcy proceedings under Chapter 7 of the U.S. Bankruptcy Code. It is uncertain at this time whetherand which we will have any responsibilitycould be responsible for that amount if the debt of the subsidiary is discharged in bankruptcy.bankruptcy, (2) balance of $0.1 million, which represents the final payment to settle certain 1999 and 2000 cost reports that will be remitted in the near future and (3) balance of $1.9 million that reflects our estimate of amounts likely to be assessed by Medicare as overpayments in respect of prior years when Medicare audits of our cost reports through October 2000 are completed. There is no assurance that if and when we apply to Medicare for repayment that such applications will be agreed to.

PPS Payment Adjustments Reserve.Reserve. The remaining balance of $2.5$1.0 million is related to notice from CMS that it intended to make certain recoveries of amounts overpaid to providers for the periods dating from the implementation of PPS on October 1, 2000 through particular dates in 2003 and 2004. The first of these amounts related to partial episode payments whereby a patient was readmitted to home health care prior to the expiration of 60 days from the previous admission date at another home health agency. In such instances, reimbursement for the first agency is reduced. CMS advised the industry that CMS had recently implemented changes to its computer system such that these instances would be adjusted at the time of claim submission on an ongoing basis, and that recovery for prior overpayments would commence in the summer of 2003 and extend over a two-year period. We reserved, based on information supplied by CMS, approximately $1.0 million in 2003 for all claims dating from October 1, 2000. Second, CMS advised the industry that CMS would seek recovery of overpayments that were made for patients who had, within 14 days of sucha readmission to home health prior to the expiry of 60 days from the previous admission date at another home health agency, been discharged from inpatient facilities, including hospitals, rehabilitation and skilled nursing units and that these recoveries would commence in April 2004. We conducted an analysis of a representative sample of claims where these events had occurred, and estimated that, for the periods dating from the implementation of the PPS on October 1, 2000 through December 31,particular dates in 2003 and 2004. We cannot be sure that we have accurately evaluated this liability and estimated an appropriate reserve.

If we must write off a reserve in thesignificant amount of intangible assets or long-lived assets, our earnings will be negatively impacted.

Because we have grown in part through acquisitions, goodwill and other acquired intangible assets represent a substantial portion of our assets. Goodwill was approximately $1.5$210.3 million was appropriate.

We depend on the services of our executive officers and other key employees.
as of September 30, 2006. If we make additional acquisitions, it is likely that we will record additional intangible assets to our consolidated financial statements. We also have long-lived assets consisting of property and equipment and other identifiable intangible assets of $55.7 million as of September 30, 2006, which we review both on a periodic basis as well as when events or circumstances indicate that the carrying amount of an asset may not be recoverable. If a determination that a significant impairment in value of our unamortized intangible assets or long-lived assets occurs, such determination could require us to write off a substantial portion of our assets. Such a write off would negatively affect our earnings.

We depend on the services of our executive officers and other key employees.

Our success depends upon the continued employment of certain members of our senior management team, including our Chairman and Chief Executive Officer, William F. Borne, our President and Chief Operating Officer, Larry R. Graham, and our Chief Financial Officer, Gregory H. Browne.John F. Giblin, our Principal Financial Officer, Donald Loverich, Jr. and our Chief Information Officer, Alice A. Schwartz. We also depend upon the continued employment of the Senior Vice Presidentssenior vice presidents that manage several of our key functional areas, including operations, business development, accounting, finance, human resources, marketing, information systems, contracting and compliance.

We maintain key employee life insurance of $4.5 million on Mr. Borne’s life and have entered into employment agreements with each of Mr. Borne, Mr. Graham, Mr. Giblin and Mr. Browne.Loverich. The departure of any member of our senior management team may materially adversely affect our operations.

We are defending class action lawsuits that may require us to pay substantial damage awards.

     On August 23Our operations could be affected by natural disasters or terrorist acts.

Our corporate office and October 4, 2001, two class action lawsuits were filed against us and threea substantial number of our executive officers on behalfagencies are located in the Southeastern United States and the Gulf Coast Region, increasing our exposure to hurricanes and other natural disasters. The occurrence of all purchasersnatural disasters in the markets in which we operate could not only affect the day-to-day operations of our common stock between November 15, 2000agencies, but also could also disrupt our relationships with patients, employees and June 13, 2001. These suits, which were filedreferral sources located in the United States District Courtaffected areas and, in the case of our corporate office, our ability to provide administrative support services, including, for example, billing and collection services. In addition, any episode of care that is not completed due to the impact of a natural disaster will generally result in lower revenue for the Middle Districtepisode. For example, in late August and early September 2005, Hurricanes Katrina and Rita impacted our agencies, employees and patients located in Southern Louisiana and Southern Mississippi. To date, only one of our agencies affected by Hurricanes Katrina and Rita, located in Chalmette, Louisiana, has not reopened. Other of our agencies located in the Louisiana Gulf Coast Region, however, have been consolidated and seek damages based on the decline in our stock price following an announced restatement of earnings for the fourth quarter of 2000 and first quarter of 2001. The suits allegeoperating at lower capacities. We cannot assure you that we knewhurricanes or were reckless in not knowing the facts giving rise to the restatement. No trial date has been set and pre-trial discovery is ongoing. We are vigorously defending these lawsuits, which have been certified as class actions, although we are appealing such determination.

     We believe our existing insurance is sufficient to cover any amounts that may be awarded, and we have not recorded any liabilities in excess of such coverage in our financial statements. Though we believe that the ultimate outcome of these lawsuitsother natural disasters will not exceed our insurance coverage, the maximum amount

11


that could potentially be claimed in these suits substantially exceeds the amount of our coverage; under certain circumstances, a finding of liability could have a material adverse effectimpact on our business.
There is a risk that we will be held responsible for some or all of the $4.2 million liability of a bankrupt subsidiary.
business, financial condition or results of operations in the future.

In addition, the occurrence of terrorist acts and the erosion to our business caused by such an occurrence, could adversely affect our profitability. In the affected areas, our offices could be forced to close for limited or extended periods of time.

We may be held responsible for some or all of the $4.2 million liability of a bankrupt subsidiary.

We consolidate the net liabilities of Alliance Home Health, Inc., or Alliance, a bankrupt subsidiary that is no longer in operation, in our consolidated financial statements. Alliance was acquired in 1998 and ceased operations in 1999. Alliance filed for Chapter 7 federal bankruptcy protection with the United States Bankruptcy Court in the Northern District of Oklahoma on September 29, 2000. A trustee was appointed for Alliance in 2001. We are still awaiting a final ruling by the federal bankruptcy judge and until such time, our consolidated financial statements will continue to consolidate the Alliance contingencies that net to a $4.2 million liability. It is possible that we could be held responsible for some or all of this amount, and, depending upon the outcome of the bankruptcy proceedings, potentially a potentially larger amount.

Arthur Andersen LLP may not be able to satisfy any claims arising from their provision of auditing services to us, including claims that you may have under applicable securities laws.

     Arthur Andersen LLP audited our financial statements for the five years ended December 31, 2001. On June 15, 2002, Arthur Andersen was convicted of obstruction of justice by a federal jury in Houston, Texas in connection with Arthur Andersen’s work for Enron Corp. On September 15, 2002, a federal judge upheld this conviction. Arthur Andersen ceased its audit practice before the SEC on August 31, 2002. Because of the circumstances currently affecting Arthur Andersen LLP, as a practical matter it may not be able to satisfy any claims arising from the provision of auditing services to us, including claims that you may have under applicable securities laws.

Risks Related to This Offering and Ownership of Our Common Stock

The price of our common stock may be volatile and this may adversely affect our stockholders.

The price at which our common stock trades may be volatile. The stock market has from time to time experienced significant price and volume fluctuations that have affected the market prices of securities, particularly securities of health care companies. The market price of our common stock may be influenced by many factors, including:

• our operating and financial performance;
• variances in our quarterly financial results compared to research analyst expectations;
• the depth and liquidity of the market for our common stock;
• future sales of common stock or the perception that sales could occur;
• investor perception of our business and our prospects;
• developments relating to litigation or governmental investigations;
• changes or proposed changes in health care laws or regulations or enforcement of these laws and regulations, or announcements relating to these matters; or
• general economic and stock market conditions.

our operating and financial performance;

 

variances in our quarterly financial results compared to research analyst expectations;

the depth and liquidity of the market for our common stock;

future sales of common stock or the perception that sales could occur;

investor and analyst perception of our business and our prospects;

developments relating to litigation or governmental investigations;

changes or proposed changes in health care laws or regulations or enforcement of these laws and regulations, or announcements relating to these matters;

departure of key personnel;

actual or potential defaults in the restrictive covenants in our senior credit facility;

changes in the Medicare, Medicaid and private insurance reimbursement rates for home health and hospice;

announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; or

general economic and stock market conditions.

In addition, the stock market in general, and the Nasdaq NationalNASDAQ Global Select Market in particular, has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of health care provider companies. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance. In the past, securities class-action litigation has often been brought against companies following periods of volatility in the market price of their respective securities. We may become involved in this type of litigation in the future. Litigation of this type is often expensive to defend and may divert our management team’s attention as well as resources from the operation of our business.

12Sales of substantial amounts of our common stock, or the availability of those shares for future sale, could adversely affect our stock price and limit our ability to raise capital.


Sales of substantial amounts of our common stock, or the availability of those shares for future sale, could adversely affect our stock price and limit our ability to raise capital.

As of October 22, 2004 there were 15,237,601At September 30, 2006, 16,252,039 shares of our common stock were outstanding. Also on that date, up to 182,110There are 71,063 shares of our common stock that may be issued under our 1998 employee stock purchase plan. As of October 22, 2004, 382,689September 30, 2006, 866,189 shares of our common stock were issuable upon the exercise of stock options which were

outstanding but not exercisable, 485,129714,551 shares of our common stock were issuable upon the exercise of stock options which were outstanding and exercisable, and 92,50038,000 shares of our common stock were issuable upon the exercise of outstanding warrants. The market price of our common stock could decline as a result of sales of substantial amounts of our common stock in the public market after this offering or the perception that substantial sales could occur. These sales also may make it more difficult for us to sell common stock in the future to raise capital.

In the past we have had to defend class action lawsuits, and there is no assurance that we will not face similar suits in the future that could require us to pay substantial damage awards.

On August 23 and October 4, 2001, two class action lawsuits, which were later consolidated, were filed on behalf of all purchasers of our common stock between November 15, 2000 and June 13, 2001, against us and three of our executive officers, in the United States District Court for the Middle District of Louisiana. The suits sought damages based on the decline in our stock price following an announced restatement of earnings for the fourth quarter of 2000 and first quarter of 2001, alleging that our management knew or were reckless in not knowing the facts giving rise to the restatement. On June 28, 2006, we entered into a settlement agreement for $350,000 with the ten individual plaintiffs in these two lawsuits. On July 5, 2006, the United States District Court for the Middle District of Louisiana issued an order dismissing the consolidated lawsuits. We cannot assure you that we will not face similar suits in the future that could have a material adverse impact on our financial condition or results of operations.

We do not anticipate paying dividends on our common stock in the foreseeable future, and, as a result, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates.

We do not pay dividends on our common stock in the foreseeable future, and you should not expect to receive dividends on shares of our common stock.

We do not pay dividends and intend to retain all future earnings to finance our existing business and the continued growth and development of our business. In addition, we do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any future payment of cash dividends will depend uponbe at the discretion of our Board of Directors after taking into account various factors, including our financial condition, earnings, capital requirements, earnings,current and anticipated cash needs, outstanding indebtedness, plans for expansion, restrictions imposed by our lenders, if any, and other factors deemed relevant by our board of directors. Under the terms of our Senior Credit Facility,senior credit facility, we are restricted from paying cash dividends and making other cash distributions to our stockholders.

Our Board of Directors may utilize anti-takeover provisions or issue stock to discourage control contests.

Our Board of Directors may use anti-takeover provisions or issue stock to discourage control contests.

Our Certificate of Incorporation authorizes us to issue up to 30,000,00030.0 million shares of common stock and 5,000,0005.0 million shares of undesignated Preferred Stock.preferred stock. Our Board of Directors may cause us to issue additional stock to discourage an attempt to obtain control of the Company. For example, shares of stock could be sold to purchasers who might support the Board of Directors in a control contest or to dilute the voting or other rights of a person seeking to obtain control. In addition, the Board of Directors could cause us to issue Preferred Stock entitling holders to:

• vote separately on any proposed transaction;
• convert preferred stock into common stock;
• demand redemption at a specified price in connection with a change in control; or
• exercise other rights designed to impede a takeover.

vote separately on any proposed transaction;

 In addition, the

convert preferred stock into common stock;

demand redemption at a specified price in connection with a change in control; or

exercise other rights designed to impede a takeover.

The issuance of additional shares may, among other things, dilute the earnings and equity per share of our common stock and the voting rights of common stockholders.

