Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 25, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | LHCG | ||
Entity Registrant Name | LHC Group, Inc. | ||
Entity Central Index Key | 1,303,313 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 31,406,171 | ||
Entity Public Float | $ 2.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 49,363 | $ 2,849 |
Receivables: | ||
Patient accounts receivable | 252,592 | 161,898 |
Other receivables | 6,658 | 3,163 |
Amounts due from governmental entities | 830 | 830 |
Total receivables, net | 260,080 | 165,891 |
Prepaid income taxes | 11,788 | 7,006 |
Prepaid expenses | 24,775 | 13,042 |
Other current assets | 20,899 | 12,177 |
Total current assets | 366,905 | 200,965 |
Property, building and equipment, net of accumulated depreciation of $55,253 and $43,565, respectively | 79,563 | 46,453 |
Goodwill | 1,161,717 | 392,601 |
Intangible assets, net of accumulated amortization of $15,176 and $13,041, respectively | 297,379 | 134,610 |
Assets held for sale | 2,850 | 0 |
Other assets | 20,301 | 19,073 |
Total assets | 1,928,715 | 793,702 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 77,135 | 39,750 |
Salaries, wages and benefits payable | 84,254 | 44,747 |
Self insurance reserves | 32,776 | 12,450 |
Current portion of long-term notes payable | 7,773 | 286 |
Amounts due to governmental entities | 4,174 | 5,019 |
Total current liabilities | 206,112 | 102,252 |
Deferred income taxes | 43,306 | 27,466 |
Income taxes payable | 4,297 | 0 |
Revolving credit facility | 235,000 | 144,000 |
Long-term notes payable | 930 | 0 |
Total liabilities | 489,645 | 273,718 |
Noncontrolling interest-redeemable | 14,596 | 13,393 |
LHC Group, Inc. stockholders’ equity: | ||
Preferred stock – $0.01 par value: 5,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock – $0.01 par value: 60,000,000 and 40,000,000 shares authorized in 2018 and 2017, respectively; 35,636,414 and 22,640,046 shares issued in 2018 and 2017, respectively | 356 | 226 |
Treasury stock – 4,958,721 and 4,890,504 shares at cost, respectively | (49,374) | (42,249) |
Additional paid-in capital | 937,968 | 126,490 |
Retained earnings | 427,975 | 364,401 |
Total LHC Group, Inc. stockholders’ equity | 1,316,925 | 448,868 |
Noncontrolling interest – non-redeemable | 107,549 | 57,723 |
Total stockholders’ equity | 1,424,474 | 506,591 |
Total liabilities and stockholders’ equity | $ 1,928,715 | $ 793,702 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Property, building and equipment, accumulated depreciation | $ 55,253 | $ 43,565 |
Intangible assets, accumulated amortization | $ 15,176 | $ 13,041 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 40,000,000 |
Common stock, shares issued | 35,636,414 | 22,640,046 |
Treasury stock at cost, shares | (4,958,721) | (4,890,504) |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||||||||||
Net service revenue | $ 509,842 | $ 507,043 | $ 502,024 | $ 291,054 | $ 291,140 | $ 269,678 | $ 257,535 | $ 244,249 | $ 1,809,963 | $ 1,062,602 | $ 900,033 |
Cost of service revenue | 1,156,357 | 675,810 | 557,650 | ||||||||
Gross margin | 185,303 | 184,847 | 181,020 | 102,436 | 103,714 | 96,822 | 96,377 | 89,879 | 653,606 | 386,792 | 342,383 |
General and administrative expenses | 537,916 | 310,539 | 270,622 | ||||||||
Impairment of intangibles and other | 4,689 | 1,571 | 1,199 | ||||||||
Operating income | 111,001 | 74,682 | 70,562 | ||||||||
Interest expense | (9,679) | (3,352) | (2,444) | ||||||||
Income before income taxes and noncontrolling interests | 101,322 | 71,330 | 68,118 | ||||||||
Income tax expense | 22,399 | 10,944 | 22,176 | ||||||||
Net income | 78,923 | 60,386 | 45,942 | ||||||||
Less net income attributable to noncontrolling interests | 15,349 | 10,274 | 9,359 | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | $ 20,552 | $ 21,230 | $ 16,797 | $ 4,995 | $ 18,435 | $ 10,906 | $ 11,304 | $ 9,467 | $ 63,574 | $ 50,112 | $ 36,583 |
Earnings per share - basic: | |||||||||||
Net income attributable to LHC Group, Inc.’s common stockholders (in dollars per share) | $ 0.67 | $ 0.69 | $ 0.55 | $ 0.28 | $ 1.04 | $ 0.61 | $ 0.64 | $ 0.54 | $ 2.31 | $ 2.83 | $ 2.08 |
Earnings per share - diluted: | |||||||||||
Net income attributable to LHC Group, Inc.’s common stockholders (in dollars per share) | $ 0.66 | $ 0.68 | $ 0.55 | $ 0.28 | $ 1.02 | $ 0.61 | $ 0.63 | $ 0.53 | $ 2.29 | $ 2.79 | $ 2.07 |
Weighted average shares outstanding: | |||||||||||
Basic (in shares) | 30,777,556 | 30,750,227 | 30,497,501 | 17,789,863 | 17,749,872 | 17,740,818 | 17,728,567 | 17,643,463 | 27,498,351 | 17,715,992 | 17,559,477 |
Diluted (in shares) | 31,142,061 | 31,083,815 | 30,742,293 | 18,039,345 | 18,043,297 | 18,010,522 | 17,964,387 | 17,817,880 | 27,773,396 | 17,961,018 | 17,682,820 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury | Additional paid-in capital | Retained earnings | Noncontrolling interest -non- redeemable | Total equity | Non controlling interest - redeemable | Net income |
Beginning balance (in shares) at Dec. 31, 2015 | 22,224,423 | 4,776,560 | |||||||
Beginning balance at Dec. 31, 2015 | $ 222 | $ (37,139) | $ 113,793 | $ 277,706 | $ 3,211 | $ 357,793 | $ 12,408 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 36,583 | 1,373 | 37,956 | 7,986 | |||||
Net income | $ 45,942 | $ 45,942 | |||||||
Acquired noncontrolling interest | 1,783 | 1,783 | 0 | ||||||
Sale of noncontrolling interest | (931) | 1,400 | 469 | ||||||
Noncontrolling interest distributions | (1,341) | (1,341) | (7,827) | ||||||
Stock options exercised (in shares) | 5,500 | ||||||||
Stock options exercised | 109 | 109 | |||||||
Nonvested stock compensation | 4,872 | 4,872 | |||||||
Issuance of vested stock (in shares) | 174,969 | ||||||||
Issuance of vested stock | $ 2 | (2) | |||||||
Treasury shares redeemed to pay income tax (in shares) | 52,119 | 52,119 | |||||||
Treasury shares redeemed to pay income tax | $ (1,996) | (1,996) | |||||||
Excess tax benefits-vesting nonvested stock | 995 | 995 | |||||||
Issuance of common stock under Employee Stock Purchase Plan | $ 0 | 912 | 912 | ||||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 24,149 | 24,149 | |||||||
Ending balance (in shares) at Dec. 31, 2016 | 22,429,041 | 4,828,679 | |||||||
Ending balance at Dec. 31, 2016 | $ 224 | $ (39,135) | 119,748 | 314,289 | 6,426 | 401,552 | 12,567 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 50,112 | (595) | 49,517 | 10,869 | |||||
Net income | $ 60,386 | 60,386 | |||||||
Acquired noncontrolling interest | 53,657 | 53,657 | |||||||
Purchase of additional controlling interest | (368) | (368) | (1,120) | ||||||
Sale of noncontrolling interest | 122 | 282 | 404 | 412 | |||||
Noncontrolling interest distributions | (2,047) | (2,047) | (9,335) | ||||||
Nonvested stock compensation | 5,964 | 5,964 | |||||||
Issuance of vested stock (in shares) | 192,463 | ||||||||
Issuance of vested stock | $ 2 | (2) | |||||||
Treasury shares redeemed to pay income tax (in shares) | 61,825 | 61,825 | |||||||
Treasury shares redeemed to pay income tax | $ (3,114) | (3,114) | |||||||
Issuance of common stock under Employee Stock Purchase Plan | $ 0 | 1,026 | 1,026 | ||||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 18,542 | 18,542 | |||||||
Ending balance (in shares) at Dec. 31, 2017 | 22,640,046 | 4,890,504 | |||||||
Ending balance at Dec. 31, 2017 | $ 506,591 | $ 226 | $ (42,249) | 126,490 | 364,401 | 57,723 | 506,591 | 13,393 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 63,574 | 5,672 | 69,246 | 9,677 | |||||
Net income | $ 78,923 | $ 78,923 | |||||||
Acquired noncontrolling interest | 41,055 | 41,055 | 8,230 | ||||||
Purchase of additional controlling interest | 7,661 | (371) | 7,290 | (7,706) | |||||
Sale of noncontrolling interest | (2,161) | 6,016 | 3,855 | 590 | |||||
Noncontrolling interest distributions | (2,546) | (2,546) | (9,588) | ||||||
Nonvested stock compensation | 9,358 | 9,358 | |||||||
Issuance of vested stock (in shares) | 212,355 | ||||||||
Issuance of vested stock | $ 3 | 0 | 3 | ||||||
Treasury shares redeemed to pay income tax (in shares) | 68,217 | 68,217 | |||||||
Treasury shares redeemed to pay income tax | $ (7,125) | (7,125) | |||||||
Merger consideration (in shares) | 12,765,288 | ||||||||
Merger consideration | $ 127 | 795,278 | 795,405 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 1,342 | 1,342 | |||||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 18,725 | 18,725 | |||||||
Ending balance (in shares) at Dec. 31, 2018 | 35,636,414 | 4,958,721 | |||||||
Ending balance at Dec. 31, 2018 | $ 1,424,474 | $ 356 | $ (49,374) | $ 937,968 | $ 427,975 | $ 107,549 | $ 1,424,474 | $ 14,596 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net income | $ 78,923 | $ 60,386 | $ 45,942 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 16,362 | 13,422 | 12,160 |
Stock-based compensation expense | 9,358 | 5,964 | 4,872 |
Deferred income taxes | 19,453 | (4,475) | 7,402 |
Loss on disposal of assets | 319 | 60 | 1,199 |
Impairment of goodwill and intangibles | 4,370 | 1,511 | |
Changes in operating assets and liabilities, net of acquisitions: | |||
Receivables | (362) | (26,906) | (14,083) |
Prepaid expenses and other assets | (10,257) | (26,973) | 1,034 |
Prepaid income taxes | (2,519) | (7,006) | 1,641 |
Accounts payable and accrued expenses | (6,577) | 19,666 | 9,182 |
Income tax payable | 511 | (3,499) | 84 |
Net amounts due to/from governmental entities | (996) | 176 | (1,961) |
Net cash provided by operating activities | 108,585 | 32,326 | 67,472 |
Investing activities | |||
Cash acquired from business combination, net of cash paid | 7,702 | (64,598) | (23,156) |
Purchases of property, building and equipment | (32,993) | (10,176) | (16,009) |
Advanced payments on acquisitions | 0 | (11,215) | |
Net cash used in investing activities | (25,291) | (74,774) | (50,380) |
Financing activities | |||
Proceeds from line of credit | 303,943 | 96,000 | 38,000 |
Payments on line of credit | (319,743) | (39,000) | (49,000) |
Proceeds from employee stock purchase plan | 1,342 | 1,026 | 912 |
Payments on debt | (4,975) | (260) | (238) |
Payments on deferred financing fees | (1,884) | 0 | 0 |
Noncontrolling interest distributions | (12,134) | (11,382) | (9,413) |
Purchase of additional controlling interest | (412) | (1,488) | 0 |
Sale of noncontrolling interest | 4,208 | 251 | 356 |
Withholding taxes paid on stock-based compensation | (7,125) | (3,114) | (584) |
Net cash (used in) provided by financing activities | (36,780) | 42,033 | (19,967) |
Change in cash | 46,514 | (415) | (2,875) |
Cash at beginning of period | 2,849 | 3,264 | 6,139 |
Cash at end of period | 49,363 | 2,849 | 3,264 |
Supplemental disclosures of cash flow information | |||
Interest paid | 9,067 | 3,853 | 3,123 |
Income taxes paid | 5,703 | 25,199 | 11,533 |
Non-cash financing and investing activity: | |||
Accrued capital expenditures | 3,449 | 0 | 0 |
Consideration transferred for a business combination | 795,412 | 0 | 0 |
Purchase of additional controlling interests | $ 7,705 | $ 0 | $ 0 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization LHC Group, Inc. (the “Company”) is a health care provider specializing in the post-acute continuum of care. The Company provides services through five segments: home health, hospice, home and community-based, facility-based, the latter primarily through long-term acute care hospitals ("LTACHs"), and healthcare innovations ("HCI"). On April 1, 2018, the Company completed its previously announced "merger of equals" business combination (the "Merger") with Almost Family, Inc. ("Almost Family"). Almost Family's operating results are included in the Company's operating results from the date of acquisition. See Note 3 of the Notes to the Consolidated Financial Statements. As of December 31, 2018 , the Company, through its wholly and majority-owned subsidiaries, equity joint ventures, controlled affiliates, and management agreements, operated 757 service providers in 36 states within the continental United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the Company's accompanying consolidated financial statements and notes to the consolidated financial statements. Actual results could differ from those estimates. The most significant estimates relate to revenue recognition, collectability of accounts receivable and impairment of goodwill and other indefinite-lived intangible assets. A description of the significant accounting policies and a discussion of the significant estimates and judgments associated with such policies are described below. Principles of Consolidation The consolidated financial statements include all subsidiaries and entities controlled by the Company through direct ownership of majority interest or controlling member ownership of such entities. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s consolidated financial statements. The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity for the periods presented for the years ending December 31: Ownership type 2018 2017 2016 Wholly owned subsidiaries 59.2 % 51.1 % 57.1 % Equity joint ventures 40.0 46.8 41.2 Managed or licensed 0.8 2.1 1.7 100.0 % 100.0 % 100.0 % All significant inter-company accounts and transactions have been eliminated in consolidation. All business combinations accounted for under the acquisition method have been included in the consolidated financial statements from the respective dates of acquisition. The Company consolidates equity joint venture entities as the Company has controlling interests, has voting control over these entities, or has ability to exercise significant influence in these entities. The members of the Company's equity joint ventures participate in profits and losses in proportion to their equity interests. The Company has management services agreements under which the Company manages certain operations of agencies. The Company does not consolidate managed agencies that the Company does not have an ownership interest in, nor does it have an obligation to absorb losses of, or right to receive benefits from the entities that own the agencies. The Company, through wholly owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing and hospice agencies. As with wholly owned subsidiaries, the Company owns 100% of the equity of these entities and consolidates them based on such ownership. Revenue Recognition Basis of Presentation The Company adopted ASU No. 2014-09, Revenue from Contracts with Customers, ("ASU 2014-09") on January 1, 2018 on a full retrospective basis, which required the Company to present the prior comparable periods as adjusted. The adoption of the standard did not have a material impact on the Company's financial statements. The Company did not adjust the opening balance of retained earnings to account for the implementation of the requirements of this standard as there are no timing differences related to the recognition of implicit price concessions as part of net service revenue. All amounts previously classified as provision for bad debts were reclassified within the Company's net service revenue. For the year ending December 31, 2018, the Company recorded $25.5 million of implicit price concessions as a direct reduction of net service revenue that would have been recorded as provision for bad debts prior to the adoption of ASU 2014-09. Adoption of the standard impacted the Company's previously reported results as follows (amounts in thousands): As previously reported Adjustment for ASU 2014-09 As adjusted As of December 31, 2017 Consolidated Balance Sheets: Patients accounts receivable $ 161,898 $ — $ 161,898 Allowance for uncollectible accounts 23,556 (23,556 ) — For the year ended December 31, 2017 Consolidated Statements of Income: Net service revenue $ 1,072,086 $ (9,484 ) $ 1,062,602 Provision for bad debts (9,484 ) 9,484 — Net income attributable to LHC Group, Inc.'s common stockholders 50,112 — 50,112 Consolidated Statements of Cash Flows: Provision for bad debts 9,484 (9,484 ) — Changes in operating assets and liabilities, net of acquisitions: Receivables (36,390 ) 9,484 (26,906 ) For the year ended December 31, 2016 Consolidated Statements of Income: Net service revenue $ 914,823 $ (14,790 ) $ 900,033 Provision for bad debts (14,790 ) 14,790 — Net income attributable to LHC Group, Inc.'s common stockholders 36,583 — 36,583 Consolidated Statements of Cash Flows: Provision for bad debts 14,790 (14,790 ) — Changes in operating assets and liabilities, net of acquisitions: Receivables (28,873 ) 14,790 (14,083 ) Net service revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for providing services. Receipts are from Medicare, Medicaid, Managed Care, Commercial and others for services rendered, and they include implicit price concessions for retroactive revenue adjustments due to actual receipts from third-party payors, settlements of audits, and reviews. The estimated uncollectible amounts due from these payors are considered implicit price concessions that are a direct reduction to net service revenue. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare contributes to the net service revenue of the Company's home health services, hospice services, facility-based services, and healthcare innovations services. Medicaid and other payors contribute to the net service revenue of all of the Company's segments. Performance obligations are determined based on the nature of the services provided by the Company. The majority of the Company's performance obligations is to provide services to each patient based on medical necessity and identifies the bundle of services to be provided to achieve the goals established in the contract, while the healthcare innovations segment's performance obligation is largely to provide services under customer contracts. Revenue for performance obligations is satisfied over time and recognized based on actual charges incurred in relation to total expected charges over the measurement period of the performance obligation, which depicts the transfer of services and related benefits received by the patient and customers over the term of the contract to satisfy the obligations. The Company measures the satisfaction of the performance obligation as services are provided. The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the option exemption provided by ASC 606 - Revenue Recognition, and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged. The Company determines the transaction price for the majority of its performance obligations based on gross charges for services provided, reduced by explicit price concessions provided to third-party payors and implicit price concessions. The Company determines estimates of explicit price concessions, principally contractual adjustments based on established agreements with payors, and implicit price concessions based on historical collection experience. Estimates of explicit and implicit price concessions are periodically reviewed to ensure they encompass the Company's current contract terms, are reflective of the Company's current patient mix, and are indicative of the Company's historic collections to ensure net service revenue is recognized at the expected transaction price. As such, net service revenue is recorded equal to expected cash receipts for services when rendered. The following table sets forth the percentage of net service revenue earned by category of payor for the years ending December 31: 2018 2017 2016 Home health: Medicare 71.8 % 72.6 % 76.8 % Medicaid 1.3 1.1 1.0 Managed Care, Commercial, and Other 26.9 26.3 22.2 100.0 % 100.0 % 100.0 % Hospice: Medicare 90.7 % 92.9 % 94.8 % Medicaid 0.4 0.3 0.9 Managed Care, Commercial, and Other 8.9 6.8 4.3 100.0 % 100.0 % 100.0 % Home and Community-Based: Medicaid 23.9 % 18.9 % 15.2 % Managed Care, Commercial, and Other 76.1 81.1 84.8 100.0 % 100.0 % 100.0 % Facility-Based: Medicare 59.7 % 63.7 % 72.5 % Managed Care, Commercial, and Other 40.3 36.3 27.5 100.0 % 100.0 % 100.0 % Healthcare Innovations: Medicare 22.8 % — % — % Medicaid 0.3 — — Managed Care, Commercial, and Other 76.9 — — 100.0 % — % — % Medicare Home Health Services The home health segment's Medicare patients, including certain Medicare Advantage patients, are classified into one of 153 home health resource groups prior to receiving services. Based on the patient's home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60 -day period referred to as an episode. The Company elects to use the same 60 -day length of episode that Medicare recognized as standard but accelerates revenue upon discharge to align with a patient's episode length, if less than the expected 60 days, which depicts the transfer of services and related benefits received by the patient over the term necessary to satisfy the obligations. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period. Final payments from Medicare will reflect base payment adjustments for case-mix and geographic wage differences and 2% sequestration reduction. In addition, final payments may reflect one of four retroactive adjustments to the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five ; (c) a partial payment if the patient transferred to another provider or transferred from another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required. The retroactive adjustments outlined above are recognized in net service revenue when the event causing the adjustment occurs and during the period in which the services are provided to the patient. The Company reviews these adjustments to ensure it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustments is subsequently resolved. Net service revenue and related patient accounts receivable are recorded at amounts estimated to be realized from Medicare for services rendered. Hospice Services The Company's hospice services segment is reimbursed by Medicare under a per diem payment system based on the determined need for the patient on a daily basis. The hospice segment receives one of four predetermined daily rates based upon the level of care the Company furnishes. Each level of care is contingent upon the patient's medical necessity and is a distinct performance obligation, which depicts the transfer of services and related benefits received by the patient over the term to satisfy the obligations. The Company records net service revenue for hospice services based on the promulgated per diem rate over time as services are provided, satisfying the performance obligation. Hospice payments are subject to variable consideration through an inpatient cap and an overall Medicare payment cap. The inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall Medicare payment cap relates to individual programs receiving reimbursements in excess of a “cap amount,” determined by Medicare to be payment equal to six months of hospice care for the aggregate base of hospice patients, indexed for inflation. The determination for each cap is made annually based on the 12 -month period ending on October 31 of each year. The Company monitors its limits on a provider-by-provider basis and records an estimate of its liability for reimbursements received in excess of the cap amount, if any, in the reporting period. The Company reviews these estimates to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustments is subsequently resolved. Facility-Based Services The Company's facility-based services segment is reimbursed primarily by Medicare for services provided under the long-term acute care hospital (“LTACH”) prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare LTACH patient classified in that particular long-term care diagnosis-related group. For selected LTACH patients, the amount may be further adjusted based on length-of-stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for LTACH claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Net service revenue adjustments resulting from reviews and audits of Medicare cost report settlements are considered implicit price concessions for LTACHs and are measured at expected value. The Company reviews these estimates to ensure that it is probable that a significant reversal in the amount of LTACH services cumulative revenue recognized will not occur when the uncertainty associated with retroactive adjustments is subsequently resolved. Net service revenue for the Company's LTACH services are satisfied over time and recognized based on actual charges incurred in relation to total expected charges, which depicts the transfer of services and related benefits received by the customer over the service period to satisfy the obligations. Non-Medicare Revenues Substantially all remaining revenues are derived from services provided under a per visit, per hour or unit basis, per assessment or per member per month basis for which revenues are calculated and recorded using payor-specific or patient-specific fee schedules based on the contracted rates in each underlying third party payor or services agreement or out of network rates, as applicable. Net service revenue is recognized as such services are provided and costs for delivery of such services are incurred. Contingent Service Revenues The Company's Healthcare Innovations segment provides strategic health management services to Affordable Care Organizations ("ACOs") that have been approved to participate in the Medicare Shared Savings Program ("MSSP"). The HCI segment has service agreements with ACOs that provide for sharing of MSSP payments received by the ACO, if any. ACOs are legal entities that contract with Centers for Medicare and Medicaid Services ("CMS") to provide services to the Medicare fee-for-service population for a specified annual period with the goal of providing better care for the individual, improving health for populations and lowering costs. ACOs share savings with CMS to the extent that the actual costs of serving assigned beneficiaries are below certain trended benchmarks of such beneficiaries and certain quality performance measures are achieved. The generation of shared savings is the performance obligation of each ACO, which only become certain upon the final issuance of unembargoed calculations by CMS, generally in the third quarter of each year. During the year ended December 31, 2018, the HCI segment recorded net service revenue of $3.7 million related to the 2017 ACO service periods, as certain ACOs served by the HCI segment received a MSSP payment from CMS confirming the performance obligation had been met. As of December 31, 2018, no net service revenue was recognized related to potential MSSP payments for savings generated for the program periods ended December 31, 2018, if any, as it remains unclear as to if performance obligation has been met by any ACOs served by the HCI segment. Accounts Receivable The Company reports accounts receivable net of estimates of variable consideration and implicit price concessions. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, Medicaid, other third-party payors, and to a lesser degree patients. The Company establishes an allowances for explicit and implicit price concessions to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk associated with receivables from other payors is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 55.0% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other significant concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable. The amount of the provision for implicit price concessions is based upon the Company’s assessment of historical and expected net collections, business and economic conditions, and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined that the account will not be collected. A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is recouped prior to receiving final payment in full. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% of the estimated reimbursement. The Company’s services to the Medicare population are paid at prospectively set amounts that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and other in or out of network payors provide for payments based upon a predetermined fee schedule or an episodic basis. The Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated explicit price concessions when reporting net service revenue for each reporting period. The following table sets forth the percentage of patient accounts receivable by payor for the years ended December 31: 2018 2017 Medicare 51.3 % 60.8 % Medicaid 8.6 5.8 Managed Care, Commercial, and Other 40.1 33.4 Total patient accounts receivable 100.0 % 100.0 % Business Combination The Company accounts for its acquisitions in accordance with ASC 805, "Business Combinations" ("ASC 805") using the acquisition method of accounting. Assets typically acquired consist primarily of Medicare licenses, trade names, certificates of need, and/or non-compete agreements. The assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method. The noncontrolling interest associated with joint venture acquisitions is also measured and recorded at fair value as of the acquisition date. Goodwill represents the excess of the cost of an acquired entity over the net amounts assigned to assets acquired and liabilities assumed. The operations of the acquisitions are included in the consolidated financial statements from their respective dates of acquisition. Acquisition transactions that occurred in 2018 are further described in Notes 3 and 4 and goodwill and intangible assets are discussed in Note 5. Insurance Programs The Company bears significant risk under its large-deductible workers’ compensation insurance program and its self-insured employee health program. Under the workers’ compensation insurance program, the Company bears risk up to $0.5 million per incident, after which stop-loss coverage is maintained. The Company purchases stop-loss insurance for the employee health plan and bear risk up to $0.3 million per incident. Malpractice and general patient liability claims for incidents which may give rise to litigation have been asserted against the Company by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. The Company currently carries professional liability insurance coverage on a claims made basis and general liability insurance coverage on an occurrence basis for this exposure with a $0.1 million . The Company also carries D&O coverage (also on a claims made basis) for potential claims against the Company’s directors and officers, including securities actions, with deductibles ranging from $0.5 million to $1.0 million per claim. The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company monitors its estimated insurance-related liabilities and recoveries, if any, on a monthly basis and records amounts due under insurance policies in other current assets, while recording the estimated carrier liability in self-insurance reserves. As facts change, it may become necessary to make adjustments that could be material to the Company’s results of operations and financial condition. Goodwill and Intangible Assets In accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350") goodwill and intangible assets with indefinite lives are reviewed by the Company at least annually for impairment. The Company performs its annual impairment review of goodwill at November 30, and when a triggering event occurs between annual impairment tests. For 2018 and 2017, the Company performed a qualitative assessment of goodwill and determined that it is not more likely than not that the fair values of its reporting units are less than the carrying amounts. The Company has not recognized any goodwill impairment charges in 2018 , 2017 or 2016 related to the annual impairment testing. Components of the Company's reporting units are collections of markets of similar service offerings that operate collaboratively under a house of brands, i.e. multiple brands are used across markets, states, and segments. During the years ended December 31, 2018 and 2017, the Company recognized a disposal of $0.6 million and $1.5 million , respectively related to goodwill associated with the closure of underperforming locations. The impairments were calculated using a market approach. Included in intangible assets are definite-lived assets subject to amortization such as non-compete agreements and defensive assets, which are defined as trade names that are not actively used. Amortization of definite-lived intangible assets is calculated on a straight-line basis over the estimated useful lives of the related assets, ranging from two to ten years. Amortization expense for the Company's definite-lived intangible assets for the years ended December 31, 2018 , 2017 and 2016 was $2.1 million , $2.1 million and $2.5 million , respectively, which was recorded in general and administrative expenses. The Company also has indefinite-lived assets that are not subject to amortization expense such as trade names, certificates of need, and Medicare licenses to conduct specific operations within geographic markets. The Company has concluded that trade names, certificates of need, and licenses have indefinite lives, because there are no legal, regulatory, contractual, economic or other factors that would limit the useful lives of these intangible assets and the Company intends to renew and operate the certificates of need and licenses and use the trade names indefinitely. In some cases, the value of licenses and certificates of need is increased by moratoriums in effect. These indefinite-lived intangible assets are reviewed annually for impairment or more frequently if circumstances indicate impairment may have occurred. To determine whether an indefinite-lived intangible asset is impaired, the Company performs a qualitative assessment to support the conclusion that the indefinite-lived intangible asset is not impaired. Based on the results of that qualitative assessment, the Company may perform a quantitative test. The Company utilizes a relief-from-royalty method in its quantitative impairment test of trade names. Under this method, the fair value of the trade name is determined by calculating the present value of the after-tax cost savings associated with owning the trade names and, therefore, not having to pay royalties for use over its estimated useful life. The Company utilizes the replacement cost approach in its quantitative impairment test for certificates of need and licenses. Under this method, assumptions are made about the cost to replace the certificates of need and licenses. During the twelve months ended December 31, 2018 and 2017, the Company did not record an impairment charge related to indefinite-lived intangible assets. During the year ended December 31, 2018, the Company recognized a disposal of $3.7 million related to intangible assets associated with closures of underperforming locations. Due to/from Governmental Entities The Company’s LTACHs are reimbursed for certain activities based on tentative rates. The amounts recorded in due to/from governmental entities on the Company’s consolidated balance sheets relate to settled and open cost reports that are subject to the completion of audits and the issuance of final assessments. Final reimbursement is determined based on submission of annual cost reports and audits by the fiscal intermediary. Adjustments are accrued on an estimated basis in the period the related services were rendered and further adjusted as final settlements are determined. These adjustments are accounted for as changes in estimates. Additionally, reimbursements received in excess of hospice cap amounts are recorded in this account, if any. Property, Building and Equipment Property, building and equipment are recorded at cost. Property and equipment acquired in connection with business combinations are recorded at estimated fair value in accordance with the acquisition method of accounting in accordance with ASC 805. Expenditures that increase capacities or extend useful lives are capitalized to the appropriate property, building and equipment accounts. Costs and related accumulated depreciation associated with assets that are sold or retired are written off and any gain or losses are recorded in operating income. Routine repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the individual assets. The estimated useful life of buildings is 39 years , while the estimated useful lives of transportation equipment and furniture and other equipment range from 3 to 10 years . The useful life for leasehold improvements is the shorter of the lease term or the expected life of the leasehold improvement. In accordance with ASC 360, "Property, Plant, and Equipment", the Company evaluates its long-lived assets for possible impairment whenever events or changes in circumstances occur that indicate that the carrying amount of the asset may not be recoverable. There were no impairment charges recognized during the periods ended December 31, 2018 , 2017 and 2016 . The following table describes the Company’s components of property, building and equipment for the years ended December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Land $ 6,750 $ 2,033 Building and improvements 35,474 14,166 Transportation equipment 13,503 11,363 Fixed equipment 745 780 Office furniture and medical equipment 78,344 61,676 134,816 90,018 Less accumulated depreciation 55,253 43,565 Property, building and equipment, net $ 79,563 $ 46,453 Depreciation expense for the years ended December 31, 2018 , 2017 and 2016 was $14.1 million , $11.3 million and $9.7 million , respectively, which was recorded in general and administrative expenses. Noncontrolling Interest The Company classifies noncontrolling interests of its joint ventures based upon a review of the legal provisions governing the redemption of such interests. In each of the Company’s joint ventures, those provisions are embodied within the joint venture’s operating agreement. For joint ventures with operating agreement provisions that establish an obligation for the Company to purchase the third party partners’ noncontrolling interests other than as a result of events that lead to a liquidation of the joint venture, such noncontrolling interests are classified as redeemable noncontrolling interests in temporary equity. For joint ventures with operating agreement provisions that establish an obligation that the Company purchase the third party partners’ noncontrolling interests, but which obligation is triggered by events that lead to a liquidation of the joint venture, such noncontrolling interests are classified as nonredeemable noncontrolling interests in permanent equity. Additionally, for joint ventures with operating agreement provisions that do not establish an obligation for the Company to purchase the third party partners’ noncontrolling interests (e.g., where the Company has the option, but not the obligation, to purchase the third party partners’ noncontrolling interests), such noncontrolling interests are classified as nonredeemable noncontrolling interests in permanent equity. The Company’s equity joint ventures that are classified as redeemable noncontrolling interests are subject to operating agreement provisions that require the Company to purchase the noncontrolling partner’s interest upon the occurrence of certain triggering events, which are defined as the bankruptcy of the partner or the partner’s exclusion from the Medicare or Medicaid programs. These triggering events and the related repurchase provisions are specific to each redeemable equity joint venture, since the triggering of a repurchase obligation for any one redeemable noncontrolling interest in an equity joint venture does not necessarily impact any of the other redeemable noncontrolling interests in other equity joint ventures. Upon the occurrence of a triggering event requiring the purchase of a redeemable noncontrolling interest, the Company would be required to purchase the noncontrolling partner’s interest based upon a valuation methodology set forth in the applicable joint venture agreement. Redeemable noncontrolling interests and nonredeemable noncontrolling interests are initially recorded at their fair value as of the closing date of the transaction establishing the joint venture. Such fair values are determined using various accepted valuation methods, including the income approach, the market approach, the cost approach, and a combination of one or more of these approaches. A number of facts and circumstances concerning the operation of the joint venture are evaluated for each transaction, including (but not limited to) |
Almost Family Merger
Almost Family Merger | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Almost Family Merger | Almost Family Merger On November 15, 2017, the Company announced the execution of an Agreement and Plan of Merger (the “Merger Agreement”) entered into among the Company, Almost Family, Inc. (“Almost Family”), and Hammer Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of the Company, providing for a “merger of equals” business combination of the Company and Almost Family (the "Merger"). On April 1, 2018, the Company completed the Merger as contemplated by that certain Agreement and Plan of Merger. At the effective time of the Merger on April 1, 2018, each outstanding share of Almost Family, other than certain canceled shares, was converted into the right to receive 0.9150 shares of the Company's common stock and cash in lieu of any fractional shares of any Company common stock that Almost Family shareholders would otherwise have been entitled to receive. As a result, the Company issued approximately 12.8 million shares of its common stock to former stockholders of Almost Family. The Company was determined to be the accounting acquirer in the Merger. The following table summarizes the consideration transferred in connection with the Merger (amounts in thousands, except share data): Outstanding shares of Almost Family common stock as of April 1, 2018 13,951,134 Exchange ratio 0.9150 Shares of the Company issued 12,765,288 Price per share as of April 1, 2018 $ 61.56 Fair value of the Company common stock issued $ 785,831 Fair value of vested Almost Family equity awards exchanged for equity awards in the Company $ 9,581 Preliminary merger consideration $ 795,412 The Company's preliminary valuation analysis of identifiable assets and liabilities assumed for the Merger is in accordance with the requirements of ASC Topic 805, Business Combinations, the preliminary estimates of which are presented in the table below (amounts in thousands). The final determination of the fair value of assets acquired and liabilities assumed will be completed in accordance with the applicable accounting guidance. Due to the significance of the Merger, the Company may use all of the measurement period to adequately analyze and assess the fair value of assets acquired and liabilities assumed. Preliminary merger consideration Stock $ 795,412 Preliminary fair value of total consideration transferred Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 16,547 Patient accounts receivable 91,095 Prepaid income taxes 2,262 Prepaid expenses and other current assets 11,490 Property and equipment 11,144 Trade name 76,090 Certificates of need/licenses 76,505 Customer relationships 13,970 Assets held for sale 2,850 Deferred income taxes 3,613 Accounts payable (43,731 ) Accrued other liabilities (56,100 ) Seller notes payable (13,555 ) NCI - Redeemable (8,034 ) Long term income taxes payable (3,786 ) Line of credit (106,800 ) NCI - Nonredeemable (36,609 ) Other assets and (liabilities), net (2 ) Total identifiable assets and liabilities 36,949 Preliminary goodwill $ 758,463 Trade names, certificates of need and licenses are indefinite-lived assets and, therefore, not subject to amortization. Acquired trade names that are not being used actively are amortized over the estimated useful life on the straight line basis. Trade names are valued using the relief from royalty method, a form of the income approach. Certificates of need are valued using the replacement cost approach based on registration fees and opportunity costs. Licenses are valued based on the estimated direct costs associated with the recreating the asset, including opportunity costs based on an income approach. In the case of states with a moratorium in place, the licenses are valued using the multi period excess earnings method. The other identifiable assets include customer relationships that are amortized over 20 years. Customer relationships were valued using the multi period excess earnings method. Noncontrolling interest is valued at fair value. The following unaudited pro forma financial information reflects the consolidated results of operations of the Company had the Merger occurred on January 1, 2017. Almost Family's financial information has been compiled in a manner consistent with the accounting policies adopted by LHC Group. The unaudited pro forma financial information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the Merger occurred on January 1, 2017, nor are they indicative of any future results (amounts in thousands, except per share amount). Pro forma (unaudited) 2018 2017 Net service revenue $ 2,002,420 $ 1,845,041 Net income attributable to the Company 79,434 70,526 Diluted earnings per share $ 2.55 $ 2.26 The pro forma financial information contained in this report, including the above, is based on the Company's preliminary assignment of consideration given and therefore subject to adjustment. These proforma amounts were calculated after applying the Company's accounting policies and adjusting Almost Family's and LHC Group's results to reflect adjustments that are directly attributable to the Merger. These adjustments mainly exclude transaction costs incurred by Almost Family and LHC Group in the fiscal quarter preceding the consummation of the Merger, together with the consequential tax effects at the statutory rate. The unaudited pro forma financial information contained in this report, including the above, has been prepared for informational purposes only and does not include any anticipated synergies or other potential benefits of the Merger. Pro forma information is not present for any other acquisitions or joint venture transactions, as the aggregate operations of the acquired businesses were not significant to the overall operations of the Company. It also does not give effect to certain future charges that the Company expects to incur in connection with the Merger, including, but not limited to, additional professional fees, legal expenses, severance, retention and other employee-related costs, contract breakage costs, and costs related to consolidation of technology systems and corporate facilities. Transaction costs associated with the Merger that were incurred by the Company during the year ended December 31, 2018 are being expensed as incurred and are presented in the consolidated statements of income as general and administrative expenses. These expenses include investment banking, legal, accounting, and other third-party transaction costs associated with the Merger, including preparation for regulatory filings and shareholder approvals. During the year ended December 31, 2018, the Company incurred $ 33.0 million of transaction, transition and integration costs related to the Merger. |
