Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 06, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2019 | |
Entity File Number | 001-33989 | |
Entity Registrant Name | LHC Group, Inc | |
Entity Central Index Key | 0001303313 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 71-0918189 | |
Entity Address, Address Line One | 901 Hugh Wallis Road South | |
Entity Address, City or Town | Lafayette | |
Entity Address, State or Province | LA | |
Entity Address, Postal Zip Code | 70508 | |
City Area Code | 337 | |
Local Phone Number | 233-1307 | |
Title of 12(b) Security | Common Stock, par value of $0.01 | |
Trading Symbol | LHCG | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,508,180 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 26,737 | $ 49,363 |
Receivables: | ||
Patient accounts receivable | 272,941 | 252,592 |
Other receivables | 6,153 | 6,658 |
Amounts due from governmental entities | 1,018 | 830 |
Total receivables | 280,112 | 260,080 |
Prepaid income taxes | 4,511 | 11,788 |
Prepaid expenses | 25,134 | 24,775 |
Other current assets | 21,310 | 20,899 |
Total current assets | 357,804 | 366,905 |
Property, building and equipment, net of accumulated depreciation of $62,354 and $55,253, respectively | 80,088 | 79,563 |
Goodwill | 1,188,227 | 1,161,717 |
Intangible assets, net of accumulated amortization of $15,854 and $15,176, respectively | 296,716 | 297,379 |
Assets held for sale | 2,500 | 2,850 |
Operating lease right of use asset | 84,638 | 0 |
Other assets | 19,882 | 20,301 |
Total assets | 2,029,855 | 1,928,715 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 79,038 | 77,135 |
Salaries, wages, and benefits payable | 81,645 | 84,254 |
Self-insurance reserves | 32,570 | 32,776 |
Current operating lease liabilities | 26,453 | 0 |
Current portion of long-term debt | 0 | 7,773 |
Amounts due to governmental entities | 5,065 | 4,174 |
Total current liabilities | 224,771 | 206,112 |
Deferred income taxes | 46,919 | 43,306 |
Income taxes payable | 4,671 | 4,297 |
Revolving credit facility | 230,000 | 235,000 |
Long term notes payable | 0 | 930 |
Operating lease payable | 59,980 | 0 |
Total liabilities | 566,341 | 489,645 |
Noncontrolling interest — redeemable | 15,467 | 14,596 |
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 shares authorized in 2019 and 2018; 35,837,779 and 35,636,414 shares issued in 2019 and 2018, respectively | 358 | 356 |
Treasury stock — 5,052,927 and 4,958,721 shares at cost, respectively | (57,893) | (49,374) |
Additional paid-in capital | 941,923 | 937,968 |
Retained earnings | 471,831 | 427,975 |
Total LHC Group, Inc. stockholders’ equity | 1,356,219 | 1,316,925 |
Noncontrolling interest — non-redeemable | 91,828 | 107,549 |
Total equity | 1,448,047 | 1,424,474 |
Total liabilities and equity | $ 2,029,855 | $ 1,928,715 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Property, building and equipment, accumulated depreciation | $ 62,354 | $ 55,253 |
Intangible assets, accumulated amortization | $ 15,854 | $ 15,176 |
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 | 60,000,000 |
Common stock, shares issued | 35,837,779 | 35,636,414 |
Treasury stock at cost, shares | 5,052,927 | 4,958,721 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net service revenue | $ 517,842 | $ 502,024 | $ 1,020,427 | $ 793,078 |
Cost of service revenue | 325,860 | 321,004 | 646,852 | 509,622 |
Gross margin | 191,982 | 181,020 | 373,575 | 283,456 |
General and administrative expenses | 148,584 | 149,214 | 293,805 | 241,245 |
Other intangible impairment charge | 1,018 | 778 | 7,337 | 778 |
Operating income | 42,380 | 31,028 | 72,433 | 41,433 |
Interest expense | (2,885) | (3,202) | (5,937) | (4,652) |
Income before income taxes and noncontrolling interest | 39,495 | 27,826 | 66,496 | 36,781 |
Income tax expense | 9,557 | 7,170 | 13,157 | 8,147 |
Net income | 29,938 | 20,656 | 53,339 | 28,634 |
Less net income attributable to noncontrolling interests | 4,938 | 3,859 | 9,483 | 6,842 |
Net income attributable to LHC Group, Inc.’s common stockholders | $ 25,000 | $ 16,797 | $ 43,856 | $ 21,792 |
Earnings per share: | ||||
Basic (usd per share) | $ 0.81 | $ 0.55 | $ 1.42 | $ 0.90 |
Diluted (usd per share) | $ 0.80 | $ 0.55 | $ 1.41 | $ 0.89 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 30,960 | 30,498 | 30,899 | 24,179 |
Diluted (in shares) | 31,201 | 30,742 | 31,188 | 24,403 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury | Additional Paid-In Capital | Retained Earnings | Noncontrolling Interest Non Redeemable | |
Beginning balance, Amount at Dec. 31, 2017 | $ 506,591 | $ 226 | $ (42,249) | $ 126,490 | $ 364,401 | $ 57,723 | |
Beginning balance (in shares) at Dec. 31, 2017 | 22,640,046 | ||||||
Beginning balance, Treasury (in shares) at Dec. 31, 2017 | 4,890,504 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | [1] | 5,592 | 4,995 | 597 | |||
Acquired noncontrolling interest | 1,235 | 1,235 | |||||
Noncontrolling interest distributions | (615) | (615) | |||||
NCI acquired, net of sales | 3,554 | (2,029) | 5,583 | ||||
Purchase of additional controlling interest | (56) | (44) | (12) | ||||
Nonvested stock compensation | 1,601 | 1,601 | |||||
Restricted share grants | $ 2 | (2) | |||||
Restricted stock vesting (in shares) | 165,567 | ||||||
Treasury shares redeemed to pay income tax | (3,467) | $ (3,467) | |||||
Treasury shares redeemed to pay income tax (in shares) | 56,772 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 332 | 332 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 5,534 | ||||||
Ending balance, Amount at Mar. 31, 2018 | 514,767 | $ 228 | $ (45,716) | 126,348 | 369,396 | 64,511 | |
Ending balance (in shares) at Mar. 31, 2018 | 22,811,147 | ||||||
Ending balance, Treasury (in shares) at Mar. 31, 2018 | 4,947,276 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | [1] | 18,187 | 16,797 | 1,390 | |||
Acquired noncontrolling interest | 35,239 | 35,239 | |||||
Noncontrolling interest distributions | (504) | (504) | |||||
NCI acquired, net of sales | (591) | (591) | 0 | ||||
Nonvested stock compensation | 2,318 | 2,318 | |||||
Restricted stock vesting (in shares) | 10,818 | ||||||
Treasury shares redeemed to pay income tax | (628) | $ (628) | |||||
Treasury shares redeemed to pay income tax (in shares) | 6,389 | ||||||
Merger consideration | 795,405 | $ 127 | 795,278 | ||||
Merger consideration (in shares) | 12,765,288 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | 302 | $ 0 | 302 | ||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 5,171 | ||||||
Ending balance, Amount at Jun. 30, 2018 | 1,364,495 | $ 355 | $ (46,344) | 923,655 | 386,193 | 100,636 | |
Ending balance (in shares) at Jun. 30, 2018 | 35,592,424 | ||||||
Ending balance, Treasury (in shares) at Jun. 30, 2018 | 4,953,665 | ||||||
Beginning balance, Amount at Dec. 31, 2018 | $ 1,424,474 | $ 356 | $ (49,374) | 937,968 | 427,975 | 107,549 | |
Beginning balance (in shares) at Dec. 31, 2018 | 35,636,414 | ||||||
Beginning balance, Treasury (in shares) at Dec. 31, 2018 | (4,958,721) | (4,958,721) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | [1] | $ 20,542 | 18,856 | 1,686 | |||
Acquired noncontrolling interest | 820 | 820 | |||||
Noncontrolling interest distributions | (6,799) | (6,799) | |||||
NCI acquired, net of sales | (18,000) | (18,000) | |||||
Nonvested stock compensation | 1,804 | 1,804 | |||||
Restricted share grants | 2 | $ 2 | |||||
Restricted stock vesting (in shares) | 174,562 | ||||||
Treasury shares redeemed to pay income tax | (7,692) | $ (7,577) | (115) | ||||
Treasury shares redeemed to pay income tax (in shares) | 85,509 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | $ 478 | 478 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 5,357 | 5,357 | |||||
Ending balance, Amount at Mar. 31, 2019 | $ 1,415,629 | $ 358 | $ (56,951) | 940,135 | 446,831 | 85,256 | |
Ending balance (in shares) at Mar. 31, 2019 | 35,816,333 | ||||||
Ending balance, Treasury (in shares) at Mar. 31, 2019 | (5,044,230) | ||||||
Beginning balance, Amount at Dec. 31, 2018 | $ 1,424,474 | $ 356 | $ (49,374) | 937,968 | 427,975 | 107,549 | |
Beginning balance (in shares) at Dec. 31, 2018 | 35,636,414 | ||||||
Beginning balance, Treasury (in shares) at Dec. 31, 2018 | (4,958,721) | (4,958,721) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Treasury shares redeemed to pay income tax (in shares) | 66,181 | ||||||
Ending balance, Amount at Jun. 30, 2019 | $ 1,448,047 | $ 358 | $ (57,893) | 941,923 | 471,831 | 91,828 | |
Ending balance (in shares) at Jun. 30, 2019 | 35,837,779 | ||||||
Ending balance, Treasury (in shares) at Jun. 30, 2019 | (5,052,927) | 5,052,927 | |||||
Beginning balance, Amount at Mar. 31, 2019 | $ 1,415,629 | $ 358 | $ (56,951) | 940,135 | 446,831 | 85,256 | |
Beginning balance (in shares) at Mar. 31, 2019 | 35,816,333 | ||||||
Beginning balance, Treasury (in shares) at Mar. 31, 2019 | (5,044,230) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | [1] | 26,897 | 25,000 | 1,897 | |||
Acquired noncontrolling interest | 6,170 | 6,170 | |||||
Noncontrolling interest distributions | (2,026) | (2,026) | |||||
NCI acquired, net of sales | (752) | (1,283) | 531 | ||||
Nonvested stock compensation | 2,588 | 2,588 | |||||
Restricted stock vesting (in shares) | 17,145 | ||||||
Treasury shares redeemed to pay income tax | (912) | $ (942) | 30 | ||||
Treasury shares redeemed to pay income tax (in shares) | 8,697 | ||||||
Issuance of common stock under Employee Stock Purchase Plan | $ 453 | 453 | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 4,301 | 4,301 | |||||
Ending balance, Amount at Jun. 30, 2019 | $ 1,448,047 | $ 358 | $ (57,893) | $ 941,923 | $ 471,831 | $ 91,828 | |
Ending balance (in shares) at Jun. 30, 2019 | 35,837,779 | ||||||
Ending balance, Treasury (in shares) at Jun. 30, 2019 | (5,052,927) | 5,052,927 | |||||
[1] | Net income excludes net income attributable to noncontrolling interest-redeemable of $2.5 million and $4.9 million during the three and six months ending June 30, 2018, respectively. Noncontrolling interest-redeemable is reflected outside of permanent equity on the condensed consolidated balance sheets. See Note 8 of the Notes to Condensed Consolidated Financial Statements. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net income attributable to noncontrolling interest-redeemable | $ 3,000 | $ 2,500 | $ 5,900 | $ 4,900 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating activities: | ||
Net income | $ 53,339 | $ 28,634 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 8,400 | 7,548 |
Amortization of operating lease right of use asset | 15,528 | 0 |
Stock-based compensation expense | 4,392 | 3,919 |
Deferred income taxes | 4,821 | 1,714 |
Loss (gain) on disposal of assets | 312 | (126) |
Impairment of intangibles and other | 7,337 | 778 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Receivables | (22,704) | (18,897) |
Prepaid expenses and other assets | (324) | (6,521) |
Prepaid income taxes | 5,063 | 4,624 |
Accounts payable and accrued expenses | (18,735) | 8,729 |
Income taxes payable | 374 | |
Net amounts due to/from governmental entities | 528 | (704) |
Net cash provided by operating activities | 58,331 | 29,698 |