We have implemented other anti-takeover provisions or provisions that could have an anti-takeover effect, includingincluding: (1) advance notice requirements for director nominations and stockholder proposals and (2) a stockholder rights plan, also known as a “poison pill.” These provisions, and others that the Board of Directors may adopt hereafter, may discourage offers to acquire us and may permit our Board of Directors to choose not to entertain offers to purchase us, even if such offers include a substantial premium to the market price of our stock. Therefore, our stockholders may be deprived of opportunities to profit from a sale of control.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus, including the documents that we incorporate by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Any statements about our expectations, beliefs, plans, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking.forward-looking These

13


statements are often, but not always, made through the use of words or phrases such as “anticipate,“anticipates,“estimate,“believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “projects,” “continuing,“guidance,“ongoing,“forecasts,“expects,“outlook,“management believes,“target,“we believe,“trends,“we intend”“should,” “could,” “would,” “will,” and similar words or phrases.

     Accordingly, theseThese statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus.

Because the Therisk factors referred to above, beginning on page 7 of this prospectus, as well as the riskother factors beginning on page 4 ofdiscussed in this prospectus, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf and you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

USE OF PROCEEDS

We estimate that we will receive net proceeds of approximately $122.3 million (based on the last reported sales price for our common stock on October 26, 2006) from the sale of 3,000,000 shares of our common stock in this offering, after deducting our estimated underwriting discounts and commissions and our estimated offering expenses. If the underwriters’ over-allotment option is exercised in full, we estimate that we will receive approximately $140.7 million. We plan to use approximately $43.1 million of the proceeds to pay down and extinguish the term loan portion of our senior secured credit facility with Wachovia Bank, N.A. that expires in June 2010. As of September 30, 2006, we owe approximately $43.1 million under the term loan, which bears interest at a rate of LIBOR plus 1.75% based upon our current leverage. We intend to use the remaining proceeds of this offering for general corporate purposes, including working capital and possible acquisitions.

PRICE RANGE OF COMMON STOCK

Our common stock is traded on the NASDAQ Global Select Market under the symbol “AMED.” The following table summarizes the high and low intra-day sales prices for our common stock for the periods indicated through October 26, 2006:

 

   High  Low

2006:

    

Fourth Quarter (through October 26, 2006)

  $44.69  $38.25

Third Quarter

  $42.62  $34.40

Second Quarter

  $39.81  $32.06

First Quarter

  $47.00  $30.46

2005:

    

Fourth Quarter

  $47.66  $32.85

Third Quarter

  $44.43  $35.44

Second Quarter

  $37.63  $28.10

First Quarter

  $34.59  $26.87

2004:

    

Fourth Quarter

  $36.80  $28.57

Third Quarter

  $33.06  $23.07

Second Quarter

  $33.57  $23.01

First Quarter

  $24.95  $13.47

On October 26, 2006, the last reported sale price of our common stock on the NASDAQ Global Select Market was $43.05 per share. As of October 26, 2006, there were approximately 673 stockholders of record of our common stock.

CAPITALIZATION

The selling shareholdersfollowing table sets forth our actual cash and cash equivalents and capitalization as of September 30, 2006 and as adjusted to give effect to the issuance of 3,000,000 shares of our common stock being offered hereby and the application of the estimated net proceeds of the offering (based on the last reported sales price for our common stock on October 26, 2006). You should read this table together with our consolidated financial statements and notes thereto incorporated by reference in this prospectus.

   As of September 30, 2006
       Actual      As
    Adjusted    
   

(Unaudited)

(In thousands, except per share
amounts)

Cash and cash equivalents

  $9,855  $89,073
        

Debt and capital lease obligations:

   

Long-term debt, including current portion

  $47,137  $4,012

Capital lease obligations, including current portion

   792   792
        

Total debt and capital lease obligations

   47,929   4,804
        

Stockholders’ equity:

   

Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued and outstanding

   —     —  

Common stock, $0.001 par value per share; 30,000,000 shares authorized, 16,256,922 (actual) and 19,256,922 (as adjusted) shares issued, and 16,252,039 (actual) and 19,252,039 (as adjusted) outstanding

   16   19

Additional paid-in capital

   158,342   280,682

Treasury stock at cost, 4,883 shares held at September 30, 2006 (actual and as adjusted)

   (52)  (52)

Retained earnings

   73,448   72,457
        

Total stockholders’ equity

   231,754   353,106
        

Total capitalization

  $279,683  $357,910
        

SELECTED FINANCIAL DATA

The following table presents our selected financial information, which you should read in conjunction with, and is qualified in its entirety by reference to, our historical consolidated financial statements, the notes to those financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the documents incorporated by reference in this prospectus. The selected financial information set forth below as of and for the years ended December 31, 2001, 2002, 2003, 2004 and 2005 has been derived from our audited consolidated financial statements. The selected financial information as of and for the nine-month periods ended September 30, 2005 and 2006 has been derived from unaudited financial statements, which include all adjustments consisting of normal recurring accruals that we consider necessary for a fair presentation of the financial position and the results of operations for these periods. Historical results are not necessarily indicative of future performance and partial year results are not necessarily indicative of full year results.

Selected Historical Statements of Operations

  Year ended December 31,  Nine-month periods
ended September 30,
 
  2001  2002  2003  2004  2005  2005  2006 
  (In thousands, except per share amounts and operational data) 

Net service revenue

 $110,174  $129,424  $142,473  $227,089  $381,558  $262,665  $397,138 

Cost of service revenue (excluding depreciation and amortization)

  49,046   58,244   58,554   96,078   163,032   110,517   172,311 

General and administrative and other expenses

  53,665   64,700   69,581   97,633   168,424   113,886   178,253 
                            

Operating income

  7,463   6,480   14,338   33,378   50,102   38,262   46,574 

Other (expense) income, net

  (2,167)  (9,013)  (711)  (19)  (1,362)  (638)  (2,626)

Income tax (expense) benefit

  (220)  3,285   (5,220)  (12,855)  (18,638)  (14,824)  (17,052)
                            

Income from continuing operations

  5,076   752   8,407   20,504   30,102   22,800   26,896 

Discontinued operations, net (1)

  310   —     —     —     —     —     —   
                            

Net income

 $5,386  $752  $8,407  $20,504  $30,102  $22,800  $26,896 
                            

Weighted average common shares used in computing basic net income per share

  5,941   8,499   9,808   13,057   15,606   15,531   15,981 
                            

Weighted average common shares used in computing diluted net income per share

  7,980   9,007   10,074   13,543   15,970   15,887   16,334 
                            

Basic Earnings Per Share

          

Net income before discontinued operations

 $0.85  $0.09  $0.86  $1.57  $1.93  $1.46  $1.68 

Discontinued operations, net(1)

  0.05   —     —     —     —     —     —   
                            

Net income

 $0.90  $0.09  $0.86  $1.57  $1.93  $1.46  $1.68 
                            

Diluted Earnings Per Share

          

Net income before discontinued operations

 $0.64  $0.08  $0.83  $1.51  $1.88  $1.44  $1.65 

Discontinued operations, net(1)

  0.04   —     —     —     —     —     —   
                            

Net income

 $0.68  $0.08  $0.83  $1.51  $1.88  $1.44  $1.65 
                            

Summary Balance Sheet Data

          

Cash and cash equivalents

 $3,515  $4,861  $29,229  $57,679  $17,231  $20,750  $9,855 

Patient accounts receivable, net of allowance for doubtful accounts

  23,682   14,102   15,185   24,478   68,139   59,212   81,109 

Total current assets

  28,263   23,223   49,596   118,890   92,340   92,030   97,010 

Goodwill and other intangible assets, net

  22,301   25,768   35,448   66,984   208,449   208,483   223,174 

Total assets

  60,854   58,959   92,473   199,733   339,997   330,605   370,188 

Total current liabilities

  46,623   31,755   34,018   41,976   99,955   87,115   92,124 

Long-term obligations, less current portions

  8,799   5,516   3,087   1,709   43,063   55,208   36,513 

Total stockholders’ equity

  3,309   16,963   51,399   148,473   192,599   182,446   231,754 

  Year ended December 31,  Nine-month periods
ended September 30,
  2001 2002 2003 2004 2005  2005 2006
  (In thousands, except per share amounts and operational data)

Operational Data

          
 

General

           

States

 9 10 11 13 16   15 17

Locations

 56 63 79 110 221  212 264
 

Home Health

           

Locations

 56 63 79 108 208  199 249

Medicare admissions(2)

 36,634 42,979 43,008 51,400 99,642  56,972 78,491

Completed episodes(3)

 40,973 43,957 51,078 75,510 120,987  84,665 126,214

Medicare visits(4)

 854,321 885,302 913,726 1,349,936 2,089,524  1,477,597 2,233,952

Total visits(5)

 1,010,090 1,068,983 1,052,391 1,514,000 2,364,887  1,625,152 2,533,298

Medicare visits per episode(6)

 20.3 19.7 17.0 16.8 16.3  16.1 16.9
 

Hospice

           

Locations

 n/a n/a n/a 2 13  13 13

Average Daily Census(7)

 n/a n/a n/a 98 461  348 807


(1)For the year ended December 31, 2001, we recognized a gain, net of income taxes, of $0.3 million from discontinued operations that consisted of a $0.9 million gain on the sale of an outpatient surgery center that was partially offset by $0.6 million in operating losses related to this outpatient surgery center and an infusion therapy division that was divested in 2000. Our basic and diluted net income per share, inclusive of discontinued operations, was $0.90 and $0.68, respectively, for the year ended December 31, 2001.
(2)Medicare admissions are defined as the number of patients admitted to our agencies during the period for the first time where payment for services by Medicare is anticipated.
(3)Completed episodes are the number of Medicare patients that have either reached the end of their 60-day eligibility period or terminated their service before the 60-day eligibility period has lapsed.
(4)Medicare visits are the number of times during the period that our registered nurses, licensed practical nurses, physical therapists, speech therapists, occupational therapists, medical social workers and home health aides visit Medicare eligible patients in their residence.
(5)Total visits are the number of times during the period that our registered nurses, licensed practical nurses, physical therapists, speech therapists, occupational therapists, medical social workers and home health aides visit all eligible patients in their residence.
(6)Medicare visits per episode is calculated by dividing the total number of Medicare visits on completed episodes in the period by the total number of Medicare episodes completed in the period.
(7)Average Daily Census is calculated by dividing the total number of days that hospice care is provided by the total number of days in the period.

OUR BUSINESS

We are one of the nation’s largest providers of home health services to Medicare beneficiaries. We deliver a wide range of health-related services in the home to individuals who may be recovering from surgery, have a chronic disability or terminal illness, or need assistance with the essential activities of daily living. The services we provide include skilled nursing and home health aide services; physical, occupational and speech therapy; and medically oriented social work to eligible individuals who require ongoing care that cannot be provided effectively by family and friends. In addition, we have developed and offer clinically focused programs for high-cost chronic conditions and disease categories, such as diabetes, coronary artery disease, congestive heart failure, complex wound care, chronic obstructive pulmonary disease, geriatric surgical recovery, behavioral health, stroke recovery and various rehabilitative programs with the focus on improving the functional ability of our geriatric population. As of September 30, 2006, we operated 249 Medicare-certified home health agencies in 17 states primarily in the Southern and Southeastern United States. We believe our services are attractive to payors and physicians because we combine clinical quality with cost-effectiveness and are accessible 24 hours a day, seven days a week. Our objective is to be the leading provider of high-quality, low-cost home health services in each market in which we operate.

In addition to home health agencies, we also operated 13 Medicare-certified hospice agencies as of September 30, 2006. Our hospice agencies provide palliative care and comfort to terminally ill patients of all age groups and their families. We provide hospice services to each patient using an interdisciplinary care team comprised of a physician, a patient care manager, registered nurses, certified home health aides, social workers, a chaplain, a homemaker and specially trained volunteers to assess the clinical, psychosocial and spiritual needs of the patients and their families and manage that care accordingly. We acquired our first hospice operation in April 2004 and currently operate hospice agencies in four states. Although we expect Medicare home health to remain our primary focus over the near and intermediate term, we believe home health and hospice are complementary services and plan to expand our hospice network through acquisitions and start-up activities in new and existing markets.

We have generated significant increases in revenue and earnings by focusing on internal growth and completing acquisitions on a selective basis. For the nine-month period ended September 30, 2006, we reported net service revenue of $397.1 million, net income of $26.9 million and earnings per diluted share of $1.65, compared to net service revenue of $262.7 million, net income of $22.8 million and earnings per diluted share of $1.44 for the same period in 2005. For the year ended December 31, 2005, we reported net service revenue of $381.6 million, net income of $30.1 million and earnings per diluted share of $1.88, compared to net service revenue of $227.1 million, net income of $20.5 million and earnings per diluted share of $1.51 for 2004. Our internal growth rate of Medicare patient admissions for the nine-month period ended September 30, 2006 was approximately 13%.

Our Market and Opportunity

Home health expenditures in the United States were approximately $43.2 billion in 2004, according to National Health Expenditure data. The home health industry is comprised of facility-based and hospital-based agencies owned by publicly traded and privately held companies, visiting nurse associations and nurse registries. The bulk of the home health industry is made up of thousands of relatively small local or regional providers, most of which are not well capitalized. The industry remains highly fragmented and we believe it represents an attractive consolidation opportunity. Although a small number of large, for-profit companies exist, none has a dominant market presence. Medicare is the largest single home health payor, accounting for $16.4 billion, or 38%, of total home health spending. These expenditures are expected to increase substantially over the coming years, growing to $27.3 billion by 2010 according to CMS, the U.S. federal agency that administers Medicare. There are approximately 8,100 Medicare-certified home health agencies currently in operation.

