Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 12, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-41406 | ||
Entity Registrant Name | Enhabit, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-2409192 | ||
Entity Address, Address Line One | 6688 N. Central Expressway | ||
Entity Address, Address Line Two | Suite 1300 | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75206 | ||
City Area Code | 214 | ||
Local Phone Number | 239-6500 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | EHAB | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 570.7 | ||
Entity Common Stock, Shares Outstanding | 50,155,940 | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement for its 2024 Annual Meeting of stockholders are incorporated by reference into Part III. | ||
Entity Central Index Key | 0001803737 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Dallas, Texas |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net service revenue | $ 1,046.3 | $ 1,071.1 | $ 1,106.6 |
Revenue, Product and Service [Extensible Enumeration] | Service [Member] | Service [Member] | Service [Member] |
Cost of service, excluding depreciation and amortization | $ 535.6 | $ 525.6 | $ 513.9 |
Cost, Product and Service [Extensible Enumeration] | Service [Member] | Service [Member] | Service [Member] |
General and administrative expenses | $ 441.6 | $ 414.9 | $ 412.9 |
Depreciation and amortization | 30.9 | 33 | 36.9 |
Impairment of goodwill | 85.8 | 109 | 0 |
Operating (loss) income | (47.6) | (11.4) | 142.9 |
Interest expense and amortization of debt discounts and fees | 43 | 15 | 0.3 |
Equity in net income of nonconsolidated affiliates | 0 | 0 | (0.6) |
Other income | (0.2) | (0.9) | (4.8) |
(Loss) income before income taxes and noncontrolling interests | (90.4) | (25.5) | 148 |
Income tax (benefit) expense | (11.4) | 12.8 | 35.1 |
Net (loss) income | (79) | (38.3) | 112.9 |
Less: Net income attributable to noncontrolling interests | 1.5 | 2.1 | 1.8 |
Net (loss) income attributable to Enhabit, Inc. | $ (80.5) | $ (40.4) | $ 111.1 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 49.9 | 49.7 | 49.6 |
Diluted (in shares) | 49.9 | 49.7 | 49.6 |
(Loss) earnings per common share: | |||
Basic (loss) earnings per share attributable to Enhabit, Inc. common stockholders (in dollars per share) | $ (1.61) | $ (0.81) | $ 2.24 |
Diluted (loss) earnings per share attributable to Enhabit, Inc. common stockholders (in dollars per share) | $ (1.61) | $ (0.81) | $ 2.24 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income including noncontrolling interests | $ (79) | $ (38.3) | $ 112.9 |
Other comprehensive income (loss): | |||
Unrealized gain (loss) on cash flow hedges, net of tax expense (benefit) of $0.1, $(0.2), and $—, respectively | 0.2 | (0.7) | 0 |
Total other comprehensive income (loss) | 0.2 | (0.7) | 0 |
Comprehensive (loss) income including noncontrolling interests | (78.8) | (39) | 112.9 |
Less: Comprehensive income attributable to noncontrolling interests | 1.5 | 2.1 | 1.8 |
Comprehensive (loss) income attributable to Enhabit, Inc. | $ (80.3) | $ (41.1) | $ 111.1 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized gain (loss) of cash flow hedges, net of tax expense (benefit) | $ 0.1 | $ (0.2) | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | |
Current assets: | |||
Cash and cash equivalents | $ 27.4 | $ 22.9 | |
Restricted cash | 2.4 | 4.3 | |
Accounts receivable, net of allowances | 164.7 | 149.6 | |
Income tax receivable | 3 | 11.4 | |
Prepaid expenses and other current assets | 12.6 | 23.6 | |
Total current assets | 210.1 | 211.8 | |
Property and equipment, net | 19 | 20.4 | |
Operating lease right-of-use assets | 57.5 | 42 | |
Goodwill | 1,061.7 | 1,144.8 | |
Intangible assets, net | 80 | 102.6 | |
Other long-term assets | 5.3 | 5.2 | |
Total assets | [1] | 1,433.6 | 1,526.8 |
Current liabilities: | |||
Current portion of long-term debt | 22.5 | 23.1 | |
Current portion of operating lease liabilities | 11.8 | 14 | |
Accounts payable | 7.6 | 3.8 | |
Accrued payroll | 38.5 | 35.5 | |
Refunds due patients and other third-party payors | 8.2 | 8.3 | |
Accrued medical insurance | 8.4 | 7.5 | |
Other current liabilities | 40.7 | 40.7 | |
Total current liabilities | 137.7 | 132.9 | |
Long-term debt, net of current portion | 530.1 | 560 | |
Long-term operating lease liabilities, net of current portion | 45.7 | 28.1 | |
Deferred income tax liabilities | 17.1 | 28.6 | |
Other long-term liabilities | 1.3 | 1.9 | |
Total liabilities | 731.9 | 751.5 | |
Commitments and contingencies (See Note 13) | |||
Redeemable noncontrolling interests | 5 | 5.2 | |
Enhabit, Inc. stockholders’ equity: | |||
Enhabit, Inc. stockholders’ equity: Common stock, $0.01 par value; 200,000,000 shares authorized; 50,167,706 and 50,099,716 shares issued; and 50,053,375 and 50,099,716 outstanding as of December 31, 2023 and 2022, respectively | 0.5 | 0.5 | |
Capital in excess of par value | 415.8 | 406.9 | |
Accumulated other comprehensive loss | (0.5) | (0.7) | |
Retained earnings | 254.5 | 335 | |
Treasury Stock, at cost, 114,331 and — shares as of December 31, 2023 and 2022, respectively | (0.6) | 0 | |
Total Enhabit, Inc. stockholders’ equity | 669.7 | 741.7 | |
Noncontrolling interests | 27 | 28.4 | |
Total stockholders’ equity | 696.7 | 770.1 | |
Total liabilities and stockholders' equity | [1] | $ 1,433.6 | $ 1,526.8 |
Treasury stock (in shares) | 114,331 | 0 | |
[1]Our consolidated assets as of December 31, 2023 and 2022 include total assets of variable interest entities of $18.0 million and $20.6 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2023 and 2022 include total liabilities of the variable interest entities of $0.6 million and $0.5 million, respectively. See Note 3, Variable Interest Entities . |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock, shares issued (in shares) | 50,167,706 | 50,099,716 | |
Common stock, shares outstanding (in shares) | 50,053,375 | 50,099,716 | |
Treasury stock (in shares) | 114,331 | 0 | |
Assets | [1] | $ 1,433.6 | $ 1,526.8 |
Liabilities | 731.9 | 751.5 | |
VIE, Primary Beneficiary | |||
Assets | 18 | 20.6 | |
Liabilities | $ 0.6 | $ 0.5 | |
[1]Our consolidated assets as of December 31, 2023 and 2022 include total assets of variable interest entities of $18.0 million and $20.6 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2023 and 2022 include total liabilities of the variable interest entities of $0.6 million and $0.5 million, respectively. See Note 3, Variable Interest Entities . |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Other Comprehensive Income | Retained Earnings | Treasury Stock | Noncontrolling Interests |
Number of Common Shares Outstanding, beginning balance (in shares) at Dec. 31, 2020 | 49,600,000 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ 1,389.8 | $ 0.5 | $ 1,118.3 | $ 0 | $ 264.3 | $ 0 | $ 6.7 |
Number of treasury shares outstanding, beginning balance (in shares) at Dec. 31, 2020 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | 112.9 | 111.1 | 1.8 | ||||
Other comprehensive (loss) income, net of tax | 0 | ||||||
Capital contributions | 130.4 | 130.4 | |||||
Capital distributions | (154.5) | (154.5) | |||||
Distributions declared | (1.3) | (1.3) | |||||
Acquisitions | 1.1 | 1.1 | |||||
Other | (0.1) | (0.1) | |||||
Number of Common Shares Outstanding, ending balance (in shares) at Dec. 31, 2021 | 49,600,000 | ||||||
Balance at end of period at Dec. 31, 2021 | 1,478.3 | $ 0.5 | 1,094.1 | 0 | 375.4 | $ 0 | 8.3 |
Number of treasury shares outstanding, ending balance (in shares) at Dec. 31, 2021 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | (38.5) | (40.4) | 1.9 | ||||
Other comprehensive (loss) income, net of tax | (0.7) | (0.7) | |||||
Capital contributions | 62.3 | 62.3 | |||||
Capital distributions | (759.1) | (759.1) | |||||
Distributions declared | (1.2) | (1.2) | |||||
Acquisitions | 15.9 | 15.9 | |||||
Issuance of restricted stock awards (in shares) | 500,000 | ||||||
Contributions from noncontrolling interests of consolidated affiliates | 6.4 | 2.9 | 3.5 | ||||
Other | $ 6.7 | 6.7 | |||||
Number of Common Shares Outstanding, ending balance (in shares) at Dec. 31, 2022 | 50,099,716 | 50,100,000 | |||||
Balance at end of period at Dec. 31, 2022 | $ 770.1 | $ 0.5 | 406.9 | (0.7) | 335 | $ 0 | 28.4 |
Number of treasury shares outstanding, ending balance (in shares) at Dec. 31, 2022 | 0 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | $ (79) | (80.5) | 1.5 | ||||
Other comprehensive (loss) income, net of tax | 0.2 | 0.2 | |||||
Distributions declared | (2.9) | (2.9) | |||||
Stock-based compensation expense | 8.9 | 8.9 | |||||
Restricted stock forfeited, including forfeitures due to net share settlement of income taxes (in shares) | (100,000) | 100,000 | |||||
Restricted stock forfeited, including forfeitures due to net share settlement of income taxes | $ (0.6) | $ (0.6) | |||||
Issuance of common stock pursuant to omnibus incentive plan (in shares) | 100,000 | ||||||
Number of Common Shares Outstanding, ending balance (in shares) at Dec. 31, 2023 | 50,053,375 | 50,100,000 | |||||
Balance at end of period at Dec. 31, 2023 | $ 696.7 | $ 0.5 | $ 415.8 | $ (0.5) | $ 254.5 | $ (0.6) | $ 27 |
Number of treasury shares outstanding, ending balance (in shares) at Dec. 31, 2023 | 114,331 | 100,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (79) | $ (38.3) | $ 112.9 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities— | |||
Depreciation and amortization | 30.9 | 33 | 36.9 |
Amortization of debt related costs | 2.1 | 0.6 | 0 |
Impairment of goodwill | 85.8 | 109 | 0 |
Equity in net income of nonconsolidated affiliates | 0 | 0 | (0.6) |
Distributions from nonconsolidated affiliates | 0 | 0 | 0.3 |
Stock-based compensation | 8.9 | 9.2 | 3.6 |
Deferred tax (benefit) expense | (11.6) | (4.3) | 8.6 |
Other, net | (0.4) | 0.1 | (5.6) |
Changes in assets and liabilities, net of acquisitions — | |||
Accounts receivable, net of allowances | (14.6) | 21.6 | (24.8) |
Prepaid expenses and other assets | 19.1 | (27.5) | (0.1) |
Accounts payable | 3.8 | 0.2 | (0.7) |
Accrued payroll | 3 | (31) | (7.7) |
Other liabilities | 0.4 | 7.5 | 0.5 |
Net cash provided by operating activities | 48.4 | 80.1 | 123.3 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (2.8) | (36.3) | (117.5) |
Purchases of property and equipment, including capitalized software costs | (3.5) | (7.1) | (4.3) |
Other | 1 | 1.1 | 2.6 |
Net cash used in investing activities | (5.3) | (42.3) | (119.2) |
Cash flows from financing activities: | |||
Principal borrowings on term loan | 0 | 400 | 0 |
Principal payments on debt | (20) | (10) | 0 |
Borrowings on revolving credit facility | 0 | 190 | 0 |
Payments on revolving credit facility | (10) | 0 | 0 |
Principal payments under finance lease obligations | (3.4) | (5) | (7.2) |
Debt issuance costs | (3.2) | (4.7) | 0 |
Distributions paid to noncontrolling interests of consolidated affiliates | (3.2) | 0 | 0 |
Contributions from Encompass | 0 | 59.8 | 126.4 |
Distributions to Encompass | 0 | (654.9) | (154.1) |
Contributions from noncontrolling interests of consolidated affiliates | 0 | 7.4 | 0 |
Other | (0.7) | (1.2) | (1.2) |
Net cash used in financing activities | (40.5) | (18.6) | (36.1) |
Increase (decrease) in cash, cash equivalents, and restricted cash | 2.6 | 19.2 | (32) |
Cash, cash equivalents, and restricted cash at beginning of year | 27.2 | 8 | 40 |
Cash, cash equivalents, and restricted cash at end of year | 29.8 | 27.2 | 8 |
Supplemental cash flow information: | |||
Cash received (paid) for income taxes | 8.2 | ||
Cash received (paid) for income taxes | (11.9) | (28.4) | |
Cash paid for interest | (40.6) | (13.1) | (0.2) |
Supplemental schedule of noncash activities: | |||
Property and equipment additions through finance leases | 3.8 | 3.5 | 3.9 |
Operating lease additions | 31.6 | 10.1 | 23.2 |