Investing activities: | ||
Purchases of property, building and equipment | (7,599) | (13,760) |
Cash acquired from business combination, net of cash paid | (20,431) | 13,086 |
Net cash used in investing activities | (28,030) | (674) |
Financing activities: | ||
Proceeds from line of credit | 25,000 | 270,084 |
Payments on line of credit | (30,000) | (278,884) |
Proceeds from employee stock purchase plan | 931 | 634 |
Payments on debt | (7,650) | 135 |
Payments on deferred financing fees | 0 | (1,881) |
Noncontrolling interest distributions | (13,857) | (5,763) |
Withholding taxes paid on stock-based compensation | (8,519) | (4,095) |
Purchase of additional controlling interest | (18,748) | (55) |
Exercise of options | (84) | |
Sale of noncontrolling interest | 0 | 3,322 |
Net cash (used in) financing activities | (52,927) | (16,503) |
Change in cash | (22,626) | 12,521 |
Cash at beginning of period | 49,363 | 2,849 |
Cash at end of period | 26,737 | 15,370 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 4,038 | 3,112 |
Income taxes paid | 4,042 | $ 2,139 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 98,070 | |
Capital expenditures accrued | $ 1,000 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
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 home health services, hospice services, home and community-based services, facility-based services, the latter primarily through long-term acute care hospitals (“LTACHs”), and healthcare innovations services ("HCI"). On April 1, 2018, the Company completed a "merger of equals" business combination (the "Merger") with Almost Family, Inc. ("Almost Family"). As a result, the financial results of the Company for the three and six month periods in 2019 include the operating results of Almost Family, while the financial results of the Company with the addition of Almost Family start to be reflected during the second quarter of 2018. See Note 3 to Condensed Consolidated Financial Statements. As of June 30, 2019 , the Company, through its wholly- and majority-owned subsidiaries, equity joint ventures, controlled affiliates, and management agreements operated 760 service locations in 35 states within the continental United States and the District of Columbia. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 , and the related unaudited condensed consolidated statements of income for the three and six months ended June 30, 2019 and 2018 , condensed consolidated statements of changes in equity for the three and six months ended June 30, 2019 and 2018, condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 , and related notes (collectively, these financial statements are referred to as the "interim financial statements" and together with the related notes are referred to herein as the “interim financial information”) have been prepared by the Company. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented. This report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10-K"). The 2018 Form 10-K was filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2019 , and includes information and disclosures not included herein. Reclassification |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates. Critical Accounting Policies The Company’s most critical accounting policies relate to revenue recognition. Net Service Revenue 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, and other commercial or managed care insurance programs for services rendered, are subject to adjustment based upon implicit price concessions for retroactive revenue adjustments by third- party payors, settlements of audits, and claims 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, hospice, facility-based, 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 are to provide services to patients based on medical necessity and the bundle of services to be provided to achieve the goals established in the contract, while the healthcare innovations segment's performance obligations are largely to provide care, assessments and management services under various customer contracts. Revenue for performance obligations that are satisfied over time is 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 obligations 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 optional 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. Any unsatisfied or partially unsatisfied performance obligations at the end of a reporting period are generally completed prior to the patient being discharged. The Company determines the transaction price for the majority of its performance obligations based on gross charges for services provided, reduced by contractual adjustments 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 a result, revenue is recorded in amounts 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 three and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended 2019 2018 2019 2018 Home health: Medicare 70.8 % 72.9 % 71.1 % 72.3 % Managed Care, Commercial, and Other 29.2 27.1 28.9 27.7 100.0 % 100.0 % 100.0 % 100.0 % Hospice: Medicare 92.9 % 91.1 % 92.7 % 91.7 % Managed Care, Commercial, and Other 7.1 8.9 7.3 8.3 100.0 % 100.0 % 100.0 % 100.0 % Home and Community-Based Services: Medicaid 24.3 % 24.7 % 24.7 % 23.1 % Managed Care, Commercial, and Other 75.7 75.3 75.3 76.9 100.0 % 100.0 % 100.0 % 100.0 % Facility-Based Services: Medicare 53.0 % 58.7 % 55.2 % 61.4 % Managed Care, Commercial, and Other 47.0 41.3 44.8 38.6 100.0 % 100.0 % 100.0 % 100.0 % HCI: Medicare 23.5 % 26.7 % 22.8 % 26.7 % Managed Care, Commercial, and Other 76.5 73.3 77.2 73.3 100.0 % 100.0 % 100.0 % 100.0 % Medicare The Company's home health, hospice, and facility-based segments recognize revenue under their respective Medicare programs, which are discussed in more detail below. 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 recognizes 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 of the contract 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 a 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 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 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. Net service revenue and related patient accounts receivable are recorded at amounts estimated to be realized from Medicare for services rendered. The Company's hospice services segment is reimbursed by Medicare under a per diem payment system based on the daily needs determined for patients' 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 separate and distinct performance obligation, which depicts the transfer of services and related benefits received by the patient over the term of the contract to satisfy such obligations. The Company records net service revenue for hospice services based on the promulgated per diem rate over time as services are provided, in satisfaction of 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 their 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. 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 the retroactive adjustments is subsequently resolved. Net service revenue for the Company’s LTACH services that are satisfied over time is 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 Each of the Company's segments recognize revenue from various non-Medicare payor sources. Revenue from these payor sources are derived from services provided under a per visit, per hour or per unit basis, per assessment or per member per month basis. Such fee for service 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 ("HCI") segment provides strategic health management services to Accountable Care Organizations (“ACOs”) that have been approved to participate in the Medicare Shared Savings Program (“MSSP”). The HCI segment maintains 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 calendar year. As of June 30, 2019 , no net service revenue was recognized related to potential MSSP payments for savings generated for the program periods that ended December 31, 2018 , if any, as it remains unclear as to if performance obligations have been met by any ACO 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 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 50% 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. 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 reimbursements are 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 actual amounts to be received at the patient level and to 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. Other Significant Accounting Policies Earnings Per Share Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding plus potentially dilutive shares. The following table sets forth shares used in the computation of basic and diluted per share information and, with respect to the data provided for the three and six months ended June 30, 2019 (amounts in thousands). Three Months Ended Six Months Ended 2019 2018 2019 2018 Weighted average number of shares outstanding for basic per share calculation 30,960 30,498 30,899 24,179 Effect of dilutive potential shares: Nonvested stock 241 244 289 224 Adjusted weighted average shares for diluted per share calculation 31,201 30,742 31,188 24,403 Anti-dilutive shares 13 20 153 236 Recently Adopted 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 were classified as finance or operating right-of-use ("ROU") assets and lease liabilities. The new standard was effective for the Company on January 1, 2019. ASU 2016-02 provides a number of optional practical expedients in transition and the Company (a) 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, (b) elected all the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company, and (c) elected all the new standard's available transition practical expedients. Adoption of this standard increased total assets and total liabilities by $84.6 million , primarily for the Company's operating leased office space 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 did 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. See Note 9 of the Notes to Condensed Consolidated Financial Statements. Recently Issued Accounting Pronouncements In January 2017, the FASB issued ASU 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 amount and the fair value of the reporting unit. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2019, and is not expected to significantly impact the company. |
Acquisitions and Joint Venture