Among other factors, we believe that home health industry growth is being driven by primarily:

Patient Preference. We believe that when possible, patients prefer the convenience and comfort of receiving treatment in their homes. Studies have shown that patients actually respond to treatment more effectively if they are comfortable in the environment in which they receive care. Continuing advances in pharmaceutical development and medical technology are enabling a growing number of patients to receive treatment in lower intensity settings and, in many cases, to self-administer medications or to do so under the supervision of a qualified caregiver in their home.

Payor Incentives. Continuing economic pressures within the health care industry have led both public and private sector payors to implement strategies that create incentives for providers to deliver care more efficiently and in the most appropriate setting. This trend, combined with the substantial cost savings that can be realized through at-home treatment, has led to increased utilization of home health over the past ten years.

Demographic Changes. The population of older Americans is growing at an increasing rate and life expectancies in the United States are increasing. The U.S. Census Bureau estimates the population aged 65 and older will grow 49% from its 2005 level of 36.7 million (12% of the total population) to 54.6 million (16% of the total population) by 2020. The U.S. Census Bureau projects an increase in the over-85 population from 5.1 million in 2005 to 7.3 million in 2020. The growth in the elderly population and continued aging of these individuals is expected to continue to drive demand for home health services.

Increases in Chronic Disease Prevalence. Prolonged life expectancy often results in a higher incidence of chronic conditions and disease. For example, the use of antibiotics has markedly reduced death due to infectious causes, which in turn has led to an increase in the prevalence of chronic, non-infectious conditions such as coronary artery disease and diabetes. Other examples include success with preventive measures, such as the treatment of vascular disease, and ability to intervene effectively during acute events such as myocardial infarctions. These interventions have decreased the incidence of death resulting from acute episodes, which has led to the increased prevalence of chronic conditions associated with long-term disease.

We believe that many of the factors listed above are also driving growth in the hospice market. According to MedPAC, an independent federal body that advises Congress on Medicare issues, between 2000 and 2004 the number of Medicare beneficiaries utilizing hospice increased 49% and the share of Medicare decedents in hospice increased from 22% to 31%. Both medical professionals and the general public are becoming more educated regarding end-of-life care and are choosing hospice care over other alternative settings because of its focus on providing comfort and counseling to patients and their families. In addition, hospice has proven a much more cost-effective setting for terminal patients than hospitals and skilled nursing facilities. The largest payor in the hospice industry is Medicare, with 2006 estimated expenditures of $9.8 billion. According to data from the National Hospice and Palliative Care Organization, there are 3,650 hospice programs in the United States, with 2,872 Medicare-certified hospices in 2005 according to CMS. Approximately 57% of Medicare-certified agencies are freestanding and approximately 46% operate as for-profit entities. The hospice industry is similar to home health in that it is a highly fragmented market and has a relatively small number of companies of significant size. We believe it represents an attractive growth opportunity.

Our Competitive Strengths

We believe the following competitive strengths contribute to our strong market share in each of the markets in which we operate and will enable us to grow our business successfully and increase profitability:

Primary Emphasis on Medicare Home Health. Our primary focus is on providing home health services to Medicare beneficiaries, and we derive approximately 93% of our revenues from Medicare. We recruit and retain caregivers who are attentive to, and familiar with, the specialized needs of the elderly population. We deploy specialized nursing programs that focus on the high-cost diseases and conditions prevalent in the 65 and older demographic segment. We believe these efforts position us competitively

to take advantage of recent CMS initiatives designed to deliver disease management services to seniors with high-cost or chronic conditions. Additionally, there are other benefits to our Medicare focus. For example, our billing and collections are simplified when compared to other health care providers because of our emphasis on the Medicare reimbursement process.

Proven Operating Model. Our home health model balances the benefits of promoting local agency responsibility and accountability for quality of care and operating results with the efficiencies gained from centralizing key administrative functions. Our home health agencies carry locally recognized branding and tailor their respective marketing efforts to address the specific needs of the communities, referral sources and Medicare beneficiaries they serve. Agency management teams work to establish strong relationships in their communities and with referral sources. To support our local management teams, we have centralized accounting, regulatory, marketing, payroll, intake, billing, collections, risk management and quality assurance functions. We have deployed standardized clinical programs and believe this initiative has improved quality of care and risk management through the implementation of best practices, which helps us actively manage clinical compliance across all of our home health agencies. In addition, our operations typically have access to more resources and financial management expertise than locally owned competitors.

Integrated Technology and Management Systems. We have invested in information technology and real-time management and monitoring capabilities that allow us to standardize the care delivered across our system and monitor the status of the patients we treat. Under the PPS, the majority of our revenue is pre-determined at admission based on a range of clinical criteria and the local wage index. Monitoring and controlling the time and costs associated with the care we provide is essential to maintaining our operating margins and profitability. Our real-time monitoring capability has contributed significantly to our ability to manage admissions growth. We believe that most competing providers lack the resources to implement similar systems. We believe our investment in technology enhances our ability to provide the quality and outcomes data required by CMS. In addition, we are deploying PoC laptop devices to our clinical staff to enhance the accuracy of patient information and further improve our compliance controls.

Demonstrated Ability to Identify and Integrate Acquisitions. We believe that we have a demonstrated track record of identifying, evaluating, acquiring and integrating companies in the home health and hospice markets. We attribute part of our success in integrating these agencies to our rigorous due diligence process prior to completing acquisitions. We employ a disciplined strategy based on defined acquisition criteria, including high service quality, a strong referral base, a compatible payor mix and opportunities for cost savings and significant internal growth. We have also developed a comprehensive post-acquisition strategic plan to facilitate the integration of acquired agencies that includes improving operating margins, recruiting qualified nurses and account executives, expanding relationships with local physicians and discharge planners, expanding the breadth and quality of services and transitioning acquired agencies onto our information technology platform.

Significant Cash Flow from Operations and Relatively Low Capital Expenditures. We generate significant cash flow from operations due to the profitable operation of our business, our relatively low capital expenditure requirements and active management of our working capital. Our capital expenditure requirements are low because our services do not require the purchase and replacement of expensive medical equipment. Historically, our maintenance capital expenditures have amounted to less than 2% of our revenue.

Patient-Oriented Company Culture. We believe that we have developed a strong patient-oriented culture that emphasizes quality of care. We communicate frequently with our employees and provide education opportunities along with competitive benefits. We reinforce our culture not only through an orientation program for new employees, but also an ongoing emphasis on the importance of high-quality patient care and the need to remain productive while keeping our costs low. We keep our employees informed about corporate events and solicit feedback regarding ways to improve our services and their working environment. We also provide extensive sales and compliance training for our employees as part of their ongoing education.

Our Strategy

Our objective is to be the leading provider of high-quality, low-cost home health services in each of the markets in which we operate. To achieve this objective, we intend to:

Focus on Medicare-Eligible Patients. The rapidly growing population of Medicare beneficiaries represents a compelling market for home health and hospice providers. Implementation of the PPS in the home health industry has created a relatively stable reimbursement environment favoring companies such as ours that focus on providing high-quality, low-cost home health and hospice services.

Emphasize Internal Growth. We emphasize the internal growth of Medicare patient admissions, which increased approximately 13% for the nine-month period ended September 30, 2006. We drive internal growth by: (1) maintaining an emphasis on high-quality care; (2) expanding and enhancing referral relationships in our local and regional markets; (3) continuing to educate referral sources regarding our specialized programs that focus on high-cost chronic conditions and diseases; (4) developing strategic partnerships with large hospital systems to increase admission volume; (5) expanding our service coverage areas by developing new locations; and (6) attracting and retaining highly skilled and experienced employees through communication, education, empowerment and competitive benefits.

Grow Through Strategic Acquisitions. We believe our focus on Medicare beneficiaries and our size and national reputation provides us with a strategic advantage when assessing potential acquisitions. The majority of the home health agencies and hospice programs are owned either by hospitals or independent operators. We employ a disciplined acquisition strategy based on defined acquisition criteria, including high-quality service, a strong referral base and compatible payor mix. Between October 1, 2005 and September 30, 2006, we completed seven acquisitions that included 14 home health agencies and one therapy staffing agency. In the future, we plan to evaluate and pursue home health and hospice acquisitions in our target markets as well as other acquisitions that complement our business strategy. Attractive acquisitions offer prospects for cost efficiencies and internal growth within our existing markets, opportunities to expand service coverage into contiguous geographic markets and the ability to achieve economies of scale associated with large, concentrated patient volumes.

Leverage our Cost-Efficient Operating Structure. We believe the size and scale of our infrastructure and operating systems offer the opportunity to achieve operating leverage at both the agency and corporate level. At the agency level, we have developed a cost-efficient operating model that focuses on productivity, per episode utilization and clinical outcomes, among other measures. To manage our diverse network of locations, we use a proprietary information system that reduces administrative and operating costs through the integration of clinical, financial and operating functions. We manage all patient care and utilization on a real-time basis from both a clinical and financial perspective through a system of exception reporting. We believe our operating structure and information systems have facilitated our ability to generate and manage strong internal growth in admissions. At the corporate level, our geographic focus and investment in infrastructure and information systems enable us to leverage regional and senior management resources and add new locations without proportionate increases in corporate expense.

Continue to Develop and Deploy Specialized Programs for Chronic Diseases and Conditions. We have developed specialized services that focus on high-cost diseases and chronic conditions and have successfully launched programs for diabetes, coronary artery disease, congestive heart failure, orthopedics, wound care, geriatric surgical recovery and behavioral health, among others. Our specialty programs represent an attractive growth opportunity because they combine clinical quality and 24-hour access, seven days a week, which is appealing to patients and physicians, with cost-effective delivery of high-quality nursing care to patients who have high-cost or chronic conditions. We believe these efforts position us to participate in CMS disease management initiatives to address the needs of chronic Medicare populations either directly or through partnerships, including the CMS Medicare Health Support Program and Medicare Advantage Special Needs Plans. Medicare Health Support is a CMS initiative focused on introducing disease management services and protocols to Medicare-eligible

individuals. Special Needs Plans are arrangements under which Medicare Advantage managed care entities are allowed exemptions to target and enroll specific populations meeting certain eligibility criteria, one such category being seniors with high-cost or chronic conditions requiring specialized care.

Our Home Health Agencies

As of September 30, 2006, we operated 249 Medicare-certified home health agencies in 17 states primarily in the Southern and Southeastern United States. A director and team of administrative professionals lead each agency and have primary responsibility for the day-to-day operations. Our agencies are staffed with experienced clinical home health professionals who provide a wide range of patient care services. Our home health operations are organized into six regions, each of which provides clinical, operational and sales support. To support our local agencies, we have centralized accounting, regulatory, marketing, payroll, intake, billing, collections, risk management and quality assurance function. All of our agencies are accredited or in the process of seeking accreditation by the Joint Commission on Accreditation of Health Care Organizations, or JCAHO.

We deliver health-related services in the home to eligible individuals who require ongoing skilled nursing and associated care. Our patients are typically recovering, disabled, or chronically or terminally ill persons in need of medical, nursing, social, or therapeutic treatment and assistance with the essential activities of daily living.

We provide a wide variety of home health services including:

registered nursing services such as infusion therapy, skilled monitoring, assessments and patient education;

licensed practical nursing services, including performance of technical procedures, administration of medications and changing of surgical and medical dressings;

physical and occupational therapy to strengthen muscles, restore range of motion and help patients perform the activities of daily living;

speech pathology and therapy to restore communication and oral skills;

social work to help families address the problems associated with acute and chronic illnesses;

home health aid services to perform personal care such as bathing or assistance in walking; and

private duty services such as continuous hourly nursing care and sitter services.

Our Hospice Agencies

As of September 30, 2006, we operated 13 Medicare-certified hospice agencies in four states in the Southern and Southeastern United States. Our hospice agencies provide palliative care and comfort to terminally ill patients of all age groups and their families. We provide hospice services to each patient using an interdisciplinary care team comprised of a physician, a patient care manager, registered nurses, certified home health aides, social workers, a chaplain, a homemaker and specially trained volunteers. This team develops a plan of care and delivers, monitors and coordinates that plan with the goal of providing appropriate care for the patient and their family.

Sales and Marketing

Our sales and marketing efforts are directed primarily at physicians and hospital discharge planners, who are responsible for referring patients to home health and hospice agencies. Marketing activities are coordinated locally by the individual agency and are supplemented by regional sales management and dedicated corporate personnel. These activities generally emphasize the benefits offered by our home health and hospice agencies as compared to other providers in the market, such as our focus on addressing the unique needs of Medicare

beneficiaries; our specialized programs and focus on specific disease and chronic conditions such as diabetes, coronary artery disease and congestive heart failure, orthopedics and wound care; our ability to schedule and coordinate patient assessment and admission, when appropriate, with little to no inconvenience to the patient; and our size and scale. Although the agency director is the primary point of contact, physicians who utilize our agencies are important sources of recommendations to other physicians regarding the benefits of using our services. Each agency director develops a target list of physicians and discharge planners, and we continually review these marketing lists and the progress in contacting and successfully attracting additional local referral sources.