Trade name transfer to Encompass (including deferred tax liability) | $ 0 | $ 104.2 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies: Organization and Description of Business— Enhabit, Inc. (“Enhabit,” “we,” “us,” “our,” and the “Company”), incorporated in Delaware in 2014, provides a comprehensive range of Medicare-certified skilled home health and hospice services in 34 states, with a concentration in the southern half of the United States. We manage our operations and disclose financial information using two reportable segments: (1) home health and (2) hospice. See Note 14, Segment Reporting . Prior to July 1, 2022, the Company operated as a reporting segment of Encompass Health Corporation (“Encompass”). On December 9, 2020, Encompass announced a formal process to explore strategic alternatives for its home health and hospice business. On January 19, 2022, Encompass announced its home health and hospice business would be rebranded and operate under the name Enhabit Home Health & Hospice. In March 2022, we changed our name from Encompass Health Home Health Holdings, Inc. to Enhabit, Inc. Separation from Encompass— On July 1, 2022, Encompass completed the previously announced separation of the Company through the distribution of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit to the stockholders of record of Encompass (the “Distribution”) as of the close of business on June 24, 2022 (the “Record Date”). The Distribution was effective at 12:01 a.m. Eastern Time on July 1, 2022. The Distribution was structured as a pro rata distribution of one share of Enhabit common stock for every two shares of Encompass common stock held of record as of the Record Date. No fractional shares were distributed. A cash payment was made in lieu of any fractional shares. As a result of the Distribution, Enhabit is now an independent public company, and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange (the “Separation”). The Separation was completed pursuant to a separation and distribution agreement (the “Separation and Distribution Agreement”) and other agreements with Encompass related to the Separation, including, but not limited to, a tax matters agreement (the “Tax Matters Agreement”), an employee matters agreement (the “Employee Matters Agreement”), and a transition services agreement (the “Transition Services Agreement” or “TSA”). Following the Separation, certain functions continue to be provided by Encompass under the TSA or are being performed using the Company’s own resources or third‑party providers. The Company incurred certain costs in its establishment as an independent, publicly traded company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company. In early 2022, in anticipation of the Distribution, we transferred the “Encompass” trade name with a book value of $135.2 million and the related deferred tax liabilities with a book value of $31.0 million to Encompass, as they will continue to operate under the Encompass brand. All share and earnings per share information has been retroactively adjusted for all periods presented to reflect the Distribution. See also Note 8, Long-term Debt . Basis of Presentation and Consolidation— For periods prior to July 1, 2022, the accompanying consolidated financial statements of the Company and its subsidiaries have been derived from the consolidated financial statements and accounting records of Encompass as if the Company had operated on a stand-alone basis during the periods presented and were prepared utilizing the legal entity approach, in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Prior to July 1, 2022, the Company was reported as a single reportable segment within Encompass’s reportable segments and did not operate as a stand-alone company. Accordingly, Encompass historically reported the financial position and the related results of operations, cash flows, and changes in equity of the Company as a component of Encompass’s consolidated financial statements. The consolidated financial statements include an allocation of expenses related to certain Encompass corporate functions as discussed in Note 15, Related Party Transactions . The consolidated financial statements also include revenues and expenses directly attributable to the Company and assets and liabilities specifically attributable to the Company. Encompass’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt, and the borrowings are not specifically identifiable to the Company. However, subsequent to April 23, 2020, the Company was a guarantor for Encompass’s credit agreement and senior debt. In connection with the Distribution, the Company was released from its guarantee of Encompass’s indebtedness. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Encompass. Prior to the Distribution and Separation, we joined with Encompass in various U.S. federal, state, and local consolidated income tax filings. See Note 11, Income Taxes , for information related to our Tax Sharing Agreement with Encompass. The income tax amounts in these consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate, with adjustments described in Note 11, Income Taxes . The consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. We eliminate all intercompany accounts and transactions within the Company from our financial results. Transactions between the Company and Encompass have been included in these consolidated financial statements. The transfers with Encompass that were not settled are reflected in stockholders’ equity within Capital in excess of par value on the Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity. Within the Consolidated Statements of Cash Flows, these transfers are treated as an operating, financing or noncash activity determined by the nature of the transaction. Transactions between the Company and Encompass prior to July 1, 2022 were considered related party transactions. See Note 15, Related Party Transactions , for more information. Variable Interest Entities— Any entity considered a variable interest entity (“VIE”) is evaluated to determine which party is the primary beneficiary and thus should consolidate the VIE. This analysis is complex, involves uncertainties, and requires significant judgment on various matters. To determine if we are the primary beneficiary of a VIE, we must determine what activities most significantly impact the economic performance of the entity, whether we have the power to direct those activities, and if our obligation to absorb losses or receive benefits from the VIE could potentially be significant to the VIE. Use of Estimates and Assumptions— The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) estimates of net transaction prices to be collected for services and related revenue adjustments; (2) fair value of acquired assets and assumed liabilities in business combinations; (3) asset impairments, including goodwill; (4) depreciable lives of assets; (5) useful lives of intangible assets; (6) economic lives and fair value of leased assets; (7) fair value of stock-based compensation; (8) fair value of derivative instruments; (9) reserves for self-insured healthcare plans; and (10) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results could differ from those estimates. COVID-19 Pandemic— The rapid onset of the COVID-19 Pandemic (the “pandemic”) caused a disruption to our nation’s healthcare system. In response to the public health emergency associated with the pandemic, the United States Congress and Centers for Medicare and Medicaid Services (“CMS”) adopted several statutory and regulatory measures intended to provide relief to healthcare providers to ensure patients would continue to have adequate access to care. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”), which temporarily suspended sequestration from May 1 through December 31, 2021. After the sequestration suspension was extended several times, sequestration resumed as of April 1, 2022, but was only a 1% payment reduction through June 30, 2022. Thereafter, the full 2% Medicare payment reduction resumed. Federal legislation, including the CARES Act and the 2021 Budget Act, and CMS regulatory actions include a number of other provisions, which are discussed below, affecting our reimbursement and operations in both segments. In the United States, the public health emergency measures expired on May 11, 2023. Additionally, the CARES Act, the 2021 Budget Act, and a series of waivers and guidance issued by CMS suspended various Medicare patient coverage criteria and documentation and care requirements in an effort to provide regulatory relief until the public health emergency for the pandemic ended. For home health, the relief included the allowance of nurse practitioners and physician assistants under certain conditions to certify, establish, and periodically review the plan of care, as well as supervise the provision of items and services for beneficiaries under the Medicare home health benefit, and the expansion of the use of telehealth. Additionally, CMS expanded the definition of “homebound” to include patients needing skilled services who are homebound due solely to their COVID-19 diagnosis or patients susceptible to contract COVID-19. For hospice, the relief included the temporary waiver of the requirement to use volunteers and to conduct a nurse visit every two weeks to evaluate aides, as well as the expanded use of telehealth for routine services and patient recertification. The foregoing and other disruptions to our business as a result of the pandemic have had an adverse effect on our business and could have a material adverse effect on our business, results of operations, financial condition, and cash flows. Net Service Revenue— Our Net service revenue by payor source and segment is as follows (in millions): Home Health Hospice Consolidated Year Ended December 31, Year Ended December 31, Year Ended December 31, 2023 2022 2021 2023 2022 2021 2023 2022 2021 Medicare $ 557.4 $ 647.7 $ 701.8 $ 190.5 $ 191.7 $ 204.8 $ 747.9 $ 839.4 $ 906.6 Medicare Advantage 199.2 152.1 117.4 — — — 199.2 152.1 117.4 Managed care 80.9 63.7 62.1 5.0 1.4 3.2 85.9 65.1 65.3 Medicaid 11.8 12.0 14.2 0.7 0.9 1.3 12.5 12.9 15.5 Other 0.8 1.6 1.8 — — — 0.8 1.6 1.8 Total $ 850.1 $ 877.1 $ 897.3 $ 196.2 $ 194.0 $ 209.3 $ 1,046.3 $ 1,071.1 $ 1,106.6 We record Net service revenue on an accrual basis using our best estimate of the transaction price for the type of service provided to the patient and expect to receive in exchange for providing services directly to patients. Our estimate of the transaction price includes adjustments for contractual rate and other revenue adjustments, including uncollectible amounts. Contractual rate revenue adjustments are recorded for the excess of our standard rates over the contracted rate applicable to the relevant payor, if any. We calculate contractual rate adjustments on a patient-by-patient basis based on the rates in effect for each primary third-party payor. Other revenue adjustments include adjustments for self-pay, uninsured patients and other payors and include revenue adjustments arising from billing documentation, face-to-face documentation, authorizations, and adjustments that may arise from payment, and other reviews by third-party payors or their agents. Estimates for other revenue adjustments are determined based on the aging of our accounts receivable, our historical collection experience for each type of payor, our success rate in the claims adjudication process and other relevant factors. Management continually reviews the transaction price estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms that result from contract renegotiations and renewals. Due to complexities involved in determining amounts ultimately due under reimbursement arrangements with third-party payors, which are often subject to interpretation, we may receive reimbursement for healthcare services authorized and provided that is different from our estimates, and such differences could be material. In addition, laws and regulations governing the Medicare and Medicaid programs are complex, subject to interpretation, and are routinely modified for provider reimbursement. All healthcare providers participating in the Medicare and Medicaid programs are required to meet certain financial reporting requirements. Federal regulations require submission of annual cost reports covering medical costs and expenses associated with the services provided under each home health and hospice provider number to program beneficiaries. Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may result in adjustments to the amounts ultimately determined to be due to the Company under these reimbursement programs. If actual results are not consistent with our assumptions and judgments, we may be exposed to adjustments to our Net Service Revenue that could be material. CMS has been granted authority to suspend payments, in whole or in part, to Medicare providers if CMS possesses reliable information concerning an overpayment, fraud, or willful misrepresentation. If CMS suspects payments are being made as the result of fraud or willful misrepresentation, CMS may suspend payment at any time without providing prior notice to us. The initial suspension period is limited to 180 days; however, the payment suspension period can be extended almost indefinitely if the matter is under investigation by the United States Department of Health and Human Services Office of Inspector General or the United States Department of Justice. Therefore, we are unable to predict if or when we may be subject to a suspension of payments by the Medicare and/or Medicaid programs, the possible length of the suspension period, or the potential cash flow impact of a payment suspension. Any such suspension would adversely impact our financial position, results of operations, and cash flows. Our performance obligations relate to contracts with a duration of less than one year. Therefore, we elected to apply the optional exemption to not 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. These unsatisfied or partially unsatisfied performance obligations primarily relate to services provided at the end of the reporting period. We are subject to changes in government legislation that could impact Medicare payment levels and changes in payor patterns that may impact the level and timing of payments for services rendered. Home Health Revenues Under the Medicare home health prospective payment system, we are paid by Medicare based on episodes of care. The performance obligation is the rendering of services to the patient during the term of the episode of care. An episode of care is defined as a length of stay up to 60 days, with multiple continuous episodes allowed. A base episode payment is established by the Medicare program through federal regulation. The base episode payment can be adjusted based on each patient’s health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers, and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. Medicare reimburses home health providers under the Patient-Driven Groupings Model. Under the Patient Driven Groupings Model (“PDGM”), the initial certification remains valid for 60 days. If a patient remains eligible for care after the initial period as certified by a physician, a new treatment period may begin. Prior to January 1, 2021, we billed a portion of reimbursement from each Medicare episode near the start of each episode, and the resulting cash payment was typically received before all services were rendered. Effective January 1, 2021, this early payment process was eliminated. As we provide home health services to our patients on a scheduled basis over the episode of care in a manner that approximates a pro rata pattern, revenue for the episode of care is recorded over an average length of treatment period using a calendar day prorating method. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the pro rata number of days in the episode that have been completed as of the period end date. We are subject to certain Medicare regulations affecting outlier revenue if our patient’s care was unusually costly. Regulations require a cap on all outlier revenue at 10% of total Medicare revenues received by each provider during a cost reporting year. Management has reviewed the potential cap. Adjustments to the transaction price for the outlier cap were not material as of December 31, 2023 and December 31, 2022. For episodic-based rates that are paid by other insurance carriers, including Medicare Advantage, we recognize revenue in a similar manner as discussed above for Medicare revenues. However, these rates can vary based upon the negotiated terms. For non-episodic-based revenue, revenue is recorded on an accrual basis based upon the date of service at amounts equal to our estimated per-visit transaction price. Price concessions, including contractual rate and other revenue adjustments are recorded as decreases to the transaction price. Hospice Revenues Medicare revenues for hospice are recognized and recorded on an accrual basis using the input method based on the number of days a patient has been on service at amounts equal to an estimated daily or hourly payment rate. The performance obligation is the rendering of services to the patient during each day that he or she is on hospice care. The payment rate is dependent on whether a patient is receiving routine home care, general inpatient care, continuous home care or respite care. Adjustments to Medicare revenues are recorded based on an inability to obtain appropriate billing documentation or authorizations acceptable to the payor or other reasons unrelated to credit risk. Hospice companies are subject to two specific payment limit caps under the Medicare program. One limit relates to inpatient care days that exceed 20% of the total days of hospice care provided for the year. The second limit relates to an aggregate Medicare reimbursement cap calculated by the Medicare Administrative Contractors. Adjustments to the transaction price for these caps were not material as of December 31, 2023 and December 31, 2022. For non-Medicare hospice revenues, we record gross revenue on an accrual basis based upon the date of service at amounts equal to our estimated per day transaction price. Price concessions, including contractual and other revenue adjustments are recorded as decreases to the transaction price and thus reduce our Net service revenue . Cash and Cash Equivalents— Cash and cash equivalents include highly liquid investments with maturities of three months or less when purchased. Carrying values of Cash and cash equivalents approximate fair value due to the short-term nature of these instruments. We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the creditworthiness of those institutions, and we have not experienced any losses on such deposits. Restricted Cash— Restricted cash represents cash accounts maintained by a joint venture in which our joint venture partner requested, and we agreed, that the joint venture’s cash not be commingled with other corporate cash accounts and be used only to fund the operations of the joint venture. Accounts Receivable, Net of Allowances— We report Accounts receivable, net of allowances from services rendered at their estimated transaction price, which takes into account price concessions based on the amounts expected to be due from payors including federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, workers’ compensation programs, employers, and patients. We estimate the value of Accounts receivable, net of allowances based upon historical experience and other factors, including an aging of accounts receivable, evaluation of expected adjustments, past adjustments, and collection experience in relation to amounts billed, current contract and reimbursement terms, shifts in payors and other relevant information. Collection of Net service revenue we expect to receive is normally a function of providing complete and correct billing information to the payors within the various filing deadlines. The evaluation of these factors involves complex, subjective judgments impacting the determination of the implicit price concession assumption. In addition, we compare our cash collections to recorded Net service revenue and evaluate our historical allowances, including implicit price concessions, based upon the ultimate resolution of the accounts receivable balance. Our Accounts receivable, net of allowances are concentrated by type of payor. The concentration of patient service accounts receivable by payor class, as a percentage of total patient service Accounts receivable, net of allowances , is as follows: As of December 31, 2023 2022 Medicare 66.9 % 74.2 % Managed care and other discount plans, including Medicare Advantage 27.1 % 21.0 % Medicaid 5.2 % 3.9 % Other 0.8 % 0.9 % Total 100.0 % 100.0 % While revenues and accounts receivable from the Medicare program are significant to our operations, we do not believe there are significant credit risks associated with this government agency. We do not believe there are any other significant concentrations of revenues from any particular payor that would subject us to any significant credit risks in the collection of our accounts receivable. Accounts requiring collection efforts are reviewed via system-generated work queues that automatically stage (based on age and size of outstanding balance) accounts requiring collection efforts for patient account representatives. Collection efforts include contacting the applicable party (both in writing and by telephone), providing information (both financial and clinical) to allow for payment or to overturn payor decisions to deny payment, and arranging payment plans with self-pay patients, among other techniques. When we determine all in-house efforts have been exhausted or it is a more prudent use of resources, accounts may be turned over to a collection agency. The collection of outstanding receivables from Medicare and managed care payors is our primary source of cash and is critical to our operating performance. While it is our policy to verify insurance prior to a patient being admitted, there are various exceptions that can occur. Such exceptions include instances where we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid, and it takes several days, weeks, or months before qualification for such benefits is confirmed or denied. If actual results are not consistent with our assumptions and judgments, we may be exposed to adjustments to our Net service revenue and cash collections that could be material. Changes in general economic conditions, business office operations, payor mix, or trends in federal or state governmental and private employer healthcare coverage could affect our collection of accounts receivable, financial position, results of operations, and cash flows. Subsequent adjustments to accounts receivable determined to be the result of an adverse change in the payor’s ability to pay are recognized as provision for credit losses. The majority of what historically was classified as provision for credit losses under operating expenses is now treated as an implicit price concession factored into the determination of Net service revenue discussed above. As of December 31, 2023 and 2022, the allowance for credit losses balance was $1.1 million. See Note 4, Accounts Receivable, Net of Allowances , for additional information. Property and Equipment— We report leasehold improvements, vehicles, and equipment at cost, net of accumulated depreciation and amortization and any asset impairments. We depreciate our assets using the straight-line method over the shorter of the estimated useful life of the assets or life of the underlying leases. Useful lives are generally as follows: Years Leasehold improvements 2 to 5 Vehicles 3 Furniture, fixtures, and equipment 2 to 5 Maintenance and repairs of leasehold improvements and equipment are expensed as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We retain fully depreciated assets and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement, or disposal, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the Consolidated Statements of Income. Leases— We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. We do not account for lease and non‑lease components separately for purposes of establishing right-of-use assets and lease liabilities. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. Goodwill and Other Intangible Assets, Net— We are required to test our goodwill for impairment at least annually, as of October 1 st , absent any triggering events that would accelerate an impairment assessment. The Company may perform interim impairment tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or an indefinite lived intangible asset below its carrying amount. Potential impairment of a reporting unit is identified by comparing the reporting unit’s estimated fair value to its carrying amount. We recognize an impairment charge for any amount by which the carrying amount of the asset exceeds its fair value. The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative assessment for its reporting units and perform a quantitative test as of the measurement date of the test. We assess qualitative factors in our home health and hospice reporting units to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative goodwill impairment test, we would estimate the fair value of our reporting units using generally accepted valuation techniques including the income approach and the market approach. Fair value under the income approach is determined by discounting to present value the estimated future cash flows of each reporting unit. Significant assumptions are incorporated into the discounted cash flow analysis, such as estimates of revenue growth rates, timing of de novo openings, forecasted operating margins, the weighted average cost of capital, and terminal growth rates. Fair value under the market approach utilizes the guideline public company methodology, which uses valuation indicators, including market multiples of earnings before interest, taxes, depreciation and amortization, from other businesses that are similar to each reporting unit and implied control premiums. Changes in general economic and market conditions impacting these assumptions could result in goodwill impairment charges in future periods. When we dispose of a home health or hospice agency, goodwill is allocated to the gain or loss on disposition using the relative fair value methodology. We amortize the cost of intangible assets with finite useful lives over their respective estimated useful lives to their estimated residual value. As of December 31, 2023, none of our finite useful lived intangible assets has an estimated residual value. We also review these assets for impairment whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 5 years using straight-line basis Trade names 1 to 5 years using straight-line basis Internal-use software 3 years using straight-line basis We capitalize the costs of obtaining or developing internal-use software, including external direct costs of material and services and directly related payroll costs. Amortization begins |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations: We completed one, four and two acquisitions, respectively, during the years ended December 31, 2023, 2022, and 2021. We accounted for these transactions under the acquisition method of accounting and reported the results of operations of the acquired locations from the date of acquisition. Assets acquired, liabilities assumed, and noncontrolling interests were recorded at their estimated fair values as of the acquisition date. Estimated fair values were based on various valuation methodologies including: an income approach using primarily discounted cash flow techniques for the noncompete and license intangible assets; and an income approach utilizing the relief-from-royalty method for the trade name intangible asset. The aforementioned income methods utilize management’s estimates of future operating results and cash flows discounted using a weighted average cost of capital that reflects market participant assumptions. For all other assets and liabilities, the fair value was assumed to represent carrying value due to their short maturities. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. All goodwill recorded reflects our expectations of favorable growth opportunities in the home health and hospice markets based on positive demographic trends. 2023 Acquisitions During the year ended December 31, 2023, we completed one acquisition for a total purchase price of $3.1 million using cash on hand. This acquisition was not material to our consolidated financial statements. 2022 Acquisitions On January 1, 2022, we acquired a 50% equity interest from Frontier Home Health and Hospice, LLC in a joint venture with Saint Alphonsus Health System (“Saint Alphonsus”) which operates home health and hospice locations in Boise and Nampa, Idaho. This acquisition was made to enhance our position and ability to provide services to patients in this geographic area. The total purchase price was $15.9 million and was funded on December 31, 2021 using cash on hand. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.7 Accounts receivable, net of allowances 1.6 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.2 Trade name (useful life of 6 months) 0.1 Licenses (useful lives of 10 years) 0.9 Internal-use software (useful life of 3 years) 0.1 Goodwill 28.7 Total assets acquired 32.6 Liabilities assumed: Current operating lease liabilities 0.1 Accounts payable 0.1 Accrued payroll 0.2 Other current liabilities 0.2 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.8 Noncontrolling interests 15.9 Net assets acquired $ 15.9 Information regarding the cash paid for this acquisition during 2022 is as follows (in millions): Fair value of assets acquired $ 3.9 Goodwill 28.7 Less: Fair value of liabilities assumed 0.8 Fair value of noncontrolling interest owned by joint venture partner 15.9 Net cash paid for acquisition (1) $ 15.9 (1) As discussed above, the $15.9 million was funded on December 31, 2021, and is, therefore, included in the Consolidated Statement of Cash Flows for the year ended December 31, 2021. On October 1, 2022, we acquired the assets of four Caring Hearts Hospice locations in Texas. This acquisition was made to enhance our position and ability to provide services to patients in this geographic area. The total purchase price was $13.9 million and was funded using cash on hand. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Identifiable intangible assets: Noncompete agreement (useful life of 5 years) $ 0.6 Licenses (useful lives of 10 years) 0.6 Goodwill 14.3 Total assets acquired 15.5 Liabilities assumed: Other current liabilities 1.6 Total liabilities assumed 1.6 Net assets acquired $ 13.9 Information regarding the cash paid for the acquisitions during 2022 is as follows (in millions): Fair value of assets acquired $ 1.2 Goodwill 14.3 Less: Fair value of liabilities assumed 1.6 Net cash paid for acquisitions $ 13.9 On November 1, 2022, we acquired the assets of Unity Hospice LLC, a hospice provider with one location in Arizona. This acquisition was made to enhance our position and ability to provide services to patients in this geographic area. The total purchase price was $2.1 million and was funded using cash on hand. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Identifiable intangible assets: Noncompete agreement (useful life of 5 years) $ 0.1 Licenses (useful lives of 10 years) 0.1 Goodwill 2.2 Total assets acquired 2.4 Liabilities assumed: Other current liabilities 0.3 Total liabilities assumed 0.3 Net assets acquired $ 2.1 Information regarding the cash paid for this acquisition during 2022 is as follows (in millions): Fair value of assets acquired $ 0.2 Goodwill 2.2 Less: Fair value of liabilities assumed 0.3 Net cash paid for acquisitions $ 2.1 On December 1, 2022, we acquired the assets of Southwest Florida Home Care, Inc., a home health provider with a location in Fort Myers, Florida. This acquisition was made to enhance our position and ability to provide services to patients in this geographic area. The total purchase price was $21.0 million and was funded using cash on hand and borrowings under our Revolving Credit Facility (as defined in Note 8, Long-term Debt ). The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Prepaid expenses and other current assets $ 0.1 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.8 Licenses (useful lives of 10 years) 0.6 Goodwill 19.6 Total assets acquired 21.4 Liabilities assumed: Current operating lease liabilities 0.1 Accrued payroll 0.1 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.4 Net assets acquired $ 21.0 Information regarding the cash paid for this acquisition during 2022 is as follows (in millions): Fair value of assets acquired $ 1.8 Goodwill 19.6 Less: Fair value of liabilities assumed 0.4 Net cash paid for acquisitions $ 21.0 Pro Forma Results of Operations The following table summarizes the results of operations of the above-mentioned acquisitions from their respective dates of acquisition included in our Consolidated Statements of Income and the unaudited pro forma results of operations of the combined entities had the date of the acquisitions been January 1, 2021 (in millions): Net Service Net Income (Loss) Attributable to Enhabit Acquired entities only: Actual from acquisition date to December 31, 2022 $ 12.1 $ 1.1 Combined entity: Supplemental pro forma from 01/01/2022-12/31/2022 (unaudited) $ 1,093.0 $ (37.2) Combined entity: Supplemental pro forma from 01/01/2021-12/31/2021 (unaudited) $ 1,136.5 $ 114.1 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of 2021. Approximately $50.5 million of the goodwill recorded as a result of these 2022 transactions is deductible for federal income tax purposes. 2021 Acquisitions Frontier Acquisition On June 1, 2021, we completed the acquisition of the home health and hospice assets of Frontier Home Health and Hospice (“Frontier”) in Alaska, Colorado, Montana, Washington, and Wyoming. The Frontier acquisition included the purchase of a 50% equity interest in the Heart of the Rockies Home Health joint venture and a 90% equity interest in the Hospice of Southwest Montana joint venture (inclusive of an additional 40% equity interest purchased for approximately $4.0 million). We consolidate both of these joint ventures. The Hospice of Southwest Montana joint venture is consolidated under the VIE model. On the acquisition date, nine home health and eleven hospice locations became part of our national network of home health and hospice locations. This acquisition was made to expand our existing presence in Colorado and Wyoming and extend our services to Alaska, Montana, and Washington. We funded this transaction using cash on hand and contributions from Encompass. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.8 Accounts receivable, net of allowances 0.9 Prepaid expenses and other current assets 0.2 Property and equipment 0.1 Operating lease right-of-use-assets 0.9 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 1.7 Trade name (useful life of 3 months) 0.2 Certificates of need (useful lives of 10 years) 3.1 Licenses (useful lives of 10 years) 4.8 Goodwill 92.4 Total assets acquired 105.1 Liabilities assumed: Current operating lease liabilities 0.3 Accounts payable 0.2 Accrued payroll 0.8 Long-term operating lease liabilities 0.7 Total liabilities assumed 2.0 Redeemable and nonredeemable noncontrolling interests 3.9 Net assets acquired $ 99.2 Information regarding the net cash paid for this acquisition is as follows (in millions): Fair value of assets acquired, net of $0.8 million of cash acquired $ 11.9 Goodwill 92.4 Less: Fair value of liabilities assumed 2.0 Fair value of redeemable and nonredeemable noncontrolling interest owned by joint venture partner 3.9 Net cash paid for acquisition $ 98.4 Other Home Health and Hospice Acquisition In December 2021, we acquired an additional 29% equity interest from Baptist Outpatient Services, Inc. in our existing Encompass Health Home Health of South Florida, LLC joint venture. This transaction increased our ownership interest from 51% to 80% and resulted in a change in accounting for this joint venture from the equity method of accounting to a consolidated entity. As a result of our consolidation of this entity and the remeasurement of our previously held equity interest to fair value, Goodwill increased $8.0 million, and we recorded a $3.2 million gain as part of Other income during 2021. This transaction was made to increase our ownership in a profitable entity and continue to grow our business. This acquisition was funded using cash on hand. The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.8 Accounts receivable, net of allowances 2.0 Identifiable intangible assets: Noncompete agreement (useful life of 2 years) 0.1 Licenses (useful lives of 10 years) 1.7 Goodwill 8.0 Total assets acquired 12.6 Liabilities assumed: Accounts payable 0.2 Accrued payroll 0.3 Other current liabilities 0.4 Other long-term liabilities 0.1 Total liabilities assumed 1.0 Redeemable noncontrolling interests 2.3 Net assets acquired $ 9.3 Information regarding the net cash paid for this acquisition is as follows (in millions): Fair value of assets acquired, net of $0.8 million of cash acquired $ 3.8 Goodwill 8.0 Less: Fair value of liabilities assumed 1.0 Fair value of redeemable noncontrolling interest owned by joint venture partner 2.3 Fair value of equity interest prior to acquisition 5.3 Net cash paid for acquisition $ 3.2 Pro Forma Results of Operations The following table summarizes the results of operations of the above-mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2021 (in millions): Net Service Net Income (Loss) Attributable to Acquired entities only: Actual from acquisition date to December 31, 2021 Frontier $ 19.7 $ 0.7 All other home health and hospice $ 0.9 $ (0.1) Combined entity: Supplemental pro forma from 01/01/2021-12/31/2021 (unaudited) $ 1,131.0 $ 111.6 The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisitions had occurred as of the beginning of our 2021 reporting period. The amount of goodwill recorded as a result of these 2021 transactions that is deductible for federal income tax purposes is $96.3 million. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities: As of December 31, 2023, 2022, and 2021 we consolidated two joint venture entities that are VIEs and of which we are the primary beneficiary. Our ownership percentages in these entities range from 60% to 90% as of December 31, 2023. Through partnership and management agreements with or governing these entities, we manage these entities and handle all day-to-day operating decisions. Accordingly, we have the decision-making power over the activities that most significantly impact the economic performance of the VIEs and an obligation to absorb losses or receive benefits from the VIEs that could potentially be significant to the VIEs. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections and creation and maintenance of medical records. The terms of the agreements governing the VIEs prohibit us from using the assets of the VIEs to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our Consolidated Balance Sheet, are as follows (in millions): As of December 31, 2023 2022 Assets Current Assets Restricted cash $ 1.8 $ 4.0 Accounts receivable, net of allowances 2.3 2.9 Other current assets 0.5 — Total current assets 4.6 6.9 Operating lease right-of-use assets 0.1 0.2 Goodwill 12.4 12.4 Intangible assets, net 0.9 1.1 Total assets $ 18.0 $ 20.6 As of December 31, 2023 2022 Liabilities Current Liabilities: Current operating lease liabilities $ 0.1 $ 0.1 Accrued payroll 0.2 0.2 Other current liabilities 0.2 0.1 Total current liabilities 0.5 0.4 Other long-term liabilities 0.1 0.1 Total liabilities $ 0.6 $ 0.5 |
Accounts Receivable, Net of All
Accounts Receivable, Net of Allowances | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, Net of Allowances | Accounts Receivable, Net of Allowances: Accounts receivable, net of allowances consists of the following (in millions): As of December 31, 2023 2022 Accounts receivable $ 165.8 $ 150.7 Less: allowance for credit losses 1.1 1.1 Accounts receivable, net of allowances $ 164.7 $ 149.6 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment: Property and equipment consists of the following (in millions): As of December 31, 2023 2022 Leasehold improvements $ 3.1 $ 3.0 Vehicles 29.9 31.3 Furniture, fixtures, and equipment 41.4 38.5 74.4 72.8 Less: Accumulated depreciation and amortization (55.4) (52.4) Property and equipment, net $ 19.0 $ 20.4 The amount of depreciation expense is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Depreciation expense $ 4.3 $ 4.6 $ 5.8 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases: We lease office space, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2035. Our operating and finance leases generally have one The components of lease costs are as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Operating lease cost: General and administrative expenses $ 20.5 $ 20.1 $ 19.2 Finance lease cost: Amortization of right-of-use assets 3.1 3.8 6.0 Interest on lease liabilities 0.2 0.2 0.2 Total finance lease cost 3.3 4.0 6.2 Total lease cost $ 23.8 $ 24.1 $ 25.4 Supplemental Consolidated Balance Sheet information related to leases is as follows (in millions): As of December 31, Classification 2023 2022 Assets Operating lease Operating lease right-of-use assets $ 57.5 $ 42.0 Finance lease (1) Property and equipment, net 9.9 10.1 Total leased assets $ 67.4 $ 52.1 Liabilities Current Liabilities: Operating lease Current portion of operating lease liabilities $ 11.8 $ 14.0 Finance lease Current portion of long-term debt 2.5 3.1 Noncurrent liabilities Operating lease Long-term operating lease liabilities, net of current portion 45.7 28.1 Finance lease Long-term debt, net of current portion 3.1 2.1 Total leased liabilities $ 63.1 $ 47.3 (1) Finance lease assets are recorded net of accumulated amortization of $20.0 million and $21.3 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 2022 Weighted Average Remaining Lease Term Operating lease 5.8 years 3.5 years Finance lease 2.7 years 1.8 years Weighted Average Discount Rate Operating lease 6.7 % 4.7 % Finance lease 4.7 % 2.9 % Maturities of lease liabilities as of December 31, 2023 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2024 $ 15.0 $ 2.7 2025 13.9 1.6 2026 11.1 1.0 2027 8.1 0.7 2028 5.3 — 2029 and thereafter 17.8 — Total lease payments 71.2 6.0 Less: Interest portion (13.7) (0.5) Total lease liabilities. $ 57.5 $ 5.5 Supplemental cash flow information related to our leases is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 16.0 $ 17.1 $ 16.5 Operating cash flows from finance leases $ 0.2 $ 0.2 $ 0.2 Financing cash flows from finance leases $ 3.4 $ 5.0 $ 7.2 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 31.6 $ 10.7 $ 24.2 Finance leases $ 3.8 $ 3.5 $ 4.1 In March 2023, we renewed the lease on our corporate headquarters office space for a term of 11 years. The lease commences on June 1, 2024 and expires in May 2035. The minimum lease payment obligations due under this lease are $19.8 million. |