Other Acquisitions and Joint Ve
Other Acquisitions and Joint Ventures | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Other Acquisitions and Joint Ventures | Other Acquisitions and Joint Ventures 2018 Acquisitions The Company acquired the majority-ownership of seven home health agencies and one hospice agency during the year ended December 31, 2018. The total aggregate purchase price for these transactions was $9.4 million , of which $8.8 million was paid in cash. The purchase prices were determined based on the Company's analysis of comparable acquisitions and the target market's potential future cash flows. Substantially all of the preliminary allocation of the purchase price for the acquisitions were allocated to goodwill of $11.0 million , indefinite lived intangibles trade names of $1.5 million and certificates of need/licenses of $1.4 million . Acquired noncontrolling interest was $5.0 million . Goodwill generated from the acquisitions was recognized based on the expected contributions of each acquisition to the overall corporate strategy. The Company expects its portion of goodwill to be fully tax deductible. The acquisitions were accounted for under the acquisition method of accounting, and, accordingly, the accompanying financial information includes the results of operations of the acquired entities from the dates of acquisition. During the year ended December 31, 2018, the Company sold ownership interests in five of its wholly-owned subsidiaries. The total sales prices of such ownership interests were $4.2 million , all of which were accounted for as equity transactions, resulting in the Company reducing additional paid in capital by $2.2 million . During the year ended December 31, 2018, the Company purchased additional ownership interests in two of its equity joint venture subsidiaries. The total consideration of such ownership was $8.1 million , of which $7.7 million was paid in shares of the Company's common stock. These transactions were accounted for as equity transactions, resulting in the Company increasing additional paid in capital by $7.7 million . The Company conducted preliminary assessments and recognized provisional amounts in its initial accounting for these acquisitions for all identified assets in accordance with the requirements of ASC 805. The Company is continuing its review of these matters during the measurement period. If new information about facts and circumstances that existed at the acquisition date is obtained and indicates adjustments are necessary, the acquisition accounting will be revised to adjust to the provisional amounts initially recognized. 2017 Acquisitions On January 1, 2017, the Company formed a joint venture with LifePoint Health, Inc. ("LifePoint"). LifePoint contributed 28 home health agencies, 12 hospice agencies, and one inpatient hospice unit to the joint venture during the twelve months ended December 31, 2017. The Company acquired majority ownership of the membership interests of these agencies. These providers conduct home health operations in Arizona, Colorado, Louisiana, Michigan, North Carolina, Pennsylvania, Tennessee, Texas, and Virginia; and conduct hospice operations in Michigan, North Carolina, Pennsylvania, Tennessee, and Virginia, and conduct inpatient hospice operations in North Carolina. On June 1, 2017, the Company formed a joint venture with Baptist Memorial Health Care ("Baptist"). Baptist contributed three home health agencies, six hospice agencies, and one inpatient hospice unit to the joint venture during the twelve months ended December 31, 2017. The Company acquired majority ownership of the membership interests of these agencies. These providers conduct home health and hospice operations in Mississippi and Tennessee, and conduct inpatient hospice operations in Tennessee. On September 1, 2017, the Company formed a joint venture with CHRISTUS Continuing Care (“CHRISTUS”). CHRISTUS contributed seven home health agencies, five hospice agencies, one inpatient hospice unit, one home and community-based agency, and six LTACH agencies to the joint venture during the twelve months ended December 31, 2017. The Company acquired majority ownership of the membership interests of these agencies. These providers conduct home health and hospice operations in Louisiana and Texas, conduct inpatient hospice operations in Texas, conduct home and community-based operations in Texas; and conduct LTACH operations in Arkansas, Louisiana, and Texas. In separate transactions, the Company acquired five home health agencies, two hospice agencies, and one pharmacy during the twelve months ended December 31, 2017. The total aggregate purchase price for these transactions was $80.2 million , of which $10.4 million was paid in December 2016 and $64.6 million was paid in cash during the twelve months ended December 31, 2017. The difference between the total aggregate purchase price and cash payments relates to acquired liabilities for each business combination. |
Goodwill and Other Intangibles,
Goodwill and Other Intangibles, Net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles, Net | Goodwill and Other Intangibles, Net The following table summarizes changes in goodwill by reporting unit during the twelve months ended December 31, 2018 and 2017 (amounts in thousands): Home health Hospice Home and community- based Facility-based Healthcare Innovations Total Balance as of December 31, 2016 $ 210,839 $ 64,234 $ 18,820 $ 13,424 — $ 307,317 Acquisitions 30,623 15,000 6,220 160 — 52,003 Noncontrolling interests 21,469 9,580 3,501 (141 ) — 34,409 Adjustments and disposals (1,475 ) — — 347 — (1,128 ) Balance as of December 31, 2017 $ 261,456 $ 88,814 $ 28,541 $ 13,790 $ — $ 392,601 Acquisitions 558,628 29,263 137,042 — 40,755 765,688 Noncontrolling interests 3,297 506 — — — 3,803 Adjustments and disposals (779 ) — — 404 — (375 ) Balance as of December 31, 2018 $ 822,602 $ 118,583 $ 165,583 $ 14,194 $ 40,755 $ 1,161,717 The Company determined that there was no impairment for the goodwill of any reporting units as of December 31, 2018, 2017 and 2016 based on the Company's annual impairment testing. The Company did record $0.6 million and $1.5 million of disposal of goodwill during the years ended December 31, 2018 and 2017 due to the closure of underperforming locations. The amount of disposal of goodwill was determined using prices of comparable business in the market. This was recorded in impairment of intangibles and other on the Company's consolidated statements of income. The Company performed an impairment analysis on its indefinite-lived intangible assets related to the Company's trade names, licenses and certificates of need and determined that it is not more likely than not that the fair values of the indefinite-lived intangible assets are less than its carrying amount as of November 30, 2018; however, the Company did record $3.7 million of disposals of licenses, certificates of needs, and customer relationship intangible assets due to the closure of underperforming locations. This was recorded in impairment of intangibles and other on the Company's consolidated statements of income. The following tables summarize the changes in intangible assets during the twelve months ended December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Indefinite-lived intangible assets: Trade Names $ 156,049 $ 78,299 Certificates of Need/Licenses 128,577 53,493 Net total 284,626 131,792 Definite-lived intangible assets: Trade Names Gross carrying amount 10,127 10,127 Accumulated amortization (8,817 ) (7,547 ) Net total 1,310 2,580 Non-compete agreements Gross carrying amount 5,980 5,732 Accumulated amortization (5,729 ) (5,494 ) Net total 251 238 Customer relationships Gross carrying amount 11,822 — Accumulated amortization (630 ) — Net total 11,192 — Total definite-lived intangible assets Gross carrying amount 27,929 15,859 Accumulated amortization (15,176 ) (13,041 ) Net total 12,753 2,818 Total intangible assets: Gross carrying amount 312,555 147,651 Accumulated amortization (15,176 ) (13,041 ) Net total $ 297,379 $ 134,610 Remaining useful lives of trade names, customer relationships, and non-compete agreements were 8.8 , 19.3 , and 2.8 years, respectively. Similar amounts at December 31, 2017 were 10.3 and 2.1 years for trade names and non-compete agreements, respectively. Amortization expense for the Company's intangible assets was $2.1 million for the years ended December 31, 2018 and 2017 and $2.5 million for the year ended December 31, 2016, which was recorded in general and administrative expenses. The estimated intangible asset amortization expense for each of the five years subsequent to December 31, 2018 is as follows (amounts in thousands): Year Amortization amount 2019 $ 1,112 2020 899 2021 732 2022 682 2023 682 Total $ 4,107 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred taxes are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax laws that will be in effect when the differences are expected to reverse. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 were as follows (amounts in thousands): 2018 2017 Deferred tax assets: Allowance for uncollectible accounts $ 8,645 $ 5,224 Accrued employee benefits 6,038 4,147 Stock compensation 2,322 663 Accrued self-insurance 8,656 2,157 Acquisition costs 1,413 2,064 Net operating loss carry forward 9,147 1,299 Intangible asset impairment 18 21 Other 1,021 91 Capital loss carryforward — 12 Valuation allowance (3,574 ) (44 ) Deferred tax assets $ 33,686 $ 15,634 Deferred tax liabilities: Amortization of intangible assets (64,001 ) (35,955 ) Tax depreciation in excess of book depreciation (7,693 ) (5,988 ) Prepaid expenses (1,134 ) (623 ) Non-accrual experience accounting method (602 ) (534 ) Other (3,562 ) — Deferred tax liabilities (76,992 ) (43,100 ) Net deferred tax liability $ (43,306 ) $ (27,466 ) Based on the Company’s historical pattern of taxable income, the Company believes it will produce sufficient income in the future to realize its deferred income tax assets. Management provides a valuation allowance for any net deferred tax assets when it is more likely than not that a portion of such net deferred tax assets will not be recovered. The components of the Company’s income tax expense from continuing operations, less noncontrolling interest, were as follows (amounts in thousands): 2018 2017 2016 Current: Federal $ 892 $ 12,798 $ 12,563 State 3,382 2,621 2,371 4,274 15,419 14,934 Deferred: Federal 15,383 (6,273 ) 6,223 State 2,742 1,798 1,019 18,125 (4,475 ) 7,242 Total income tax expense $ 22,399 $ 10,944 $ 22,176 A reconciliation of the difference between the federal statutory tax rate and the Company's effective tax rate for income taxes for each period is as follows: 2018 2017 2016 Federal statutory tax rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 5.7 4.4 3.8 Nondeductible expenses 2.6 3.2 2.6 Uncertain tax position (1.3 ) — (3.3 ) TCJA Enactment — (22.9 ) — Excess Tax Benefit (2.6 ) (1.6 ) — Credits and other 0.7 (0.1 ) (0.4 ) Effective tax rate 26.1 % 18.0 % 37.7 % The Company is subject to both federal tax and state income tax for jurisdictions within which it operates. Within these jurisdictions, the Company is open to examination for tax years ended after December 31, 2013. As of December 31, 2018, the Company has U.S. operating loss carry forwards of $15.5 million that are available to reduce future taxable income. If not used to offset taxable income, a portion of these losses will expire between 2032 and 2034. Losses generated in years ending after December 31, 2017 have an unlimited carryforward under the Tax Cut and Jobs Act. Due to U.S. limitations on acquired operating losses, a valuation allowance has been established on $0.8 million of these losses. State operating loss carryforwards totaling $92.3 million at December 31, 2018 are being carried forward in jurisdictions where the Company is permitted to use tax losses from prior periods to reduce future taxable income. If not used to offset future taxable income, these losses will expire between 2019 and 2038. Due to uncertainty regarding the Company's ability to use some of the carryforwards, a valuation allowance has been established on $49.4 million of state net operating loss carryforwards. Based on the Company's historical record of producing taxable income and expectations for the future, the Company has concluded that future operating income will be sufficient to give rise to taxable income sufficient to utilize the remaining state net operating loss carryforwards. US GAAP prescribes a recognition threshold and measurement attribute for the accounting and financial statement disclosure of tax positions taken or expected to be taken in a tax return. The evaluation of a tax position is a two-step process. The first step requires the Company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. The second step requires the Company to recognize in the financial statements each tax position that meets the more likely than not criteria, measured at the amount of benefit that has a greater than 50% likelihood of being realized. The Company's unrecognized tax benefits would affect the tax rate, if recognized. The Company includes the full amount of unrecognized tax benefits in other noncurrent liabilities in the consolidated balance sheets. The Company anticipates it is reasonably possible an increase or decrease in the amount of unrecognized tax benefits could be made in the next twelve months. However, the Company does not presently anticipate that any increase or decrease in unrecognized tax benefits will be material to the consolidated financial statements. The amount recognized as of December 31, 2018 was $4.3 million . A reconciliation of the total amounts of unrecognized tax benefits follows: Acquired unrecognized tax position $ 3,786 Increased (decreases) in unrecognized tax benefits as a result of: Tax positions taken in the current year 1,835 Lapse of statute of limitations (1,324 ) Total unrecognized tax benefits as of December 31, 2018 $ 4,297 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facility During the period from January 1, 2018 through April 1, 2018, the Company maintained its revolving line of credit through a credit facility with Capital One, National Association (the "Prior Credit Facility"), which provided a senior, secured revolving line of credit commitment with a maximum principal borrowing limit of $225.0 million and a letter of credit sub-limit equal to $15.0 million . The expiration date of the Credit Agreement was June 18, 2019 . On March 30, 2018, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., which was effective on April 2, 2018 following the Merger (the "New Credit Agreement"). The New Credit Agreement provides a senior, secured revolving line of credit commitment with a maximum principal borrowing limit of $500.0 million , which includes an additional $200.0 million accordion expansion feature, and a letter of credit sub-limit equal to $50.0 million . The expiration date of the New Credit Agreement is March 20, 2023. The New Credit Agreement replaced the Prior Credit Facility with Capital One, National Association, which was set to mature on June 18, 2019. The Company's obligations under the New Credit Agreement were secured by substantially all of the assets of the Company and its wholly-owned subsidiaries (subject to customary exclusions), which assets include the Company's equity ownership of its wholly-owned subsidiaries and its equity ownership in joint venture entities. The Company's wholly-owned subsidiaries also guarantee the obligations of the Company under the New Credit Agreement. Debt issuance costs of $1.9 million were capitalized with the New Credit Agreement and will be amortized through March 30, 2023, the termination date for the New Credit Agreement. Revolving loans under the New Credit Agreement with JPMorgan Chase Bank, N.A. bear interest at, as selected by the Company, either a (a) Base Rate which is defined as a fluctuating rate per annum equal to the highest of (1) the Federal Funds Rate in effect on such day plus 0.5% , (2) the Prime Rate in effect on such day and (3) the Eurodollar Rate for a one month interest period on such day plus 1.50% , plus a margin ranging from 0.5% to 1.25% per annum or (b) Eurodollar Rate plus a margin ranging from 1.50% % to 2.25% per annum, with pricing varying based on the Company's quarterly consolidated Leverage Ratio (as defined in the New Credit Agreement). Swing line loans bear interest at the Base Rate. The Company is limited to 15 Eurodollar borrowings outstanding at any time. The Company is required to pay a commitment fee for the unused commitments at rates ranging from 0.20% to 0.35% per annum depending upon the Company's quarterly consolidated Leverage Ratio. The Base Rate at December 31, 2018 was 5.50% and the Eurodollar Rate was 4.19% . As of December 31, 2018 , the effective interest rate on outstanding borrowings under the New Credit Agreement was 4.19% . On April 2, 2018, in connection with the consummation of the Merger, the Company borrowed approximately $247.4 million under the New Credit Agreement to (i) repay the approximately $107.3 million of outstanding borrowings under Almost Family' $350.0 million credit facility, which was terminated in connection with the Merger (ii) repay the approximately $125.1 million of outstanding borrowings under the Prior Credit Facility, which was also terminated in connection with the Merger, and (iii) pay certain debt issuance and repayment costs and Merger related fees and expenses. As of December 31, 2018 the Company had $235.0 million drawn and letters of credit in the amount of $30.4 million outstanding under the credit facility. At December 31, 2017 , the Company had $144.0 million drawn and letters of credit in the amount of $9.6 million outstanding under the Prior Credit Facility. Under the terms of the New Credit Agreement, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The New Credit Agreement permits the Company to make certain restricted payments, such as purchasing shares of its stock, within certain parameters, provided the Company maintains compliance with those financial ratios and covenants after giving effect to such restricted payments. The Company was in compliance with debt covenants at December 31, 2018 . The scheduled principal payments on long-term debt for each of the five years subsequent to December 31, 2018 is as follows (amounts in thousands): Year Principal payment amount 2019 $ 7,773 2020 235,123 2021 133 2022 143 2023 531 Total $ 243,703 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Equity Based Awards At the Company’s 2018 Annual Meeting of Stockholders held on June 7, 2018, the stockholders of the Company approved the Company’s 2018 Long Term Incentive Plan (the “2018 Incentive Plan”) to replace the Company's 2010 Long Term Incentive Plan (the "Prior Plan"). The 2018 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). The total number of shares of the Company's common stock originally reserved and available for issuance pursuant to awards granted under the 2018 Incentive Plan was 2,000,000 , plus an additional number of shares (not to exceed 300,000 ) underlying stock awards granted under the Company's Prior Plan that terminated, expired, or forfeited. As of June 7, 2018, there were 2,210,544 shares of our common stock reserved for future awards, under the 2018 Incentive Plan. A total of 2,194,074 shares are available for issuance as of December 31, 2018. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2018 Incentive Plan, including incentive or non-qualified statutory stock options and restricted stock, restricted stock units and performance-based awards. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee. The Compensation Committee determines the exercise price for stock options, which cannot be less than the fair market value of the Company's common stock as of the date of grant. Almost Family had Stock and Incentive Compensation Plans that provided for stock awards of the Company's common stock to employees, non-employee directors, or independent contractors. Almost Family issued restricted shares and/or option awards to employees and non-employee directors. Under the change of control provisions of the Almost Family plans, all outstanding restricted stock, performance restricted stock, and options became non-forfeitable in conjunction with the Merger. Each unvested restricted share award issued by Almost Family that was outstanding immediately prior to the Merger converted into a restricted stock award to acquire shares of the Company on the same terms and conditions rounded up or down to the nearest whole share, determined by multiplying the number of shares of Almost Family's common stock subject to such restricted stock award by the exchange ratio. Each stock option to purchase shares of Almost Family that was outstanding immediately prior to the Merger converted into an option to purchase shares of the Company on the same terms and conditions, (A) the number of shares of LHC's common stock, rounded down to the nearest whole share, determined by multiplying (I) the total number of shares of Almost Family's common stock by (II) the exchange ratio, and (B) at a per-share exercise price, rounded up to the nearest whole cent, equal to the quotient determined by dividing (I) the exercise price per share of Almost Family's common stock by (II) the exchange ratio. Share Based Compensation Nonvested Stock The Company issues stock-based compensation to employees in the form of nonvested stock, which is an award of common stock subject to certain restrictions. The awards, which the Company calls nonvested shares, generally vest over a five year period, conditioned on continued employment for the full incentive period. Compensation expense for the nonvested stock is recognized for the awards that are expected to vest. The expense is based on the fair value of the awards on the date of grant recognized on a straight-line basis over the requisite service period, which generally relates to the vesting period. During 2018 , 2017 and 2016 , respectively, 213,105 , 139,310 and 220,800 nonvested shares were granted to employees pursuant to the 2010 Incentive Plan. In addition, 16,470 nonvested shares were granted to employees pursuant to the 2018 Incentive Plan. The Company also issues nonvested stock to its independent directors of the Company’s Board of Directors. During 2018 , 2017 and 2016 , respectively, 13,600 , 11,700 and 15,300 nonvested shares of stock were granted to the independent directors under the 2005 Director Compensation Plan. The shares issued under the 2005 Director Compensation Plan were drawn from the 1,500,000 shares reserved for issuance under the 2010 Incentive Plan. The shares fully vest one year from the date of the grant. During the twelve months ended December 31, 2018, four new directors were granted 14,000 nonvested shares of common stock under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan. The shares vest 33% at the grant date, then 33% each year on the anniversary date until the third year. The fair value of nonvested shares is determined based on the closing trading price of the Company’s shares on the grant date. The weighted average grant date fair values of nonvested shares granted during the years ended December 31, 2018, 2017 and 2016 were $64.11 , $48.52 and $37.99 , respectively. The following table represents the share grants stock activity for the year ended December 31, 2018 : Restricted stock Options Number of Shares Weighted average grant date fair value Number of Shares Weighted average grant date fair value Share grants outstanding at December 31, 2017 529,465 $ 37.34 — $ — Granted 257,175 64.11 — — Acquired — — 270,710 36.48 Vested or exercised (212,355 ) 37.77 (108,903 ) 34.11 Share grants outstanding at December 31, 2018 574,285 $ 49.68 161,807 $ 38.08 As of December 31, 2018 , there was $19.4 million of total unrecognized compensation cost related to nonvested shares granted. That cost is expected to be recognized over the weighted average period of 3.10 years . The total fair value of shares vested in the year ended December 31, 2018 was $8.0 million and the total fair value of shares vested in the years December 31, 2017 and 2016 was $5.6 million and $4.5 million , respectively. The Company records compensation expense related to nonvested share awards at the grant date for shares that are awarded fully vested and over the vesting term on a straight line basis for shares that vest over time. Compensation expense is reduced for estimated forfeitures. The Company estimates forfeitures at the time of grant and revises the estimate in subsequent periods if actual forfeitures differ. The Company has recorded $9.4 million , $6.0 million and $4.9 million in compensation expense related to non-vested stock grants in the years ended December 31, 2018, 2017 and 2016 , respectively. Options acquired in connection with the Merger are fully vested and non-forfeitable. Aggregate intrinsic value for options represents the estimated value of the Company's common stock at the end of the period in excess of the weighted average exercise price multiplied by the number of options exercisable. The aggregate intrinsic value of options outstanding at December 31, 2018 was $9.0 million . The total intrinsic value of options exercised during the year ended December 31, 2018 was $6.8 million . The following table summarizes information about stock options outstanding and exercisable at December 31, 2018: Range of Exercise Price Shares Wtd. Avg. Remaining Contractual Life Wtd. Avg. Exercise Price $0.00 - 30.00 47,579 4.47 $ 24.93 $30.01 - 40.00 71,684 6.23 $ 39.43 Over $40.00 42,544 7.73 $ 50.51 161,807 6.46 $ 38.08 Employee Stock Purchase Plan In 2006, the Company adopted the Employee Stock Purchase Plan allowing eligible employees to purchase the Company’s common stock at 95% of the market price on the last day of each calendar quarter. There were 250,000 shares reserved for the plan. On June 20, 2013, the Amended and Restated Employee Stock Purchase Plan was approved by the Company’s stockholders. As a result of the amendment, the Employee Stock Purchase Plan was modified as follows: • An additional 250,000 shares of common stock were authorized for issuance over the term of the Employee Stock Purchase Plan. • The term of the Employee Stock Purchase Plan was extended from January 1, 2016 to January 1, 2023. The following table represents the shares issued during 2018 , 2017 and 2016 under the Employee Stock Purchase Plan: Number of Shares Weighted Average Per Share Price Shares available as of December 31, 2015 213,760 Shares issued in 2016 24,149 $ 37.79 Shares issued in 2017 18,542 $ 55.40 Shares issued in 2018 18,725 $ 71.12 Shares available as of December 31, 2018 152,344 Treasury Stock In conjunction with the vesting of the nonvested shares of stock or exercise of options, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy those personal tax obligations. The Company redeemed 68,217 , 61,825 and 52,119 shares of common stock related to these tax obligations during the years ended December 31, 2018, 2017 and 2016 , respectively. In addition, the Company redeemed 68,070 shares of common stock valued at $ 2.5 million, related to the exercise of Almost Family options. Such shares are held as treasury stock and are available for reissuance by the Company. Additionally, shares were submitted by employees in lieu of paying the stock option exercise price that would have otherwise been due on exercise. Such shares are held in treasury stock and are available for reissuance by the Company. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space and equipment at its various locations. Many of the leases contain renewal options with varying terms and conditions. Management expects that in the normal course of business, expiring leases will be renewed or, upon making a decision to relocate, replaced by leases for new locations. Operating lease terms range from three to ten years . Rent expense includes insurance, maintenance, and other costs as required by the lease. Total rental expense was $47.6 million , $25.1 million and $20.8 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Future minimum rental commitments under non-cancelable operating leases are as follows (amounts in thousands): Year Total 2019 $ 35,473 2020 24,663 2021 17,815 2022 10,795 2023 6,302 Thereafter 12,883 $ 107,931 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan Defined Contribution Plan The Company sponsors a 401(k) plan for all eligible employees. The plan allows participants to contribute up to $18,500 in 2018 , tax deferred (subject to IRS guidelines). The plan also allows discretionary Company contributions as determined by the Company’s Board of Directors. Effective January 1, 2006, the Company implemented a discretionary match of up to two percent of participating employee contributions. The employer contribution will vest 25% in an employee's account for each year of service with the Company and 25% each additional year until it is fully vested in year four . Contribution expense to the Company was $10.1 million , $7.9 million and $6.3 million in the years ended December 31, 2018 , 2017 and 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies The Company provides services in a highly regulated industry and is a party to various proceedings and regulatory and other governmental and internal audits and investigations in the ordinary course of business (including audits by Zone Program Integrity Contractors ("ZPICs") and Recovery Audit Contractors ("RACs") and investigations resulting from the Company's obligation to self-report suspected violations of law). Management cannot predict the ultimate outcome of any regulatory and other governmental and internal audits and investigations. While such audits and investigations are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve. The Department of Justice, CMS, or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company's businesses in the future. These audits and investigations have caused and could potentially continue to cause delays in collections, recoupments from governmental payors. Currently, the Company has recorded $16.9 million in other assets, which are from government payors related to the disputed finding of pending ZPIC audits. Additionally, these audits may subject the Company to sanctions, damages, extrapolation of damage findings, additional recoupments, fines, and other penalties (some of which may not be covered by insurance), which may, either individually or in the aggregate, have a material adverse effect on the Company's business and financial condition. On January 18, 2018, Jordan Rosenblatt, a purported shareholder of Almost Family, Inc. (“Almost Family”) filed a Complaint for Violations of the Securities Exchange Act of 1934 (the "1934 Act") in the United States District Court for the Western District of Kentucky, styled Rosenblatt v. Almost Family, Inc., et al. , Case No. 3:18-cv-40-TBR (the “Rosenblatt Action”). The Rosenblatt Action was filed against the Company, Almost Family, Almost Family’s board of directors, and Hammer Merger Sub, Inc. ("Merger Sub"). The complaint in the Rosenblatt Action (“Complaint”) asserts that the Form S-4 Registration Statement (“Registration Statement”) filed on December 21, 2017 contains false and misleading statements with respect to the Merger. The Complaint asserts claims against Almost Family and its board of directors for violations of Section 14(a) of the 1934 Act in connection with the dissemination of the Registration Statement, and asserted claims against the Almost Family board of directors and the Company for violations of Section 20(a) of the 1934 Act as controlling persons of Almost Family. The Rosenblatt Action seeks, among other things, an injunction enjoining the Merger from closing and an award of attorneys’ fees and costs. In addition to the Rosenblatt Action, two additional complaints were filed against Almost Family in the United States District Court for the District of Delaware ("the Delaware Actions") alleging similar violations as the Rosenblatt Action. These Delaware Actions also sought, among other things, an injunction to enjoin both the vote of the Almost Family stockholders with respect to the Merger and the closing of the Merger, monetary damages and an award of attorneys’ fees and costs from Almost Family. On February 22, 2018, one of the plaintiffs in the Delaware Actions moved for a preliminary injunction to enjoin the merger of Almost Family and Merger Sub. Then, on March 2, 2018 the Delaware Actions were transferred to the United States District Court for the Western District of Kentucky. Shortly thereafter, on March 12, 2018, Almost Family, LHC and Merger Sub opposed the plaintiffs' motion for a preliminary injunction, and the court heard oral argument on the plaintiffs' motion for a preliminary injunction on March 19, 2018. On March 22, 2018, the court denied the plaintiffs' motion for preliminary injunction. The next day, on March 23, 2018, one of the plaintiffs in the Delaware Actions moved to consolidate the Delaware Actions with the Rosenblatt Action and for the appointment of a lead plaintiff and that motion is pending before the court. The Company believes that the claims asserted in these lawsuits are entirely without merit and intend to defend these lawsuits vigorously. The Company is involved in various legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, management believes the outcome of pending litigation will not have a material adverse effect, after considering the effect of the Company’s insurance coverage, on the Company’s consolidated financial information. During 2018, the Company purchased the home office building, land and adjacent land parcels in Lafayette for approximately $19.3 million . The purchase was part of plans for an approximate $70.0 million home office expansion. The expansion is structured into multiple phases. The early phase commitment which was active at December 31, 2018 was approximately $4.0 million . Joint Venture Buy/Sell Provisions Most of the Company’s joint ventures include a buy/sell option that grants to the Company and its joint venture partners the right to require the other joint venture party to either purchase all of the exercising member’s membership interests or sell to the exercising member all of the non-exercising member’s membership interest, at the non-exercising member’s option, within 30 days of the receipt of notice of the exercise of the buy/sell option. In some instances, the purchase price is based on a multiple of the historical or future earnings before income taxes and depreciation and amortization of the equity joint venture at the time the buy/sell option is exercised. In other instances, the buy/sell purchase price will be negotiated by the partners and subject to a fair market valuation process. The Company has not received notice from any joint venture partners of their intent to exercise the terms of the buy/sell agreement nor has the Company notified any joint venture partners of its intent to exercise the terms of the buy/sell agreement. Compliance The laws and regulations governing the Company’s operations, along with the terms of participation in various government programs, regulate how the Company does business, the services offered and its 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 materially and adversely affect the Company’s operations and financial condition. The Company is subject to various routine and non-routine governmental reviews, audits and investigations. In recent years, federal and state civil and criminal enforcement agencies have heightened and coordinated their oversight efforts related to the health care industry, including referral practices, cost reporting, billing practices, joint ventures and other financial relationships among health care providers. Violation of the laws governing the Company’s operations, or changes in the interpretation of those laws, could result in the imposition of fines, civil or criminal penalties, and/or termination of the Company’s rights to participate in federal and state-sponsored programs and suspension or revocation of the Company’s licenses. The Company believes that it is in material compliance with all applicable laws and regulations. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information In the second quarter of 2018, in recognition of the changes to the Company's business segments resulting from the addition of Almost Family and its subsidiaries through the Merger, the Company redefined its reporting segments to include (1) home health services, (2) hospice services, (3) home and community-based services, formerly referred to by the Company as community-based services, (4) facility-based services, and (5) healthcare innovations (“HCI”). In management’s opinion, this approach provides investors clarity and best aligns with the Company’s internal decision-making processes as viewed by the chief operating decision maker. Reportable segments have been identified based upon how management has organized the business by services provided to customers and how the chief operating decision maker manages the business and allocates resources, consistent with the criteria in ASC 280, Segment Reporting. The accounting policies of the segments are the same as those described in the summary of significant accounting policies, as described in Note 2 of the Notes to Condensed Consolidated Financial Statements, including the adoption of ASU 2014-09. The following tables summarize the Company’s segment information for the twelve months ended December 31, 2018 , 2017 and 2016 (amounts in thousands): Year Ended December 31, 2018 Home health Hospice Home and community-based Facility-based Healthcare innovations Total Net service revenue $ 1,291,457 $ 199,118 $ 172,501 $ 113,784 $ 33,103 $ 1,809,963 Cost of service revenue 802,006 130,991 130,660 76,899 15,801 1,156,357 General and administrative expenses 378,124 60,933 40,467 39,638 18,754 537,916 Impairment of intangibles and other 1,816 186 (6 ) 554 2,139 4,689 Operating income (loss) 109,511 7,008 1,380 (3,307 ) (3,591 ) 111,001 Interest expense (7,060 ) (1,529 ) (76 ) (545 ) (469 ) (9,679 ) Income (loss) before income taxes and noncontrolling interests 102,451 5,479 1,304 (3,852 ) (4,060 ) 101,322 Income tax expense (benefit) 22,711 1,227 420 (1,136 ) (823 ) 22,399 Net income (loss) 79,740 4,252 884 (2,716 ) (3,237 ) 78,923 Less net income (loss) attributable to noncontrolling interests 13,361 1,764 (275 ) 589 (90 ) 15,349 Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 66,379 $ 2,488 $ 1,159 $ (3,305 ) $ (3,147 ) $ 63,574 Total assets $ 1,336,988 $ 209,680 $ 236,072 $ 70,261 $ 75,714 $ 1,928,715 Year Ended December 31, 2017 Home health Hospice Home and community-based Facility-based Healthcare innovations Total Net service revenue $ 777,583 $ 157,287 $ 46,159 $ 81,573 $ — $ 1,062,602 Cost of service revenue 482,179 103,969 35,244 54,418 — 675,810 General and administrative expenses 229,264 45,516 9,946 25,813 — 310,539 Impairment of intangibles and other 1,612 22 — (63 ) — 1,571 Operating income 64,528 7,780 969 1,405 — 74,682 Interest expense (2,546 ) (511 ) (191 ) (104 ) — (3,352 ) Income before income taxes and noncontrolling interests 61,982 7,269 778 1,301 — 71,330 Income tax expense 9,509 1,057 156 222 — 10,944 Net income 52,473 6,212 622 1,079 — 60,386 Less net income (loss) attributable to noncontrolling interests 9,102 1,248 (111 ) 35 — 10,274 Net income attributable to LHC Group, Inc.’s common stockholders $ 43,371 $ 4,964 $ 733 $ 1,044 $ — $ 50,112 Total assets $ 534,385 $ 155,230 $ 48,216 $ 55,871 $ — $ 793,702 Year Ended December 31, 2016 Home health Hospice Home and community-based Facility-based Healthcare innovations Total Net service revenue $ 656,287 $ 131,547 $ 43,094 $ 69,105 $ — $ 900,033 Cost of service revenue 398,450 83,359 32,603 43,238 — 557,650 General and administrative expenses 203,418 37,207 8,785 21,212 — 270,622 Impairment of intangibles and other 857 338 49 (45 ) — 1,199 Operating income 53,562 10,643 1,657 4,700 — 70,562 Interest expense (1,794 ) (292 ) (130 ) (228 ) — (2,444 ) Income before income taxes and noncontrolling interests 51,768 10,351 1,527 4,472 — 68,118 Income tax expense 16,505 3,485 651 1,535 — 22,176 Net income 35,263 6,866 876 2,937 — 45,942 Less net income attributable to noncontrolling interests 6,876 1,867 (58 ) 674 — 9,359 Net income attributable to LHC Group, Inc.’s common stockholders $ 28,387 $ 4,999 $ 934 $ 2,263 $ — $ 36,583 Total assets $ 427,782 $ 116,090 $ 33,520 $ 36,679 $ — $ 614,071 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company’s cash, receivables, accounts payable and accrued liabilities approximate their fair values. The estimated fair value of intangible assets was calculated using level 3 inputs based on the present value of anticipated future benefits. For the year ended December 31, 2018 , the carrying value of the Company’s long-term debt approximates fair value as the interest rates approximates current rates. |
Concentration of Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | Concentration of Risk The Company operates in 36 states within the continental United States. The Company's facilities in Louisiana, Tennessee, Arkansas, Mississippi, Kentucky, Florida, and Alabama accounted for approximately 54.2% , 63.0% and 66.6% of net service revenue during the years ended December 31, 2018 , 2017 and 2016 , respectively. Any material change in the current economic or competitive conditions in these states could have a disproportionate effect on the Company’s overall business results. |
Unaudited Summarized Quarterly