Technology

The development and enhancement of our information technology systems continues to be a key component of our strategy. We have invested significant time and resources enhancing the capabilities of our technology platform in recent years to provide us with a potential strategic advantage over competitors. We have standardized and have automated most of the critical components of the operational, clinical, financial and compliance-related processes at our locations. We have implemented a wide area network that connects all of our agencies to a central corporate system. This infrastructure allows us to introduce standardized programs to all of our locations in a highly efficient manner and to monitor and manage critical clinical and financial aspects of patient care and utilization on a real-time basis.

Through our PoC system, we are streamlining the process by which our visiting home health nurses accumulate information while in the residences of our patients. This initiative includes providing our visiting staff with laptop computers that allow them to document all relevant clinical information, and the patient’s medical situation. This electronic memorialization of the visit will significantly reduce paper processing and duplicative work while contributing to a higher degree of accuracy and expediting the billing process. We anticipate that approximately 100 agencies will be on-line by the end of 2006 with the rollout complete in mid-2007.

We have developed and utilize a proprietary Windows-based clinical software system to collect assessment data, schedule and log patient visits, generate medical orders and monitor treatments and outcomes in accordance with established medical standards. We have enhanced this software extensively utilizing employed development staff. Our billing and collection software has been designed to ease the flow of information to our accounting, payroll, human resources and employee benefit software and is used throughout our operations. We intend to continue our efforts to improve the clinical, financial and compliance applications of our information technology systems.

Until such time as our PoC system is fully operational, we will continue to use document recognition software developed by Healthcare Quality Systems, or HQS, that enables our agencies to scan assessment forms into our clinical system, which reduces the amount of time spent on data entry, standardizes the data collection process and significantly reduces data entry errors. Each assessment from our agencies is sent electronically to HQS, which uses a proprietary software system of smart edits to flag inconsistencies and errors in order to enable our nurses to make necessary corrections. Assessments are then provided to us electronically by HQS and automatically uploaded to our clinical and operational system. Once the data is integrated into our clinical system, it is used in all of our processing functions.

Compliance and Quality Improvement

We are a health care services business and the quality and reputation of our personnel and operations are critical to our success. We develop, implement and maintain comprehensive compliance and quality improvement programs as a component of the centralized corporate services provided to our home health and hospice agencies. Our compliance program includes a code of ethical conduct for our employees and affiliates and a process for reporting regulatory or ethical concerns to our Chief Compliance Officer, including a toll-free

telephone hotline. We have a Compliance Committee, which is chaired by the Chief Compliance Officer and is comprised of our Chief Executive Officer, Chief Operating Officer, the Senior Vice President of Clinical Operations and the Senior Vice President of Human Resources. This Corporate Compliance Committee reviews and recommends appropriate courses of action for handling compliance issues.

The effectiveness of our compliance program is directly related to the legal and ethical training that we provide to our employees. Compliance education for new hires is initiated immediately upon employment with corporate video and on-line training. This education is reinforced through regional corporate orientation during the quarter following an employee’s hire date when the Chief Compliance Officer conducts a comprehensive compliance training seminar along with both the Chief Executive Officer and the Chief Operating Officer. Moreover, we conduct specific compliance training targeting employees in specific areas of the company. In particular, all employees in our corporate offices and in the field that are involved in the billing process are required to participate in an annual billing compliance seminar that is led by the Chief Compliance Officer and is conducted at various, regional sites each year. Additionally, billing staff are also required to complete an annual Billing Compliance Training and Certification course, which includes a video and workbook, as well as a post-test requiring 100% accuracy in order to maintain employment. All newly hired sales employees receive additional training from the Chief Compliance Officer in conjunction with business development orientation. In addition, all of our existing employees are required to receive continuing compliance education and training each year. We conduct periodic compliance surveys of all of our agencies, which include audits of patient charts and documentation to ensure compliance with Medicare regulations. Audit findings and corresponding action plans are routed to both the Chief Compliance Officer and the Senior Vice President of Operations.

An internal auditor provides a second compliance review function to ensure the legality and propriety of our activities and to report any finding of potential fraud or abuse that is uncovered in the course of the audits. Our quality improvement reinforces and complements our compliance program by improving the quality of field staff education, performing competency assessments, conducting separate agency quality audits and visiting patients to ensure compliance guidelines are met.

Our proprietary disease management programs and clinical protocols ensure that consistent, quality care is delivered across the organization and are a critical component of improving patient outcomes. We utilize the federal government’s Outcome Based Quality Improvement Scores and the Home Health Outcome Compare Scores to measure the quality of our services and to monitor the effectiveness of our quality improvement initiatives. We also use outside consultants to provide independent data and analysis to support our quality improvement initiatives. One such consulting firm benchmarks clinical activities and outcomes for all of our agencies against state, regional and national averages and provides individual agency rankings across a host of categories that enable us to identify trends in the delivery of care. Another independent firm provides computer software systems that analyze our billings to ensure that assessment forms are completed properly and that internally mandated assessment methodologies and coding procedures are followed. This software system identifies any assessment or billing trends that are exceptions to corporate guidelines.

Our compliance and quality improvement programs are intended to ensure that our employees are well trained and capable of delivering high-quality service. We incorporate compliance staffing and oversight into our growth plans and believe our consistent focus on compliance and quality improvement provides us with a competitive advantage in the market.

Reimbursement

Patient Eligibility and Payors

Medicare is a federally funded and administered health insurance program, primarily for individuals entitled to social security benefits who are 65 or older or who are disabled. The Medicare home health benefit is available to patients who need care following discharge from a hospital, as well as patients who suffer from chronic conditions that require ongoing but intermittent care. The services received need not be rehabilitative or of a

finite duration; however, patients who require full-time skilled nursing for an extended period of time generally do not qualify for Medicare home health benefits. As a condition of participation under Medicare, beneficiaries must: (1) be homebound in that they are unable to leave their home without considerable effort; (2) require intermittent skilled nursing, physical therapy or speech therapy services that are covered by Medicare; and (3) receive treatment under a plan of care that is established and periodically reviewed by a physician. Qualifying patients may also receive reimbursement for occupational therapy, medical social services and home health aide services if these additional services are part of a plan of care prescribed by a physician. There is no limit to the number of episodes a beneficiary may receive as long as they remain eligible. The Medicare hospice benefit is available to Medicare-eligible patients who have advanced illnesses and are certified by a physician as having a life expectancy of six months or less. Revenue from our home health and hospice services is derived from Medicare, Medicaid, private insurance carriers, managed care organizations, individuals and other health insurance programs. Medicaid, a program jointly funded by federal, state and local governmental health care programs, is designed to pay for certain health care and medical services provided to low income individuals without regard to age. We also have several contracts for negotiated fees with insurers and managed care organizations.

Home Health Reimbursement

Under the PPS, we receive a standard prospective Medicare payment for delivering care over a base 60-day period, or episode of care. Most patients complete treatment within one payment episode, though multiple continuous episodes are allowed. The base payment, which is established through federal legislation, is a flat rate that is adjusted upward or downward to account for differences in the expected resource needs of individual patients as indicated by clinical severity, functional severity and service utilization. The adjustment is derived from each patient’s categorization into one of 80 payment groups, known as home health resource groups, and the cost of care for patients in each group relative to the average patient. Our payment is also adjusted for differences in local prices using the hospital wage index.

We bill and are reimbursed for services in two stages: (1) an initial claim when the episode commences and (2) a final claim when it is completed. We receive 60% of the estimated payment for a patient’s initial episode upon admission after the initial assessment is completed and billed and the remaining 40% upon completion of the episode and after all final treatment orders are signed by the physician. In the event of subsequent episodes, reimbursement is paid 50% up-front and 50% upon completion of the episode. Final payments may reflect one of five retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (1) an outlier payment if the patient’s care was unusually costly; (2) a low utilization adjustment if the number of visits was fewer than five; (3) a partial payment if the patient transferred to another provider before completing the episode; (4) a change-in-condition adjustment if the patient’s medical status changed significantly, resulting in the need for more or less care; or (5) a payment adjustment based upon the level of therapy services required. We submit all Medicare claims through two fiscal intermediaries for the federal government.

The current base payment for a Medicare home health episode is $2,264. Since implementation of the PPS in October 2000, the base episode payment has varied due to the impact of annual market basket based increases and Medicare-related legislation. CMS recently proposed a 3.1% increase to Medicare home health rates for 2007 despite MedPAC recommending to Congress that the 2007 increase be eliminated. MedPAC based its recommendation on factors that it believes indicate improving access to home health care, favorable economics for providers, and improving quality of care. Under the current CMS proposal, 2.0% of the proposed 3.1% increase is contingent upon home health providers reporting ten clinical quality measures through Outcome and Assessment Information Set, or OASIS. CMS has collected and published OASIS data since 2003 and has indicated that it is considering using this data to reward providers with superior outcomes. CMS has further indicated that any such change to reimbursement would be budget-neutral. Under such a system, a modest portion of total payments would be redistributed, or increased slightly for providers with above average outcomes scores and decreased slightly for providers with scores below average in their respective service areas or regions. We collect and submit OASIS data for all of our Medicare episodes and believe we provide high-quality services.

Hospice Reimbursement

Hospice services became a covered benefit under Medicare in 1983. Medicare distinguishes between four levels of hospice care: (1) routine home care; (2) general inpatient care; (3) continuous home care; and (4) respite care. Medicare reimburses for services based on a standard prospective rate for delivering care over a base 90-day or 60-day period. More than 95% of hospice care is classified as routine home care, which had a per diem reimbursement rate of $126 for the period November 1, 2005 to October 31, 2006. For the period November 1, 2006 to October 31, 2007, CMS approved a 3.4% rate increase for hospice services.

Government Regulation

Our home health and hospice businesses are highly regulated by federal, state and local authorities. Regulations and policies frequently change and we monitor changes through trade and governmental publications and associations. We also meet regularly with a group of financial, legal and regulatory consultants to discuss emerging issues that may affect our business. Our home health and hospice subsidiaries are certified by CMS and are therefore eligible to receive reimbursement for services through the Medicare system.

Our agencies also are subject to federal, state and local laws dealing with issues such as occupational safety, employment, medical leave, insurance, civil rights, discrimination, building codes and other environmental issues. Federal, state and local governments are expanding the regulatory requirements on businesses. The imposition of these regulatory requirements may have the effect of increasing our operating costs and reducing the profitability of our operations.

Certificates of Need and Permits of Approval

Home health and hospice agencies have licenses granted by the health authorities of their respective states. Additionally, state health authorities in 18 states require a certificate of need, or CON (or, as it is referred to in Arkansas, a permit of approval, or POA) in order to establish and operate a home health agency and twelve states require a CON to operate a hospice agency.

We have home health agencies in the following CON states: Alabama, Arkansas (POA), Georgia, Kentucky, Maryland, Mississippi, North Carolina, South Carolina, Tennessee and West Virginia. Florida, Indiana, Louisiana, Ohio, Oklahoma, Texas and Virginia currently do not have such requirements; however, Louisiana remains subject to a legislative moratorium on the award of new home health licenses.

We have hospice locations in only one CON state, Tennessee. Alabama, Louisiana and Virginia do not have such requirements.

In every state where required, our locations possess a license and/or CON or POA issued by the state health authority that determines the local service areas for the home health or hospice agency. States with CON and POA laws place limits on the (1) construction and acquisition of health care facilities and operations and (2) expansion of existing facilities and services. In these states, approvals are required for capital expenditures exceeding amounts above the stated thresholds.

State CON and POA laws generally provide that, prior to the addition of new capacity, the construction of new facilities or the introduction of new services, a designated state health planning agency must determine that a need exists for those beds, facilities or services. The process is intended to promote comprehensive health care planning, assist in providing high-quality health care at the lowest possible cost and avoid unnecessary duplication by ensuring that only those health care facilities and operations that are needed will be built and opened.

Medicare Participation

Approximately 93% of our revenue during 2005 and for the nine-month period ended September 30, 2006 was received from Medicare and we expect to continue to receive the majority of our revenues from serving Medicare beneficiaries. To participate in the Medicare program and receive Medicare payments, our agencies must comply with regulations promulgated by the Department of Health and Human Services. Among other things, these regulations, known as “conditions of participation,” relate to the type of facility, its personnel and its standards of medical care, as well as its compliance with state and local laws and regulations.