Leases | Leases: We lease office space, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2035. Our operating and finance leases generally have one The components of lease costs are as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Operating lease cost: General and administrative expenses $ 20.5 $ 20.1 $ 19.2 Finance lease cost: Amortization of right-of-use assets 3.1 3.8 6.0 Interest on lease liabilities 0.2 0.2 0.2 Total finance lease cost 3.3 4.0 6.2 Total lease cost $ 23.8 $ 24.1 $ 25.4 Supplemental Consolidated Balance Sheet information related to leases is as follows (in millions): As of December 31, Classification 2023 2022 Assets Operating lease Operating lease right-of-use assets $ 57.5 $ 42.0 Finance lease (1) Property and equipment, net 9.9 10.1 Total leased assets $ 67.4 $ 52.1 Liabilities Current Liabilities: Operating lease Current portion of operating lease liabilities $ 11.8 $ 14.0 Finance lease Current portion of long-term debt 2.5 3.1 Noncurrent liabilities Operating lease Long-term operating lease liabilities, net of current portion 45.7 28.1 Finance lease Long-term debt, net of current portion 3.1 2.1 Total leased liabilities $ 63.1 $ 47.3 (1) Finance lease assets are recorded net of accumulated amortization of $20.0 million and $21.3 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 2022 Weighted Average Remaining Lease Term Operating lease 5.8 years 3.5 years Finance lease 2.7 years 1.8 years Weighted Average Discount Rate Operating lease 6.7 % 4.7 % Finance lease 4.7 % 2.9 % Maturities of lease liabilities as of December 31, 2023 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2024 $ 15.0 $ 2.7 2025 13.9 1.6 2026 11.1 1.0 2027 8.1 0.7 2028 5.3 — 2029 and thereafter 17.8 — Total lease payments 71.2 6.0 Less: Interest portion (13.7) (0.5) Total lease liabilities. $ 57.5 $ 5.5 Supplemental cash flow information related to our leases is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 16.0 $ 17.1 $ 16.5 Operating cash flows from finance leases $ 0.2 $ 0.2 $ 0.2 Financing cash flows from finance leases $ 3.4 $ 5.0 $ 7.2 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 31.6 $ 10.7 $ 24.2 Finance leases $ 3.8 $ 3.5 $ 4.1 In March 2023, we renewed the lease on our corporate headquarters office space for a term of 11 years. The lease commences on June 1, 2024 and expires in May 2035. The minimum lease payment obligations due under this lease are $19.8 million. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net: The following table shows changes in the carrying amount of Goodwill for the years ended December 31, 2023 and 2022 (in millions): Home Health Hospice Consolidated Goodwill as of December 31, 2021 $ 911.7 $ 277.3 $ 1,189.0 Acquisitions 38.5 26.3 64.8 Impairment (109.0) — (109.0) Goodwill as of December 31, 2022 $ 841.2 $ 303.6 $ 1,144.8 Acquisitions 2.7 — 2.7 Impairment — (85.8) (85.8) Goodwill as of December 31, 2023 $ 843.9 $ 217.8 $ 1,061.7 Goodwill decreased as a result of the impairment charges recorded for the years ended December 31, 2023 and 2022. These decreases were partially offset by the acquisitions discussed in Note 2, Business Combinations . We are required to test our goodwill for impairment at least annually, as of October 1 st , absent any triggering events that would accelerate an impairment assessment. During the preparation of our consolidated financial statements for the year ended December 31, 2022, we identified potential impairment triggering events in the fourth quarter and determined a quantitative analysis of our two reporting units should be performed. These triggering events included lower than expected fourth quarter operating results, a change in our acquisition strategy and declining collections, which we believe was in part a result of the growing shift in our third‑party payor mix, and specifically, an increase in Medicare Advantage payors. During the three months ended June 30, 2023, we identified potential impairment triggering events in the quarter and determined a quantitative analysis of our two reporting units should be performed. These triggering events included our performance against the 2023 forecast, a decrease in our share price and market capitalization, and the release of the 2024 proposed rule for home health on June 30, 2023, which included a net negative home health payment update. During the three months ended September 30, 2023, we identified potential impairment triggering events in the quarter and determined a quantitative analysis of our two reporting units should be performed. These triggering events included our performance against the 2023 forecast and a decrease in our share price and market capitalization. We estimated the fair value of our reporting units using both the income approach and market approach. The assumptions used in the income approach incorporate a number of significant estimates and judgments, including the revenue growth rates, timing of de novo openings, forecasted operating margins, the weighted average cost of capital, and terminal growth rates. The market approach utilizes the guideline public company methodology, which uses valuation indicators, including market multiples of earnings before interest, taxes, depreciation and amortization, from other businesses that are similar to each reporting unit and implied control premiums. While management believes the assumptions used are reasonable and commensurate with the views of a market participant, there is also uncertainty in current general economic and market conditions. The result of the analysis is sensitive to changes in key assumptions, such as assumed future reimbursement rates, rising interest rates and labor costs and delays in our ability to complete de novo openings, which could negatively impact our forecasted cash flows and result in an impairment charge in future periods. Based on the quantitative analysis in the fourth quarter of 2022, we recorded an impairment charge of $109.0 million in the three months ended December 31, 2022 to reflect a decrease in the carrying value of our home health reporting unit. As of December 31, 2022, the fair value of our hospice reporting unit exceeded its carrying value by less than 15%. As of December 31, 2022, the hospice reporting unit had an allocated goodwill balance of $303.6 million. Based on the quantitative analysis in the second quarter of 2023, we recorded an impairment charge of $85.8 million for the three months ended June 30, 2023 to reflect a decrease in the carrying value of our hospice reporting unit. As of June 30, 2023, the hospice reporting unit had an allocated goodwill balance of $217.8 million. As of June 30, 2023, the home health reporting unit had an allocated goodwill balance of $843.9 million. Based on the results of the quantitative analysis, no adjustments to the carrying value of goodwill for each of the reporting units were necessary during the three months ended September 30, 2023. As of September 30, 2023, the fair value of our home health and hospice units exceeded their carrying value by less than 7% and 5%, respectively. The home health and hospice reporting units had an allocated goodwill balance of $843.9 million and $217.8 million, respectively. We conducted our annual impairment test again at October 1, 2023, which resulted in the same values determined as of September 30, 2023. As of December 31, 2023 and 2022, consolidated accumulated impairment charges of $194.8 million and $109.0 million, respectively, were included in Goodwill . The following table provides information regarding our other Intangible assets, net (in millions): Gross Carrying Amount Accumulated Amortization Net Certificates of need: 2023 $ 89.2 $ (50.0) $ 39.2 2022 $ 89.2 $ (41.4) $ 47.8 Licenses: 2023 $ 131.2 $ (93.9) $ 37.3 2022 $ 131.1 $ (80.8) $ 50.3 Noncompete agreements: 2023 $ 15.1 $ (12.6) $ 2.5 2022 $ 14.9 $ (11.6) $ 3.3 Trade names: 2023 $ 7.6 $ (7.6) $ — 2022 $ 7.5 $ (7.5) $ — Internal-use software: 2023 $ 25.9 $ (24.9) $ 1.0 2022 $ 25.4 $ (24.2) $ 1.2 Total intangible assets: 2023 $ 269.0 $ (189.0) $ 80.0 2022 $ 268.1 $ (165.5) $ 102.6 Amortization expense for other intangible assets is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Amortization expense $23.5 $24.5 $25.1 Total estimated amortization expense for our other intangible assets for the next five years is as follows (in millions): Year Ending December 31, Estimated Amortization Expense 2024 $ 23.0 2025 $ 15.7 2026 $ 12.4 2027 $ 11.3 2028 $ 8.0 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt: Our long-term debt outstanding consists of the following (in millions): As of December 31, 2023 2022 Credit Agreement— Advances under revolving credit facility $ 180.0 $ 190.0 Term loan facilities 367.1 387.9 Finance lease obligations 5.5 5.2 552.6 583.1 Less: Current portion (22.5) (23.1) Long-term debt, net of current portion $ 530.1 $ 560.0 The following chart shows scheduled principal payments due on long-term debt for the next five years (in millions): Year Ending December 31, Amount 2024 $ 22.5 2025 21.4 2026 21.0 2027 490.6 2028 and thereafter — Gross maturities 555.5 Less unamortized debt issuance costs (2.9) Total $ 552.6 In June 2022, the Company entered into a credit agreement (the “Credit Agreement”) that consists of a $400.0 million term loan A facility (the “Term Loan A Facility”) and a $350.0 million revolving credit facility (the “Revolving Credit Facility” and together with the Term Loan A Facility, the “Credit Facilities”). The Credit Facilities mature in June 2027. Interest on the loans under the Credit Facilities is calculated by reference to the Secured Overnight Financing Rate (“SOFR”) or an alternative base rate, plus an applicable interest rate margin. Enhabit may voluntarily prepay outstanding loans under the Credit Facilities at any time without premium or penalty, other than customary breakage costs with respect to SOFR loans. The Term Loan A Facility contains customary mandatory prepayments, including with respect to proceeds from asset sales and from certain incurrences of indebtedness. On June 30, 2022, we drew the full $400.0 million of the Term Loan A Facility and $170.0 million on the Revolving Credit Facility. The net proceeds of $566.6 million were distributed to Encompass prior to the completion of the Distribution. For additional information on the Separation, see Note 1, Summary of Significant Accounting Policies , to the accompanying consolidated financial statements. The Term Loan A Facility amortizes by an amount per annum equal to 5.0% of the outstanding principal amount thereon as of the closing date, payable in equal quarterly installments, with the balance being payable in June 2027. The Revolving Credit Facility provides the ability to borrow and obtain letters of credit, which is subject to a $75.0 million sublimit. Obligations under the Credit Facilities are guaranteed by our existing and future wholly owned domestic material subsidiaries (the “Guarantors”), subject to certain exceptions. Borrowings under the Credit Facilities are secured by first priority liens on substantially all the assets of Enhabit and the Guarantors, subject to certain exceptions. The Credit Facilities contain representations and warranties, affirmative and negative covenants, and events of default customary for secured financings of this type, including limitations with respect to liens, fundamental changes, indebtedness, restricted payments, investments, and affiliate transactions, in each case, subject to a number of important exceptions and qualifications. On June 27, 2023, we amended the Credit Facilities (the “First Amendment”) to provide for, among other things: (i) a new tier to the pricing grid for interest rate margins when the total net leverage ratio exceeds 4.50 to 1.00; (ii) changes to the conditions concerning the Company’s total net leverage ratio that must be met for the Company to borrow incremental ratio-based amounts; (iii) an increase in the maximum permitted total net leverage ratio to 5.25 to 1.00 for the quarters ending June 30, 2023, September 30, 2023, and December 31, 2023, stepping down to 5.00 to 1.00 for the quarter ending March 31, 2024, 4.75 to 1.00 for the quarter ending June 30, 2024, and 4.50 to 1.00 for the quarter ending September 30, 2024 and thereafter; and (iv) modifications to the Company’s ability to declare and make certain restricted payments. On September 29, 2023, we entered into a Limited Waiver (the “Waiver”) with Wells Fargo Bank, National Association, as administrative agent to the other lenders (the “Administrative Agent”) under the Credit Agreement and the First Amendment. The Waiver released the Company from the requirement to comply with the total net leverage ratio and the interest coverage ratio covenants for the three months ended September 30, 2023. The Waiver also required that, until such time as the Company certified compliance with the waived financial covenants, the aggregate principal amount of the Company’s revolving loans allowed under the Credit Agreement were decreased from $350.0 million to $230.0 million. All other covenants and terms of the Credit Agreement remained unchanged and in effect. Although we were not required to be in compliance with the financial covenants as of September 30, 2023, we were in compliance with the financial covenants under the Credit Facilities. As of September 30, 2023, our forecasted results suggested there was uncertainty of meeting our covenants through a period of one year from the issuance date of the September 30, 2023 financial statements. As a result, on November 3, 2023, we amended the Credit Facilities (the “Second Amendment”) to provide for, among other things: (i) an increase in the maximum permitted Total Net Leverage Ratio (as defined in the Credit Agreement) to 6.75 to 1.00 for the quarters ending December 31, 2023 and March 31, 2024, stepping down to 6.50 to 1.00 for the quarters ending June 30, September 30 and December 31, 2024, 5.75 to 1.00 for the quarter ending March 31, 2025, and 4.50 to 1.00 for the quarter ending June 30, 2025 and thereafter; (ii) the addition of a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) covenant of 1.15 to 1.00 until the end