Acquisitions and Joint Venture Activities | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Joint Venture Activities | Acquisitions and Joint Venture Activities The Merger On April 1, 2018, the Company completed the Merger with Almost Family. At the effective time of the Merger on April 1, 2018, each outstanding share of common stock 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, while also converting outstanding employee share awards, which resulted in total merger consideration of approximately $795.4 million . The Company was determined to be the accounting acquirer in the Merger. The Company's final valuation analysis of identifiable assets and liabilities assumed for the Merger in accordance with the requirements of ASC Topic 805, Business Combinations, are presented in the table below (amounts in thousands): Merger consideration Stock $ 795,412 Fair value of total consideration transferred Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 16,547 Patient accounts receivable 88,234 Prepaid income taxes 47 Prepaid expenses and other current assets 11,490 Property and equipment 11,144 Trade names 76,090 Certificates of needs/licenses 76,505 Customer relationships 13,970 Assets held for sale 2,500 Deferred income taxes 4,821 Accounts payable (43,027 ) Accrued other liabilities (57,243 ) Seller notes payable (12,145 ) 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 (178 ) Total identifiable assets and liabilities 33,526 Goodwill $ 761,886 Acquisitions The Company acquired the majority-ownership of ten home health agencies and five hospice agencies during the six months ended June 30, 2019 . The total aggregate purchase price for these transactions was $23.5 million , of which $20.4 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. 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. Accordingly, the accompanying interim financial information includes the results of operations of the acquired entities from the date of acquisition. The following table summarizes the aggregate consideration paid for the acquisitions and the amounts of the assets acquired and liabilities assumed at the acquisition dates, as well as their fair value at the acquisition dates and the noncontrolling interest acquired during the six months ended June 30, 2019 : Consideration Cash $ 20,431 Fair value of total consideration transferred Recognized amounts of identifiable assets acquired and liabilities assumed: Trade name 3,480 Certificates of need/licenses 2,864 Other assets and (liabilities), net (3,021 ) Total identifiable assets 3,323 Noncontrolling interest 6,990 Goodwill, including noncontrolling interest of $5,359 $ 24,098 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 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 20.0 years . Customer relationships were valued using the multi-period excess earnings method. Noncontrolling interest is valued at fair value. Joint Venture Activities During the six months ended June 30, 2019 , the Company acquired the minority ownership interests associated with certain agencies previously operated within three of its equity joint ventures, whereby such agencies became wholly-owned subsidiaries of the Company. The total consideration for the purchase of such ownership interests was $18.7 million , which was paid in cash. These transactions were accounted for as equity transactions. During the six months ended June 30, 2019 , the Company sold minority ownership interests associated with two home health agencies. The total consideration for the sale of such ownership interests was $3.5 million |
Goodwill and Intangibles
Goodwill and Intangibles | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Goodwill and Intangibles The changes in recorded goodwill and intangible assets by reporting unit for the six months ended June 30, 2019 were as follows (amounts in thousands): Home health reporting unit Hospice reporting unit Home and community-based services reporting unit Facility-based reporting unit HCI reporting unit Total Goodwill Balance as of December 31, 2018 $ 822,602 $ 118,583 $ 165,583 $ 14,194 $ 40,755 $ 1,161,717 Acquisitions 13,113 5,626 — — — 18,739 Noncontrolling interests 3,826 1,533 — — — 5,359 Adjustments and disposals 595 1,215 495 — 107 2,412 Balance as of June 30, 2019 $ 840,136 $ 126,957 $ 166,078 $ 14,194 $ 40,862 $ 1,188,227 Intangible assets Balance as of December 31, 2018 $ 215,382 $ 37,010 $ 23,948 $ 4,147 $ 16,892 $ 297,379 Acquisitions 4,981 1,750 — — — 6,731 Adjustments and disposals (7,719 ) 1,633 — — (630 ) (6,716 ) Amortization (308 ) (51 ) (2 ) (26 ) (291 ) (678 ) Balance as of June 30, 2019 $ 212,336 $ 40,342 $ 23,946 $ 4,121 $ 15,971 $ 296,716 The allocation of goodwill from acquisitions purchased during the six months ended June 30, 2019 for each reporting unit is preliminary and subject to change once the valuation analysis required by ASC 805, Business Combinations is finalized. In assigning fair value acquired in acquisitions as required by ASC 805, Business Combinations, the Company had assigned fair value to Certificates of need or license moratoria, as applicable, in certain states. During the six months ended June 30, 2019, the Company recorded $6.0 million of moratoria impairment as a result of the Centers for Medicare and Medicaid Services (“CMS”) action to remove all federal moratoria with regard to Medicare provider enrollment. Additionally, the Company recorded $1.3 million of disposals of intangible assets, which consist of licenses and Certificates of needs, due to the closure of underperforming locations. The disposal and impairment were classified 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 six months ended June 30, 2019 and December 31, 2018 (amounts in thousands): 2019 2018 Indefinite-lived intangible assets: Trade Names $ 159,632 $ 156,049 Certificates of Need/Licenses 124,751 128,577 Net Total $ 284,383 $ 284,626 Definite-lived intangible assets: Trade Names Gross carrying amount $ 10,127 $ 10,127 Accumulated amortization (9,087 ) (8,817 ) Net total $ 1,040 $ 1,310 Non-compete agreements Gross carrying amount $ 6,238 $ 5,980 Accumulated amortization (5,846 ) (5,729 ) Net total $ 392 $ 251 Customer relationships Gross carrying amount $ 11,822 $ 11,822 Accumulated amortization (921 ) (630 ) Net total $ 10,901 $ 11,192 Total definite-lived intangible assets Gross carrying amount $ 28,187 $ 27,929 Accumulated amortization (15,854 ) (15,176 ) Net total $ 12,333 $ 12,753 Total intangible assets: Gross carrying amount $ 312,570 $ 312,555 Accumulated amortization (15,854 ) (15,176 ) Net total $ 296,716 $ 297,379 Remaining useful lives for trade names, customer relationships, and non-compete agreements were 8.3 , 18.8 and 2.5 years, respectively, at June 30, 2019 . Similar periods at December 31, 2018 were 8.8 , 19.3 , and 2.8 years for trade names, customer relationships, and non-compete agreements, respectively. Amortization expense was recorded in general and administrative expenses. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facility On March 30, 2018 , the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., which was effective on April 2, 2018 (the "Credit Agreement"). The 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 Credit Agreement is March 30, 2023 . The Company’s obligations under the Credit Agreement are 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 Credit Agreement. Revolving loans under the Credit Agreement 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 1.5% , plus a margin ranging from 0.50% 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. 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 as of June 30, 2019 was 6.25% and the LIBOR rate was 4.19% . As of June 30, 2019 , the effective interest rate on outstanding borrowings under the New Credit Agreement was 4.19% . As of June 30, 2019 , the Company had $230.0 million drawn, letters of credit issued in the amount of $22.3 million , and $247.7 million of remaining borrowing capacity available under the New Credit Agreement. At December 31, 2018 , the Company had $235.0 million drawn and letters of credit issued in the amount of $30.4 million under the Credit Facility. Under the terms of the Credit Agreement, the Company is required to maintain certain financial ratios and comply with certain financial covenants. The 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 its debt covenants under the Credit Agreement at June 30, 2019 |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholder's Equity | Stockholder’s Equity Equity Based Awards The 2018 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors. The total number of shares of the Company's common stock originally reserved were 2,210,544 shares of our common stock and a total of 2,030,629 shares are currently available for issuance. A variety of discretionary awards for employees, officers, directors, and consultants are authorized under the 2018 Incentive Plan, including incentive or non-qualified 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 of the Board of Directors. 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. Share Based Compensation Nonvested Stock During the six months ended June 30, 2019 , the Company granted 10,800 and 3,600 nonvested shares of common stock to independent directors and members of the Transitional Advisory Council, respectively under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan. The shares vest 100% on the one year anniversary date. During the six months ended June 30, 2019 , one new director was granted 3,500 nonvested shares of common stock under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan, which shares vest 33% at the grant date, then 33% on each of the first two anniversaries of the grant date. During the six months ended June 30, 2019 , employees were granted 141,945 nonvested shares of common stock pursuant to the 2018 Incentive Plan. The shares vest over a period of five years , conditioned on continued employment. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date. The weighted average grant date fair value of nonvested shares of common stock granted during the six months ended June 30, 2019 was $68.81 . The following table represents the share grants activity for the six months ended June 30, 2019 : Restricted stock Options Number of shares Weighted average grant date fair value Number of shares Weighted average grant date fair value Share grants outstanding as of December 31, 2018 574,285 $ 49.68 161,807 $ 38.08 Granted 159,845 $ 109.29 — $ — Vested or exercised (191,707 ) $ 43.71 (47,680 ) $ 35.55 Share grants outstanding as of June 30, 2019 542,423 $ 68.81 114,127 $ 39.59 As of June 30, 2019 , there was $28.1 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.27 years . The Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight line basis for shares of common stock that vest over time. The Company estimates forfeitures at the time of grant and revises the estimate in subsequent periods if actual forfeitures differ. The Company recorded $2.6 million and $4.4 million of compensation expense related to nonvested stock grants for the three and six months ended June 30, 2019 , respectively. The Company recorded $2.3 million and $3.9 million of compensation expense related to nonvested stock grants for the three and six months ended June 30, 2018, respectively. Employee Stock Purchase Plan In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan. In 2013 , the Company adopted the Amended and Restated Employee Stock Purchase Plan, which reserved an additional 250,000 shares of common stock to the plan. The table below details the shares of common stock issued during 2019 : Number of shares Per share price Shares available as of December 31, 2018 152,344 Shares issued during the three months ended March 31, 2019 5,357 $ 89.19 Shares issued during the three months ended June 30, 2019 4,301 $ 105.36 Shares available as of June 30, 2019 142,686 Treasury Stock In conjunction with the vesting of the nonvested shares of common stock or the exercise of stock options, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the six months ended June 30, 2019 , the Company redeemed 66,181 shares of common stock valued at $7.3 million , related to share vesting tax obligations. In addition, the Company redeemed 25,542 shares of common stock valued at $1.1 million , related to the exercise of 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 exercise price that would have otherwise been due on exercise of stock options, which shares are held in treasury stock and are available for reissuance by the Company. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies Regulatory Matters 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. 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 due from government payors related to the disputed finding of pending appeals of 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. Merger Related Litigation On January 18, 2018, Jordan Rosenblatt, a purported shareholder of Almost Family filed a complaint for violations of the Securities Exchange Act of 1934 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 Merger Sub. The complaint in the Rosenblatt Action (“Rosenblatt Complaint”) asserts, among other things, that the Form S-4 Registration Statement (“Registration Statement”) filed on December 21, 2017 in connection with the Merger contained false and misleading statements with respect to the Merger. The Rosenblatt Action sought, 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, 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, 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, the Company, 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 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. On December 19, 2018, the Court granted the motion to consolidate, appointed Leonard Stein, a purported Almost Family shareholder, as the Lead Plaintiff, and approved Stein's selection of Lead Counsel. On February 1, 2019, Lead Plaintiff filed his Consolidated Amended Class Action Complaint (the "Consolidated Complaint"). The Consolidated Complaint asserts claims against Almost Family, the Company and Almost Family's board of directors for violations of Section 14(a) of the 1934 Act in connection with the dissemination of the Company's and Almost Family's Proxy Statement concerning the Merger, and asserts breach of fiduciary duty claims and claims for violations of Section 20(a) of the 1934 Act against Almost Family's former board of directors. The Consolidated Complaint seeks, among other things, monetary damages and an award of attorneys' fees and costs. On April 12, 2019, the Company moved to dismiss the Consolidated Complaint and filed a motion to strike an affidavit attached to the Consolidated Complaint. Lead Plaintiff opposed the Company's motions on May 28, 2019, and the Company submitted reply briefs in support of its motions on June 19, 2019. The Company's motions are currently pending before the court. We believe that the claims asserted in these lawsuits are entirely without merit and intend to defend these lawsuits vigorously. Other Litigation We are involved in various other legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, we believe the outcome of pending litigation will not have a material adverse effect, after considering the effect of our insurance coverage, on our consolidated financial information. 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. 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. |
Noncontrolling interests
Noncontrolling interests | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling interests | Noncontrolling interests The Company classifies noncontrolling interests of its joint venture parties 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 controlling the joint venture’s strategy and direction, in order to determine the fair value of the noncontrolling interest. Based upon the Company’s evaluation of the redemption provisions concerning redeemable noncontrolling interests as of June 30, 2019 , 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. Subsequent to the closing date of the transaction establishing the joint venture, the Company records adjustments to the carrying amounts of noncontrolling interests during each reporting period to reflect (a) comprehensive income (loss) attributed to each noncontrolling interest, which is calculated by multiplying the noncontrolling interest percentage by the comprehensive income (loss) of the joint venture’s operations, (b) dividends paid to the noncontrolling interest partner, and (c) any other transactions that increase or decrease the Company’s ownership interest in each joint venture, as a result of which the Company retains its controlling interest. If the Company determines that, 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 six months ended June 30, 2019 is not less than the initial amount reported for each instrument. The following table summarizes the activity of noncontrolling interest-redeemable for the six months ended June 30, 2019 (amounts in thousands): Balance as of December 31, 2018 $ 14,596 Net income attributable to noncontrolling interest-redeemable 5,900 Noncontrolling interest-redeemable distributions (5,029 ) Balance as of June 30, 2019 $ 15,467 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company adopted ASU 2016-02 on January 1, 2019, which resulted in the recognition of a right to use asset and liability for certain operating leases on the Company's Consolidated Balance Sheets at January 1, 2019. The Company determines if a contract contains a lease at inception and recognizes operating lease right of use assets and operating lease liabilities based on the present value of the future minimum lease payments at the lease commencement date. The Company's leases do not provide implicit rates. Therefore, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. Lease expense is recognized on a straight-line basis over the lease term. The Company's operating lease obligations relate to office leases, which have remaining lease terms up to nine years . Some lease obligations include options to extend the leases based on individual lease agreements and may include options to terminate the leases within one year . The Company elected the 'package of practical expedient', which permitted the Company to not recognize the operating lease right of use assets or liabilities for short term leases, which are those leases with a term of twelve months or less at the lease commencement date. Expenses associated with lease expense was $13.3 million and $25.7 million for the three and six months ended June 30, 2019, respectively. Information related to the Company's operating lease right of use assets and related lease liabilities for the office leases were as follows (amounts in thousands): Six Months Ended Cash paid for operating lease liabilities $ 7,325 Right-of-use assets obtained in exchange for new operating lease liabilities $ 98,070 Weighted-average remaining lease term 4.44 Weighted-average discount rate 4.83 % Maturities of operating lease liabilities as of June 30, 2019 were as follows (amounts in thousands): Year ending December 31, 2019 (remaining) $ 13,419 2020 25,133 2021 19,367 2022 11,697 2023 (and thereafter) 17,253 Total future minimum lease payments 86,869 Less imputed interest (436 ) Total $ 86,433 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
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 because of their short maturity. The estimated fair value of intangible assets acquired was calculated using level 3 inputs based on the present value of anticipated future benefits. For the six months ended June 30, 2019 , the carrying value of the Company’s long-term debt approximates fair value, as the interest rates approximate current rates. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
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”). 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. 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 following tables summarize the Company’s segment information for the three and six months ended June 30, 2019 and 2018 (amounts in thousands): Three Months Ended June 30, 2019 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 375,253 $ 55,057 $ 52,414 $ 27,975 $ 7,143 $ 517,842 Cost of service revenue 230,545 34,858 39,505 17,572 3,380 325,860 General and administrative expenses 108,958 15,096 11,213 9,335 3,982 148,584 Other intangible impairment charge 748 270 — — — 1,018 Operating income (loss) 35,002 4,833 1,696 1,068 (219 ) 42,380 Interest expense (2,023 ) (323 ) (284 ) (170 ) (85 ) (2,885 ) Income (loss) before income taxes and noncontrolling interest 32,979 4,510 1,412 898 (304 ) 39,495 Income tax expense (benefit) 8,070 1,581 (171 ) 148 (71 ) 9,557 Net income (loss) 24,909 2,929 1,583 750 (233 ) 29,938 Less net income (loss) attributable to non controlling interests 3,948 898 (267 ) 365 (6 ) 4,938 Net income (loss) attributable to LHC Group, Inc.'s common stockholder $ 20,961 $ 2,031 $ 1,850 $ 385 $ (227 ) $ 25,000 Total assets $ 1,407,221 $ 234,789 $ 240,746 $ 77,686 $ 69,413 $ 2,029,855 Three Months Ended June 30, 2018 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 360,276 $ 50,554 $ 52,753 $ 28,304 $ 10,137 $ 502,024 Cost of service revenue 223,490 32,998 39,682 19,307 5,527 321,004 General and administrative expenses 105,674 15,108 12,444 10,601 5,387 149,214 Other intangible impairment charge 291 — — 487 — 778 Operating income (loss) 30,821 2,448 627 (2,091 ) (777 ) 31,028 Interest expense (2,256 ) (473 ) (158 ) (159 ) (156 ) (3,202 ) Income (loss) before income taxes and noncontrolling interest 28,565 1,975 469 (2,250 ) (933 ) 27,826 Income tax expense (benefit) 7,091 483 139 (313 ) (230 ) 7,170 Net income (loss) 21,474 1,492 330 (1,937 ) (703 ) 20,656 Less net income (loss) attributable to noncontrolling interests 3,810 412 (90 ) (207 ) (66 ) 3,859 Net income (loss) attributable to LHC Group, Inc.'s common stockholders $ 17,664 $ 1,080 $ 420 $ (1,730 ) $ (637 ) $ 16,797 Total assets $ 1,306,773 $ 189,447 $ 255,456 $ 66,665 $ 63,329 $ 1,881,670 Six Months Ended June 30, 2019 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 738,288 $ 106,793 $ 104,199 $ 55,676 $ 15,471 $ 1,020,427 Cost of service revenue 456,668 68,034 79,360 35,304 7,486 646,852 General and administrative expenses 213,797 29,949 22,195 18,512 9,352 293,805 Other intangible impairment charge 7,066 271 — — — 7,337 Operating income (loss) 60,757 8,539 2,644 1,860 (1,367 ) 72,433 Interest expense (4,161 ) (666 ) (585 ) (350 ) (175 ) (5,937 ) Income (loss) before income taxes and noncontrolling interest 56,596 7,873 2,059 1,510 (1,542 ) 66,496 Income tax expense (benefit) 11,278 2,027 (20 ) 153 (281 ) 13,157 Net income (loss) 45,318 5,846 2,079 1,357 (1,261 ) 53,339 Less net income (loss) attributable to non controlling interests 7,728 1,499 (577 ) 846 (13 ) 9,483 Net income (loss) attributable to LHC Group, Inc.'s common stockholder $ 37,590 $ 4,347 $ 2,656 $ 511 $ (1,248 ) $ 43,856 Six Months Ended June 30, 2018 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 564,463 $ 93,180 $ 66,844 $ 58,454 $ 10,137 $ 793,078 Cost of service revenue 353,651 61,016 50,472 38,956 5,527 509,622 General and administrative expenses 171,963 28,406 15,742 19,747 5,387 241,245 Other intangible impairment charge 291 — — 487 — 778 Operating income 38,558 3,758 630 (736 ) (777 ) 41,433 Interest expense (3,344 ) (690 ) (229 ) (232 ) (157 ) (4,652 ) Income (loss) before income taxes and noncontrolling interest 35,214 3,068 401 (968 ) (934 ) 36,781 Income tax expense (benefit) 7,814 594 124 (155 ) (230 ) 8,147 Net income (loss) 27,400 2,474 277 (813 ) (704 ) 28,634 Less net income (loss) attributable to noncontrolling interests 6,047 829 (69 ) 101 (66 ) 6,842 Net income (loss) attributable to LHC Group, Inc.'s common stockholders $ 21,353 $ 1,645 $ 346 $ (914 ) $ (638 ) $ 21,792 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the six months ended June 30, 2019 and 2018 benefited from $2.6 million and $0.9 million , respectively, of excess tax benefits associated with stock-based compensation arrangements. U.S. 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 Company's 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. As of June 30, 2019 and December 31, 2018, the Company recognized $4.7 million and $4.3 million , respectively, in unrecognized tax benefits. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Critical Accounting Policies | Critical Accounting Policies The Company’s most critical accounting policies relate to revenue recognition. |