Unaudited Summarized Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Summarized Quarterly Financial Information | Unaudited Summarized Quarterly Financial Information The following table represents the Company’s unaudited quarterly results of operations (amounts in thousands, except share data): First Quarter 2018 Second Quarter 2018 Third Quarter 2018 Fourth Quarter 2018 Net service revenue $ 291,054 $ 502,024 $ 507,043 $ 509,842 Gross margin 102,436 181,020 184,847 185,303 Net income attributable to LHC Group, Inc.’s common stockholders 4,995 16,797 21,230 20,552 Net income attributable to LHC Group' Inc.'s common stockholders Basic earnings per share: $ 0.28 $ 0.55 $ 0.69 $ 0.67 Diluted earnings per share: $ 0.28 $ 0.55 $ 0.68 $ 0.66 Weighted average shares outstanding: Basic 17,789,863 30,497,501 30,750,227 30,777,556 Diluted 18,039,345 30,742,293 31,083,815 31,142,061 First Quarter 2017 Second Quarter 2017 Third Quarter 2017 Fourth Quarter 2017 Net service revenue $ 244,249 $ 257,535 $ 269,678 $ 291,140 Gross margin 89,879 96,377 96,822 103,714 Net income attributable to LHC Group, Inc.’s common stockholders 9,467 11,304 10,906 18,435 Net income attributable to LHC Group' Inc.'s common stockholders Basic earnings per share: $ 0.54 $ 0.64 $ 0.61 $ 1.04 Diluted earnings per share: $ 0.53 $ 0.63 $ 0.61 $ 1.02 Weighted average shares outstanding: Basic 17,643,463 17,728,567 17,740,818 17,749,872 Diluted 17,817,880 17,964,387 18,010,522 18,043,297 Because of the method used to calculate per share amounts, quarterly per share amounts may not necessarily total to the per share amounts for the entire year. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On February 26, 2019, the Company announced an anticipated definitive agreement with Geisinger Home Health and Hospice for a joint venture partnership in Pennsylvania and New Jersey. The expected completion date is April 1, 2019 for the Pennsylvania locations and June 1, 2019 for the New Jersey locations, subject to customary closing conditions. The Company will purchase the majority ownership of these home health and hospice locations and assume management responsibility. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts in the Company's accompanying consolidated financial statements and notes to the consolidated financial statements. Actual results could differ from those estimates. The most significant estimates relate to revenue recognition, collectability of accounts receivable and impairment of goodwill and other indefinite-lived intangible assets. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include all subsidiaries and entities controlled by the Company through direct ownership of majority interest or controlling member ownership of such entities. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s consolidated financial statements. All significant inter-company accounts and transactions have been eliminated in consolidation. All business combinations accounted for under the acquisition method have been included in the consolidated financial statements from the respective dates of acquisition. The Company consolidates equity joint venture entities as the Company has controlling interests, has voting control over these entities, or has ability to exercise significant influence in these entities. The members of the Company's equity joint ventures participate in profits and losses in proportion to their equity interests. The Company has management services agreements under which the Company manages certain operations of agencies. The Company does not consolidate managed agencies that the Company does not have an ownership interest in, nor does it have an obligation to absorb losses of, or right to receive benefits from the entities that own the agencies. The Company, through wholly owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing and hospice agencies. As with wholly owned subsidiaries, the Company owns 100% of the equity of these entities and consolidates them based on such ownership. |
Revenue Recognition | Net service revenue is reported at the amount that reflects the consideration the Company expects to receive in exchange for providing services. Receipts are from Medicare, Medicaid, Managed Care, Commercial and others for services rendered, and they include implicit price concessions for retroactive revenue adjustments due to actual receipts from third-party payors, settlements of audits, and reviews. The estimated uncollectible amounts due from these payors are considered implicit price concessions that are a direct reduction to net service revenue. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare contributes to the net service revenue of the Company's home health services, hospice services, facility-based services, and healthcare innovations services. Medicaid and other payors contribute to the net service revenue of all of the Company's segments. Performance obligations are determined based on the nature of the services provided by the Company. The majority of the Company's performance obligations is to provide services to each patient based on medical necessity and identifies the bundle of services to be provided to achieve the goals established in the contract, while the healthcare innovations segment's performance obligation is largely to provide services under customer contracts. Revenue for performance obligations is satisfied over time and recognized based on actual charges incurred in relation to total expected charges over the measurement period of the performance obligation, which depicts the transfer of services and related benefits received by the patient and customers over the term of the contract to satisfy the obligations. The Company measures the satisfaction of the performance obligation as services are provided. The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the option exemption provided by ASC 606 - Revenue Recognition, and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged. The Company determines the transaction price for the majority of its performance obligations based on gross charges for services provided, reduced by explicit price concessions provided to third-party payors and implicit price concessions. The Company determines estimates of explicit price concessions, principally contractual adjustments based on established agreements with payors, and implicit price concessions based on historical collection experience. Estimates of explicit and implicit price concessions are periodically reviewed to ensure they encompass the Company's current contract terms, are reflective of the Company's current patient mix, and are indicative of the Company's historic collections to ensure net service revenue is recognized at the expected transaction price. Medicare Home Health Services The home health segment's Medicare patients, including certain Medicare Advantage patients, are classified into one of 153 home health resource groups prior to receiving services. Based on the patient's home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60 -day period referred to as an episode. The Company elects to use the same 60 -day length of episode that Medicare recognized as standard but accelerates revenue upon discharge to align with a patient's episode length, if less than the expected 60 days, which depicts the transfer of services and related benefits received by the patient over the term necessary to satisfy the obligations. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period. Final payments from Medicare will reflect base payment adjustments for case-mix and geographic wage differences and 2% sequestration reduction. In addition, final payments may reflect one of four retroactive adjustments to the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five ; (c) a partial payment if the patient transferred to another provider or transferred from another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required. The retroactive adjustments outlined above are recognized in net service revenue when the event causing the adjustment occurs and during the period in which the services are provided to the patient. The Company reviews these adjustments to ensure it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustments is subsequently resolved. Net service revenue and related patient accounts receivable are recorded at amounts estimated to be realized from Medicare for services rendered. Hospice Services The Company's hospice services segment is reimbursed by Medicare under a per diem payment system based on the determined need for the patient on a daily basis. The hospice segment receives one of four predetermined daily rates based upon the level of care the Company furnishes. Each level of care is contingent upon the patient's medical necessity and is a distinct performance obligation, which depicts the transfer of services and related benefits received by the patient over the term to satisfy the obligations. The Company records net service revenue for hospice services based on the promulgated per diem rate over time as services are provided, satisfying the performance obligation. Hospice payments are subject to variable consideration through an inpatient cap and an overall Medicare payment cap. The inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall Medicare payment cap relates to individual programs receiving reimbursements in excess of a “cap amount,” determined by Medicare to be payment equal to six months of hospice care for the aggregate base of hospice patients, indexed for inflation. The determination for each cap is made annually based on the 12 -month period ending on October 31 of each year. The Company monitors its limits on a provider-by-provider basis and records an estimate of its liability for reimbursements received in excess of the cap amount, if any, in the reporting period. The Company reviews these estimates to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the retroactive adjustments is subsequently resolved. Facility-Based Services The Company's facility-based services segment is reimbursed primarily by Medicare for services provided under the long-term acute care hospital (“LTACH”) prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare LTACH patient classified in that particular long-term care diagnosis-related group. For selected LTACH patients, the amount may be further adjusted based on length-of-stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for LTACH claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Net service revenue adjustments resulting from reviews and audits of Medicare cost report settlements are considered implicit price concessions for LTACHs and are measured at expected value. The Company reviews these estimates to ensure that it is probable that a significant reversal in the amount of LTACH services cumulative revenue recognized will not occur when the uncertainty associated with retroactive adjustments is subsequently resolved. Net service revenue for the Company's LTACH services are satisfied over time and recognized based on actual charges incurred in relation to total expected charges, which depicts the transfer of services and related benefits received by the customer over the service period to satisfy the obligations. Non-Medicare Revenues Substantially all remaining revenues are derived from services provided under a per visit, per hour or unit basis, per assessment or per member per month basis for which revenues are calculated and recorded using payor-specific or patient-specific fee schedules based on the contracted rates in each underlying third party payor or services agreement or out of network rates, as applicable. Net service revenue is recognized as such services are provided and costs for delivery of such services are incurred. Contingent Service Revenues The Company's Healthcare Innovations segment provides strategic health management services to Affordable Care Organizations ("ACOs") that have been approved to participate in the Medicare Shared Savings Program ("MSSP"). The HCI segment has service agreements with ACOs that provide for sharing of MSSP payments received by the ACO, if any. ACOs are legal entities that contract with Centers for Medicare and Medicaid Services ("CMS") to provide services to the Medicare fee-for-service population for a specified annual period with the goal of providing better care for the individual, improving health for populations and lowering costs. ACOs share savings with CMS to the extent that the actual costs of serving assigned beneficiaries are below certain trended benchmarks of such beneficiaries and certain quality performance measures are achieved. The generation of shared savings is the performance obligation of each ACO, which only become certain upon the final issuance of unembargoed calculations by CMS, generally in the third quarter of each year. During the year ended December 31, 2018, the HCI segment recorded net service revenue of $3.7 million related to the 2017 ACO service periods, as certain ACOs served by the HCI segment received a MSSP payment from CMS confirming the performance obligation had been met. As of December 31, 2018, no net service revenue was recognized related to potential MSSP payments for savings generated for the program periods ended December 31, 2018, if any, as it remains unclear as to if performance obligation has been met by any ACOs served by the HCI segment. Revenue Recognition Basis of Presentation The Company adopted ASU No. 2014-09, Revenue from Contracts with Customers, ("ASU 2014-09") on January 1, 2018 on a full retrospective basis, which required the Company to present the prior comparable periods as adjusted. The adoption of the standard did not have a material impact on the Company's financial statements. The Company did not adjust the opening balance of retained earnings to account for the implementation of the requirements of this standard as there are no timing differences related to the recognition of implicit price concessions as part of net service revenue. All amounts previously classified as provision for bad debts were reclassified within the Company's net service revenue. For the year ending December 31, 2018, the Company recorded $25.5 million of implicit price concessions as a direct reduction of net service revenue that would have been recorded as provision for bad debts prior to the adoption of ASU 2014-09. |
Accounts Receivable | Accounts Receivable The Company reports accounts receivable net of estimates of variable consideration and implicit price concessions. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, Medicaid, other third-party payors, and to a lesser degree patients. The Company establishes an allowances for explicit and implicit price concessions to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk associated with receivables from other payors is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 55.0% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other significant concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable. The amount of the provision for implicit price concessions is based upon the Company’s assessment of historical and expected net collections, business and economic conditions, and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined that the account will not be collected. A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is recouped prior to receiving final payment in full. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% of the estimated reimbursement. The Company’s services to the Medicare population are paid at prospectively set amounts that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and other in or out of network payors provide for payments based upon a predetermined fee schedule or an episodic basis. The Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated explicit price concessions when reporting net service revenue for each reporting period. |
Business Combinations | Business Combination The Company accounts for its acquisitions in accordance with ASC 805, "Business Combinations" ("ASC 805") using the acquisition method of accounting. Assets typically acquired consist primarily of Medicare licenses, trade names, certificates of need, and/or non-compete agreements. The assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method. The noncontrolling interest associated with joint venture acquisitions is also measured and recorded at fair value as of the acquisition date. Goodwill represents the excess of the cost of an acquired entity over the net amounts assigned to assets acquired and liabilities assumed. The operations of the acquisitions are included in the consolidated financial statements from their respective dates of acquisition. |
Insurance Programs | Insurance Programs The Company bears significant risk under its large-deductible workers’ compensation insurance program and its self-insured employee health program. Under the workers’ compensation insurance program, the Company bears risk up to $0.5 million per incident, after which stop-loss coverage is maintained. The Company purchases stop-loss insurance for the employee health plan and bear risk up to $0.3 million per incident. Malpractice and general patient liability claims for incidents which may give rise to litigation have been asserted against the Company by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. The Company currently carries professional liability insurance coverage on a claims made basis and general liability insurance coverage on an occurrence basis for this exposure with a $0.1 million . The Company also carries D&O coverage (also on a claims made basis) for potential claims against the Company’s directors and officers, including securities actions, with deductibles ranging from $0.5 million to $1.0 million per claim. The Company records estimated liabilities for its insurance programs based on information provided by the third-party plan administrators, historical claims experience, the life cycle of claims, expected costs of claims incurred but not paid, and expected costs to settle unpaid claims. The Company monitors its estimated insurance-related liabilities and recoveries, if any, on a monthly basis and records amounts due under insurance policies in other current assets, while recording the estimated carrier liability in self-insurance reserves. As facts change, it may become necessary to make adjustments that could be material to the Company’s results of operations and financial condition. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets In accordance with ASC 350, "Intangibles - Goodwill and Other" ("ASC 350") goodwill and intangible assets with indefinite lives are reviewed by the Company at least annually for impairment. The Company performs its annual impairment review of goodwill at November 30, and when a triggering event occurs between annual impairment tests. For 2018 and 2017, the Company performed a qualitative assessment of goodwill and determined that it is not more likely than not that the fair values of its reporting units are less than the carrying amounts. The Company has not recognized any goodwill impairment charges in 2018 , 2017 or 2016 related to the annual impairment testing. Components of the Company's reporting units are collections of markets of similar service offerings that operate collaboratively under a house of brands, i.e. multiple brands are used across markets, states, and segments. During the years ended December 31, 2018 and 2017, the Company recognized a disposal of $0.6 million and $1.5 million , respectively related to goodwill associated with the closure of underperforming locations. The impairments were calculated using a market approach. Included in intangible assets are definite-lived assets subject to amortization such as non-compete agreements and defensive assets, which are defined as trade names that are not actively used. Amortization of definite-lived intangible assets is calculated on a straight-line basis over the estimated useful lives of the related assets, ranging from two to ten years. Amortization expense for the Company's definite-lived intangible assets for the years ended December 31, 2018 , 2017 and 2016 was $2.1 million , $2.1 million and $2.5 million , respectively, which was recorded in general and administrative expenses. The Company also has indefinite-lived assets that are not subject to amortization expense such as trade names, certificates of need, and Medicare licenses to conduct specific operations within geographic markets. The Company has concluded that trade names, certificates of need, and licenses have indefinite lives, because there are no legal, regulatory, contractual, economic or other factors that would limit the useful lives of these intangible assets and the Company intends to renew and operate the certificates of need and licenses and use the trade names indefinitely. In some cases, the value of licenses and certificates of need is increased by moratoriums in effect. These indefinite-lived intangible assets are reviewed annually for impairment or more frequently if circumstances indicate impairment may have occurred. To determine whether an indefinite-lived intangible asset is impaired, the Company performs a qualitative assessment to support the conclusion that the indefinite-lived intangible asset is not impaired. Based on the results of that qualitative assessment, the Company may perform a quantitative test. The Company utilizes a relief-from-royalty method in its quantitative impairment test of trade names. Under this method, the fair value of the trade name is determined by calculating the present value of the after-tax cost savings associated with owning the trade names and, therefore, not having to pay royalties for use over its estimated useful life. The Company utilizes the replacement cost approach in its quantitative impairment test for certificates of need and licenses. Under this method, assumptions are made about the cost to replace the certificates of need and licenses. |
Due to/from Governmental Entities | Due to/from Governmental Entities The Company’s LTACHs are reimbursed for certain activities based on tentative rates. The amounts recorded in due to/from governmental entities on the Company’s consolidated balance sheets relate to settled and open cost reports that are subject to the completion of audits and the issuance of final assessments. Final reimbursement is determined based on submission of annual cost reports and audits by the fiscal intermediary. Adjustments are accrued on an estimated basis in the period the related services were rendered and further adjusted as final settlements are determined. These adjustments are accounted for as changes in estimates. Additionally, reimbursements received in excess of hospice cap amounts are recorded in this account, if any. |
Property, Plant and Equipment | Depreciation expense for the years ended December 31, 2018 , 2017 and 2016 was $14.1 million , $11.3 million and $9.7 million , respectively, which was recorded in general and administrative expenses. Property, Building and Equipment Property, building and equipment are recorded at cost. Property and equipment acquired in connection with business combinations are recorded at estimated fair value in accordance with the acquisition method of accounting in accordance with ASC 805. Expenditures that increase capacities or extend useful lives are capitalized to the appropriate property, building and equipment accounts. Costs and related accumulated depreciation associated with assets that are sold or retired are written off and any gain or losses are recorded in operating income. Routine repairs and maintenance costs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the individual assets. The estimated useful life of buildings is 39 years , while the estimated useful lives of transportation equipment and furniture and other equipment range from 3 to 10 years . The useful life for leasehold improvements is the shorter of the lease term or the expected life of the leasehold improvement. In accordance with ASC 360, "Property, Plant, and Equipment", the Company evaluates its long-lived assets for possible impairment whenever events or changes in circumstances occur that indicate that the carrying amount of the asset may not be recoverable. There were no impairment charges recognized during the periods ended December 31, 2018 , 2017 and 2016 . |