Federal and State Anti-Kickback Laws

As a provider under the Medicare and Medicaid systems, we are subject to the various anti-fraud and abuse laws, including the federal health care programs’ anti-kickback statute and, where applicable, their state law counterparts. These laws prohibit any offer, payment, solicitation or receipt of any form of remuneration to induce or reward the referral of business reimbursable under a federal health care program or in return for the purchase, lease, order, arranging for, or recommendation of items or services covered by any federal health care programs or any health care plans or programs that are funded by the United States government (other than certain federal employee health insurance benefits) and certain state health care programs that receive federal funds under various programs, such as Medicaid. A related law forbids the offer or transfer of any item or service for less than fair market value, or certain waivers of co-payment obligations, to a beneficiary of Medicare or a state health care program that is likely to influence the beneficiary’s selection of health care providers. Violations of the anti-fraud and abuse laws can result in the imposition of substantial civil and criminal penalties and, potentially, exclusion from furnishing services under any federal health care programs. In addition, the states in which we operate generally have laws that prohibit certain direct or indirect payments or fee-splitting arrangements between health care providers where they are designed to obtain the referral of patients from a particular provider.

Stark Laws

Congress adopted legislation in 1989, known as the “Stark law,” that generally prohibits a physician from ordering clinical laboratory services for a Medicare beneficiary where the entity providing that service has a financial relationship (including direct or indirect ownership or compensation relationships) with the physician (or a member of his/her immediate family), and prohibits such entity from billing for or receiving reimbursement for such services, unless a specified exception is available. Additional legislation, known as “Stark II,” became effective January 1, 1993. That legislation extends the Stark law prohibitions to services under state Medicaid programs and beyond clinical laboratory services to all “designated health services,” including, but not limited to, home health services, durable medical equipment and supplies, parenteral and enteral nutrients, equipment and supplies. Violations of the Stark laws may also trigger civil monetary penalties and program exclusion. Pursuant to Stark II, physicians who are compensated by us will be prohibited from seeking reimbursement for designated health services rendered to such patients unless an exception applies. One such exception we use is a safe harbor that allows us to contract with certain physicians at fair market value to provide consulting work to our agencies. Another such exception that we make use of is a safe harbor allowing us to lease office space from certain physicians at fair market value for legitimate and commercially reasonable business purposes. Several of the states in which we conduct business have also enacted statutes similar in scope and purpose to the federal fraud and abuse laws and the Stark laws.

HIPAA

HIPAA was enacted August 21, 1996 to assure health insurance portability, reduce health care fraud and abuse, guarantee security and privacy of health information and enforce standards for health information. Organizations were required to be in compliance with certain HIPAA provisions relating to security and privacy beginning April 14, 2003. Organizations are subject to significant fines and penalties if found not to be compliant with the provisions outlined in the regulations. Regulations issued pursuant to HIPAA impose ongoing obligations relative to training, monitoring and enforcement and management has implemented processes and procedures to ensure continued compliance with these regulations.

Pursuant to the provisions of HIPAA, covered health care providers are required to be compliant with the regulation’s electronic Health Care Transactions and Code Sets Requirements. In conformity with these federal regulations, we are now capable of transmitting data in the new standard format.

Insurance

We are obligated for certain costs under various insurance programs, including employee health and welfare, workers’ compensation and professional liability, and while we maintain various insurance programs to cover these risks, we are self-insured for a substantial portion of our potential claims. We recognize our

obligations associated with these costs in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported, up to specified deductible limits. These costs have generally been estimated based on independent actuarial analysis and historical data of our claims experience. Such estimates, and the resulting reserves, are reviewed and updated on a quarterly basis.

We are self-insured for health claims up to contractual policy limits. Claims in excess of $150,000 per incident are insured by third party reinsurers. As of September 30, 2006, we have made deposits with our carrier net of claims already paid of $0.8 million and our accrual for both outstanding and incurred but not reported claims was $2.6 million based upon independent actuarial estimates.

We are self-insured for workers compensation claims up to $250,000. Claims in excess of $250,000 per incident are insured by third party reinsurers. We have elected to either fund our carrier with a letter of credit or a deposit for the purpose of guaranteeing the payment of claims. Our deposits may be depleting or non-depleting. A depleting deposit allows the carrier to draw upon the funds in order to pay the claims. Where we have provided a non-depleting deposit, the carrier invoices us each month for reimbursement of claims that they have paid. For carriers funded by a letter of credit and carriers where our deposit is deemed insufficient to satisfy our total estimated obligation, we record an accrued liability for the portion of the estimated obligation that exceeds the amount of cash held by the carrier. As of September 30, 2006, we have made deposits with the carriers net of claims already paid of $3.4 million, outstanding letters of credit totaled $4.7 million and our accrual for both outstanding and incurred but not reported claims was $8.6 million based upon independent actuarial estimates.

We maintain insurance coverage with per case deductible limits of $100,000 with respect to professional liability. As of September 30, 2006, our accrual for both outstanding claims and incurred but not reported claims was $1.1 million based upon actuarial estimates.

We maintain directors’ and officers’ insurance with aggregate annual limits of $15.0 million.

Legal Proceedings

We are involved in legal actions in the normal course of business, some of which seek monetary damages, including claims for punitive damages, which may not be covered by our insurance. These actions, when finally concluded and determined, will not, in our opinion, have a material adverse effect on our financial position, results of operations or cash flows.

Alliance Home Health, Inc.

Alliance Home Health, Inc., or Alliance, one of our wholly owned subsidiaries, was acquired in 1998 and ceased operations in 1999. Alliance filed for Chapter 7 federal bankruptcy protection with the United States Bankruptcy Court in the Northern District of Oklahoma on September 29, 2000. A trustee was appointed for Alliance in 2001. We are still awaiting a final ruling by the federal bankruptcy judge and until such time, our consolidated financial statements will continue to consolidate the Alliance contingencies that net to a $4.2 million liability.

Corporate Integrity Agreement

In 1999, we uncovered certain improprieties stemming from the unauthorized conduct of an agency director in an agency we had acquired in Monroe, Louisiana. We self-reported these improprieties to the OIG and following an extensive series of audits, reached a settlement with the Federal government in August 2003, whereby we agreed to repay approximately $1.2 million to the government in three annual payments, the last of which we made in August 2005. As part of the settlement, we also executed the CIA, a three-year arrangement which required, among other things, that we (1) maintain our training and compliance programs; (2) provide additional, specific training in certain areas; (3) conduct annual, independent audits of the Monroe agency; and (4) make timely disclosure of, and repay, overpayments resulting from any potential fraud or abuse of which we

became aware. The term of the CIA expired on August 11, 2006. Notwithstanding this expiration, we have trailing obligations under the CIA. For example, we are required to submit final annual reports and audits, must grant the OIG inspection and review rights for 120 days post-filing of the final annual report, and must retain records of our compliance with the CIA through August 2010.

Competition

We compete with local, regional and national home health and hospice providers for referrals based primarily on scope and quality of services, geographic coverage, outcomes data and, in selected instances, pricing. The impact of this competition is best determined on a market-by-market basis. Our primary competitors for our home health business are hospital-based home health agencies, local home health agencies and visiting nurse associations. We compete with other home health providers on the basis of availability of personnel, quality and expertise of services and the value and price of services. In addition, there are relatively few barriers to entry in some of the home health and hospice markets in which we operate. We believe our generally favorable competitive position is attributable to our reputation for consistent, high-quality care, comprehensive range of services, state-of-the-art information management systems and widespread service network.

Employees

At September 30, 2006, we had 7,005 employees, of which 4,670 were full-time employees. None of our employees are represented by a collective bargaining agreement. We believe that we have a good relationship with our employees.

Properties

Our corporate headquarters are located in Baton Rouge, Louisiana in a total of 36,869 square feet of leased office space, under four separate lease agreements, each of which expires December 31, 2006. We are in the process of renovating an approximately 110,000 square foot building in Baton Rouge that we purchased in 2005. Upon completion in November 2006, we will consolidate our corporate operations in that new location.

Typically, our home health and hospice agencies are located in leased facilities. Generally, the leases have initial terms of three years, but range from one to six years. Most of the leases contain options to extend the lease period for up to five additional years.

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement dated November    , 2006, the underwriters named below, for whom Raymond James & Associates, Inc. is acting as representative, have severally agreed to purchase from us the respective number of shares of our common stock set forth opposite their names below:

Underwriters

Number of Shares

Raymond James & Associates, Inc.  

Wachovia Capital Markets, LLC

UBS Securities LLC

CIBC World Markets Corp.  

J.P. Morgan Securities Inc.  

Total

3,000,000

The underwriting agreement provides that the obligations of the several underwriters to purchase and accept delivery of the common stock offered by this prospectus are subject to the terms and conditions set forth in the underwriting agreement. The underwriters are obligated to purchase and accept delivery of all of the netshares of common stock offered by this prospectus, if any are purchased, other than those covered by the over-allotment option described below.

The underwriters propose to offer the common stock directly to the public at the public offering price indicated on the cover page of this prospectus and to various dealers at that price less a concession not to exceed $             per share, of which $             may be re-allowed to other dealers. After this offering, the public offering price, concession and re-allowance to dealers may be reduced by the underwriters. No reduction will change the amount of proceeds to be received by us as indicated on the cover page of this prospectus. The shares of common stock are offered by the underwriters as stated in this prospectus, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part.

We have granted to the underwriters an option, exercisable within 30 days after the date of this prospectus, to purchase from time to time up to an aggregate of 450,000 additional shares of common stock to cover over-allotments, if any, at the public offering price less the underwriting discount. If the underwriters exercise their over-allotment option to purchase any of these additional 450,000 shares of common stock, each underwriter, subject to several conditions, will become obligated to purchase its pro rata portion of these additional shares based on the underwriter’s percentage purchase commitment in this offering as indicated in the table above. If purchased, these additional shares will be sold by the underwriters on the same terms as those on which the shares offered by this prospectus are being sold. The underwriters may exercise the over-allotment option only to cover over-allotments made in connection with the sale of the shares of common stock underoffered in this prospectus. We will not receive any proceeds fromoffering.

The following table summarizes the sales ofunderwriting compensation to be paid to the sharesunderwriters by us if the selling shareholders, but we will receive anyunderwriters exercise the over-allotment option. These amounts due to us uponassume both no exercise and full exercise of the warrant.

SELLING SHAREHOLDERSunderwriters’ over-allotment option to purchase additional shares from us. We estimate that the total expenses payable by us in connection with this offering, other than the underwriting discount referred to below, will be approximately $            .

 

Per
Share

Without

Option

With
Option

Underwriting discount payable by us

We are registeringhave agreed to indemnify the underwriters against various liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Subject to specified exceptions, each of our directors and our executive officers will agree, and we will use our best efforts to cause certain of our shareholders to agree, for resalea period of 90 days after the date of this prospectus, without the prior written consent of Raymond James & Associates, Inc., not to offer, sell, contract to sell, pledge, grant any option to purchase or otherwise dispose of any shares of our common stock heldor securities convertible into or exercisable or exchangeable for any shares of our common stock. This agreement also precludes any hedging, collar or other transaction designed or reasonably expected to result in a disposition of our common stock or securities convertible into or exercisable or exchangeable for our common stock.

In addition, we have agreed that, for 90 days after the date of this prospectus, we will not, directly or indirectly, without the prior written consent of Raymond James & Associates, Inc., issue, sell, contract to sell, or otherwise dispose of or transfer, any of our common stock or securities convertible into, exercisable for or exchangeable for our common stock, or enter into any swap or other agreement that transfers, in whole or in part, the economic consequences of ownership of our common stock or securities convertible into, exercisable for or exchangeable for our common stock, except for our sale of common stock in this offering, and the issuance of options or shares of common stock under our currently outstanding warrants and our existing stock option plans.

Until the offering is completed, the rules of the SEC may limit the ability of the underwriters and selling group members to bid for and purchase shares of our common stock. As an exception to these rules, the underwriters may engage in some types of transactions that stabilize the price of our common stock. These transactions may include short sales, stabilizing transactions, purchases to cover positions created by short sales and passive market making. Short sales involve the sale by the selling shareholders listed below. Of the totalunderwriters of a greater number of shares of our common stock covered by this prospectus, 50,000 sharesthan they are subjectrequired to a common stock warrant, and 173,167 were issued upon the exercise of common stock warrants or upon the conversion of shares of our preferred stock that were subject to preferred stock warrants. We have agreed to file, on behalf of the selling shareholders, a registration statement with the SEC covering the shares. This prospectus is a part of that registration statement. We are registering the shares to permit the selling shareholders and their respective pledgees, donees, transferees and other successors-in-interest that receive their shares from a shareholder as a gift, partnership distribution or other non-sale related transfer after the date of this prospectus to resell the shares when and as they deem appropriate. See “Plan of Distribution.”

     The following table gives information about the selling shareholders and the number of shares of our common stock that were beneficially owned by each of them prior to the offering, including the number of shares subject to the warrant, held by the selling shareholders. This information has been provided to us by the selling shareholders. The table also gives the number of shares offered hereby for each selling shareholder’s account. The table is based on information available to us as of July 9, 2002, butpurchase in the caseoffering. Stabilizing transactions consist of Mr. Christos, asbids or purchases made for the purpose of December 17, 2002 andpreventing or retarding a decline in the case of HCA Inc., as of November 4, 2004. We cannot estimate the number or percentage of the shares of common stock that will be held by each selling shareholder upon completion of this offering because the selling shareholders may sell none, all or some portion of the shares offered by this prospectus. We do not know whether or to what extent the selling shareholder who holds a warrant will exercise its warrant. Likewise, we do not know when or in what

14


amounts the selling shareholders may offer shares for resale, and cannot be certain that the selling shareholders will sell any or all of the shares offered by this prospectus.
          