Net Service Revenue | Net Service Revenue 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, and other commercial or managed care insurance programs for services rendered, are subject to adjustment based upon implicit price concessions for retroactive revenue adjustments by third- party payors, settlements of audits, and claims 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, hospice, facility-based, 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 are to provide services to patients based on medical necessity and the bundle of services to be provided to achieve the goals established in the contract, while the healthcare innovations segment's performance obligations are largely to provide care, assessments and management services under various customer contracts. Revenue for performance obligations that are satisfied over time is 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 obligations 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 optional 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. Any unsatisfied or partially unsatisfied performance obligations at the end of a reporting period are generally completed prior to the patient being discharged. The Company determines the transaction price for the majority of its performance obligations based on gross charges for services provided, reduced by contractual adjustments 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 a result, revenue is recorded in amounts 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 three and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended 2019 2018 2019 2018 Home health: Medicare 70.8 % 72.9 % 71.1 % 72.3 % Managed Care, Commercial, and Other 29.2 27.1 28.9 27.7 100.0 % 100.0 % 100.0 % 100.0 % Hospice: Medicare 92.9 % 91.1 % 92.7 % 91.7 % Managed Care, Commercial, and Other 7.1 8.9 7.3 8.3 100.0 % 100.0 % 100.0 % 100.0 % Home and Community-Based Services: Medicaid 24.3 % 24.7 % 24.7 % 23.1 % Managed Care, Commercial, and Other 75.7 75.3 75.3 76.9 100.0 % 100.0 % 100.0 % 100.0 % Facility-Based Services: Medicare 53.0 % 58.7 % 55.2 % 61.4 % Managed Care, Commercial, and Other 47.0 41.3 44.8 38.6 100.0 % 100.0 % 100.0 % 100.0 % HCI: Medicare 23.5 % 26.7 % 22.8 % 26.7 % Managed Care, Commercial, and Other 76.5 73.3 77.2 73.3 100.0 % 100.0 % 100.0 % 100.0 % Medicare The Company's home health, hospice, and facility-based segments recognize revenue under their respective Medicare programs, which are discussed in more detail below. 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 recognizes 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 of the contract 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 a 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 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 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. Net service revenue and related patient accounts receivable are recorded at amounts estimated to be realized from Medicare for services rendered. The Company's hospice services segment is reimbursed by Medicare under a per diem payment system based on the daily needs determined for patients' 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 separate and distinct performance obligation, which depicts the transfer of services and related benefits received by the patient over the term of the contract to satisfy such obligations. The Company records net service revenue for hospice services based on the promulgated per diem rate over time as services are provided, in satisfaction of 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 their 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. 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 the retroactive adjustments is subsequently resolved. Net service revenue for the Company’s LTACH services that are satisfied over time is 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 Each of the Company's segments recognize revenue from various non-Medicare payor sources. Revenue from these payor sources are derived from services provided under a per visit, per hour or per unit basis, per assessment or per member per month basis. Such fee for service 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 ("HCI") segment provides strategic health management services to Accountable Care Organizations (“ACOs”) that have been approved to participate in the Medicare Shared Savings Program (“MSSP”). The HCI segment maintains 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 calendar year. As of June 30, 2019 , no net service revenue was recognized related to potential MSSP payments for savings generated for the program periods that ended December 31, 2018 , if any, as it remains unclear as to if performance obligations have been met by any ACO served by the HCI segment. |
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 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 50% 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. 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 reimbursements are 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 actual amounts to be received at the patient level and to 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. |
Earnings Per Share | Earnings Per Share Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding plus potentially dilutive shares. |
Recently Adopted Accounting Pronouncements | Recently Adopted 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 were classified as finance or operating right-of-use ("ROU") assets and lease liabilities. The new standard was effective for the Company on January 1, 2019. ASU 2016-02 provides a number of optional practical expedients in transition and the Company (a) 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, (b) elected all the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company, and (c) elected all the new standard's available transition practical expedients. Adoption of this standard increased total assets and total liabilities by $84.6 million , primarily for the Company's operating leased office space 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 did 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. See Note 9 of the Notes to Condensed Consolidated Financial Statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In January 2017, the FASB issued ASU 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 amount and the fair value of the reporting unit. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2019, and is not expected to significantly impact the company. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
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 three and six months ended June 30, 2019 and 2018 : Three Months Ended Six Months Ended 2019 2018 2019 2018 Home health: Medicare 70.8 % 72.9 % 71.1 % 72.3 % Managed Care, Commercial, and Other 29.2 27.1 28.9 27.7 100.0 % 100.0 % 100.0 % 100.0 % Hospice: Medicare 92.9 % 91.1 % 92.7 % 91.7 % Managed Care, Commercial, and Other 7.1 8.9 7.3 8.3 100.0 % 100.0 % 100.0 % 100.0 % Home and Community-Based Services: Medicaid 24.3 % 24.7 % 24.7 % 23.1 % Managed Care, Commercial, and Other 75.7 75.3 75.3 76.9 100.0 % 100.0 % 100.0 % 100.0 % Facility-Based Services: Medicare 53.0 % 58.7 % 55.2 % 61.4 % Managed Care, Commercial, and Other 47.0 41.3 44.8 38.6 100.0 % 100.0 % 100.0 % 100.0 % HCI: Medicare 23.5 % 26.7 % 22.8 % 26.7 % Managed Care, Commercial, and Other 76.5 73.3 77.2 73.3 100.0 % 100.0 % 100.0 % 100.0 % |
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 and, with respect to the data provided for the three and six months ended June 30, 2019 (amounts in thousands). Three Months Ended Six Months Ended 2019 2018 2019 2018 Weighted average number of shares outstanding for basic per share calculation 30,960 30,498 30,899 24,179 Effect of dilutive potential shares: Nonvested stock 241 244 289 224 Adjusted weighted average shares for diluted per share calculation 31,201 30,742 31,188 24,403 Anti-dilutive shares 13 20 153 236 |
Acquisitions and Joint Ventur_2
Acquisitions and Joint Venture Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The Company was determined to be the accounting acquirer in the Merger. The Company's final valuation analysis of identifiable assets and liabilities assumed for the Merger in accordance with the requirements of ASC Topic 805, Business Combinations, are presented in the table below (amounts in thousands): Merger consideration Stock $ 795,412 Fair value of total consideration transferred Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 16,547 Patient accounts receivable 88,234 Prepaid income taxes 47 Prepaid expenses and other current assets 11,490 Property and equipment 11,144 Trade names 76,090 Certificates of needs/licenses 76,505 Customer relationships 13,970 Assets held for sale 2,500 Deferred income taxes 4,821 Accounts payable (43,027 ) Accrued other liabilities (57,243 ) Seller notes payable (12,145 ) 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 (178 ) Total identifiable assets and liabilities 33,526 Goodwill $ 761,886 The following table summarizes the aggregate consideration paid for the acquisitions and the amounts of the assets acquired and liabilities assumed at the acquisition dates, as well as their fair value at the acquisition dates and the noncontrolling interest acquired during the six months ended June 30, 2019 : Consideration Cash $ 20,431 Fair value of total consideration transferred Recognized amounts of identifiable assets acquired and liabilities assumed: Trade name 3,480 Certificates of need/licenses 2,864 Other assets and (liabilities), net (3,021 ) Total identifiable assets 3,323 Noncontrolling interest 6,990 Goodwill, including noncontrolling interest of $5,359 $ 24,098 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Recorded Goodwill by Reporting Unit | The changes in recorded goodwill and intangible assets by reporting unit for the six months ended June 30, 2019 were as follows (amounts in thousands): Home health reporting unit Hospice reporting unit Home and community-based services reporting unit Facility-based reporting unit HCI reporting unit Total Goodwill Balance as of December 31, 2018 $ 822,602 $ 118,583 $ 165,583 $ 14,194 $ 40,755 $ 1,161,717 Acquisitions 13,113 5,626 — — — 18,739 Noncontrolling interests 3,826 1,533 — — — 5,359 Adjustments and disposals 595 1,215 495 — 107 2,412 Balance as of June 30, 2019 $ 840,136 $ 126,957 $ 166,078 $ 14,194 $ 40,862 $ 1,188,227 Intangible assets Balance as of December 31, 2018 $ 215,382 $ 37,010 $ 23,948 $ 4,147 $ 16,892 $ 297,379 Acquisitions 4,981 1,750 — — — 6,731 Adjustments and disposals (7,719 ) 1,633 — — (630 ) (6,716 ) Amortization (308 ) (51 ) (2 ) (26 ) (291 ) (678 ) Balance as of June 30, 2019 $ 212,336 $ 40,342 $ 23,946 $ 4,121 $ 15,971 $ 296,716 |