Noncontrolling Interest | Noncontrolling Interest The Company classifies noncontrolling interests of its joint ventures based upon a review of the legal provisions governing the redemption of such interests. In each of the Company’s joint ventures, those provisions are embodied within the joint venture’s operating agreement. For joint ventures with operating agreement provisions that establish an obligation for the Company to purchase the third party partners’ noncontrolling interests other than as a result of events that lead to a liquidation of the joint venture, such noncontrolling interests are classified as redeemable noncontrolling interests in temporary equity. For joint ventures with operating agreement provisions that establish an obligation that the Company purchase the third party partners’ noncontrolling interests, but which obligation is triggered by events that lead to a liquidation of the joint venture, such noncontrolling interests are classified as nonredeemable noncontrolling interests in permanent equity. Additionally, for joint ventures with operating agreement provisions that do not establish an obligation for the Company to purchase the third party partners’ noncontrolling interests (e.g., where the Company has the option, but not the obligation, to purchase the third party partners’ noncontrolling interests), such noncontrolling interests are classified as nonredeemable noncontrolling interests in permanent equity. The Company’s equity joint ventures that are classified as redeemable noncontrolling interests are subject to operating agreement provisions that require the Company to purchase the noncontrolling partner’s interest upon the occurrence of certain triggering events, which are defined as the bankruptcy of the partner or the partner’s exclusion from the Medicare or Medicaid programs. These triggering events and the related repurchase provisions are specific to each redeemable equity joint venture, since the triggering of a repurchase obligation for any one redeemable noncontrolling interest in an equity joint venture does not necessarily impact any of the other redeemable noncontrolling interests in other equity joint ventures. Upon the occurrence of a triggering event requiring the purchase of a redeemable noncontrolling interest, the Company would be required to purchase the noncontrolling partner’s interest based upon a valuation methodology set forth in the applicable joint venture agreement. Redeemable noncontrolling interests and nonredeemable noncontrolling interests are initially recorded at their fair value as of the closing date of the transaction establishing the joint venture. Such fair values are determined using various accepted valuation methods, including the income approach, the market approach, the cost approach, and a combination of one or more of these approaches. A number of facts and circumstances concerning the operation of the joint venture are evaluated for each transaction, including (but not limited to) the ability to choose management, control over acquiring or liquidating assets, and control over the joint venture’s strategy and direction, in order to determine the fair value of the noncontrolling interest. Subsequent to the closing date of the transaction establishing the joint venture, recorded values for both redeemable and nonredeemable noncontrolling interests are adjusted at the end of each reporting period for (a) comprehensive income (loss) that is attributed to the noncontrolling interest, which is calculated by multiplying the noncontrolling interest percentage by the comprehensive income (loss) of the joint venture’s operations during the reporting period, (b) dividends paid to the noncontrolling interest partner during the reporting period, and (c) any other transactions that increase or decrease the Company’s ownership interest in the joint venture, as a result of which the Company retains its controlling interest. If the Company determines based upon its analysis as of the end of each reporting period in accordance with authoritative accounting guidance, that it is not probable that an event would occur to otherwise require the redemption of a redeemable noncontrolling interest (i.e., the date for such event is not set or such event is not certain to occur), then the Company does not adjust the recorded amount of such redeemable noncontrolling interest. The carrying amount of each redeemable equity instrument presented in temporary equity for the twelve months ended December 31, 2018 is not less than the initial amount reported for each instrument. The activity of noncontrolling interest-redeemable for the twelve months ended December 31, 2018 is summarized in the Company’s Statements of Changes in Equity. Based upon the Company’s evaluation of the redemption provisions concerning redeemable noncontrolling interests as of December 31, 2018, the Company determined in accordance with authoritative accounting guidance that it was not probable that an event otherwise requiring redemption of any redeemable noncontrolling interest would occur (i.e., the date for such event was not set or such event is not certain to occur). Therefore, none of the redeemable noncontrolling interests were identified as mandatorily redeemable interests at such times, and the Company did not record any values in respect of any mandatorily redeemable interests. |
Share-based Compensation | Stock-Based Compensation The Company accounts for its stock-based awards in accordance with provisions of ASC 718, "Compensation - Stock Compensation" ("ASC 718"). The Company grants restricted stock or restricted stock units to employees and members of its Board of Directors as a form of compensation. In accordance with ASC 718, the expense for such awards is based on the grant date fair value of the award and is recognized on a straight-line basis over the requisite service period. See Note 8 to these consolidated financial statements. |
Assets Held for Sale | Assets Held for Sale As of December 31, 2018, assets held for sale includes the land and building and all related equipment and fixtures of one closed hospice facility, which was acquired in the Merger and that the Company is actively marketing and intends to sell. |
Recently Adopted and Issued Accounting Pronouncements | Other Recently Adopted Accounting Pronouncements In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments , ("ASU 2016-15"), which addresses eight classification issues related to the statement of cash flows. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2017. Entities should apply this ASU using a retrospective transition method to each period presented. There is no material impact to the Company's consolidated financial statements upon adoption of ASU 2016-15. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business , ("ASU 2017-01"), which assist entities with evaluating whether a set of transferred assets and activities is a business. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2017. There is no material impact on the Company's consolidated financial statements upon adoption of ASU 2017-0l. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases , ("ASU 2016-02"), as modified by ASUs 2018-01, 2018-10, 2018-11 and 2018-20 (collectively, ASU 2016-02), which requires lessees to recognize leases with terms exceeding 12 months on the Company's Consolidated Balance Sheet. Qualifying leases will be classified as finance or operating right-of-use ("ROU") assets and lease liabilities. The new standard was effective on January 1, 2019. Early adoption is permitted. ASU 2016-02 provides a number of optional practical expedients in transition. The Company: i) elected the 'package of practical expedients', which permitted the Company not to reassess under the new standard the Company's prior conclusions about lease identification, lease classification and initial direct costs, ii) elected all the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company, iii) to elect all the new standard's available transition practical expedients. Adoption of this standard increased total assets and total liabilities by $90.0 million for the Company's operating leased office space and copiers for locations in each segment. The adoption did not change the Company's leasing activities. ASU 2016-02 also provides practical expedients for an entity's ongoing accounting. The Company elected the short-term recognition exemption for certain medical devices and storage space leases that qualify, which means it will not recognize ROU assets or lease liabilities, including not recognizing ROU assets or lease liabilities for existing short-term leases of these assets in transition. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment , which requires an entity to no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying value and fair value of the reporting unit. This ASU is effective for the annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests with measurement dates on or after January 1, 2017. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Percentage of Net Service Revenue Earned by Type of Ownership or Relationship with Operating Entity | The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity for the periods presented for the years ending December 31: Ownership type 2018 2017 2016 Wholly owned subsidiaries 59.2 % 51.1 % 57.1 % Equity joint ventures 40.0 46.8 41.2 Managed or licensed 0.8 2.1 1.7 100.0 % 100.0 % 100.0 % |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Adoption of the standard impacted the Company's previously reported results as follows (amounts in thousands): As previously reported Adjustment for ASU 2014-09 As adjusted As of December 31, 2017 Consolidated Balance Sheets: Patients accounts receivable $ 161,898 $ — $ 161,898 Allowance for uncollectible accounts 23,556 (23,556 ) — For the year ended December 31, 2017 Consolidated Statements of Income: Net service revenue $ 1,072,086 $ (9,484 ) $ 1,062,602 Provision for bad debts (9,484 ) 9,484 — Net income attributable to LHC Group, Inc.'s common stockholders 50,112 — 50,112 Consolidated Statements of Cash Flows: Provision for bad debts 9,484 (9,484 ) — Changes in operating assets and liabilities, net of acquisitions: Receivables (36,390 ) 9,484 (26,906 ) For the year ended December 31, 2016 Consolidated Statements of Income: Net service revenue $ 914,823 $ (14,790 ) $ 900,033 Provision for bad debts (14,790 ) 14,790 — Net income attributable to LHC Group, Inc.'s common stockholders 36,583 — 36,583 Consolidated Statements of Cash Flows: Provision for bad debts 14,790 (14,790 ) — Changes in operating assets and liabilities, net of acquisitions: Receivables (28,873 ) 14,790 (14,083 ) |
Percentage of Net Service Revenue Earned by Category of Payor | The following table sets forth the percentage of net service revenue earned by category of payor for the years ending December 31: 2018 2017 2016 Home health: Medicare 71.8 % 72.6 % 76.8 % Medicaid 1.3 1.1 1.0 Managed Care, Commercial, and Other 26.9 26.3 22.2 100.0 % 100.0 % 100.0 % Hospice: Medicare 90.7 % 92.9 % 94.8 % Medicaid 0.4 0.3 0.9 Managed Care, Commercial, and Other 8.9 6.8 4.3 100.0 % 100.0 % 100.0 % Home and Community-Based: Medicaid 23.9 % 18.9 % 15.2 % Managed Care, Commercial, and Other 76.1 81.1 84.8 100.0 % 100.0 % 100.0 % Facility-Based: Medicare 59.7 % 63.7 % 72.5 % Managed Care, Commercial, and Other 40.3 36.3 27.5 100.0 % 100.0 % 100.0 % Healthcare Innovations: Medicare 22.8 % — % — % Medicaid 0.3 — — Managed Care, Commercial, and Other 76.9 — — 100.0 % — % — % |
Schedules of Percentage of Patient Accounts Receivable by Payor | The following table sets forth the percentage of patient accounts receivable by payor for the years ended December 31: 2018 2017 Medicare 51.3 % 60.8 % Medicaid 8.6 5.8 Managed Care, Commercial, and Other 40.1 33.4 Total patient accounts receivable 100.0 % 100.0 % |
Property, Plant and Equipment | The following table describes the Company’s components of property, building and equipment for the years ended December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Land $ 6,750 $ 2,033 Building and improvements 35,474 14,166 Transportation equipment 13,503 11,363 Fixed equipment 745 780 Office furniture and medical equipment 78,344 61,676 134,816 90,018 Less accumulated depreciation 55,253 43,565 Property, building and equipment, net $ 79,563 $ 46,453 |
Shares Used in Computation of Basic and Diluted per Share Information | The following table sets forth shares used in the computation of basic and diluted per share information for the years ended December 31, 2018 , 2017 and 2016 : 2018 2017 2016 Weighted average number of shares outstanding for basic per share calculation 27,498,351 17,715,992 17,559,477 Effect of dilutive potential shares: Options — — 863 Nonvested restricted stock 275,045 245,026 122,480 Adjusted weighted average shares for diluted per share calculation 27,773,396 17,961,018 17,682,820 Antidilutive shares 46,002 — 219,855 |
Almost Family Merger (Tables)
Almost Family Merger (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of the Consideration Transferred in Connection with the Merger | The following table summarizes the consideration transferred in connection with the Merger (amounts in thousands, except share data): Outstanding shares of Almost Family common stock as of April 1, 2018 13,951,134 Exchange ratio 0.9150 Shares of the Company issued 12,765,288 Price per share as of April 1, 2018 $ 61.56 Fair value of the Company common stock issued $ 785,831 Fair value of vested Almost Family equity awards exchanged for equity awards in the Company $ 9,581 Preliminary merger consideration $ 795,412 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The Company's preliminary valuation analysis of identifiable assets and liabilities assumed for the Merger is in accordance with the requirements of ASC Topic 805, Business Combinations, the preliminary estimates of which are presented in the table below (amounts in thousands). The final determination of the fair value of assets acquired and liabilities assumed will be completed in accordance with the applicable accounting guidance. Due to the significance of the Merger, the Company may use all of the measurement period to adequately analyze and assess the fair value of assets acquired and liabilities assumed. Preliminary merger consideration Stock $ 795,412 Preliminary fair value of total consideration transferred Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 16,547 Patient accounts receivable 91,095 Prepaid income taxes 2,262 Prepaid expenses and other current assets 11,490 Property and equipment 11,144 Trade name 76,090 Certificates of need/licenses 76,505 Customer relationships 13,970 Assets held for sale 2,850 Deferred income taxes 3,613 Accounts payable (43,731 ) Accrued other liabilities (56,100 ) Seller notes payable (13,555 ) NCI - Redeemable (8,034 ) Long term income taxes payable (3,786 ) Line of credit (106,800 ) NCI - Nonredeemable (36,609 ) Other assets and (liabilities), net (2 ) Total identifiable assets and liabilities 36,949 Preliminary goodwill $ 758,463 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information reflects the consolidated results of operations of the Company had the Merger occurred on January 1, 2017. Almost Family's financial information has been compiled in a manner consistent with the accounting policies adopted by LHC Group. The unaudited pro forma financial information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the Merger occurred on January 1, 2017, nor are they indicative of any future results (amounts in thousands, except per share amount). Pro forma (unaudited) 2018 2017 Net service revenue $ 2,002,420 $ 1,845,041 Net income attributable to the Company 79,434 70,526 Diluted earnings per share $ 2.55 $ 2.26 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in goodwill by reporting unit during the twelve months ended December 31, 2018 and 2017 (amounts in thousands): Home health Hospice Home and community- based Facility-based Healthcare Innovations Total Balance as of December 31, 2016 $ 210,839 $ 64,234 $ 18,820 $ 13,424 — $ 307,317 Acquisitions 30,623 15,000 6,220 160 — 52,003 Noncontrolling interests 21,469 9,580 3,501 (141 ) — 34,409 Adjustments and disposals (1,475 ) — — 347 — (1,128 ) Balance as of December 31, 2017 $ 261,456 $ 88,814 $ 28,541 $ 13,790 $ — $ 392,601 Acquisitions 558,628 29,263 137,042 — 40,755 765,688 Noncontrolling interests 3,297 506 — — — 3,803 Adjustments and disposals (779 ) — — 404 — (375 ) Balance as of December 31, 2018 $ 822,602 $ 118,583 $ 165,583 $ 14,194 $ 40,755 $ 1,161,717 |
Schedule of Acquired Finite and Indefinite Lived Intangible Assets by Major Class Table | The following tables summarize the changes in intangible assets during the twelve months ended December 31, 2018 and 2017 (amounts in thousands): 2018 2017 Indefinite-lived intangible assets: Trade Names $ 156,049 $ 78,299 Certificates of Need/Licenses 128,577 53,493 Net total 284,626 131,792 Definite-lived intangible assets: Trade Names Gross carrying amount 10,127 10,127 Accumulated amortization (8,817 ) (7,547 ) Net total 1,310 2,580 Non-compete agreements Gross carrying amount 5,980 5,732 Accumulated amortization (5,729 ) (5,494 ) Net total 251 238 Customer relationships Gross carrying amount 11,822 — Accumulated amortization (630 ) — Net total 11,192 — Total definite-lived intangible assets Gross carrying amount 27,929 15,859 Accumulated amortization (15,176 ) (13,041 ) Net total 12,753 2,818 Total intangible assets: Gross carrying amount 312,555 147,651 Accumulated amortization (15,176 ) (13,041 ) Net total $ 297,379 $ 134,610 |
Schedule of Intangible Asset Future Amortization Expense | The estimated intangible asset amortization expense for each of the five years subsequent to December 31, 2018 is as follows (amounts in thousands): Year Amortization amount 2019 $ 1,112 2020 899 2021 732 2022 682 2023 682 Total $ 4,107 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 were as follows (amounts in thousands): 2018 2017 Deferred tax assets: Allowance for uncollectible accounts $ 8,645 $ 5,224 Accrued employee benefits 6,038 4,147 Stock compensation 2,322 663 Accrued self-insurance 8,656 2,157 Acquisition costs 1,413 2,064 Net operating loss carry forward 9,147 1,299 Intangible asset impairment 18 21 Other 1,021 91 Capital loss carryforward — 12 Valuation allowance (3,574 ) (44 ) Deferred tax assets $ 33,686 $ 15,634 Deferred tax liabilities: Amortization of intangible assets (64,001 ) (35,955 ) Tax depreciation in excess of book depreciation (7,693 ) (5,988 ) Prepaid expenses (1,134 ) (623 ) Non-accrual experience accounting method (602 ) (534 ) Other (3,562 ) — Deferred tax liabilities (76,992 ) (43,100 ) Net deferred tax liability $ (43,306 ) $ (27,466 ) |
Income Tax Expense (Benefit) from Continuing Operations, Less Noncontrolling Interest | The components of the Company’s income tax expense from continuing operations, less noncontrolling interest, were as follows (amounts in thousands): 2018 2017 2016 Current: Federal $ 892 $ 12,798 $ 12,563 State 3,382 2,621 2,371 4,274 15,419 14,934 Deferred: Federal 15,383 (6,273 ) 6,223 State 2,742 1,798 1,019 18,125 (4,475 ) 7,242 Total income tax expense $ 22,399 $ 10,944 $ 22,176 |
Statutory Rate and Provisions for Income Taxes | A reconciliation of the difference between the federal statutory tax rate and the Company's effective tax rate for income taxes for each period is as follows: 2018 2017 2016 Federal statutory tax rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 5.7 4.4 3.8 Nondeductible expenses 2.6 3.2 2.6 Uncertain tax position (1.3 ) — (3.3 ) TCJA Enactment — (22.9 ) — Excess Tax Benefit (2.6 ) (1.6 ) — Credits and other 0.7 (0.1 ) (0.4 ) Effective tax rate 26.1 % 18.0 % 37.7 % |
Schedule of Unrecognized Tax Benefits | A reconciliation of the total amounts of unrecognized tax benefits follows: Acquired unrecognized tax position $ 3,786 Increased (decreases) in unrecognized tax benefits as a result of: Tax positions taken in the current year 1,835 Lapse of statute of limitations (1,324 ) Total unrecognized tax benefits as of December 31, 2018 $ 4,297 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Payments on Long-Term Debt | The scheduled principal payments on long-term debt for each of the five years subsequent to December 31, 2018 is as follows (amounts in thousands): Year Principal payment amount 2019 $ 7,773 2020 235,123 2021 133 2022 143 2023 531 Total $ 243,703 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Share Grants Activity | The following table represents the share grants stock activity for the year ended December 31, 2018 : Restricted stock Options Number of Shares Weighted average grant date fair value Number of Shares Weighted average grant date fair value Share grants outstanding at December 31, 2017 529,465 $ 37.34 — $ — Granted 257,175 64.11 — — Acquired — — 270,710 36.48 Vested or exercised (212,355 ) 37.77 (108,903 ) 34.11 Share grants outstanding at December 31, 2018 574,285 $ 49.68 161,807 $ 38.08 |
Schedule of Stock Option Outstanding, by Exercise Price Range | The following table summarizes information about stock options outstanding and exercisable at December 31, 2018: Range of Exercise Price Shares Wtd. Avg. Remaining Contractual Life Wtd. Avg. Exercise Price $0.00 - 30.00 47,579 4.47 $ 24.93 $30.01 - 40.00 71,684 6.23 $ 39.43 Over $40.00 42,544 7.73 $ 50.51 161,807 6.46 $ 38.08 |
