Segment Information | Segment Information The Company's reporting segments include (1) home health services, (2) hospice services, (3) home and community-based services, (4) facility-based services and (5) healthcare innovations (“HCI”). 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 home health segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. During the three months ended March 31, 2019, 71.3% of the home health services segment revenues were generated from the Medicare program, while the balance is generated from Medicaid and private insurance programs. The hospice segment services are largely provided in patients’ homes and generally require specialized hospice nursing skills. Hospice services segment revenues are generated on a per diem basis and are primarily from Medicare, which accounted for 92.4% of hospice services segment revenues during the three months ended March 31, 2019. The home and community-based segment provides traditional home and community-based services (generally provided by paraprofessional staff such as home health aides), which are generally of a custodial rather than skilled nature. Home and community-based services segment revenues are generated on a shift or hourly basis and are primarily from Managed Care, Commercial, and Other payor sources, which accounted for 74.9% of home and community-based services segment revenues during the three months ended March 31, 2019. The facility-based segment services includes services primarily provided through LTACHs. The facility-based services segment is reimbursed primarily by Medicare under the LTACH prospective payment system, which accounted for 57.4% of facility-based services segment revenue during the three months ended March 31, 2019. The HCI segment combines reporting on the Company’s developmental activities outside its other business segments. The HCI segment includes (a) Imperium Health Management, LLC, an ACO enablement company, (b) Long Term Solutions, Inc., an in-home assessment company serving the long-term care insurance industry, and (c) certain assets operated by Advanced Care House Calls, which provides primary medical care for patients with chronic and acute illnesses who have difficulty traveling to a doctor’s office. These activities are intended to ultimately, whether directly or indirectly, to benefit the Company’s patients and payors through the enhanced provision of services in the Company’s other segments. The activities all share a common goal of improving patient experiences and quality outcomes, while lowering costs. They include, but are not limited to, items such as: technology, information, population health management, risk-sharing, care-coordination and transitions, clinical advancements, enhanced patient engagement and informed clinical decision and technology enabled in-home clinical assessments. 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. The following tables summarize the Company’s segment information for the three months ended March 31, 2019 and 2018 (amounts in thousands): Three Months Ended March 31, 2019 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 363,035 $ 51,736 $ 51,785 $ 27,701 $ 8,328 $ 502,585 Cost of service revenue 226,123 33,176 39,855 17,732 4,106 320,992 General and administrative expenses 104,839 14,853 10,982 9,177 5,370 145,221 Other intangible impairment charge 6,318 1 — — — 6,319 Operating income (loss) 25,755 3,706 948 792 (1,148 ) 30,053 Interest expense (2,138 ) (343 ) (301 ) (180 ) (90 ) (3,052 ) Income (loss) before income taxes and noncontrolling interest 23,617 3,363 647 612 (1,238 ) 27,001 Income tax expense (benefit) 3,208 446 151 5 (210 ) 3,600 Net income (loss) 20,409 2,917 496 607 (1,028 ) 23,401 Less net income (loss) attributable to noncontrolling interests 3,780 601 (310 ) 481 (7 ) 4,545 Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 16,629 $ 2,316 $ 806 $ 126 $ (1,021 ) $ 18,856 Total assets $ 1,421,000 $ 220,347 $ 226,991 $ 79,257 $ 66,262 $ 2,013,857 Three Months Ended March 31, 2018 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 204,187 $ 42,626 $ 14,091 $ 30,150 $ — $ 291,054 Cost of service revenue 130,161 28,018 10,790 19,649 — 188,618 General and administrative expenses 66,289 13,298 3,298 9,146 — 92,031 Operating income 7,737 1,310 3 1,355 — 10,405 Interest expense (1,088 ) (218 ) (72 ) (72 ) — (1,450 ) Income (loss) before income taxes and noncontrolling interest 6,649 1,092 (69 ) 1,283 — 8,955 Income tax expense 722 111 (15 ) 159 — 977 Net income (loss) 5,927 981 (54 ) 1,124 — 7,978 Less net income attributable to noncontrolling interests 2,236 417 21 309 — 2,983 Net income (loss) attributable to LHC Group, Inc.’s common stockholders $ 3,691 $ 564 $ (75 ) $ 815 $ — $ 4,995 Total assets $ 530,197 $ 157,338 $ 47,819 $ 69,969 $ — $ 805,323 |