Summary of Changes in Intangible Assets | The following tables summarize the changes in intangible assets during the six months ended June 30, 2019 and December 31, 2018 (amounts in thousands): 2019 2018 Indefinite-lived intangible assets: Trade Names $ 159,632 $ 156,049 Certificates of Need/Licenses 124,751 128,577 Net Total $ 284,383 $ 284,626 Definite-lived intangible assets: Trade Names Gross carrying amount $ 10,127 $ 10,127 Accumulated amortization (9,087 ) (8,817 ) Net total $ 1,040 $ 1,310 Non-compete agreements Gross carrying amount $ 6,238 $ 5,980 Accumulated amortization (5,846 ) (5,729 ) Net total $ 392 $ 251 Customer relationships Gross carrying amount $ 11,822 $ 11,822 Accumulated amortization (921 ) (630 ) Net total $ 10,901 $ 11,192 Total definite-lived intangible assets Gross carrying amount $ 28,187 $ 27,929 Accumulated amortization (15,854 ) (15,176 ) Net total $ 12,333 $ 12,753 Total intangible assets: Gross carrying amount $ 312,570 $ 312,555 Accumulated amortization (15,854 ) (15,176 ) Net total $ 296,716 $ 297,379 |
Summary of Changes in Intangible Assets | The following tables summarize the changes in intangible assets during the six months ended June 30, 2019 and December 31, 2018 (amounts in thousands): 2019 2018 Indefinite-lived intangible assets: Trade Names $ 159,632 $ 156,049 Certificates of Need/Licenses 124,751 128,577 Net Total $ 284,383 $ 284,626 Definite-lived intangible assets: Trade Names Gross carrying amount $ 10,127 $ 10,127 Accumulated amortization (9,087 ) (8,817 ) Net total $ 1,040 $ 1,310 Non-compete agreements Gross carrying amount $ 6,238 $ 5,980 Accumulated amortization (5,846 ) (5,729 ) Net total $ 392 $ 251 Customer relationships Gross carrying amount $ 11,822 $ 11,822 Accumulated amortization (921 ) (630 ) Net total $ 10,901 $ 11,192 Total definite-lived intangible assets Gross carrying amount $ 28,187 $ 27,929 Accumulated amortization (15,854 ) (15,176 ) Net total $ 12,333 $ 12,753 Total intangible assets: Gross carrying amount $ 312,570 $ 312,555 Accumulated amortization (15,854 ) (15,176 ) Net total $ 296,716 $ 297,379 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Share Grants Activity | The following table represents the share grants activity for the six months ended June 30, 2019 : Restricted stock Options Number of shares Weighted average grant date fair value Number of shares Weighted average grant date fair value Share grants outstanding as of December 31, 2018 574,285 $ 49.68 161,807 $ 38.08 Granted 159,845 $ 109.29 — $ — Vested or exercised (191,707 ) $ 43.71 (47,680 ) $ 35.55 Share grants outstanding as of June 30, 2019 542,423 $ 68.81 114,127 $ 39.59 |
Shares of Common Stock Issued Under Employee Stock Purchase Plan | The table below details the shares of common stock issued during 2019 : Number of shares Per share price Shares available as of December 31, 2018 152,344 Shares issued during the three months ended March 31, 2019 5,357 $ 89.19 Shares issued during the three months ended June 30, 2019 4,301 $ 105.36 Shares available as of June 30, 2019 142,686 |
Noncontrolling interests (Table
Noncontrolling interests (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Summary of Activity of Noncontrolling Interest-Redeemable | The following table summarizes the activity of noncontrolling interest-redeemable for the six months ended June 30, 2019 (amounts in thousands): Balance as of December 31, 2018 $ 14,596 Net income attributable to noncontrolling interest-redeemable 5,900 Noncontrolling interest-redeemable distributions (5,029 ) Balance as of June 30, 2019 $ 15,467 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | Information related to the Company's operating lease right of use assets and related lease liabilities for the office leases were as follows (amounts in thousands): Six Months Ended Cash paid for operating lease liabilities $ 7,325 Right-of-use assets obtained in exchange for new operating lease liabilities $ 98,070 Weighted-average remaining lease term 4.44 Weighted-average discount rate 4.83 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating lease liabilities as of June 30, 2019 were as follows (amounts in thousands): Year ending December 31, 2019 (remaining) $ 13,419 2020 25,133 2021 19,367 2022 11,697 2023 (and thereafter) 17,253 Total future minimum lease payments 86,869 Less imputed interest (436 ) Total $ 86,433 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables summarize the Company’s segment information for the three and six months ended June 30, 2019 and 2018 (amounts in thousands): Three Months Ended June 30, 2019 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 375,253 $ 55,057 $ 52,414 $ 27,975 $ 7,143 $ 517,842 Cost of service revenue 230,545 34,858 39,505 17,572 3,380 325,860 General and administrative expenses 108,958 15,096 11,213 9,335 3,982 148,584 Other intangible impairment charge 748 270 — — — 1,018 Operating income (loss) 35,002 4,833 1,696 1,068 (219 ) 42,380 Interest expense (2,023 ) (323 ) (284 ) (170 ) (85 ) (2,885 ) Income (loss) before income taxes and noncontrolling interest 32,979 4,510 1,412 898 (304 ) 39,495 Income tax expense (benefit) 8,070 1,581 (171 ) 148 (71 ) 9,557 Net income (loss) 24,909 2,929 1,583 750 (233 ) 29,938 Less net income (loss) attributable to non controlling interests 3,948 898 (267 ) 365 (6 ) 4,938 Net income (loss) attributable to LHC Group, Inc.'s common stockholder $ 20,961 $ 2,031 $ 1,850 $ 385 $ (227 ) $ 25,000 Total assets $ 1,407,221 $ 234,789 $ 240,746 $ 77,686 $ 69,413 $ 2,029,855 Three Months Ended June 30, 2018 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 360,276 $ 50,554 $ 52,753 $ 28,304 $ 10,137 $ 502,024 Cost of service revenue 223,490 32,998 39,682 19,307 5,527 321,004 General and administrative expenses 105,674 15,108 12,444 10,601 5,387 149,214 Other intangible impairment charge 291 — — 487 — 778 Operating income (loss) 30,821 2,448 627 (2,091 ) (777 ) 31,028 Interest expense (2,256 ) (473 ) (158 ) (159 ) (156 ) (3,202 ) Income (loss) before income taxes and noncontrolling interest 28,565 1,975 469 (2,250 ) (933 ) 27,826 Income tax expense (benefit) 7,091 483 139 (313 ) (230 ) 7,170 Net income (loss) 21,474 1,492 330 (1,937 ) (703 ) 20,656 Less net income (loss) attributable to noncontrolling interests 3,810 412 (90 ) (207 ) (66 ) 3,859 Net income (loss) attributable to LHC Group, Inc.'s common stockholders $ 17,664 $ 1,080 $ 420 $ (1,730 ) $ (637 ) $ 16,797 Total assets $ 1,306,773 $ 189,447 $ 255,456 $ 66,665 $ 63,329 $ 1,881,670 Six Months Ended June 30, 2019 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 738,288 $ 106,793 $ 104,199 $ 55,676 $ 15,471 $ 1,020,427 Cost of service revenue 456,668 68,034 79,360 35,304 7,486 646,852 General and administrative expenses 213,797 29,949 22,195 18,512 9,352 293,805 Other intangible impairment charge 7,066 271 — — — 7,337 Operating income (loss) 60,757 8,539 2,644 1,860 (1,367 ) 72,433 Interest expense (4,161 ) (666 ) (585 ) (350 ) (175 ) (5,937 ) Income (loss) before income taxes and noncontrolling interest 56,596 7,873 2,059 1,510 (1,542 ) 66,496 Income tax expense (benefit) 11,278 2,027 (20 ) 153 (281 ) 13,157 Net income (loss) 45,318 5,846 2,079 1,357 (1,261 ) 53,339 Less net income (loss) attributable to non controlling interests 7,728 1,499 (577 ) 846 (13 ) 9,483 Net income (loss) attributable to LHC Group, Inc.'s common stockholder $ 37,590 $ 4,347 $ 2,656 $ 511 $ (1,248 ) $ 43,856 Six Months Ended June 30, 2018 Home health services Hospice services Home and community-based services Facility-based services HCI Total Net service revenue $ 564,463 $ 93,180 $ 66,844 $ 58,454 $ 10,137 $ 793,078 Cost of service revenue 353,651 61,016 50,472 38,956 5,527 509,622 General and administrative expenses 171,963 28,406 15,742 19,747 5,387 241,245 Other intangible impairment charge 291 — — 487 — 778 Operating income 38,558 3,758 630 (736 ) (777 ) 41,433 Interest expense (3,344 ) (690 ) (229 ) (232 ) (157 ) (4,652 ) Income (loss) before income taxes and noncontrolling interest 35,214 3,068 401 (968 ) (934 ) 36,781 Income tax expense (benefit) 7,814 594 124 (155 ) (230 ) 8,147 Net income (loss) 27,400 2,474 277 (813 ) (704 ) 28,634 Less net income (loss) attributable to noncontrolling interests 6,047 829 (69 ) 101 (66 ) 6,842 Net income (loss) attributable to LHC Group, Inc.'s common stockholders $ 21,353 $ 1,645 $ 346 $ (914 ) $ (638 ) $ 21,792 |
Organization - Additional Infor
Organization - Additional Information (Details) | Jun. 30, 2019LocationState |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of service providers operated | Location | 760 |
Number of states in which Company operates | State | 35 |
Significant Accounting Polici_4
Significant Accounting Policies - Percentage of Net Service Revenue Earned by Category of Payor (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Home health services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Hospice services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Home and community-based services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Facility-based services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% | 100.00% |
HCI | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Medicare | Home health services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 70.80% | 72.90% | 71.10% | 72.30% |
Medicare | Hospice services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 92.90% | 91.10% | 92.70% | 91.70% |
Medicare | Facility-based services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 53.00% | 58.70% | 55.20% | 61.40% |
Medicare | HCI | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 23.50% | 26.70% | 22.80% | 26.70% |
Medicaid | Home and community-based services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 24.30% | 24.70% | 24.70% | 23.10% |
Managed Care, Commercial, and Other | Home health services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 29.20% | 27.10% | 28.90% | 27.70% |
Managed Care, Commercial, and Other | Hospice services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 7.10% | 8.90% | 7.30% | 8.30% |