Number of Shares BeneficiallyNumber of Shares
Owned Prior to the OfferingOffered in This
Selling Shareholders(As of July 9, 2002)Prospectus



HCA Inc.   50,000   50,000(1)
 One Park Plaza        
 Nashville, TN 37203        
Longview Partners, Inc.   4,000   4,000 
 19 Maple Lane        
 Rhinebeck, NY 12572        
Martin Brenner  15,000   15,000 
 Station Street 22        
 Uerikon        
 8713        
 Switzerland        
June Gorlin  15,000   15,000 
 206 Flint Street        
 Signal Mountain, TN 37377        
Peter N. Christos(2)  52,500   52,500 
 118 East 60th Street        
 Apt.#30-H        
 New York, NY 10022        
Raifinanz AG  122,500   81,667(3)
 Bahnhofstrasse 106        
 CH-8001        
 Zurich, Switzerland        
Robert White  5,000   5,000 
 206 Flint Street        
 Signal Mountain, TN 37377        


(1) Since we issued our original prospectus covering the shares subject to warrants held by HCA Inc., we issued HCA additional warrants to purchase our shares. Of those shares, 50,000 remain subject to a warrant as of the date of this prospectus. As of November 4, 2004, HCA owned no other shares of Amedisys common stock.
(2) Mr. Christos acquired preferred stock warrants from the successor of Hudson Capital Partners, which was listed as a selling shareholder in our original prospectus dated August 23, 2002. The information concerning Mr. Christos’ ownership is dated as of December 17, 2002.
(3) Since we issued our original prospectus covering these shares on August 23, 2003, warrants owned by Raifinanz AG to purchase 12,250 preferred shares, convertible into 40,833 shares of common stock, have expired. The number of shares shown as offered by Raifinanz AG excludes those 40,833 shares.

     None of the selling shareholders named above has held or had any position, office, or other material relationship with us or any of our predecessors or our affiliates since 2000, except as follows:

• We entered into a consulting agreement dated March 15, 2000 with Martin Brenner, under which he served for one year as our investor relations and corporate communications liaison in Europe. As part of Mr. Brenner’s compensation, we issued to him warrants to purchase the 15,000 shares of common stock offered by him for resale in this prospectus.
• Robert White served as our Senior Vice-President of Business Development until December 2001. We entered into a Loan and Security Agreement dated March 22, 2000 with him, under which we borrowed $250,000 from him. As consideration for Mr. White’s obligations under that agreement,

15


we issued him a warrant to purchase the 5,000 shares of our common stock offered by him for resale in this prospectus. The loan has been repaid in full.
• We entered into a Loan and Security Agreement dated March 22, 2000 with June Gorlin, under which we borrowed $750,000 from her. As consideration for Ms. Gorlin’s obligations under that agreement, we issued her a warrant to purchase the 15,000 shares of our common stock offered by her for resale in this prospectus. The loan has been repaid in full. Ms. Gorlin is the mother of Robert White.
• In connection with our acquisition in 1998 of 83 home care offices from Columbia/ HCA Healthcare Corporation, we entered into a Credit Agreement with HCA and a related promissory note for a portion of the acquisition purchase price, which were terminated in 2000 when we paid HCA $9,000,000 and executed a Warrant Agreement allowing HCA to purchase up to 200,000 shares of our common stock. The 50,000 shares offered by HCA for resale in this prospectus are subject to a warrant issued pursuant to that Warrant Agreement.

Only selling shareholders identified in the table above who beneficially own the shares set forth opposite such selling shareholder’s name in the table on the effective date of the registration statement of which this prospectus forms a part may sell those securities under the registration statement. Prior to any use of this prospectus in connection with any offering of the shares of common stock by any holder not identified in the table or with respect to shares of common stock not shown in the table, this prospectus will be supplemented or, if required, a post-effective amendment to the registration statement will be filed to set forth the name and number of shares of common stock beneficially owned by the selling shareholder intending to sell such shares and the number of shares of common stock to be offered. The prospectus supplement or the post-effective amendment, as the case may be, will also disclose whether any such selling shareholder selling in connection with the prospectus supplement or the post-effective amendment, as the case may be, has, during the three years prior to the date of the prospectus supplement or the post-effective amendment, as the case may be, had any position, office or other material relationship with us or any of our predecessors or affiliates, if this information has not been disclosed in this prospectus.

PLAN OF DISTRIBUTION

Plan of Distribution Applicable to HCA Inc.

     Pursuant to its agreement with us, the shares of HCA Inc. that are covered by this prospectus may be sold by HCA or on its behalf through or to brokers or dealers, or directly to investors pursuant to this prospectus (or another prospectus contained in and forming a part of an effective registration statement under the Securities Act of 1933) or in transactions that are exempt from the requirements of registration under the Securities Act. HCA’s shares may be sold at a fixed price or prices, which may be changed from time to time, at market prices prevailing at the time of such sale, at prices related to such market prices or at negotiated prices. In connection with such sales, distributors’ or sellers’ commission may be paid or allowed. Brokers or dealers may act as agents for HCA, or may purchase shares from HCA as principal and thereafter resell such shares from time to time in or through transactions or distributions (which may involve crosses and block transactions) on national or foreign stock exchanges where trading privileges are available, in the over-the-counter market, in private transactions or in some combination of the foregoing.

     We have agreed to indemnify HCA, and HCA has agreed to indemnify us, again certain liabilities, including liabilities under the Securities Act.

Plan of Distribution Applicable to Selling Shareholders Other Than HCA Inc.

     The selling shareholders other than HCA may sell shares of our common stock directly, through broker-dealers acting as principal or agent or pursuant to a distribution by one or more underwriters on a firm commitment or best efforts basis. Such selling shareholders may sell all or part of their shares in one or more transactions at prices at or related to the then-current market price or at negotiated prices. The

16


selling shareholders will determine the specific offering price of the shares from time to time that, at that time, may be higher or lower than the market price of our common stock on while the offering is in progress. In passive market making, the underwriter, in its capacity as market maker in the common stock, may, subject to limitations, make bids for or purchases of our common stock until the time, if any, at which a stabilizing bid is made.

The Nasdaq National Market or other securities market.

     The method by which the selling shareholders other than HCAunderwriters also may offer and sell their shares may include, but are not limitedimpose a penalty bid. This occurs when a particular underwriter repays to the following:other underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

• sales on any securities exchange on which our common stock is listed at the time of sale, or through quotation systems in which our common stock is included, at prices and terms then prevailing or at prices related to the then-current market price;
• sales in privately negotiated transactions;
• sales for their own account pursuant to this prospectus;
• cross or block trades in which broker-dealers will attempt to sell the shares as agent, but may position and resell a portion of the block as a principal to facilitate the transaction;
• purchasesThese activities by broker-dealers who then resell the shares for their own account;
• brokerage transactions in which a broker solicits purchasers;
• through the writing of options on shares, whether the options are listed on an options exchange or otherwise; and
• a combination of such methods.

     We have agreed to indemnify Peter N. Christos and Raifinanz AG, and they have agreed to indemnify us, against certain liabilities, including certain liabilities under the securities laws.

Other Matters

     In connection with any underwritten offering, underwriters and their agents may receive compensation in the form of discounts, commissions or concessions from the selling shareholders or from purchasers of shares for whom they act as agents. Underwriters may sell shares to or through dealers, and those dealers may receive compensation in the form of discounts, commissions or concessions from the underwriters may stabilize, maintain or commissions fromotherwise affect the purchasers for whom they may act as agents. The selling shareholders and any underwriters, dealers or agents participating inmarket price of our common stock. As a result, the distribution of the sharesprice of our common stock may be deemed tohigher than the price that otherwise might exist in the open market. If these activities are commenced, they may be “underwriters” withindiscontinued by the meaningunderwriters without notice at any time. These transactions may be effected on the NASDAQ Global Select Market or otherwise.

Some of the Securities Act,underwriters or their affiliates, including Raymond James & Associates, Inc., have in the past and any profit frommay in the sale of these shares by the selling shareholdersfuture perform investment banking and any compensation received by any underwriter, broker-dealerother financial services for us and our affiliates for which they may receive advisory or agent may be deemed to be underwriting discounts under the Securities Act. Neither we nor the selling shareholders can presently estimate the amount of such profit or compensation.

     From time to time, the selling shareholders may pledge or grant a security interest in some or alltransaction fees, as applicable, plus out-of-pocket expenses, of the offered shares. Ifnature and in amounts customary in the selling shareholders defaultindustry for these financial services. In particular, affiliates of certain of the underwriters are lenders under our senior credit facility. Wachovia Bank, National Association, is the administrative agent and a lender under our credit agreement. Wachovia Bank is an affiliate of one of the underwriters, Wachovia Capital Markets, LLC. UBS Loan Finance LLC is a lender under our credit agreement and is an affiliate of one of the underwriters, UBS Securities LLC. Because more than 10% of the net proceeds in performance of their secured obligations, the secured parties may offer and sell the offered shares from time to time by this prospectus. The selling shareholders also may transfer and donate offered shares in other circumstances. The number of offered shares will decrease as and when the selling shareholders transfer or donate offered shares or default in performing obligations secured by offered shares. The plan of distribution for the offered shares will otherwise remain unchanged, except that the transferees, donees, pledgees, other secured parties or other successors in interestoffering will be selling shareholders for purposespaid to an affiliate of an underwriter that is participating in this prospectus.

     The selling shareholders may also selloffering, the shares pursuant tooffering is being made in compliance with Rule 144 adopted under the Securities Act, as permitted by that rule.

     To the extent required by a particular offering, we will set forth in a prospectus supplement or, if appropriate, a post-effective amendment, the terms2720 of the offering, including among other things, the number of shares of our common stock to be sold, the public offering price, the names of any underwriters, dealers or agents and any applicable commissions or discounts.

17


     In order to comply with the securities laws of particular states, if applicable, the shares of our common stock offered under this prospectus will be sold in the jurisdictions only through registered or licensed brokers or dealers. In addition, in particular states, the shares of our common stock may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirements is available and is complied with.

     To our knowledge, noneConduct Rules of the selling shareholders has entered into, or will enter into before the effective dateNational Association of Securities Dealers, Inc.

LEGAL MATTERS

The validity of the shelf registration statementissuance of which this prospectus is a part, any agreement, arrangement or understanding with any broker or dealer relating to the sale of any of the shares covered by this prospectus. We will inform the selling shareholders that they are legally required in accordance with applicable prospectus delivery requirements to deliver copies of this prospectus in connection with any sale of the offered shares.

     Each selling shareholder will be subject to applicable provisions of the Securities Exchange Act of 1934 and the rules and regulations thereunder, which provisions may limit the timing of purchases and sales of shares of common stock by the selling shareholders.

     Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares may not simultaneously engage in market making activities with respect to our common stock for a period of two business days prior to the commencement of such distribution. In addition, each selling shareholderoffered hereby will be subject to applicable provisions of the Exchange Act and the associated rules and regulations under the Exchange Act, including Regulation M, which provisions may limit the timing of purchases and sales of shares of our common stockpassed upon for us by the selling shareholders.

     Each selling shareholder will pay all fees, discounts and brokerage commissions allocable to his, her or its shares, as well as the fees and expenses of his, her or its counsel. We will pay all expenses of this registration, including without limitation, the costs and expenses of preparing and reproducing this prospectus and complying with state securities laws, as well as filing fees with the SEC.

The shares offered by the selling shareholders in this prospectus bear legends as to their restricted transferability. Upon the effectiveness of the registration statement of which this prospectus is a part and the transfer by the selling shareholders of any of the shares pursuant to the registration statement, new certificates representing these sharesBaker, Donelson, Bearman, Caldwell & Berkowitz, PC, Nashville, Tennessee. Certain legal matters will be issued topassed upon for the transferee, free of such legends unless otherwise requiredunderwriters by law. The new certificates will also bear other applicable legends as may be required by law, to reflect applicable prospectus delivery requirements or to assist us in requiring compliance with the Securities Act.

Morrison & Foerster LLP, New York, New York.

EXPERTS

LEGAL MATTERS

Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P., New Orleans, Louisiana, has given us an opinion that the shares have been duly authorized, and that they are, or in the case of shares issuable upon the exercise of the warrant will be, validly issued, fully paid and non-assessable.

EXPERTS

     TheOur consolidated financial statements of Amedisys, Inc. as of December 31, 20022005 and 20032004 and for each of the years in the two-yearthree-year period ended December 31, 2003,2005, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2005, have been incorporated by reference herein and in the registration statement in reliance upon the reportreports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

     KPMG’s report refers to its audit of transitional disclosures for 2001 required by Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets”, which was adopted by Amedisys, Inc. on January 1, 2002 to revise the 2001 consolidated financial statements, as more fully described in Note 1 to the consolidated financial statements. However, KPMG was not engaged to audit,

18


review, or apply any procedures to the 2001 consolidated financial statements other than with respect to such disclosures.