Summary of Shares Issued Under Employee Stock Purchase Plan | The following table represents the shares issued during 2018 , 2017 and 2016 under the Employee Stock Purchase Plan: Number of Shares Weighted Average Per Share Price Shares available as of December 31, 2015 213,760 Shares issued in 2016 24,149 $ 37.79 Shares issued in 2017 18,542 $ 55.40 Shares issued in 2018 18,725 $ 71.12 Shares available as of December 31, 2018 152,344 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum rental commitments under non-cancelable operating leases are as follows (amounts in thousands): Year Total 2019 $ 35,473 2020 24,663 2021 17,815 2022 10,795 2023 6,302 Thereafter 12,883 $ 107,931 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables summarize the Company’s segment information for the twelve months ended December 31, 2018 , 2017 and 2016 (amounts in thousands): Year Ended December 31, 2018 Home health Hospice Home and community-based Facility-based Healthcare innovations Total Net service revenue $ 1,291,457 $ 199,118 $ 172,501 $ 113,784 $ 33,103 $ 1,809,963 Cost of service revenue 802,006 130,991 130,660 76,899 15,801 1,156,357 General and administrative expenses 378,124 60,933 40,467 39,638 18,754 537,916 Impairment of intangibles and other 1,816 186 (6 ) 554 2,139 4,689 Operating income (loss) 109,511 7,008 1,380 (3,307 ) (3,591 ) 111,001 Interest expense (7,060 ) (1,529 ) (76 ) (545 ) (469 ) (9,679 ) Income (loss) before income taxes and noncontrolling interests 102,451 5,479 1,304 (3,852 ) (4,060 ) 101,322 Income tax expense (benefit) 22,711 1,227 420 (1,136 ) (823 ) 22,399 Net income (loss) 79,740 4,252 884 (2,716 ) (3,237 ) 78,923 Less net income (loss) attributable to noncontrolling interests 13,361 1,764 (275 ) 589 (90 ) 15,349 Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 66,379 $ 2,488 $ 1,159 $ (3,305 ) $ (3,147 ) $ 63,574 Total assets $ 1,336,988 $ 209,680 $ 236,072 $ 70,261 $ 75,714 $ 1,928,715 Year Ended December 31, 2017 Home health Hospice Home and community-based Facility-based Healthcare innovations Total Net service revenue $ 777,583 $ 157,287 $ 46,159 $ 81,573 $ — $ 1,062,602 Cost of service revenue 482,179 103,969 35,244 54,418 — 675,810 General and administrative expenses 229,264 45,516 9,946 25,813 — 310,539 Impairment of intangibles and other 1,612 22 — (63 ) — 1,571 Operating income 64,528 7,780 969 1,405 — 74,682 Interest expense (2,546 ) (511 ) (191 ) (104 ) — (3,352 ) Income before income taxes and noncontrolling interests 61,982 7,269 778 1,301 — 71,330 Income tax expense 9,509 1,057 156 222 — 10,944 Net income 52,473 6,212 622 1,079 — 60,386 Less net income (loss) attributable to noncontrolling interests 9,102 1,248 (111 ) 35 — 10,274 Net income attributable to LHC Group, Inc.’s common stockholders $ 43,371 $ 4,964 $ 733 $ 1,044 $ — $ 50,112 Total assets $ 534,385 $ 155,230 $ 48,216 $ 55,871 $ — $ 793,702 Year Ended December 31, 2016 Home health Hospice Home and community-based Facility-based Healthcare innovations Total Net service revenue $ 656,287 $ 131,547 $ 43,094 $ 69,105 $ — $ 900,033 Cost of service revenue 398,450 83,359 32,603 43,238 — 557,650 General and administrative expenses 203,418 37,207 8,785 21,212 — 270,622 Impairment of intangibles and other 857 338 49 (45 ) — 1,199 Operating income 53,562 10,643 1,657 4,700 — 70,562 Interest expense (1,794 ) (292 ) (130 ) (228 ) — (2,444 ) Income before income taxes and noncontrolling interests 51,768 10,351 1,527 4,472 — 68,118 Income tax expense 16,505 3,485 651 1,535 — 22,176 Net income 35,263 6,866 876 2,937 — 45,942 Less net income attributable to noncontrolling interests 6,876 1,867 (58 ) 674 — 9,359 Net income attributable to LHC Group, Inc.’s common stockholders $ 28,387 $ 4,999 $ 934 $ 2,263 $ — $ 36,583 Total assets $ 427,782 $ 116,090 $ 33,520 $ 36,679 $ — $ 614,071 |
Unaudited Summarized Quarterl_2
Unaudited Summarized Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Unaudited Quarterly Results of Operations | The following table represents the Company’s unaudited quarterly results of operations (amounts in thousands, except share data): First Quarter 2018 Second Quarter 2018 Third Quarter 2018 Fourth Quarter 2018 Net service revenue $ 291,054 $ 502,024 $ 507,043 $ 509,842 Gross margin 102,436 181,020 184,847 185,303 Net income attributable to LHC Group, Inc.’s common stockholders 4,995 16,797 21,230 20,552 Net income attributable to LHC Group' Inc.'s common stockholders Basic earnings per share: $ 0.28 $ 0.55 $ 0.69 $ 0.67 Diluted earnings per share: $ 0.28 $ 0.55 $ 0.68 $ 0.66 Weighted average shares outstanding: Basic 17,789,863 30,497,501 30,750,227 30,777,556 Diluted 18,039,345 30,742,293 31,083,815 31,142,061 First Quarter 2017 Second Quarter 2017 Third Quarter 2017 Fourth Quarter 2017 Net service revenue $ 244,249 $ 257,535 $ 269,678 $ 291,140 Gross margin 89,879 96,377 96,822 103,714 Net income attributable to LHC Group, Inc.’s common stockholders 9,467 11,304 10,906 18,435 Net income attributable to LHC Group' Inc.'s common stockholders Basic earnings per share: $ 0.54 $ 0.64 $ 0.61 $ 1.04 Diluted earnings per share: $ 0.53 $ 0.63 $ 0.61 $ 1.02 Weighted average shares outstanding: Basic 17,643,463 17,728,567 17,740,818 17,749,872 Diluted 17,817,880 17,964,387 18,010,522 18,043,297 |
Organization (Details)
Organization (Details) | 12 Months Ended |
Dec. 31, 2018ServiceProviderStatesegment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of segments | segment | 5 |
Number of service providers | ServiceProvider | 757 |
Number of states in which entity operates | State | 36 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Percentage of Net Service Revenue Earned by Type of Ownership or relationship with Operating Entity (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% |
Wholly owned subsidiaries | |||
Concentration Risk [Line Items] | |||
Percentage of net service revenue | 59.20% | 51.10% | 57.10% |
Equity joint ventures | |||
Concentration Risk [Line Items] | |||
Percentage of net service revenue | 40.00% | 46.80% | 41.20% |
Managed or licensed | |||
Concentration Risk [Line Items] | |||
Percentage of net service revenue | 0.80% | 2.10% | 1.70% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018USD ($)shares | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018 | Dec. 31, 2018USD ($)GroupvisitPeriodicRateshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | Nov. 30, 2018USD ($) | Apr. 01, 2018shares | |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Percentage equity ownership, license leasing agreements | 100.00% | ||||||||||||||
Net service revenue | $ (509,842,000) | $ (507,043,000) | $ (502,024,000) | $ (291,054,000) | $ (291,140,000) | $ (269,678,000) | $ (257,535,000) | $ (244,249,000) | $ (1,809,963,000) | $ (1,062,602,000) | $ (900,033,000) | ||||
Selected number of Medicare home health groups | Group | 1 | ||||||||||||||
Number of Medicare home health resource groups | Group | 153 | ||||||||||||||
Number of days from date RAP paid to submit final Medicare bill | 60 days | ||||||||||||||
Medicare sequestration reduction for episodes | 2.00% | ||||||||||||||
Low utilization adjustment visits | visit | 5 | ||||||||||||||
Selected hospice, periodic rates used to calculate revenue | PeriodicRate | 1 | ||||||||||||||
Number of hospice, periodic rates used to calculate revenue | PeriodicRate | 4 | ||||||||||||||
Minimum percentage of Medicare reimbursement from inpatient care services that subjects individual programs to inpatient cap | 20.00% | ||||||||||||||
Determination period for hospice Medicare inpatient reimbursement cap | 12 months | ||||||||||||||
Medicare credit risk for accounts receivable | 55.00% | 55.00% | |||||||||||||
Reimbursement for initial episode of care | 60.00% | ||||||||||||||
Number of days from start of episode to submit final Medicare bill | 120 days | ||||||||||||||
Reimbursement for subsequent episodes of care | 50.00% | ||||||||||||||
Workers' compensation, maximum coverage per incident | $ 500,000 | ||||||||||||||
Stop-loss insurance purchased | 300,000 | ||||||||||||||
Goodwill impairment loss | 0 | 0 | 0 | ||||||||||||
Disposal related to goodwill associated with closure of underperforming locations | $ 600,000 | $ 1,500,000 | 600,000 | 1,500,000 | |||||||||||
Amortization expense | 2,100,000 | 2,100,000 | 2,500,000 | ||||||||||||
Disposal related to intangible assets | $ 3,700,000 | 3,700,000 | $ 3,700,000 | ||||||||||||
Loss on impairment of intangible assets | 0 | 0 | |||||||||||||
Impairment of long-lived assets | 0 | 0 | 0 | ||||||||||||
Depreciation expense | $ 14,100,000 | $ 11,300,000 | 9,700,000 | ||||||||||||
Common stock, shares authorized | shares | 60,000,000 | 40,000,000 | 60,000,000 | 40,000,000 | 60,000,000 | ||||||||||
Minimum | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Intangible asset estimated useful life | 2 years | ||||||||||||||
Maximum | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Intangible asset estimated useful life | 10 years | ||||||||||||||
Buildings | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Estimated useful lives | 39 years | ||||||||||||||
Transportation Equipment, Furniture and Other Equipment | Minimum | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Estimated useful lives | 3 years | ||||||||||||||
Transportation Equipment, Furniture and Other Equipment | Maximum | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Estimated useful lives | 10 years | ||||||||||||||
ASU 2014-09 | Adjustment for ASU 2014-09 | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Net service revenue | $ 25,500,000 | $ 9,484,000 | 14,790,000 | ||||||||||||
Healthcare innovations | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Net service revenue | (33,103,000) | $ 0 | $ 0 | ||||||||||||
Accountable Care Organizations | Healthcare innovations | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Net service revenue related to the 2017 ACO service periods | 3,700,000 | ||||||||||||||
Subsequent Event | Scenario, Forecast | ASU 2016-02 | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Increase in total assets | $ 90,000,000 | ||||||||||||||
Increase in total liabilities | $ 90,000,000 | ||||||||||||||
General liability | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Maximum coverage per incident | 100,000 | ||||||||||||||
D&O coverage | Minimum | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Deductibles | 500,000 | ||||||||||||||
D&O coverage | Maximum | |||||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||||
Deductibles | $ 1,000,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Impact of Adoption of Revenue Recognition Standard (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Patients accounts receivable | $ 161,898 | $ 161,898 | |||||||||
Allowance for uncollectible accounts | 0 | 0 | |||||||||
Net service revenue | $ 509,842 | $ 507,043 | $ 502,024 | $ 291,054 | 291,140 | $ 269,678 | $ 257,535 | $ 244,249 | $ 1,809,963 | 1,062,602 | $ 900,033 |
Provision for bad debts | 0 | 0 | |||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | $ 20,552 | $ 21,230 | $ 16,797 | $ 4,995 | 18,435 | $ 10,906 | $ 11,304 | $ 9,467 | 63,574 | 50,112 | 36,583 |
Changes in operating assets and liabilities, net of acquisitions: Receivables | (362) | (26,906) | (14,083) | ||||||||
As previously reported | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Patients accounts receivable | 161,898 | 161,898 | |||||||||
Allowance for uncollectible accounts | 23,556 | 23,556 | |||||||||
Net service revenue | 1,072,086 | 914,823 | |||||||||
Provision for bad debts | (9,484) | (14,790) | |||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | 50,112 | 36,583 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: Receivables | (36,390) | (28,873) | |||||||||
ASU 2014-09 | Adjustment for ASU 2014-09 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Patients accounts receivable | 0 | 0 | |||||||||
Allowance for uncollectible accounts | $ (23,556) | (23,556) | |||||||||
Net service revenue | $ (25,500) | (9,484) | (14,790) | ||||||||
Provision for bad debts | 9,484 | 14,790 | |||||||||
Net income attributable to LHC Group, Inc.'s common stockholders | 0 | 0 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: Receivables | $ 9,484 | $ 14,790 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Percentage of Net Service Revenue Earned by Category of Payor (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% |
Home health | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% |
Home health | Medicare | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 71.80% | 72.60% | 76.80% |
Home health | Medicaid | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 1.30% | 1.10% | 1.00% |
Home health | Managed Care, Commercial, and Other | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 26.90% | 26.30% | 22.20% |
Hospice | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% |
Hospice | Medicare | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 90.70% | 92.90% | 94.80% |
Hospice | Medicaid | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 0.40% | 0.30% | 0.90% |
Hospice | Managed Care, Commercial, and Other | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 8.90% | 6.80% | 4.30% |
Home and Community-Based | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% |
Home and Community-Based | Medicaid | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 23.90% | 18.90% | 15.20% |
Home and Community-Based | Managed Care, Commercial, and Other | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 76.10% | 81.10% | 84.80% |
Facility-based | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% |
Facility-based | Medicare | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 59.70% | 63.70% | 72.50% |
Facility-based | Managed Care, Commercial, and Other | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 40.30% | 36.30% | 27.50% |
Healthcare innovations | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 100.00% | 0.00% | 0.00% |
Healthcare innovations | Medicare | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 22.80% | 0.00% | 0.00% |
Healthcare innovations | Medicaid | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 0.30% | 0.00% | 0.00% |
Healthcare innovations | Managed Care, Commercial, and Other | |||
Significant Accounting Policies [Line Items] | |||
Percentage of net service revenue | 76.90% | 0.00% | 0.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Percentage of Patient Accounts Receivable by Payor (Details) - Product Concentration Risk - Accounts Receivable | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | ||
Concentration risk percentage | 100.00% | 100.00% |
Medicare | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 51.30% | 60.80% |
Medicaid | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 8.60% | 5.80% |
Managed Care, Commercial, and Other | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 40.10% | 33.40% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Components of Property, Building and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Long Term Assets [Line Items] | ||
Property, building and equipment, gross | $ 134,816 | $ 90,018 |
Less accumulated depreciation | 55,253 | 43,565 |
Property, Plant and Equipment, Net | 79,563 | 46,453 |
Land | ||
Other Long Term Assets [Line Items] | ||
Property, building and equipment, gross | 6,750 | 2,033 |
Building and improvements | ||
Other Long Term Assets [Line Items] | ||
Property, building and equipment, gross | 35,474 | 14,166 |
Transportation equipment | ||
Other Long Term Assets [Line Items] | ||
Property, building and equipment, gross | 13,503 | 11,363 |
Fixed equipment | ||
Other Long Term Assets [Line Items] | ||
Property, building and equipment, gross | 745 | 780 |
Office furniture and medical equipment | ||
Other Long Term Assets [Line Items] | ||
Property, building and equipment, gross | $ 78,344 | $ 61,676 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Shares Used in Computation of Basic and Diluted Per Share Information (Detail) - shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average shares outstanding: | |||||||||||
Weighted average number of shares outstanding for basic per share calculation (in shares) | 30,777,556 | 30,750,227 | 30,497,501 | 17,789,863 | 17,749,872 | 17,740,818 | 17,728,567 | 17,643,463 | 27,498,351 | 17,715,992 | 17,559,477 |
Effect of dilutive potential shares: | |||||||||||
Options (in shares) | 0 | 0 | 863 | ||||||||
Nonvested restricted stock (in shares) | 275,045 | 245,026 | 122,480 | ||||||||
Adjusted weighted average shares for diluted per share calculation (in shares) | 31,142,061 | 31,083,815 | 30,742,293 | 18,039,345 | 18,043,297 | 18,010,522 | 17,964,387 | 17,817,880 | 27,773,396 | 17,961,018 | 17,682,820 |
Antidilutive shares (in shares) | 46,002 | 0 | 219,855 |
Almost Family Merger - Addition
Almost Family Merger - Additional Information (Details) - USD ($) $ in Millions | Apr. 01, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Exchange ratio | 91.50% | |
Shares of the Company issued (in shares) | 12,765,288 | |
Almost Family | ||
Business Acquisition [Line Items] | ||
Exchange ratio | 91.50% | |
Shares of the Company issued (in shares) | 12,800,000 | |
Transaction costs related to the Merger | $ 33 | |
Customer Relationships | Almost Family | ||
Business Acquisition [Line Items] | ||
Amortization period | 20 years |
Almost Family Merger - Prelimin
Almost Family Merger - Preliminary Merger Consideration (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Combinations [Abstract] | ||||
Outstanding shares of Almost Family common stock as of April 1, 2018 (in shares) | 13,951,134 | |||
Exchange ratio | 91.50% | |||
Shares of the Company issued (in shares) | 12,765,288 | |||
Price per share as of April 1, 2018 (in dollars per share) | $ 61.56 | |||
Fair value of the Company common stock issued | $ 785,831 | |||
Fair value of vested Almost Family equity awards exchanged for equity awards in the Company | 9,581 | |||
Preliminary merger consideration | $ 795,412 | $ 795,412 | $ 0 | $ 0 |
Almost Family Merger - Prelim_2
Almost Family Merger - Preliminary Valuation Analysis of Identifiable Assets and Liabilities Assumed for the Merger (Details) - USD ($) $ in Thousands | Apr. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Preliminary goodwill | $ 1,161,717 | $ 392,601 | $ 307,317 | |
Almost Family | ||||
Business Acquisition [Line Items] | ||||
Stock | $ 795,412 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 16,547 | |||
Patient account receivable | 91,095 | |||
Prepaid income taxes | 2,262 | |||
Prepaid expenses and other current assets | 11,490 | |||
Property and equipment | 11,144 | |||
Customer relationships | 13,970 | |||
Assets held for sale | 2,850 | |||
Deferred income taxes | 3,613 | |||
Accounts payable | (43,731) | |||
Accrued other liabilities | (56,100) | |||
Seller notes payable | (13,555) | |||
NCI - Redeemable | (8,034) | |||
Long term income taxes payable | (3,786) | |||
Line of credit | (106,800) | |||
NCI - Nonredeemable | (36,609) | |||
Other assets and (liabilities), net | (2) | |||
Total identifiable assets and liabilities | 36,949 | |||
Preliminary goodwill | 758,463 | |||
Trade name | Almost Family | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Indefinite-lived intangible assets | 76,090 | |||
Certificates of need/licenses | Almost Family | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Indefinite-lived intangible assets | $ 76,505 |
Almost Family Merger - Pro Form
Almost Family Merger - Pro Forma Schedule (Details) - Almost Family - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Net service revenue | $ 2,002,420 | $ 1,845,041 |
Net income attributable to the Company | $ 79,434 | $ 70,526 |
Diluted earnings per share | $ 2.55 | $ 2.26 |
Other Acquisitions and Joint _2
Other Acquisitions and Joint Ventures - Additional Information (Detail) $ in Thousands | Apr. 01, 2018USD ($) | Sep. 01, 2017Agency | Jun. 01, 2017Agency | Jan. 01, 2017Agency | Dec. 31, 2018USD ($)Agencysubsidiary | Dec. 31, 2017USD ($)Agency | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||||
Consideration transferred for a business combination | $ 795,412 | $ 795,412 | $ 0 | $ 0 | |||
Goodwill | 1,161,717 | 392,601 | 307,317 | ||||
Proceeds from sale of ownership interests | 4,200 | ||||||
Reduction to additional paid in capital | 2,200 | ||||||
Increase to additional paid in capital | 7,700 | ||||||
Home and community-based | |||||||
Business Acquisition [Line Items] | |||||||
Number of entities acquired | Agency | 1 | ||||||
Home Health Reporting Unit | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | 822,602 | $ 261,456 | 210,839 | ||||
Number of entities acquired | Agency | 7 | 3 | 28 | 5 | |||
Hospice Reporting Unit | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | 118,583 | $ 88,814 | 64,234 | ||||
Number of entities acquired | Agency | 5 | 6 | 12 | 2 | |||
Inpatient Hospice | |||||||
Business Acquisition [Line Items] | |||||||
Number of entities acquired | Agency | 1 | 1 | 1 | ||||
LTACH Agency | |||||||
Business Acquisition [Line Items] | |||||||
Number of entities acquired | Agency | 6 | ||||||
Pharmacy | |||||||
Business Acquisition [Line Items] | |||||||
Number of entities acquired | Agency | 1 | ||||||
Home Health Agencies and Hospice Agency | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred for a business combination | 9,400 | ||||||
Cash paid for acquisitions | 8,800 | ||||||
Goodwill | 11,000 | ||||||
Acquired non-controlling interest | $ 5,000 | ||||||
Home Health Agencies and Hospice Agency | Home health | |||||||
Business Acquisition [Line Items] | |||||||
Number of agencies | Agency | 7 | ||||||
Home Health Agencies and Hospice Agency | Hospice | |||||||
Business Acquisition [Line Items] | |||||||
Number of agencies | Agency | 1 | ||||||
2017 Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid for acquisitions | $ 10,400 | $ 64,600 | |||||
Total purchase price for acquisitions | $ 80,200 | ||||||
Trade name | Home Health Agencies and Hospice Agency | |||||||
Business Acquisition [Line Items] | |||||||
Indefinite-lived intangible assets | $ 1,500 | ||||||
Certificates of need/licenses | Home Health Agencies and Hospice Agency | |||||||
Business Acquisition [Line Items] | |||||||
Indefinite-lived intangible assets | $ 1,400 | ||||||
Wholly owned subsidiaries | |||||||
Business Acquisition [Line Items] | |||||||
Number of subsidiaries | subsidiary | 5 | ||||||
Equity joint ventures | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred for a business combination | $ 8,100 | ||||||
Cash paid for acquisitions | $ 7,700 | ||||||
Number of subsidiaries | subsidiary | 2 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles, Net - Schedule of Changes in Goodwill by Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 392,601 | $ 307,317 |
Acquisitions | 765,688 | 52,003 |
Noncontrolling interests | 3,803 | 34,409 |
Adjustments and disposals | (375) | (1,128) |
Balance at end of period | 1,161,717 | 392,601 |
Home health | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 261,456 | 210,839 |
Acquisitions | 558,628 | 30,623 |
Noncontrolling interests | 3,297 | 21,469 |