Managed Care, Commercial, and Other | Home and community-based services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 75.70% | 75.30% | 75.30% | 76.90% |
Managed Care, Commercial, and Other | Facility-based services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 47.00% | 41.30% | 44.80% | 38.60% |
Managed Care, Commercial, and Other | HCI | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of net service revenue | 76.50% | 73.30% | 77.20% | 73.30% |
Significant Accounting Polici_5
Significant Accounting Policies - Additional Information (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019GroupvisitPeriodicRate | Jan. 01, 2019USD ($) | |
Accounting Policies [Abstract] | ||
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 beginning after March 31, 2013 | 2.00% | |
Low utilization adjustment visits | visit | 5 | |
Selected hospice, periodic rate used to calculate revenue | 1 | |
Number of hospice, periodic rates used to calculate revenue | 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 | 50.00% | |
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% | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Increased total assets and total liabilities by adoption of lease standard | $ | $ 84.6 |
Significant Accounting Polici_6
Significant Accounting Policies - Shares Used in Computation of Basic and Diluted Per Share Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Weighted average number of shares outstanding for basic per share calculation (in shares) | 30,960 | 30,498 | 30,899 | 24,179 |
Effect of dilutive potential shares: | ||||
Nonvested stock (in shares) | 241 | 244 | 289 | 224 |
Adjusted weighted average shares for diluted per share calculation (in shares) | 31,201 | 30,742 | 31,188 | 24,403 |
Anti-dilutive shares (in shares) | 13 | 20 | 153 | 236 |
Acquisitions and Joint Ventur_3
Acquisitions and Joint Venture Activities - Additional Information (Details) $ in Thousands, shares in Millions | Apr. 01, 2018USD ($)shares | Jun. 30, 2019USD ($)Agencysubsidiary | Jun. 30, 2019USD ($)Agencyagency_sold | Jun. 30, 2018USD ($) |
Business Acquisition [Line Items] | ||||
Preliminary merger consideration | $ 795,400 | |||
Payments to noncontrolling interests | $ 18,748 | $ 55 | ||
Number of agencies sold | agency_sold | 2 | |||
Proceeds from sale of interest | $ 3,500 | |||
Equity joint ventures | ||||
Business Acquisition [Line Items] | ||||
Number of subsidiaries | subsidiary | 3 | |||
Payments to noncontrolling interests | $ 18,700 | |||
Almost Family | ||||
Business Acquisition [Line Items] | ||||
Exchange ratio | 91.50% | |||
Shares of the company issued (in shares) | shares | 12.8 | |||
Home Health Agencies | Home health services | ||||
Business Acquisition [Line Items] | ||||
Number of agencies | Agency | 10 | 10 | ||
Hospice Agencies | Home health services | ||||
Business Acquisition [Line Items] | ||||
Number of agencies | Agency | 5 | 5 | ||
Home health agencies and hospice agency | ||||
Business Acquisition [Line Items] | ||||
Preliminary merger consideration | $ 23,500 | |||
Cash paid to for acquisitions | $ 20,431 | |||
Customer relationships | Almost Family | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 20 years |
Acquisitions and Joint Ventur_4
Acquisitions and Joint Venture Activities - Almost Family Merger (Details) - USD ($) $ in Thousands | Apr. 01, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Goodwill | $ 1,188,227 | $ 1,161,717 | |
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 accounts receivable | 88,234 | ||
Prepaid income taxes | 47 | ||
Prepaid expenses and other current assets | 11,490 | ||
Property and equipment | 11,144 | ||
Customer relationships | 13,970 | ||
Assets held for sale | 2,500 | ||
Deferred income taxes | 4,821 | ||
Accounts payable | (43,027) | ||
Accrued other liabilities | (57,243) | ||
Seller notes payable | (12,145) | ||
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 | (178) | ||
Total identifiable assets and liabilities | 33,526 | ||
Goodwill | 761,886 | ||
Almost Family | Trade name | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Indefinite-lived intangible assets | 76,090 | ||
Almost Family | Certificates of need/licenses | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||
Indefinite-lived intangible assets | $ 76,505 |
Acquisitions and Joint Ventur_5
Acquisitions and Joint Venture Activities - Price Allocation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 1,188,227 | $ 1,161,717 |
Home health agencies and hospice agency | ||
Business Acquisition [Line Items] | ||
Cash | 20,431 | |
Other assets and (liabilities), net | (3,021) | |
Total identifiable assets and liabilities | 3,323 | |
Noncontrolling interest | 6,990 | |
Goodwill | 24,098 | |
Trade Names | Home health agencies and hospice agency | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets | 3,480 | |
Certificates of need/licenses | Home health agencies and hospice agency | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangible assets | $ 2,864 |
Goodwill and Intangibles - Sche
Goodwill and Intangibles - Schedule of Changes in Recorded Goodwill by Reporting Unit (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | $ 1,161,717 |
Acquisitions | 18,739 |
Noncontrolling interests | 5,359 |
Adjustments and disposals | 2,412 |
Balance as of June 30, 2019 | 1,188,227 |
Intangible assets | |
Balance as of December 31, 2018 | 297,379 |
Acquisitions | 6,731 |
Adjustments and disposals | (6,716) |
Amortization | (678) |
Balance as of June 30, 2019 | 296,716 |
Home health reporting unit | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 822,602 |
Acquisitions | 13,113 |
Noncontrolling interests | 3,826 |
Adjustments and disposals | 595 |
Balance as of June 30, 2019 | 840,136 |
Intangible assets | |
Balance as of December 31, 2018 | 215,382 |
Acquisitions | 4,981 |
Adjustments and disposals | (7,719) |
Amortization | (308) |
Balance as of June 30, 2019 | 212,336 |
Hospice reporting unit | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 118,583 |
Acquisitions | 5,626 |
Noncontrolling interests | 1,533 |
Adjustments and disposals | 1,215 |
Balance as of June 30, 2019 | 126,957 |
Intangible assets | |
Balance as of December 31, 2018 | 37,010 |
Acquisitions | 1,750 |
Adjustments and disposals | 1,633 |
Amortization | (51) |
Balance as of June 30, 2019 | 40,342 |
Home and community-based services reporting unit | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 165,583 |
Acquisitions | 0 |
Noncontrolling interests | 0 |
Adjustments and disposals | 495 |
Balance as of June 30, 2019 | 166,078 |
Intangible assets | |
Balance as of December 31, 2018 | 23,948 |
Amortization | (2) |
Balance as of June 30, 2019 | 23,946 |
Facility-based reporting unit | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 14,194 |
Acquisitions | 0 |
Noncontrolling interests | 0 |
Adjustments and disposals | 0 |
Balance as of June 30, 2019 | 14,194 |
Intangible assets | |
Balance as of December 31, 2018 | 4,147 |
Amortization | (26) |
Balance as of June 30, 2019 | 4,121 |
HCI reporting unit | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 40,755 |
Acquisitions | 0 |
Noncontrolling interests | 0 |
Adjustments and disposals | 107 |
Balance as of June 30, 2019 | 40,862 |
Intangible assets | |
Balance as of December 31, 2018 | 16,892 |
Adjustments and disposals | (630) |
Amortization | (291) |
Balance as of June 30, 2019 | $ 15,971 |
Goodwill and Intangibles - Addi
Goodwill and Intangibles - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | $ 1,018 | $ 778 | $ 7,337 | $ 778 | |
Disposal of goodwill and intangible assets | 1,300 | 1,300 | |||
Intangible assets, net carrying amount | 296,716 | 296,716 | $ 297,379 | ||
Home health services | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | 748 | 291 | 7,066 | 291 | |
Intangible assets, net carrying amount | 212,336 | 212,336 | 215,382 | ||
Hospice services | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | 270 | 0 | 271 | 0 | |
Intangible assets, net carrying amount | 40,342 | 40,342 | 37,010 | ||
Home and community-based services | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | 0 | 0 | 0 | 0 | |
Intangible assets, net carrying amount | 23,946 | 23,946 | 23,948 | ||
Facility-based services | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | 0 | 487 | 0 | 487 | |
Intangible assets, net carrying amount | 4,121 | 4,121 | 4,147 | ||
HCI reporting unit | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | 0 | $ 0 | 0 | $ 0 | |
Intangible assets, net carrying amount | 15,971 | $ 15,971 | $ 16,892 | ||
Certificates of need/licenses | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Other intangible impairment charge | $ 6,000 | ||||
Trade Names | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Estimated useful life | 8 years 3 months 18 days | 8 years 9 months 18 days | |||
Customer relationships | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Estimated useful life | 18 years 9 months 18 days | 19 years 3 months 18 days | |||
Non-compete agreements | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Estimated useful life | 2 years 6 months | 2 years 9 months 18 days |
Goodwill and Intangibles - Summ
Goodwill and Intangibles - Summary of Changes in Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets: | $ 284,383 | $ 284,626 |
Gross carrying amount, definite-lived intangible assets | 28,187 | 27,929 |
Accumulated amortization | (15,854) | (15,176) |
Net total | 12,333 | 12,753 |
Gross carrying amount, intangible assets | 312,570 | 312,555 |
Net total | 296,716 | 297,379 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount, definite-lived intangible assets | 10,127 | 10,127 |
Accumulated amortization | (9,087) | (8,817) |
Net total | 1,040 | 1,310 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount, definite-lived intangible assets | 6,238 | 5,980 |
Accumulated amortization | (5,846) | (5,729) |
Net total | 392 | 251 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount, definite-lived intangible assets | 11,822 | 11,822 |
Accumulated amortization | (921) | (630) |
Net total | 10,901 | 11,192 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets: | 159,632 | 156,049 |
Certificates of Need/Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets: | $ 124,751 | $ 128,577 |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Thousands | Apr. 02, 2018USD ($)Instrument | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 500,000 | ||
Credit facility maximum borrowing capacity under accordion feature | 200,000 | ||
Letter of credit, sub-limit amount | $ 50,000 | ||
Interest rate percentage | 4.19% | ||
Line of credit facility drawn | $ 230,000 | $ 235,000 | |
Letter of credit outstanding | 22,300 | $ 30,400 | |
Available credit under agreement | $ 247,700 | ||
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% | ||
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 | 6.25% | ||
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% | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Line of credit facility interest rate | 4.19% |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 07, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation cost related to nonvested shares of common stock granted | $ 28,100 | $ 28,100 | |||||