     The combined Statement of Direct Revenues and Direct Operating Expenses of the Acquired Entities for the year ended December 31, 2003, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

The combined financial statements of Standard Home Health Care, Inc. and Cypress Health Services, LLC (collectively, Metro Preferred Home Care) as of and for the years ended December 31, 2002 and 2001, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

NOTICE REGARDING ARTHUR ANDERSEN LLP

Arthur Andersen LLP audited our financial statements for the five years ended December 31, 2001. We have included information derived from these financial statements in this prospectus through incorporation by reference of certain documents filed by us with the SEC. On June 15, 2002, Arthur Andersen was convicted of obstruction of justice by a federal jury in Houston, Texas in connection with Arthur Andersen’s work for Enron Corp. On September 15, 2002, a federal judge upheld this conviction. Arthur Andersen ceased its audit practice before the SEC on August 31, 2002. Effective April 30, 2002, we terminated the engagement of Arthur Andersen as our independent auditors and engaged KPMG LLP to serve as our independent auditors. KPMG LLP has audited our financial statements for the years ended December 31, 2003 and 2002. Because of the circumstances currently affecting Arthur Andersen LLP, as a practical matter it may not be able to satisfy any claims arising from the provision of auditing services to us, including claims holders of securities may have that are available to security holders under applicable securities laws.

WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. Our SEC filings are also available to the public from commercial document retrieval services and at the web site maintained by the SEC at: http://www.sec.gov. Reports, proxy statements and other information pertaining to us may also be inspected at the offices of The Nasdaq Stock Market, which is located at 1735 K Street, N.W., Washington, D.C. 20006.

This prospectus is part of a registration statement on Form S-3 that we have filed with the SEC to register the sales of the securities offered by this prospectus. The registration statement contains additional information about us and our securities. You may inspect the registration statement and exhibits at the SEC public reference room or at the SEC’s website. As allowed by the SEC rules, this prospectus does not contain all of the information you can find in our registration statement or the exhibits to the registration statement.

SEC. You should rely only on the information contained herein or representations provided in this prospectus or any supplement to this prospectus. We have not authorized anyone else to provide you with different information. The selling shareholders are not making an offer of our securities in any state where the offer is not permitted. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our affairs since the date of this prospectus. It also does not mean that the information in this prospectus is correct after this date.

     Our address on the world wide web is http://www.amedisys.com. The information on our web site is not a part of this document.

19


INCORPORATION BY REFERENCE

incorporated by reference. The SEC allows us to “incorporate by reference” thecertain information that we file with it, which means that we can disclose important information to you by referring you to documents that we have filed with the SEC.those documents. The information incorporated by reference is considered to be part of this prospectus, and information that we file later with the SEC will update automatically, update andsupplement and/or supersede this information. Any statement in a document incorporated information.or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part hereof. You should read the following summary together with the more detailed information regarding us, our common stock and our financial statements and the notes thereto appearing elsewhere in this prospectus or incorporated in this prospectus by reference.

You should rely only on the information in this prospectus. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information herein is accurate as of any date other than the date on the front page of this prospectus, regardless of the time of delivery of this prospectus or any sale of common stock. Our business, financial condition, results of operations and prospects may have changed since then.

We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read, without charge, and copy the documents we file at the SEC’s public reference room, located at 100 F. Street, N.E., Washington, D.C. 20549, under SEC File No. 000-24260. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public at no cost from the SEC’s website atwww.sec.gov. Our website address iswww.amedisys.com. Information contained on our website is not part of this prospectus.

We incorporate by reference the filed documents listed below, except as superseded, supplemented or modified by this prospectus, and any future filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until(the “Exchange Act”):

our Annual Report on Form 10-K for the completion offiscal year ended December 31, 2005;

our Quarterly Report on Form 10-Q for the offering ofquarter ended March 31, 2006;

our Quarterly Report on Form 10-Q for the securities describedquarter ended June 30, 2006;

our Quarterly Report on Form 10-Q for the quarter ended September 30, 2006;

our Current Reports on Form 8-K filed February 28, 2006, June 7, 2006 and October 26, 2006; and

our definitive proxy statement filed April 27, 2006.

The reports and other documents that we file after the date hereof will update, supplement and supersede the information in this prospectus:prospectus. You may request and obtain a copy of these filings, at no cost, by writing or telephoning us at the following address or phone number:

Amedisys, Inc.

11100 Mead Road, Suite 300

Baton Rouge, Louisiana 70816

(225) 292-2031

Attn: Donald Loverich, Jr.



TABLE OF CONTENTS

   our Annual Report on Form 10-K, filed on March 29, 2004, for the fiscal year ended December 31, 2003;Page

Prospectus Summary

1

Risk Factors

  our Quarterly Report on Form 10-Q, filed on May 13, 2004, for the fiscal quarter ended March 31, 2004;7

Special Note Concerning Forward-Looking Statements

21

Use of Proceeds

  our Quarterly Report on Form 10-Q, filed on August 9, 2004, for the fiscal quarter ended June 30, 2004;22

Price Range of Common Stock

23

Capitalization

  our Current Reports on Form 8-K, filed March 16, 2004, April 28, 2004 (reporting information under Item 5), August 11, 2004, August 23, 2004, September 9, 2004, September 17, 2004, October 1, 2004 and October 8, 2004;24

Selected Financial Data

25

Our Business

  our Amended Current Reports on Form 8-K/ A filed February 10, 2004 and July 15, 2004;27

Underwriting

39

Legal Matters

  our definitive Proxy Statement for our 2004 Annual Meeting of Stockholders filed on April 29, 2004; and41

Experts

41

Where You Can Find More Information

  The description of our common stock set forth in our Current Report on Form 8-K filed on December 11, 2000.41

 In addition to


You should rely only on the filings listed above, we incorporate by reference additional documents that we may file with the SEC between the date of this document and the date of the completion of the offering of the securities describedinformation in this prospectus. These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. We incorporate by reference also all such documents filed by us after the date of the initial filing of the registration statement of which this prospectus is a part and prior to its effectiveness.

     You can obtain any of the documents incorporated by reference in this document from us, or from the SEC through the SEC’s Internet world wide web site at http://www.sec.gov. Documents incorporated by reference are available from us without charge, excluding any exhibits to those documents, unless the exhibit is specifically incorporated by reference as an exhibit in this document. You can obtain documents incorporated by reference in this document upon written or oral request to us at the following address:

Amedisys, Inc.

            11100 Mead Road Suite 300
            Baton Rouge, Louisiana 70816
            (225) 292-2031
            Attn: Greg Browne

We have not authorized anyone else to giveprovide you with different information. We are not making an offer of these securities in any information or make any representation aboutjurisdiction where the offering or us thatoffer is different from, or in addition to, that contained in this document. Therefore, if anyone does give you information of that sort, younot permitted. You should not rely on it. Theassume that the information contained in this document speaks onlyherein is accurate as of any date other than the date of this document unlesson the information specifically indicates that another date applies.

20


     Any statement contained in a document incorporated or deemed incorporated herein by reference shall be deemed to be modified or superseded for the purposefront page of this prospectus, toregardless of the extent that a statement contained herein or in any subsequently filed document which also is, or is deemed to be, incorporated herein by reference modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as to modified or superseded, to constitute a parttime of delivery of this prospectus.prospectus or any sale of common stock. Our business, financial condition, results of operations and prospects may have changed since then.

21



3,000,000 Shares

LOGO

Common Stock


PROSPECTUS


RAYMOND JAMES

WACHOVIA SECURITIES

UBS INVESTMENT BANK


CIBC WORLD MARKETS

JPMORGAN

                         , 2006



PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.Item 14.     Other Expenses of Issuance and Distribution

The following are

The following table sets forth an estimate of the fees and expenses relating to the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions, all of which shall be borne by Amedisys, Inc. (the “Registrant” or the “Company”). All of such fees and expenses, except for the SEC registration fee, are estimated:

SEC registration fee

  $15,958

Transfer agent’s fees and expenses

   3,500

Legal fees and expenses

   100,000

Printing fees and expenses

   125,000

Accounting fees and expenses

   60,000

Listing fees

   34,500

Miscellaneous fees and expenses

   11,042
    

TOTAL

  $350,000
    

Item 15.Indemnification of Officers and expenses payable by the registrant in connection with the offering contemplated by the registration statement, all of which are estimated except the registration fee.Directors
      
Securities and Exchange Commission registration fee $510.74(1)
Printing Expenses  6,000.00 
Legal fees and expenses  20,000.00 
Accounting fees and expenses  5,500 
Miscellaneous  1,000.00 
   
 
 Total $32,984.64 
   
 

     The selling shareholders have not paid, and are not responsible for, any portion of these fees and expenses.

The Company’s By-laws provide for indemnification of officers and directors to the fullest extent permitted by the Delaware General Corporation Law. The provisions of Article VI, Section 7 of the Company’s By-laws constitute a contract of indemnification between the Company and its officers and directors. Article VI, Section 7 of the Company’s By-laws permits the Company to purchase and maintain officers’ and directors’ liability insurance in order to insure against the liabilities for which such officers and directors are indemnified pursuant to the same provision. The Company provides officers’ and directors’ liability insurance for its officers and directors.

(1) Of this amount, $223.06 has been paid with this registration statement. An additional $287.68 was paid previously with Registration No. 333-97625.

Item 15.Indemnification of Directors and Officers

     The Company’s By-laws, as amended and restated, provide for indemnification of officers and directors to the fullest extent permitted by Section 145 of the Delaware General Corporation Law. The provisions of Article VII of the Company’s By-laws constitute a contract of indemnification between the Company and its officers and directors. Article VII, Section 6 of the Company’s By-laws permits the Company to purchase and maintain officers’ and directors’ liability insurance in order to insure against the liabilities for which such officers and directors are indemnified pursuant to Article VII, Section 1. The Company provides officers’ and directors’ liability insurance for its officers and directors.

     The Company has entered into indemnification agreements with certain of its directors and executive officers providing contractual indemnification by the Company to the fullest extent permissible under Delaware law.

     The Company and the security holdersThe Company has entered into indemnification agreements with certain of its directors and executive officers providing contractual indemnification by the Company to the fullest extent permissible under Delaware law.

The Company and the underwriters have agreed to indemnify each other and each other’s controlling persons, as applicable, against certain liabilities under the Securities Act in connection with this registration statement.

II-1


Item 16.Exhibits

Exhibit
Number

Description of Document

  1.1Form of Underwriting Agreement (to be filed by pre-effective amendment)
  4.1Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of July 11, 2005 (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2005)
  4.2Amendment No. 1 to Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of August 31, 2005 (incorporated by reference to Exhibit 4.6.2 to the Annual Report on Form 10-K for the year ended December 31, 2005)
  4.3Amendment No. 2 to Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of February 16, 2006 (incorporated by reference to Exhibit 4.6.3 to the Annual Report on Form 10-K for the year ended December 31, 2005)
  4.4Amendment No. 3 to Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of June 1, 2006 (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)
  4.5Shareholder Rights Agreement (incorporated by reference to Exhibit 4 to the Current Report on Form 8-K filed June 16, 2000, and as Exhibit 4 to the Registration Statement on Form 8-A12G filed June 16, 2000)
  4.6Amendment dated July 26, 2006 to Shareholder Rights Agreement (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)
  4.7Registration Rights Agreement between Amedisys, Inc. and the person whose name and address appears on the signature page thereto (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-3 filed March 11, 1998)
  4.8Forms of Warrants issued by Amedisys, Inc. to Raymond James & Associates, Inc. and Jefferies & Company, Inc. (incorporated by reference to Exhibits 10.1 and 10.2 to the Current Report on Form 8-K filed December 10, 2003)
  4.9Common Stock Specimen (previously filed as an exhibit to the Annual Report on Form 10-KSB for the year ended December 31, 1994)
  5.1Opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC as to the legality of the securities being registered (filed herewith)
23.1Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (included in Exhibit 5.1)
23.2Consent of KPMG LLP (filed herewith)
24.1Power of Attorney (included as part of the signature page to this Registration Statement and incorporated herein by reference)

II-2


Item 17.Undertakings.

(a) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

(d) The undersigned registrant hereby undertakes that:

(1)For purposes of determining any liability under the Securities Act in connection withof 1933, the information omitted from the form of prospectus filed as part of this registration statement.

II-1


Item 16.Exhibits

The following documents are filed herewith or incorporated by reference herein:

     
Exhibit
No.Description


 2.1 Asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress-Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.2 Amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress- Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.3 Second amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress- Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.3 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.4 Third amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress- Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services. Inc. (incorporated by reference to Exhibit 2.4 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.5 Fourth amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress-Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.5 to the Registrant’s Amended Current Report on Form 8-K/A filed July 15, 2004).
 2.6 Fifth amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress-Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.6 to the Registrant’s Amended Current Report on Form 8-K/A filed July 15, 2004).
 2.7 Asset Purchase Agreement between Amedisys Mississippi, L.L.C. and Vicksburg Healthcare, LLC (incorporated by reference to Exhibit 2.7 to the Registrant’s Quarterly Report on Form 10-Q filed August 9, 2004).
 4.1 Credit agreement with General Electric Capital Corporation (incorporated by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q filed May 13, 2004).
 4.2 Common Stock Specimen (incorporated by reference to exhibits to the Registrant’s Annual Report on Form 10-KSB for the year ended December 31, 1994).