of the Covenant Adjustment Period (as defined below); (iii) no Interest Coverage Ratio (as defined in the Credit Agreement) covenant until the end of the Covenant Adjustment Period; (iv) a permanent reduction in the Revolving Credit Facility commitment from $350.0 million to $220.0 million; (v) an increase in the Applicable Commitment Fee (as defined in the Credit Agreement) during the Covenant Adjustment Period; (vi) suspension of the ability of the Company to request incremental commitments under the Credit Agreement during the Covenant Adjustment Period; (vii) an increase of 0.25% in the applicable interest rate margins on amounts outstanding under the Credit Agreement during the Covenant Adjustment Period; (viii) limits on the amount of cash the Company can keep on hand and outside the lender group during the Covenant Adjustment Period; and (ix) additional limits on permitted indebtedness and acquisitions, permitted liens, restricted payments and permitted investments during the Covenant Adjustment Period. The “Covenant Adjustment Period” begins on the date of the Second Amendment and ends on the earlier of (a) the date the Company provides evidence of compliance with the financial covenants in the Credit Agreement, as amended, for the fiscal quarter ended June 30, 2025 and (b) the date that the Company provides evidence of compliance with the financial covenants in the Credit Agreement as in effect immediately prior to the First Amendment for the applicable quarter. Under specified circumstances, including non-compliance with any of the covenants described above and the unavailability of any waiver, amendment or other modification thereto, we may not be able to borrow under the Revolving Credit Facility. Additionally, violation of the covenants would result in an event of default under the Credit Facilities. A default that occurs, and is not cured within any applicable cure period or is not waived, would permit lenders to accelerate the maturity of the debt under the Credit Facilities and to foreclose upon any collateral securing the debt. As a result of the amendment above, our forecasted results indicate we will continue to be in compliance with our financial covenants through a period of one year from the issuance date of the December 31, 2023 financial statements. We cannot guarantee we will be in compliance with our financial covenants for each reporting period through a period of one year from the issuance date of the December 31, 2023 financial statements. As of December 31, 2023, we were in compliance with our financial covenants under the Credit Facilities. We continually evaluate our expected compliance with the covenants described above and take all appropriate steps to proactively renegotiate such covenants when appropriate. As of December 31, 2023, amounts drawn under both the Term Loan A Facility and the Revolving Credit Facility had an interest rate of 8.0%. On October 20, 2022, we entered into an interest rate swap to manage our exposure to interest rate movements for a portion of our Term Loan A Facility. The interest rate swap has a $200.0 million notional value and a maturity date of October 20, 2025. Beginning in October 2022, we receive the one-month SOFR and pay a fixed rate of interest of 4.3%. See also Note 12, Derivative Instruments . The carrying amounts and estimated fair values for our long-term debt are presented in the following table (in millions): As of December 31, 2023 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 180.0 $ 180.0 $ 190.0 $ 190.0 Term loan A facility $ 367.1 $ 354.4 $ 387.9 $ 356.6 Finance lease obligations $ 5.5 $ 5.5 $ 5.2 $ 5.2 Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies —Fair Value Measurements . |
Stock-Based Payments
Stock-Based Payments | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Payments | Stock-Based Payments: Prior to July 1, 2022, the Company’s employees and board of directors participated in Encompass’s various stock‑based plans. All stock-based payments to employees are recognized in the financial statements based on their estimated grant-date fair value and amortized on a straight-line basis over the applicable requisite service period. On July 1, 2022, all unvested Encompass restricted stock awards (“RSA”), restricted stock units (“RSU”), and stock options to purchase shares issued to our employees were canceled and replaced with restricted stock, restricted stock units, and options to purchase shares issued under the Enhabit 2022 Omnibus Performance Incentive Plan (the “2022 Plan”). This represented a modification (the “Modification”) of outstanding stock-based compensation awards. Prior to the Separation, Encompass issued a total of 128,000 RSAs and RSUs to members of our management team. Approximately 47,000 of these awards contain only a service condition, while the remainder contain both a service and a performance condition. Additionally, Encompass granted approximately 22,000 stock options to a member of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies . As a result of the Modification, all outstanding stock-based compensation of Encompass stock awarded to Enhabit employees were converted to Enhabit stock using a conversion rate that retained the fair value of the awards immediately prior to the Modification. All performance-based RSUs were measured immediately prior to the Modification. The number of shares to be issued upon vesting was determined, and these awards were converted to restricted stock units of Enhabit that vest based upon a service condition. All service based RSAs were converted to restricted stock awards of Enhabit that vest based upon a service condition. The outstanding options to purchase shares of Encompass stock were converted to options to purchase shares of Enhabit stock. There was no additional compensation cost as a result of the Modification. Stock Options— Under the Enhabit, Inc. 2022 Omnibus Performance Incentive Plan, one member of management is given the right to purchase shares of Enhabit common stock at a fixed grant price determined on the day the options are granted. The terms and conditions of the options, including exercise prices and the periods in which options are exercisable, are generally at the discretion of the compensation and human capital committee of Enhabit’s board of directors. However, no options are exercisable beyond ten years from the date of grant. Granted options vest over the awards’ requisite service periods, which are generally three years. The grant date fair values of stock options granted were estimated at the grant date using the Black-Scholes option‑pricing model with the following weighted average assumptions: For the Year Ended December 31, 2023 2022 2021 Expected volatility 53.0 % 28.3 % 28.4 % Risk-free interest rate 4.1 % 1.7 % 1.1 % Expected life (years) 6.0 7.8 7.1 Dividend yield — % 1.9 % 1.9 % The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, the Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the expected stock price volatility. Prior to the Separation, volatility was calculated based on the historical volatility of Encompass’s common stock over the period commensurate with the expected term of the options. The risk-free interest rate was the implied daily yield currently available on U.S. Treasury issues with a remaining term closely approximating the expected term used as the input to the Black-Scholes option-pricing model. The expected term was estimated through an analysis of actual, historical post-vesting exercise, cancellation, and expiration behavior by Encompass employees and projected post-vesting activity of outstanding options. The dividend yield was estimated based on Encompass’s annual dividend rate and the Encompass stock price on the dividend payment dates. For options granted after the Separation, volatility was estimated using the historical value of our peer group for a period of time commensurate with the expected term of the options. The expected term was estimated using the simplified method outlined in the Securities and Exchange Commission’s Staff Accounting Bulletin 120. The dividend yield is zero. We recognize forfeitures for all award types as they occur. Under the Black-Scholes option-pricing model, the weighted average grant date fair value per share of employee stock options granted was $8.35, $7.01, and $7.79 during the years ended December 31, 2023, 2022, and 2021, respectively. A summary of our stock option activity for employees specifically identifiable to the Company and related information is as follows: Shares Weighted Average Exercise Price per Share Weighted Aggregate Intrinsic Value Outstanding, December 31, 2022 222.2 $27.07 Granted 64.1 $15.30 Expirations — $— Outstanding, December 31, 2023 286.3 $24.44 6.8 $— Exercisable, December 31, 2023 172.2 $26.66 5.6 $— The Company recognized approximately $0.4 million, $0.3 million, and $0.1 million of compensation expense related to stock options for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, there was $0.6 million of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted average period of 22 months. No options were exercised during the years ended December 31, 2023 and 2022. The total intrinsic value of stock options exercised during the year ended December 31, 2021 was $0.1 million. The total fair value of stock options vested during the years ended December 31, 2023, 2022, and 2021 was $0.3 million, $0.8 million, and zero, respectively. Restricted Stock Awards— A summary of our issued RSAs for employees specifically identifiable to the Company is as follows (share information in thousands): Shares (In Thousands) Weighted Nonvested shares at December 31, 2022 454.2 $ 25.54 Granted — — Vested (147.8) 28.14 Forfeited (28.8) 25.85 Nonvested shares at December 31, 2023 277.6 $ 24.12 The Company recognized $3.0 million, $3.3 million, and $1.7 million of stock-based compensation related to RSAs for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, there was $4.4 million of unrecognized compensation expense related to unvested RSAs. This cost is expected to be recognized over a weighted average period of 23 months. There were no RSAs granted in the year ended December 31, 2023. The weighted average grant-date fair value per share of RSAs granted was $22.74 during the year ended December 31, 2022. The total fair value of RSAs vested during the years ended December 31, 2023, 2022, and 2021 was $4.2 million, $1.3 million, and $2.5 million, respectively. All RSAs that vested prior to the Separation vested as shares of Encompass stock. Restricted Stock Units— The RSUs granted in 2023 were service-based and performance-based awards. These awards generally vest over a three-year requisite service period. The fair value of the RSU was determined by the 20-day volume weighted average closing price of Enhabit’s common stock prior to the grant date for the free cash flow performance condition and the Monte Carlo simulation model for the total shareholder return performance condition. The performance-based RSUs will vest in an amount between zero and 200% of the target units granted based on two criteria, (i) total shareholder return over the three-year period ending December 31, 2025 as compared to a designated peer group, and (ii) free cash flow generated by the Company over a three-year period ending December 31, 2025. The total shareholder return performance condition represents 20% of the total 2023 performance-based RSU award, and the free cash flow performance condition represents 80% of the total 2023 performance-based RSU award. A summary of our issued RSUs for employees specifically identifiable to the Company is as follows (share information in thousands): Service Based Performance Based Shares (In Thousands) Weighted Shares (In Thousands) Weighted Nonvested shares at December 31, 2022 362.0 $ 30.34 — $ — Granted 719.0 12.84 452.1 17.24 Vested (222.9) 18.18 — — Forfeited (107.4) 23.94 (63.8) 17.24 Nonvested shares at December 31, 2023 750.7 $ 18.11 388.3 $ 17.24 The Company recognized $5.5 million, $5.6 million, and $1.8 million of stock-based compensation related to RSUs for the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, there was $6.9 million of unrecognized compensation expense related to unvested service-based RSUs. This cost is expected to be recognized over a weighted average period of 22 months. As of December 31, 2023, there was $1.4 million of unrecognized compensation expense related to performance-based RSUs. This cost is expected to be recognized over a weighted average period of 26 months. The total compensation expense ultimately recognized for the performance-based RSUs will depend on the outcome of the free cash flow performance condition upon vesting of the award. The weighted average grant-date fair value per share of service-based RSUs granted was $12.84 and $22.12 during the years ended December 31, 2023 and 2022, respectively. The total fair value of service-based RSUs vested during the years ended December 31, 2023, 2022, and 2021 was $4.1 million, $3.8 million, and $2.8 million, respectively. All RSUs that vested prior to the Separation vested as shares of Encompass stock. In addition to the stock-based compensation expenses disclosed above, there was also an allocation of expenses related to certain Encompass functions that resulted from stock-based compensation totaling zero, $1.1 million, and $2.3 million for the years ended December 31, 2023, 2022, and 2021, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans: Substantially all our employees are eligible to enroll in Company-sponsored healthcare plans, including coverage for medical and dental benefits. Our primary healthcare plans are national plans administered by third-party administrators. We are self-insured for these plans. During 2023, 2022, and 2021, costs associated with these plans, net of amounts paid by employees and stop-loss recoveries, approximated $48.1 million, $41.5 million, and $41.5 million, respectively. As of December 31, 2023 and 2022, medical insurance accruals of $8.4 million and $7.5 million, respectively, are included in Other current liabilities in our Consolidated Balance Sheets. The Company offers one qualified 401(k) savings plans, the Home Health Savings Plan (the “HHSP”). The HHSP allows eligible employees to contribute up to 60% of their pay on a pre-tax basis into their individual retirement account in the plan subject to the normal maximum limits set annually by the Internal Revenue Service. All home health and hospice full-time and part-time employees are eligible to participate in the HHSP, and all contributions to the plan are in the form of cash. The Company’s employer matching contribution under the HHSP is 25% of the first 3% of each participant’s elective deferrals, which vest gradually over a six-year service period. Participants are always fully vested in their own contributions. Employer contributions to the HHSP approximated $2.3 million, $2.2 million, and $2.4 million in 2023, 2022, and 2021, respectively. In 2023, 2022, and 2021, approximately $0.4 million, $0.3 million, and $0.2 million, respectively, from forfeited accounts were used to fund the matching contributions in accordance with the terms of the HHSP. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The significant components of Income tax (benefit) expense are as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Current: Federal $ 0.2 $ 14.3 $ 22.2 State and other — 2.8 4.3 Total current expense 0.2 17.1 26.5 Deferred: Federal (9.3) (3.9) 7.9 State and other (2.3) (0.4) 0.7 Total deferred (benefit) expense (11.6) (4.3) 8.6 Total income tax (benefit) expense related to continuing operations $ (11.4) $ 12.8 $ 35.1 A reconciliation of differences between the federal statutory tax rate and our effective tax rate is presented below: For the Year Ended December 31, 2023 2022 2021 Federal statutory tax rate 21.0% 21.0% 21.0% Increase (decrease) in tax rate resulting from: State and other income taxes, net of federal tax benefit 3.1% 1.8% 3.3% Impairment of goodwill (10.6)% (49.1)% —% Distribution deferred tax adjustment —% (23.7)% —% Other, net (0.9)% (0.2)% (0.6)% Effective tax rate 12.6% (50.2)% 23.7% Our 2022 taxable income generated prior to the Distribution is included in the consolidated federal and state returns of Encompass (“the Pre-Spin Returns”). After the Distribution, Encompass reduced its estimate of our taxable income to be reported on the Pre-Spin Returns based primarily on a technical analysis of the timing of deductibility of transaction costs related to the Distribution. As a result, we recorded an increase to our Deferred income tax liabilities and Income tax (benefit) expense of $6.0 million in 2022, which is presented in the rate reconciliation as the Distribution deferred tax adjustment. In addition to the CARES Act provisions previously discussed in Note 1, Summary of Significant Accounting Policies —COVID-19 Pandemic , the CARES Act also includes provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, technical corrections to tax depreciation methods for qualified improvement property and deferral of employer payroll taxes. The CARES Act did not materially impact our effective tax rate, although it impacted the timing of cash payments for payroll taxes. Deferred payments of social security taxes of $14.9 million were paid in each of the years ended December 31, 2022 and 2021. There were no deferred payments of social security taxes accrued as of December 31, 2023 and 2022. Deferred income taxes recognize the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The significant components of our deferred tax assets and liabilities are presented in the following table (in millions): As of December 31, 2023 2022 Deferred income tax assets: Operating lease liabilities $ 13.2 $ 9.6 Accrued expenses and allowances 3.0 4.7 Stock-based compensation 3.2 2.7 Interest expense 13.1 2.8 Other deferred income tax assets 0.3 0.8 Total deferred income tax assets 32.8 20.6 Deferred income tax liabilities: Intangible assets (32.0) (35.7) Operating lease right-of-use assets (13.3) (9.6) Property, net (3.7) (3.9) Other deferred income tax liabilities (0.9) — Total deferred income tax liabilities (49.9) (49.2) Net deferred income tax liabilities $ (17.1) $ (28.6) Prior to July 1, 2022, the Company joined Encompass in the filing of various consolidated federal, state, and local income tax returns and was a party to an income tax allocation agreement (the “Tax Sharing Agreement”). Under the Tax Sharing Agreement, the Company paid to or received from Encompass the amount, if any, by which Encompass’s income tax liability was affected by virtue of inclusion of the Company in the consolidated income tax returns of Encompass. Effectively, that arrangement resulted in the Company’s annual income tax provision being computed, with adjustments, including the Distribution deferred tax adjustment in 2022 of $6.0 million discussed above, as if the Company filed its own separate consolidated income tax returns. The deferred tax asset for interest expense is attributable to a carryforward with an indefinite carryforward period. At the Distribution, the Company entered into the Tax Matters Agreement with Encompass, which terminated the existing Tax Sharing Agreement prospectively. The Tax Matters Agreement governs the Company’s respective rights, responsibilities and obligations with respect to taxes (including responsibility for taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the Distribution to qualify as tax-free for U.S. federal income tax purposes), entitlement to refunds, allocation of tax attributes, preparation of tax returns, control of tax contests and other matters. In addition, the Tax Matters Agreement imposes certain restrictions on the Company and its subsidiaries until the second anniversary of the Distribution (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that are designed to preserve the tax-free status of the Distribution and certain related transactions. The Tax Matters Agreement provides special rules that allocate tax liabilities in the event the Distribution or certain related transactions are not tax-free. In general, under the Tax Matters Agreement, each party is responsible for any taxes imposed on Encompass or the Company that arise from the failure of the Distribution or certain related transactions to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Section 355 of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant covenants made by that party in the Tax Matters Agreement. We recognize interest and penalties related to income tax matters in Income tax (benefit) expense . Interest recorded as part of our income tax provisions for 2023, 2022, and 2021 was not material. Accrued interest related to income taxes as of December 31, 2023 and 2022 was not material. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments: In October 2022, we entered into an interest swap agreement with a notional value of $200.0 million with a maturity of October 20, 2025. The activities of the cash flow hedge included in Accumulated other comprehensive loss for the years ended December 31, 2023 are presented in the following table (in millions): Cash Flow Hedge Balance as of December 31, 2022 $ (0.7) Unrealized gain recognized in other comprehensive income, net of tax 1.3 Reclassified to interest expense, net of tax (1.1) Balance as of December 31, 2023 $ (0.5) The fair value of derivative assets and liabilities within the Consolidated Balance Sheets are presented in the following table (in millions): As of December 31, 2023 2022 Current Assets $ 0.7 $ 1.0 Long-term liabilities (1.3) (2.0) Total $ (0.6) $ (1.0) Fair values for our derivative instruments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. |
Contingencies and Other Commitm
Contingencies and Other Commitments | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments: We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. We recorded $0.2 million for claims made against the Company that are probable of loss and reasonably estimable as liabilities within Other current liabilities in the Consolidated Balance Sheet as of December 31, 2023. Other current liabilities in the Consolidated Balance Sheet as of December 31, 2023 includes $9.9 million of accrued legal fees. Other Commitments— |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting: Our internal financial reporting and management structure is focused on the major types of services provided by the Company. We manage our operations using two operating segments that are also our reportable segments: (1) home health and (2) hospice. These reportable operating segments are consistent with information used by our Chief Executive Officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments: • Home Health - Our home health operations represent the nation’s fourth-largest provider of Medicare-certified skilled home health services, measured by 2022 Medicare revenues. We operate home health agencies in 34 states, with a concentration in the southern half of the United States. As of December 31, 2023, the Company operates 255 home health agencies. We are the sole owner of 244 of these locations. We retain 50.0% to 81.0% ownership in the remaining 11 jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. • Hospice - Our hospice operations represent one of the nation’s largest providers of Medicare-certified hospice services, measured by 2022 Medicare revenues. We operate hospice agencies in 24 states, with a concentration in the southern half of the United States. As of December 31, 2023, the Company operates 110 hospice agencies. We are the sole owner of 106 of these locations. We retain 50.0% to 90.0% ownership in the remaining four jointly owned locations. Hospice care focuses on the quality of life for patients who are experiencing an advanced, life limiting illness while treating the person and symptoms of the disease, rather than the disease itself. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies . All revenues for our services are generated through external customers. See Note 1, Summary of Significant Accounting Policies —Net Service Revenue , for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Segment assets are not reviewed by our chief operating decision maker and therefore are not disclosed below. Selected financial information for our reportable segments is as follows (in millions): Home Health Hospice For the Year Ended December 31, For the Year Ended December 31, 2023 2022 2021 2023 2022 2021 Net service revenue $ 850.1 $ 877.1 $ 897.3 $ 196.2 $ 194.0 $ 209.3 Cost of service, excluding depreciation and amortization 439.0 435.5 423.5 96.6 90.1 90.4 General and administrative expenses 240.6 238.5 244.2 63.4 65.2 62.6 Other income (0.2) (0.9) (1.6) — — — Equity in net income of nonconsolidated affiliates — — (0.6) — — — Noncontrolling interests 1.4 1.8 1.7 0.1 0.3 0.1 Segment Adjusted EBITDA $ 169.3 $ 202.2 $ 230.1 $ 36.1 $ 38.4 $ 56.2 Segment reconciliations (in millions): For the Year Ended December 31, 2023 2022 2021 Total Segment Adjusted EBITDA $ 205.4 $ 240.6 $ 286.3 Non-segment general and administrative expenses (128.7) (102.0) (102.5) Impairment of goodwill (85.8) (109.0) — Interest expense (43.0) (15.0) (0.3) Depreciation and amortization (30.9) (33.0) (36.9) Stock-based compensation expense (8.9) (9.2) (3.6) Net income attributable to noncontrolling interests 1.5 2.1 1.8 Other income — — 3.2 (Loss) income before income taxes and noncontrolling interests $ (90.4) $ (25.5) $ 148.0 Additional detail regarding the revenues of our operating segments by service line follows (in millions): For the Year Ended December 31, 2023 2022 2021 Home health: Episodic $ 661.2 $ 738.0 $ 781.5 Non-episodic 179.2 128.0 102.0 Private duty (1) 9.7 11.1 13.8 Total home health 850.1 877.1 897.3 Hospice 196.2 194.0 209.3 Total net service revenue $ 1,046.3 $ 1,071.1 $ 1,106.6 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions: In connection with the Separation, we entered into several agreements with Encompass that govern the relationship of the parties following the Distribution, including a Separation and Distribution Agreement, a Transition Services Agreement, a Tax Matters Agreement, and an Employee Matters Agreement. The Separation and Distribution Agreement contains provisions that, among other things, relate to (i) assets, liabilities, and contracts to be transferred, assumed, and assigned to each of Enhabit and Encompass as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of the Enhabit business with Enhabit and financial responsibility for the obligations and liabilities of Encompass’s remaining business with Encompass, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation between Enhabit and Encompass of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Distribution, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures governing Enhabit’s and Encompass’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of Enhabit’s business and Encompass’s business. Allocation of Corporate Expenses Historically Encompass provided the Company with certain services, including, but not limited to, executive oversight, treasury, legal, accounting, human resources, tax, internal audit, financial reporting, information technology and investor relations. After the Separation, some of these services continued to be provided by Encompass to the Company on a temporary basis under the Transition Services Agreement. As of December 31, 2023, the only remaining services Encompass was providing to us were related to information technology. Our consolidated financial statements through December 31, 2022 included an allocation of these costs for the period prior to July 1, 2022. When