Weighted average period of cost recognized | 3 years 3 months 7 days | ||||||
Compensation expense related to nonvested stock grants | $ 2,600 | $ 2,300 | $ 4,400 | $ 3,900 | |||
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 | 250,000 | |||||
Additional shares authorized for issuance (in shares) | 250,000 | ||||||
Shares redeemed to satisfy personal tax obligations (in shares) | 66,181 | ||||||
Treasury shares redeemed to pay income tax | $ 912 | $ 7,692 | $ 628 | $ 3,467 | |||
Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Treasury shares redeemed to pay income tax | $ 7,300 | ||||||
AFAM Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares redeemed to satisfy personal tax obligations (in shares) | 25,542 | ||||||
Treasury shares redeemed to pay income tax | $ 1,100 | ||||||
2018 Long-Term Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for issuance (in shares) | 2,210,544 | ||||||
Common stock available for issuance (in shares) | 2,030,629 | ||||||
2018 Long-Term Incentive Plan | Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Period of vested shares | 5 years | ||||||
Nonvested stock grants to employees (in shares) | 141,945 | ||||||
Granted (in dollars per share) | $ 68.81 | ||||||
Second Amended and Restated 2005 Non-Employee Directors Compensation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Nonvested stock grants to Independent directors (in shares) | 3,500 | ||||||
Percentage of directors' stock grant vested on one year anniversary date | 100.00% | ||||||
Period of vested shares | 1 year | ||||||
Second Amended and Restated 2005 Non-Employee Directors Compensation Plan | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Nonvested stock grants to Independent directors (in shares) | 10,800 | ||||||
Percentage of directors' stock grant vested on one year anniversary date | 33.00% | ||||||
Percentage of directors' stock grant vested on grant date | 33.00% | ||||||
Second Amended and Restated 2005 Non-Employee Directors Compensation Plan | Transitional Advisory Council | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Nonvested stock grants to Independent directors (in shares) | 3,600 |
Stockholder's Equity - Nonveste
Stockholder's Equity - Nonvested Stock Activity (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Restricted stock | |
Number of shares | |
Share grants outstanding as of December 31, 2018 | shares | 574,285 |
Granted (in shares) | shares | 159,845 |
Vested (in shares) | shares | (191,707) |
Share grants outstanding as of June 30, 2019 | shares | 542,423 |
Weighted average grant date fair value | |
Beginning balance, Weighted average grant date fair value (in dollars per share) | $ / shares | $ 49.68 |
Granted (in dollars per share) | $ / shares | 109.29 |
Vested (in dollars per share) | $ / shares | 43.71 |
Ending balance, Weighted average grant date fair value (in dollars per share) | $ / shares | $ 68.81 |
Options | |
Number of shares | |
Share grants outstanding as of December 31, 2018 | shares | 161,807 |
Granted (in shares) | shares | 0 |
Vested or exercised (in shares) | shares | (47,680) |
Share grants outstanding as of June 30, 2019 | shares | 114,127 |
Weighted average grant date fair value | |
Share grants outstanding as of December 31, 2018 (in dollars per share) | $ / shares | $ 38.08 |
Granted (in dollars per share) | $ / shares | 0 |
Vested or exercised (in dollars per share) | $ / shares | 35.55 |
Share grants outstanding as of June 30, 2019 (in dollars per share) | $ / shares | $ 39.59 |
Stockholder's Equity - Shares o
Stockholder's Equity - Shares of Common Stock Issued Under Employee Stock Purchase Plan (Details) - $ / shares | 3 Months Ended | |
Jun. 30, 2019 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Number of shares available, beginning balance (in shares) | 152,344 | |
Shares issued during period (in shares) | 4,301 | 5,357 |
Number of shares available, ending balance (in shares) | 142,686 | |
Per share price of shares issued during period (in dollars per share) | $ 105.36 | $ 89.19 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Other assets, amount from government payors | $ 16.9 |
Period of joint venture buy/sell option | 30 days |
Noncontrolling interests - Summ
Noncontrolling interests - Summary of Activity of Noncontrolling Interest-Redeemable (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Noncontrolling interest-redeemable, beginning balance | $ 14,596 | |||
Net income attributable to noncontrolling interest-redeemable | $ 3,000 | $ 2,500 | 5,900 | $ 4,900 |
Noncontrolling interest-redeemable distributions | (5,029) | |||
Noncontrolling interest-redeemable, ending balance | $ 15,467 | $ 15,467 |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 9 years | 9 years |
Operating lease termination period | 1 year | |
Lease cost | $ 13.3 | $ 25.7 |
Leases - Information Related to
Leases - Information Related to Leases (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for operating lease liabilities | $ 7,325 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 98,070 |
Weighted-average remaining lease term | 4 years 5 months 8 days |
Weighted-average discount rate | 4.83% |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (remaining) | $ 13,419 |
2020 | 25,133 |
2021 | 19,367 |
2022 | 11,697 |
2023 (and thereafter) | 17,253 |
Total future minimum lease payments | 86,869 |
Less imputed interest | (436) |
Total | $ 86,433 |
Segment Information - Summary o
Segment Information - Summary of segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Net service revenue | $ 517,842 | $ 502,024 | $ 1,020,427 | $ 793,078 | |
Cost of service revenue | 325,860 | 321,004 | 646,852 | 509,622 | |
General and administrative expenses | 148,584 | 149,214 | 293,805 | 241,245 | |
Other intangible impairment charge | 1,018 | 778 | 7,337 | 778 | |
Operating income | 42,380 | 31,028 | 72,433 | 41,433 | |
Interest expense | (2,885) | (3,202) | (5,937) | (4,652) | |
Income before income taxes and noncontrolling interest | 39,495 | 27,826 | 66,496 | 36,781 | |
Income tax expense (benefit) | 9,557 | 7,170 | 13,157 | 8,147 | |
Net income | 29,938 | 20,656 | 53,339 | 28,634 | |
Less net income (loss) attributable to noncontrolling interests | 4,938 | 3,859 | 9,483 | 6,842 | |
Net income attributable to LHC Group, Inc.’s common stockholders | 25,000 | 16,797 | 43,856 | 21,792 | |
Total assets | 2,029,855 | 1,881,670 | 2,029,855 | 1,881,670 | $ 1,928,715 |
Home health services | |||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Net service revenue | 375,253 | 360,276 | 738,288 | 564,463 | |
Cost of service revenue | 230,545 | 223,490 | 456,668 | 353,651 | |
General and administrative expenses | 108,958 | 105,674 | 213,797 | 171,963 | |
Other intangible impairment charge | 748 | 291 | 7,066 | 291 | |
Operating income | 35,002 | 30,821 | 60,757 | 38,558 | |
Interest expense | (2,023) | (2,256) | (4,161) | (3,344) | |
Income before income taxes and noncontrolling interest | 32,979 | 28,565 | 56,596 | 35,214 | |
Income tax expense (benefit) | 8,070 | 7,091 | 11,278 | 7,814 | |
Net income | 24,909 | 21,474 | 45,318 | 27,400 | |
Less net income (loss) attributable to noncontrolling interests | 3,948 | 3,810 | 7,728 | 6,047 | |
Net income attributable to LHC Group, Inc.’s common stockholders | 20,961 | 17,664 | 37,590 | 21,353 | |
Total assets | 1,407,221 | 1,306,773 | 1,407,221 | 1,306,773 | |
Hospice services | |||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Net service revenue | 55,057 | 50,554 | 106,793 | 93,180 | |
Cost of service revenue | 34,858 | 32,998 | 68,034 | 61,016 | |
General and administrative expenses | 15,096 | 15,108 | 29,949 | 28,406 | |
Other intangible impairment charge | 270 | 0 | 271 | 0 | |
Operating income | 4,833 | 2,448 | 8,539 | 3,758 | |
Interest expense | (323) | (473) | (666) | (690) | |
Income before income taxes and noncontrolling interest | 4,510 | 1,975 | 7,873 | 3,068 | |
Income tax expense (benefit) | 1,581 | 483 | 2,027 | 594 | |
Net income | 2,929 | 1,492 | 5,846 | 2,474 | |
Less net income (loss) attributable to noncontrolling interests | 898 | 412 | 1,499 | 829 | |
Net income attributable to LHC Group, Inc.’s common stockholders | 2,031 | 1,080 | 4,347 | 1,645 | |
Total assets | 234,789 | 189,447 | 234,789 | 189,447 | |
Home and community-based services | |||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Net service revenue | 52,414 | 52,753 | 104,199 | 66,844 | |
Cost of service revenue | 39,505 | 39,682 | 79,360 | 50,472 | |
General and administrative expenses | 11,213 | 12,444 | 22,195 | 15,742 | |
Other intangible impairment charge | 0 | 0 | 0 | 0 | |
Operating income | 1,696 | 627 | 2,644 | 630 | |
Interest expense | (284) | (158) | (585) | (229) | |
Income before income taxes and noncontrolling interest | 1,412 | 469 | 2,059 | 401 | |
Income tax expense (benefit) | (171) | 139 | (20) | 124 | |
Net income | 1,583 | 330 | 2,079 | 277 | |
Less net income (loss) attributable to noncontrolling interests | (267) | (90) | (577) | (69) | |
Net income attributable to LHC Group, Inc.’s common stockholders | 1,850 | 420 | 2,656 | 346 | |
Total assets | 240,746 | 255,456 | 240,746 | 255,456 | |
Facility-based services | |||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Net service revenue | 27,975 | 28,304 | 55,676 | 58,454 | |
Cost of service revenue | 17,572 | 19,307 | 35,304 | 38,956 | |
General and administrative expenses | 9,335 | 10,601 | 18,512 | 19,747 | |
Other intangible impairment charge | 0 | 487 | 0 | 487 | |
Operating income | 1,068 | (2,091) | 1,860 | (736) | |
Interest expense | (170) | (159) | (350) | (232) | |
Income before income taxes and noncontrolling interest | 898 | (2,250) | 1,510 | (968) | |
Income tax expense (benefit) | 148 | (313) | 153 | (155) | |
Net income | 750 | (1,937) | 1,357 | (813) | |
Less net income (loss) attributable to noncontrolling interests | 365 | (207) | 846 | 101 | |
Net income attributable to LHC Group, Inc.’s common stockholders | 385 | (1,730) | 511 | (914) | |
Total assets | 77,686 | 66,665 | 77,686 | 66,665 | |
HCI | |||||
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract] | |||||
Net service revenue | 7,143 | 10,137 | 15,471 | 10,137 | |
Cost of service revenue | 3,380 | 5,527 | 7,486 | 5,527 | |
General and administrative expenses | 3,982 | 5,387 | 9,352 | 5,387 | |
Other intangible impairment charge | 0 | 0 | 0 | 0 | |
Operating income | (219) | (777) | (1,367) | (777) | |
Interest expense | (85) | (156) | (175) | (157) | |
Income before income taxes and noncontrolling interest | (304) | (933) | (1,542) | (934) | |
Income tax expense (benefit) | (71) | (230) | (281) | (230) | |
Net income | (233) | (703) | (1,261) | (704) | |
Less net income (loss) attributable to noncontrolling interests | (6) | (66) | (13) | (66) | |
Net income attributable to LHC Group, Inc.’s common stockholders | (227) | (637) | (1,248) | (638) | |
Total assets | $ 69,413 | $ 63,329 | $ 69,413 | $ 63,329 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | |||
Excess tax benefits associated with stock-based compensation | $ 2.6 | $ 0.9 | |
Unrecognized tax benefits | $ 4.7 | $ 4.3 |