II-2


     
Exhibit
No.Description


 4.3 Shareholder Rights Agreement (incorporated by reference to Exhibit 4 to the Registrant’s Current Report on Form 8-K filed June 16, 2000, and to Exhibit 4 to the Registrant’s Registration Statement on Form 8-A12G filed June 16, 2000).
 5.0 Opinion of Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P. as to the legality of the securities being registered.
 10.2* Form of Warrants issued by Amedisys, Inc. to Raymond James & Associates, Inc. and Jefferies & Company, Inc.
 10.3 Settlement Agreement between the Office of Inspector General of the Department of Health and Human Services and Amedisys Specialized Medical Services and Amedisys, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed November 10, 2003).
 10.4 Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and Amedisys Specialized Medical Services and Amedisys, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed November 10, 2003).
 10.5 Amended and Restated Amedisys, Inc. 1998 Stock Option Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-3, No. 333-47763, filed March 11, 1998).
 10.8.1 Employment Agreement between Amedisys, Inc. and William F. Borne (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed March 19, 2001).
 10.8.2 Amendment to Employment Agreement by and between Amedisys, Inc. and William F. Borne (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed May 15, 2003).
 10.9.1 Employment Agreement between Amedisys, Inc. and Larry Graham (incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed March 19, 2001).
 10.9.2 Amendment to Employment Agreement by and between Amedisys, Inc. and Larry Graham (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed March 19, 2001).
 10.9.3 Second Amendment to Employment Agreement by and between Amedisys, Inc. and Larry Graham (incorporated by reference to Exhibit 10.9.3 to the Registration Statement on Form S-3, No. 333-118352, filed by the Registrant on August 18, 2004).
 10.10.1 Employment Agreement between Amedisys Inc. and Gregory H. Browne (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed August 14, 2002).
 10.10.2 Amendment to Employment Agreement between Amedisys Inc. and Gregory H. Browne (incorporated by reference to Exhibit 10.10.2 to the Registration Statement on Form S-3, No. 333-118352, filed by the Registrant on August 18, 2004).
 10.14 Director’s Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Registrant’s Quarterly Report on Form 10-Q filed May 14, 2001).
 10.15 Modification Agreement by and between CareSouth Home Health Services, Inc. and Amedisys, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed November 14, 2001).
 10.16 Software License Agreement by and between CareSouth Home Health Services, Inc. and Amedisys, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed November 14, 2001).
 21.1 List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Registration Statement on Form S-3, No. 333-118352, filed by the Registrant on August 18, 2004).

II-3


     
Exhibit
No.Description


 23.1 Consent of Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P. (included in Exhibit 5.0).
 23.2 Consent of KPMG LLP
 23.3 Consent of KPMG LLP
 23.4 Consent of KPMG LLP
 24  Power of Attorney. (See signature page.)


Incorporated by reference to Amedisys, Inc. Current Report on Form 8-K filed December 10, 2003.

Item 17.Undertakings

     (a) The undersigned registrant hereby undertakes:

     (1) To file, during any periodstatement in reliance upon Rule 430A and contained in which offers or sales are being made, a post-effective amendment to this registration statement:

     (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
     (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
     (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that subparagraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by these subparagraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13Rule 424(b) (1) or 15(d)(4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)For the purpose of determining any liability under the Securities Exchange Act of 19341933, each post-effective amendment that are incorporated by reference in this registration statement.

     (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendmentcontains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3


SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Baton Rouge, State of Louisiana, on the 26th day of October, 2006.

     (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

AMEDISYS, INC.

     (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing

/s/ William F. Borne     
William F. Borne
Chief Executive Officer and Chairman of the registrant’s annual report pursuant to Section 13(a) or Section 15(d)Board

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William F. Borne and Donald Loverich, Jr., and each of them, as his true and lawful attorneys-in-fact and agent, with full power of substitution and resubstitution, for the undersigned and in his name, place and stead, in any and all capacities, to sign and file (i) any and all amendments (including post-effective amendments) to the Registration Statement and to file the same, with all exhibits thereto, and all documents in connection therewith and (ii) a registration statement, and any and all amendments thereto, relating to the offering covered hereby filed pursuant to Rule 462(b) under the Securities Act of 1933, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated on this 26th day of October, 2006.

Name and Signature

Title

/s/ William F. Borne

William F. Borne

Chief Executive Officer and Chairman of the Securities Exchange ActBoard
(Principal Executive Officer)

/s/ Larry R. Graham

Larry R. Graham

President and Chief Operating Officer

/s/ Donald Loverich, Jr.

Donald Loverich, Jr.

Principal Financial Officer and Treasurer (Principal Financial and Accounting Officer)

/s/ Ronald A. LaBorde

Ronald A. LaBorde

Director

/s/ Jake L. Netterville

Jake L. Netterville

Director

/s/ David R. Pitts

David R. Pitts

Director

/s/ Peter F. Ricchiuti

Peter F. Ricchiuti

Director

/s/ Donald A. Washburn

Donald A. Washburn

Director

II-4


INDEX TO EXHIBITS

Exhibit
Number

Description of 1934 that is incorporatedDocument

  1.1Form of Underwriting Agreement (to be filed by pre-effective amendment)
  4.1Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of July 11, 2005 (incorporated by reference in the registration statement shall be deemed to be a new registration statement relatingExhibit 4.1 to the securities offered therein,Quarterly Report on Form 10-Q for the quarter ended June 30, 2005)
  4.2Amendment No. 1 to Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of August 31, 2005 (incorporated by reference to Exhibit 4.6.2 to the Annual Report on Form 10-K for the year ended December 31, 2005)
  4.3Amendment No. 2 to Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of February 16, 2006 (incorporated by reference to Exhibit 4.6.3 to the Annual Report on Form 10-K for the year ended December 31, 2005)
  4.4Amendment No. 3 to Credit Agreement with Wachovia Bank, National Association, as Administrative Agent, and General Electric Capital Corporation, as Syndication Agent, dated as of June 1, 2006 (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)
  4.5Shareholder Rights Agreement (incorporated by reference to Exhibit 4 to the Current Report on Form 8-K filed June 16, 2000, and as Exhibit 4 to the Registration Statement on Form 8-A12G filed June 16, 2000)
  4.6Amendment dated July 26, 2006 to Shareholder Rights Agreement (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2006)
  4.7Registration Rights Agreement between Amedisys, Inc. and the offering of such securities at that time shall be deemedperson whose name and address appears on the signature page thereto (incorporated by reference to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuantExhibit 10.5 to the foregoing

II-4


provisions, or otherwise,Registration Statement on Form S-3 filed March 11, 1998)
  4.8Forms of Warrants issued by Amedisys, Inc. to Raymond James & Associates, Inc. and Jefferies & Company, Inc. (incorporated by reference to Exhibits 10.1 and 10.2 to the registrant has been advised that inCurrent Report on Form 8-K filed December 10, 2003)
  4.9Common Stock Specimen (previously filed as an exhibit to the opinionAnnual Report on Form 10-KSB for the year ended December 31, 1994)
  5.1Opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC as to the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrantlegality of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered the registrant will, unless(filed herewith)
23.1Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC (included in the opinionExhibit 5.1)
23.2Consent of its counsel the matter has been settled by controlling precedent, submit to a courtKPMG LLP (filed herewith)
24.1Power of appropriate jurisdiction the question whether such indemnification by it is against public policyAttorney (included as expressed in the Act and will be governed by the final adjudication of such issue.

II-5


SIGNATURES

     Pursuant to the requirementspart of the Securities Act of 1933, the registrant certifies that it has reasonable groundssignature page to believe that it meets all the requirements for filing on Form S-3this Registration Statement and has duly caused this registration statement to be signed on its behalfincorporated herein by the undersigned thereunto duly authorized, in the City of Baton Rouge, State of Louisiana, on November 9, 2004.

AMEDISYS, INC.reference)

By: /s/ WILLIAM F. BORNE


William F. Borne
Chief Executive Officer

POWER OF ATTORNEY

 ��   KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints William F. Borne and Gregory H. Browne, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or his or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on November 9, 2004.

SignatureTitle


/s/ WILLIAM F. BORNE

William F. Borne
Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
/s/ GREGORY H. BROWNE

Gregory H. Browne
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ JAKE L. NETTERVILLE

Jake L. Netterville
Director
/s/ DAVID R. PITTS

David R. Pitts
Director

II-6


SignatureTitle




Peter F. Ricchiuti
Director
/s/ RONALD A. LABORDE

Ronald A. Laborde
Director


Donald A. Washburn
Director

II-7


INDEX TO EXHIBITS

     
Exhibit
No.Description


 2.1 Asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress-Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.2 Amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress- Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.3 Second amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress- Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.3 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.4 Third amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Broward County, St. Mary’s Hospital Home Health, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress- Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services. Inc. (incorporated by reference to Exhibit 2.4 to the Registrant’s Current Report on Form 8-K filed March 16, 2004).
 2.5 Fourth amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress-Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.5 to the Registrant’s Amended Current Report on Form 8-K/A filed July 15, 2004).
 2.6 Fifth amendment to asset purchase agreement by and between Amedisys, Inc. and Professional Home Health, Brookwood Home Care Services, Memorial Home Care, Spalding Regional Home Health, Tenet Home Care of Palm Beach, Tenet Home Care of Miami-Dade, First Community Home Care, Cypress-Fairbanks Home Health, St. Francis Home Health and Hospice, and Brookwood Health Services, Inc. (incorporated by reference to Exhibit 2.6 to the Registrant’s Amended Current Report on Form 8-K/A filed July 15, 2004).
 2.7 Asset Purchase Agreement between Amedisys Mississippi, L.L.C. and Vicksburg Healthcare, LLC (incorporated by reference to Exhibit 2.7 to the Registrant’s Quarterly Report on Form 10-Q filed August 9, 2004).
 4.1 Credit agreement with General Electric Capital Corporation (incorporated by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q filed May 13, 2004).
 4.2 Common Stock Specimen (incorporated by reference to exhibits to the Registrant’s Annual Report on Form 10-KSB for the year ended December 31, 1994).
 4.3 Shareholder Rights Agreement (incorporated by reference to Exhibit 4 to the Registrant’s Current Report on Form 8-K filed June 16, 2000, and to Exhibit 4 to the Registrant’s Registration Statement on Form 8-A12G filed June 16, 2000).


     
Exhibit
No.Description


 5.0 Opinion of Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P. as to the legality of the securities being registered.
 10.2* Form of Warrants issued by Amedisys, Inc. to Raymond James & Associates, Inc. and Jefferies & Company, Inc.
 10.3 Settlement Agreement between the Office of Inspector General of the Department of Health and Human Services and Amedisys Specialized Medical Services and Amedisys, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed November 10, 2003).
 10.4 Corporate Integrity Agreement between the Office of Inspector General of the Department of Health and Human Services and Amedisys Specialized Medical Services and Amedisys, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed November 10, 2003).
 10.5 Amended and Restated Amedisys, Inc. 1998 Stock Option Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-3, No. 333-47763, filed March 11, 1998).
 10.8.1 Employment Agreement between Amedisys, Inc. and William F. Borne (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed March 19, 2001).
 10.8.2 Amendment to Employment Agreement by and between Amedisys, Inc. and William F. Borne (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed May 15, 2003).
 10.9.1 Employment Agreement between Amedisys, Inc. and Larry Graham (incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed March 19, 2001).
 10.9.2 Amendment to Employment Agreement by and between Amedisys, Inc. and Larry Graham (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed March 19, 2001).
 10.9.3 Second Amendment to Employment Agreement by and between Amedisys, Inc. and Larry Graham (incorporated by reference to Exhibit 10.9.3 to the Registration Statement on Form S-3, No. 333-118352, filed by the Registrant on August 18, 2004).
 10.10.1 Employment Agreement between Amedisys Inc. and Gregory H. Browne (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed August 14, 2002).
 10.10.2 Amendment to Employment Agreement between Amedisys Inc. and Gregory H. Browne (incorporated by reference to Exhibit 10.10.2 to the Registration Statement on Form S-3, No. 333-118352, filed by the Registrant on August 18, 2004).
 10.14 Director’s Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Registrant’s Quarterly Report on Form 10-Q filed May 14, 2001).
 10.15 Modification Agreement by and between CareSouth Home Health Services, Inc. and Amedisys, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed November 14, 2001).
 10.16 Software License Agreement by and between CareSouth Home Health Services, Inc. and Amedisys, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed November 14, 2001).
 21.1 List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Registration Statement on Form S-3, No. 333-118352, filed by the Registrant on August 18, 2004).


     
Exhibit
No.Description


 23.1 Consent of Correro Fishman Haygood Phelps Walmsley & Casteix, L.L.P. (included in Exhibit 5.0).
 23.2 Consent of KPMG LLP
 23.3 Consent of KPMG LLP
 23.4 Consent of KPMG LLP
 24  Power of Attorney. (See signature page.)


Incorporated by reference to Amedisys, Inc. Current Report on Form 8-K filed December 10, 2003.