Adjustments and disposals | (779) | (1,475) |
Balance at end of period | 822,602 | 261,456 |
Hospice | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 88,814 | 64,234 |
Acquisitions | 29,263 | 15,000 |
Noncontrolling interests | 506 | 9,580 |
Adjustments and disposals | 0 | |
Balance at end of period | 118,583 | 88,814 |
Home and community- based | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 28,541 | 18,820 |
Acquisitions | 137,042 | 6,220 |
Noncontrolling interests | 3,501 | |
Adjustments and disposals | 0 | |
Balance at end of period | 165,583 | 28,541 |
Facility-based | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 13,790 | 13,424 |
Acquisitions | 0 | 160 |
Noncontrolling interests | 0 | (141) |
Adjustments and disposals | 404 | 347 |
Balance at end of period | 14,194 | 13,790 |
Healthcare innovations | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 0 | 0 |
Acquisitions | 40,755 | |
Noncontrolling interests | 0 | |
Balance at end of period | $ 40,755 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles, Net - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2018 | |
Indefinite-lived Intangible Assets [Line Items] | ||||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 | |
Disposal related to goodwill associated with closure of underperforming locations | 600,000 | 1,500,000 | ||
Disposal related to intangible assets | 3,700,000 | $ 3,700,000 | ||
Total intangible assets, Net total | 297,379,000 | 134,610,000 | ||
Amortization expense | $ 2,100,000 | $ 2,100,000 | $ 2,500,000 | |
Trade name | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible asset estimated useful life | 8 years 9 months 18 days | 10 years 3 months 18 days | ||
Customer Relationships | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible asset estimated useful life | 19 years 3 months 18 days | |||
Non-compete | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Intangible asset estimated useful life | 2 years 9 months 18 days | 2 years 1 month 6 days |
Goodwill and Other Intangible_5
Goodwill and Other Intangibles, Net - Schedule of Changes in Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | $ 284,626 | $ 131,792 |
Definite-lived intangible assets: | ||
Gross carrying amount | 27,929 | 15,859 |
Accumulated amortization | (15,176) | (13,041) |
Net total | 12,753 | 2,818 |
Total intangible assets, Gross carrying amount | 312,555 | 147,651 |
Total intangible assets, Net total | 297,379 | 134,610 |
Trade name | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 156,049 | 78,299 |
Certificates of Need/ Licenses | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 128,577 | 53,493 |
Trade name | ||
Definite-lived intangible assets: | ||
Gross carrying amount | 10,127 | 10,127 |
Accumulated amortization | (8,817) | (7,547) |
Net total | 1,310 | 2,580 |
Non-compete | ||
Definite-lived intangible assets: | ||
Gross carrying amount | 5,980 | 5,732 |
Accumulated amortization | (5,729) | (5,494) |
Net total | 251 | 238 |
Customer Relationships | ||
Definite-lived intangible assets: | ||
Gross carrying amount | 11,822 | 0 |
Accumulated amortization | (630) | 0 |
Net total | $ 11,192 | $ 0 |
Goodwill and Other Intangible_6
Goodwill and Other Intangibles, Net - Schedule of Intangible Asset Future Amortization Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 2,100 | $ 2,100 | $ 2,500 |
2,019 | 1,112 | ||
2,020 | 899 | ||
2,021 | 732 | ||
2,022 | 682 | ||
2,023 | 682 | ||
Total | $ 4,107 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for uncollectible accounts | $ 8,645 | $ 5,224 |
Accrued employee benefits | 6,038 | 4,147 |
Stock compensation | 2,322 | 663 |
Accrued self-insurance | 8,656 | 2,157 |
Acquisition costs | 1,413 | 2,064 |
Net operating loss carry forward | 9,147 | 1,299 |
Intangible asset impairment | 18 | 21 |
Other | 1,021 | 91 |
Capital loss carryforward | 0 | 12 |
Valuation allowance | (3,574) | (44) |
Deferred tax assets | 33,686 | 15,634 |
Deferred tax liabilities: | ||
Amortization of intangible assets | (64,001) | (35,955) |
Tax depreciation in excess of book depreciation | (7,693) | (5,988) |
Prepaid expenses | (1,134) | (623) |
Non-accrual experience accounting method | (602) | (534) |
Other | (3,562) | 0 |
Deferred tax liabilities | (76,992) | (43,100) |
Net deferred tax liability | $ (43,306) | $ (27,466) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) from Continuing Operations, Less Noncontrolling Interest (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 892 | $ 12,798 | $ 12,563 |
State | 3,382 | 2,621 | 2,371 |
Total Current | 4,274 | 15,419 | 14,934 |
Deferred: | |||
Federal | 15,383 | (6,273) | 6,223 |
State | 2,742 | 1,798 | 1,019 |
Total Deferred | 18,125 | (4,475) | 7,242 |
Total income tax expense | $ 22,399 | $ 10,944 | $ 22,176 |
Income Taxes - Statutory Rate a
Income Taxes - Statutory Rate and Provisions for Income Taxes Percent (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Federal statutory tax rate | 21.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 5.70% | 4.40% | 3.80% |
Nondeductible expenses | 2.60% | 3.20% | 2.60% |
Uncertain tax position | (1.30%) | (3.30%) | |
TCJA Enactment | 0.00% | (22.90%) | 0.00% |
Excess Tax Benefit | (2.60%) | (1.60%) | 0.00% |
Credits and other | 0.70% | (0.10%) | (0.40%) |
Effective tax rate | 26.10% | 18.00% | 37.70% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Apr. 01, 2018 | Dec. 31, 2017 |
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | $ 4,297 | $ 3,786 | $ 0 |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 15,500 | ||
Valuation allowance | 800 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 92,300 | ||
Valuation allowance | $ 49,400 |
Income Taxes - Total Amounts of
Income Taxes - Total Amounts of Unrecognized Tax (Detail) $ in Thousands | 9 Months Ended |
Dec. 31, 2018USD ($) | |
Increased (decreases) in unrecognized tax benefits as a result of: | |
Tax positions taken in the current year | $ 1,835 |
Lapse of statute of limitations | (1,324) |
Total unrecognized tax benefits as of December 31, 2018 | $ 4,297 |
Debt - Additional Information (
Debt - Additional Information (Details) | Apr. 02, 2018USD ($)Instrument | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 18, 2014USD ($) |
Debt Instrument [Line Items] | ||||
Credit facility, borrowing capacity | $ 225,000,000 | |||
Letter of credit, sub-limit amount | $ 50,000,000 | $ 15,000,000 | ||
Available credit under agreement | 500,000,000 | |||
Credit facility maximum borrowing capacity under accordion feature | 200,000,000 | |||
Debt issuance costs | 1,900,000 | |||
Interest rate percentage | 4.19% | |||
Line of credit facility drawn | $ 247,400,000 | $ 235,000,000 | $ 144,000,000 | |
Letter of credit outstanding | $ 30,400,000 | $ 9,600,000 | ||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee rates for unused commitments | 0.20% | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee rates for unused commitments | 0.35% | |||
Federal Funds Rate | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 0.50% | |||
Eurodollar | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 1.50% | 4.19% | ||
Line of credit facility, borrowing outstanding | Instrument | 15 | |||
Eurodollar | Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 1.50% | |||
Eurodollar | Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 2.25% | |||
Base rate | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 5.50% | |||
Base rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 0.50% | |||
Base rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility interest rate | 1.25% | |||
LHC Group | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility drawn | $ 125,100,000 | |||
Almost Family | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility, borrowing capacity | 350,000,000 | |||
Line of credit facility drawn | $ 107,300,000 |
Debt - Schedule of Principal Pa
Debt - Schedule of Principal Payments on Long-Term Debt (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 7,773 |
2,020 | 235,123 |
2,021 | 133 |
2,022 | 143 |
2,023 | 531 |
Total | $ 243,703 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Millions | Jun. 20, 2013shares | Dec. 31, 2018USD ($)director$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2006shares | Jun. 07, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved and available for issuance (in shares) | 1,500,000 | |||||
Shares available for issuance (in shares) | 2,194,074 | 2,210,544 | ||||
Number of directors | director | 4 | |||||
Granted (in dollars per share) | $ / shares | $ 64.11 | $ 48.52 | $ 37.99 | |||
Total unrecognized compensation cost related to nonvested shares of common stock granted | $ | $ 19.4 | |||||
Weighted average period of cost recognized | 3 years 1 month 5 days | |||||
Fair value of shares vested | $ | $ 8 | $ 5.6 | $ 4.5 | |||
Compensation expense related to nonvested stock grants | $ | $ 9.4 | $ 6 | $ 4.9 | |||
Price of shares issued under Employee Stock Purchase Plan as a percentage of FMV | 95.00% | |||||
Number of shares reserved for the Employee Stock Purchase Plan (in shares) | 250,000 | |||||
Additional shares authorized for issuance (in shares) | 250,000 | |||||
Shares redeemed to satisfy personal tax obligations (in shares) | 68,217 | 61,825 | 52,119 | |||
Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Period of vested shares | 1 year | |||||
Nonvested stock grants to employees (in shares) | 14,000 | |||||
Nonvested stock grants to Independent directors (in shares) | 13,600 | 11,700 | 15,300 | |||
New Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of directors' stock grant vested on one year anniversary date | 33.33% | |||||
Employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Period of vested shares | 5 years | |||||
AFAM Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares redeemed to satisfy personal tax obligations (in shares) | 68,070 | |||||
Treasury shares redeemed to pay income tax | $ | $ 2.5 | |||||
2018 Long-Term Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved and available for issuance (in shares) | 2,000,000 | |||||
2018 Long-Term Incentive Plan | Employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Nonvested stock grants to employees (in shares) | 16,470 | |||||
2010 Long-Term Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved and available for issuance (in shares) | 300,000 | |||||
2010 Long-Term Incentive Plan | Employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Nonvested stock grants to employees (in shares) | 213,105 | 139,310 | 220,800 | |||
Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in dollars per share) | $ / shares | $ 64.11 | |||||
Aggregate intrinsic value, outstanding | $ | $ 9 | |||||
Aggregate intrinsic value, exercised | $ | $ 6.8 |
Stockholders' Equity - Share Gr
Stockholders' Equity - Share Grants Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Weighted average grant date fair value | |||
Granted (in dollars per share) | $ 64.11 | $ 48.52 | $ 37.99 |
Restricted stock | |||
Number of Shares | |||
Share grants outstanding, beginning balance (in shares) | 529,465 | ||
Granted (in shares) | 257,175 | ||
Acquired (in shares) | 0 | ||
Vested or exercised (in shares) | (212,355) | ||
Share grants outstanding, ending balance (in shares) | 574,285 | 529,465 | |
Weighted average grant date fair value | |||
Share grants outstanding, beginning balance (in dollars per share) | $ 37.34 | ||
Granted (in dollars per share) | 64.11 | ||
Acquired (in dollars per share) | 0 | ||
Vested or exercised (in dollars per share) | 37.77 | ||
Share grants outstanding, ending balance (in dollars per share) | $ 49.68 | $ 37.34 | |
Options | |||
Number of Shares | |||
Share grants outstanding, beginning balance (in shares) | 0 | ||
Granted (in shares) | 0 | ||
Acquired (in shares) | 270,710 | ||
Vested or exercised (in shares) | (108,903) | ||
Share grants outstanding, ending balance (in shares) | 161,807 | 0 | |
Weighted average grant date fair value | |||
Share grants outstanding, beginning balance (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 0 | ||
Acquired (in dollars per share) | 36.48 | ||
Vested or exercised (in dollars per share) | 34.11 | ||
Share grants outstanding, ending balance (in dollars per share) | $ 38.08 | $ 0 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Outstanding, by Exercise Price Range (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
$0.00 - 30.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 0 |
Range of Exercise Price, Upper Limit | 30 |
$30.01 - 40.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | 30.01 |
Range of Exercise Price, Upper Limit | 40 |
$40.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Price, Lower Limit | $ 40 |
Options | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares | shares | 161,807 |
Wtd. Avg. Remaining Contractual Life | 6 years 168 days |
Wtd. Avg. Exercise Price (in dollars per share) | $ 38.08 |
Options | $0.00 - 30.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares | shares | 47,579 |
Wtd. Avg. Remaining Contractual Life | 4 years 172 days |
Wtd. Avg. Exercise Price (in dollars per share) | $ 24.93 |
Options | $30.01 - 40.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares | shares | 71,684 |
Wtd. Avg. Remaining Contractual Life | 6 years 84 days |
Wtd. Avg. Exercise Price (in dollars per share) | $ 39.43 |
Options | Over $40.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares | shares | 42,544 |
Wtd. Avg. Remaining Contractual Life | 7 years 266 days |
Wtd. Avg. Exercise Price (in dollars per share) | $ 50.51 |
Stockholders' Equity - Shares o
Stockholders' Equity - Shares of Common Stock Issued Under Employee Stock Purchase Plan (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Number of shares available, beginning balance (in shares) | 213,760 | ||
Shares issued during period (in shares) | 18,725 | 18,542 | 24,149 |
Number of shares available, ending balance (in shares) | 152,344 | ||
Weighted average per share price of shares issued (in dollars per share) | $ 71.12 | $ 55.40 | $ 37.79 |
Leases - Additional information
Leases - Additional information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Rent expense | $ 47.6 | $ 25.1 | $ 20.8 |
Minimum | |||
Operating lease term | 3 years | ||
Maximum | |||
Operating lease term | 10 years |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Commitments Under Non-cancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,019 | $ 35,473 |
2,020 | 24,663 |
2,021 | 17,815 |
2,022 | 10,795 |
2,023 | 6,302 |
Thereafter | 12,883 |
Total | $ 107,931 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Participants contribution | $ 18,500 | ||
Employer contribution as a percentage of employee contributions | 2.00% | ||
Employer contribution | 25.00% | ||
Full vesting period of employer contribution | 4 years | ||
Contribution expenses | $ 10,100,000 | $ 7,900,000 | $ 6,300,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)complaint | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Other Commitments [Line Items] | |||
Other assets from government payors related to disputed findings | $ 16,900 | ||
Additional complaints filed | complaint | 2 | ||
Purchase amount of property | $ 32,993 | $ 10,176 | $ 16,009 |
Amount required for expansion plan | 70,000 | ||
Early phase commitment | $ 4,000 | ||
Joint venture buy/sell option period | 30 days | ||
Lafayette | |||
Other Commitments [Line Items] | |||
Purchase amount of property | $ 19,300 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||
Net service revenue | $ 509,842 | $ 507,043 | $ 502,024 | $ 291,054 | $ 291,140 | $ 269,678 | $ 257,535 | $ 244,249 | $ 1,809,963 | $ 1,062,602 | $ 900,033 |
Cost of service revenue | 1,156,357 | 675,810 | 557,650 | ||||||||
General and administrative expenses | 537,916 | 310,539 | 270,622 | ||||||||
Impairment of intangibles and other | 4,689 | 1,571 | 1,199 | ||||||||
Operating income | 111,001 | 74,682 | 70,562 | ||||||||
Interest expense | (9,679) | (3,352) | (2,444) | ||||||||
Income before income taxes and noncontrolling interests | 101,322 | 71,330 | 68,118 | ||||||||
Income tax expense (benefit) | 22,399 | 10,944 | 22,176 | ||||||||
Net income | 78,923 | 60,386 | 45,942 | ||||||||
Less net income (loss) attributable to noncontrolling interests | 15,349 | 10,274 | 9,359 | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | 20,552 | $ 21,230 | $ 16,797 | $ 4,995 | 18,435 | $ 10,906 | $ 11,304 | $ 9,467 | 63,574 | 50,112 | 36,583 |
Total assets | 1,928,715 | 793,702 | 1,928,715 | 793,702 | 614,071 | ||||||
Home health | |||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||
Net service revenue | 1,291,457 | 777,583 | 656,287 | ||||||||
Cost of service revenue | 802,006 | 482,179 | 398,450 | ||||||||
General and administrative expenses | 378,124 | 229,264 | 203,418 | ||||||||
Impairment of intangibles and other | 1,816 | 1,612 | 857 | ||||||||
Operating income | 109,511 | 64,528 | 53,562 | ||||||||
Interest expense | (7,060) | (2,546) | (1,794) | ||||||||
Income before income taxes and noncontrolling interests | 102,451 | 61,982 | 51,768 | ||||||||
Income tax expense (benefit) | 22,711 | 9,509 | 16,505 | ||||||||
Net income | 79,740 | 52,473 | 35,263 | ||||||||
Less net income (loss) attributable to noncontrolling interests | 13,361 | 9,102 | 6,876 | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | 66,379 | 43,371 | 28,387 | ||||||||
Total assets | 1,336,988 | 534,385 | 1,336,988 | 534,385 | 427,782 | ||||||
Hospice | |||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||
Net service revenue | 199,118 | 157,287 | 131,547 | ||||||||
Cost of service revenue | 130,991 | 103,969 | 83,359 | ||||||||
General and administrative expenses | 60,933 | 45,516 | 37,207 | ||||||||
Impairment of intangibles and other | 186 | 22 | 338 | ||||||||
Operating income | 7,008 | 7,780 | 10,643 | ||||||||
Interest expense | (1,529) | (511) | (292) | ||||||||
Income before income taxes and noncontrolling interests | 5,479 | 7,269 | 10,351 | ||||||||
Income tax expense (benefit) | 1,227 | 1,057 | 3,485 | ||||||||
Net income | 4,252 | 6,212 | 6,866 | ||||||||
Less net income (loss) attributable to noncontrolling interests | 1,764 | 1,248 | 1,867 | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | 2,488 | 4,964 | 4,999 | ||||||||
Total assets | 209,680 | 155,230 | 209,680 | 155,230 | 116,090 | ||||||
Home and community-based | |||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||
Net service revenue | 172,501 | 46,159 | 43,094 | ||||||||
Cost of service revenue | 130,660 | 35,244 | 32,603 | ||||||||
General and administrative expenses | 40,467 | 9,946 | 8,785 | ||||||||
Impairment of intangibles and other | (6) | 0 | 49 | ||||||||
Operating income | 1,380 | 969 | 1,657 | ||||||||
Interest expense | (76) | (191) | (130) | ||||||||
Income before income taxes and noncontrolling interests | 1,304 | 778 | 1,527 | ||||||||
Income tax expense (benefit) | 420 | 156 | 651 | ||||||||
Net income | 884 | 622 | 876 | ||||||||
Less net income (loss) attributable to noncontrolling interests | (275) | (111) | (58) | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | 1,159 | 733 | 934 | ||||||||
Total assets | 236,072 | 48,216 | 236,072 | 48,216 | 33,520 | ||||||
Facility-based | |||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||
Net service revenue | 113,784 | 81,573 | 69,105 | ||||||||
Cost of service revenue | 76,899 | 54,418 | 43,238 | ||||||||
General and administrative expenses | 39,638 | 25,813 | 21,212 | ||||||||
Impairment of intangibles and other | 554 | (63) | (45) | ||||||||
Operating income | (3,307) | 1,405 | 4,700 | ||||||||
Interest expense | (545) | (104) | (228) | ||||||||
Income before income taxes and noncontrolling interests | (3,852) | 1,301 | 4,472 | ||||||||
Income tax expense (benefit) | (1,136) | 222 | 1,535 | ||||||||
Net income | (2,716) | 1,079 | 2,937 | ||||||||
Less net income (loss) attributable to noncontrolling interests | 589 | 35 | 674 | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | (3,305) | 1,044 | 2,263 | ||||||||
Total assets | 70,261 | 55,871 | 70,261 | 55,871 | 36,679 | ||||||
Healthcare innovations | |||||||||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||||||||
Net service revenue | 33,103 | 0 | 0 | ||||||||
Cost of service revenue | 15,801 | 0 | 0 | ||||||||
General and administrative expenses | 18,754 | 0 | 0 | ||||||||
Impairment of intangibles and other | 2,139 | 0 | |||||||||
Operating income | (3,591) | 0 | 0 | ||||||||
Interest expense | (469) | 0 | 0 | ||||||||
Income before income taxes and noncontrolling interests | (4,060) | 0 | 0 | ||||||||
Income tax expense (benefit) | (823) | 0 | 0 | ||||||||
Net income | (3,237) | 0 | 0 | ||||||||
Less net income (loss) attributable to noncontrolling interests | (90) | 0 | 0 | ||||||||
Net income attributable to LHC Group, Inc.’s common stockholders | (3,147) | 0 | 0 | ||||||||
Total assets | $ 75,714 | $ 0 | $ 75,714 | $ 0 | $ 0 |
Concentration of Risk - Additio
Concentration of Risk - Additional Information (Detail) - State | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Number of states in which entity operates | 36 | ||
Louisiana, Tennessee, Arkansas, Mississippi, Kentucky, Florida, and Alabama | Net Service Revenue | Geographic Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 54.20% | 63.00% | 66.60% |
Unaudited Summarized Quarterl_3
Unaudited Summarized Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net service revenue | $ 509,842 | $ 507,043 | $ 502,024 | $ 291,054 | $ 291,140 | $ 269,678 | $ 257,535 | $ 244,249 | $ 1,809,963 | $ 1,062,602 | $ 900,033 |
Gross margin | 185,303 | 184,847 | 181,020 | 102,436 | 103,714 | 96,822 | 96,377 | 89,879 | 653,606 | 386,792 | 342,383 |
Net Income Attributable to LHC Group Inc.'s Common Stockholders | $ 20,552 | $ 21,230 | $ 16,797 | $ 4,995 | $ 18,435 | $ 10,906 | $ 11,304 | $ 9,467 | $ 63,574 | $ 50,112 | $ 36,583 |
Net income attributable to LHC Group' Inc.'s common stockholders | |||||||||||
Basic earnings per share (in dollars per share) | $ 0.67 | $ 0.69 | $ 0.55 | $ 0.28 | $ 1.04 | $ 0.61 | $ 0.64 | $ 0.54 | $ 2.31 | $ 2.83 | $ 2.08 |
Diluted earnings per share (in dollars per share) | $ 0.66 | $ 0.68 | $ 0.55 | $ 0.28 | $ 1.02 | $ 0.61 | $ 0.63 | $ 0.53 | $ 2.29 | $ 2.79 | $ 2.07 |
Weighted average shares outstanding: | |||||||||||
Basic (in shares) | 30,777,556 | 30,750,227 | 30,497,501 | 17,789,863 | 17,749,872 | 17,740,818 | 17,728,567 | 17,643,463 | 27,498,351 | 17,715,992 | 17,559,477 |
Diluted (in shares) | 31,142,061 | 31,083,815 | 30,742,293 | 18,039,345 | 18,043,297 | 18,010,522 | 17,964,387 | 17,817,880 | 27,773,396 | 17,961,018 | 17,682,820 |