specific identification was not practicable, a proportional cost method was used, primarily based on revenue and headcount. These cost allocations reasonably reflected these services and the benefits derived for the periods presented. These allocations may not be indicative of the actual expenses that would have been incurred as an independent, publicly traded company. In addition, the Company’s employees have historically participated in Encompass’s various stock-based plans as discussed in Note 9, Stock-Based Payments . The allocations of services from Encompass to the Company and stock-based compensation are reflected in General and administrative expenses in the Consolidated Statements of Operations as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Overhead allocation $ — $ 7.7 $ 16.7 Stock-based compensation $ — $ 2.5 $ 3.6 For information related to our Tax Sharing Agreement with Encompass, see Note 11, Income Taxes . Software Services The Company is party to a client service and license agreement (the “HCHB Agreement”) with Homecare Homebase, LLC (“HCHB”) for a home care management software product that includes multiple modules for collecting, storing, retrieving and disseminating home care patient health and health-related information by and on behalf of home health care agencies, point of care staff, physicians, patients and patient family members via hand-held mobile computing devices and desktop computers linked with a website hosted by HCHB. The Company’s former Chief Executive Officer along with others created this software product and eventually sold it to HCHB. This individual serves as that company’s executive chairman. As of June 19, 2021, this individual no longer serves as our chief executive officer or in any other role in our home health and hospice business. Pursuant to the HCHB Agreement, we pay fees to HCHB based on, among other things, the software modules in use, the training programs, and the number of licensed users. Total HCHB expenses before June 19, 2021 were approximately $3.0 million and are included in General and administrative expenses in the Consolidated Statement of Income for the year ended December 31, 2021. Total HCHB expenses of $6.0 million are included in General and administrative expenses in the Consolidated Statements of Income for the years ended December 31, 2021. As of December 31, 2023 and 2022, there were no related party payables to HCHB. Data Analytics Investment During 2019, we made a $2.0 million investment in Medalogix, LLC, a healthcare predictive data and analytics company; this investment is accounted for under the measurement alternative for investments. In April 2021, Medalogix entered in an agreement whereby TVG Logic Holdings, LLC (“TVG”) acquired a majority of the issued and outstanding membership interests of Medalogix for cash. The transaction closed in May 2021. As a result of the transaction, the Company received $2.0 million of cash and a minority equity investment in TVG and recorded a $1.6 million gain as part of Other income during 2021. During 2023, 2022, and 2021, we incurred costs of approximately $4.5 million, $4.6 million, and $3.6 million, respectively, in connection with the usage of Medalogix’s analytics platforms. These costs are included in Cost of Service, excluding depreciation and amortization , and General and administrative expenses in the Consolidated Statements of Income. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | For periods prior to July 1, 2022, the accompanying consolidated financial statements of the Company and its subsidiaries have been derived from the consolidated financial statements and accounting records of Encompass as if the Company had operated on a stand-alone basis during the periods presented and were prepared utilizing the legal entity approach, in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Prior to July 1, 2022, the Company was reported as a single reportable segment within Encompass’s reportable segments and did not operate as a stand-alone company. Accordingly, Encompass historically reported the financial position and the related results of operations, cash flows, and changes in equity of the Company as a component of Encompass’s consolidated financial statements. |
Consolidation | The consolidated financial statements include an allocation of expenses related to certain Encompass corporate functions as discussed in Note 15, Related Party Transactions . The consolidated financial statements also include revenues and expenses directly attributable to the Company and assets and liabilities specifically attributable to the Company. Encompass’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt, and the borrowings are not specifically identifiable to the Company. However, subsequent to April 23, 2020, the Company was a guarantor for Encompass’s credit agreement and senior debt. In connection with the Distribution, the Company was released from its guarantee of Encompass’s indebtedness. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Encompass. Prior to the Distribution and Separation, we joined with Encompass in various U.S. federal, state, and local consolidated income tax filings. See Note 11, Income Taxes , for information related to our Tax Sharing Agreement with Encompass. The income tax amounts in these consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate, with adjustments described in Note 11, Income Taxes . The consolidated financial statements include the assets, liabilities, revenues, and expenses of all wholly owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. We eliminate all intercompany accounts and transactions within the Company from our financial results. Transactions between the Company and Encompass have been included in these consolidated financial statements. The transfers with Encompass that were not settled are reflected in stockholders’ equity within Capital in excess of par value |
Variable Interest Entities | Variable Interest Entities— Any entity considered a variable interest entity (“VIE”) is evaluated to determine which party is the primary beneficiary and thus should consolidate the VIE. This analysis is complex, involves uncertainties, and requires significant judgment on various matters. To determine if we are the primary beneficiary of a VIE, we must determine what activities most significantly impact the economic performance of the entity, whether we have the power to direct those activities, and if our obligation to absorb losses or receive benefits from the VIE could potentially be significant to the VIE. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions— The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) estimates of net transaction prices to be collected for services and related revenue adjustments; (2) fair value of acquired assets and assumed liabilities in business combinations; (3) asset impairments, including goodwill; (4) depreciable lives of assets; (5) useful lives of intangible assets; (6) economic lives and fair value of leased assets; (7) fair value of stock-based compensation; (8) fair value of derivative instruments; (9) reserves for self-insured healthcare plans; and (10) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results could differ from those estimates. |
Risks and Uncertainties | COVID-19 Pandemic— The rapid onset of the COVID-19 Pandemic (the “pandemic”) caused a disruption to our nation’s healthcare system. In response to the public health emergency associated with the pandemic, the United States Congress and Centers for Medicare and Medicaid Services (“CMS”) adopted several statutory and regulatory measures intended to provide relief to healthcare providers to ensure patients would continue to have adequate access to care. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”), which temporarily suspended sequestration from May 1 through December 31, 2021. After the sequestration suspension was extended several times, sequestration resumed as of April 1, 2022, but was only a 1% payment reduction through June 30, 2022. Thereafter, the full 2% Medicare payment reduction resumed. Federal legislation, including the CARES Act and the 2021 Budget Act, and CMS regulatory actions include a number of other provisions, which are discussed below, affecting our reimbursement and operations in both segments. In the United States, the public health emergency measures expired on May 11, 2023. Additionally, the CARES Act, the 2021 Budget Act, and a series of waivers and guidance issued by CMS suspended various Medicare patient coverage criteria and documentation and care requirements in an effort to provide regulatory relief until the public health emergency for the pandemic ended. For home health, the relief included the allowance of nurse practitioners and physician assistants under certain conditions to certify, establish, and periodically review the plan of care, as well as supervise the provision of items and services for beneficiaries under the Medicare home health benefit, and the expansion of the use of telehealth. Additionally, CMS expanded the definition of “homebound” to include patients needing skilled services who are homebound due solely to their COVID-19 diagnosis or patients susceptible to contract COVID-19. For hospice, the relief included the temporary waiver of the requirement to use volunteers and to conduct a nurse visit every two weeks to evaluate aides, as well as the expanded use of telehealth for routine services and patient recertification. The foregoing and other disruptions to our business as a result of the pandemic have had an adverse effect on our business and could have a material adverse effect on our business, results of operations, financial condition, and cash flows. |
Net Service Revenue | Net Service Revenue— We record Net service revenue on an accrual basis using our best estimate of the transaction price for the type of service provided to the patient and expect to receive in exchange for providing services directly to patients. Our estimate of the transaction price includes adjustments for contractual rate and other revenue adjustments, including uncollectible amounts. Contractual rate revenue adjustments are recorded for the excess of our standard rates over the contracted rate applicable to the relevant payor, if any. We calculate contractual rate adjustments on a patient-by-patient basis based on the rates in effect for each primary third-party payor. Other revenue adjustments include adjustments for self-pay, uninsured patients and other payors and include revenue adjustments arising from billing documentation, face-to-face documentation, authorizations, and adjustments that may arise from payment, and other reviews by third-party payors or their agents. Estimates for other revenue adjustments are determined based on the aging of our accounts receivable, our historical collection experience for each type of payor, our success rate in the claims adjudication process and other relevant factors. Management continually reviews the transaction price estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms that result from contract renegotiations and renewals. Due to complexities involved in determining amounts ultimately due under reimbursement arrangements with third-party payors, which are often subject to interpretation, we may receive reimbursement for healthcare services authorized and provided that is different from our estimates, and such differences could be material. In addition, laws and regulations governing the Medicare and Medicaid programs are complex, subject to interpretation, and are routinely modified for provider reimbursement. All healthcare providers participating in the Medicare and Medicaid programs are required to meet certain financial reporting requirements. Federal regulations require submission of annual cost reports covering medical costs and expenses associated with the services provided under each home health and hospice provider number to program beneficiaries. Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may result in adjustments to the amounts ultimately determined to be due to the Company under these reimbursement programs. If actual results are not consistent with our assumptions and judgments, we may be exposed to adjustments to our Net Service Revenue that could be material. CMS has been granted authority to suspend payments, in whole or in part, to Medicare providers if CMS possesses reliable information concerning an overpayment, fraud, or willful misrepresentation. If CMS suspects payments are being made as the result of fraud or willful misrepresentation, CMS may suspend payment at any time without providing prior notice to us. The initial suspension period is limited to 180 days; however, the payment suspension period can be extended almost indefinitely if the matter is under investigation by the United States Department of Health and Human Services Office of Inspector General or the United States Department of Justice. Therefore, we are unable to predict if or when we may be subject to a suspension of payments by the Medicare and/or Medicaid programs, the possible length of the suspension period, or the potential cash flow impact of a payment suspension. Any such suspension would adversely impact our financial position, results of operations, and cash flows. Our performance obligations relate to contracts with a duration of less than one year. Therefore, we elected to apply the optional exemption to not 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. These unsatisfied or partially unsatisfied performance obligations primarily relate to services provided at the end of the reporting period. We are subject to changes in government legislation that could impact Medicare payment levels and changes in payor patterns that may impact the level and timing of payments for services rendered. Home Health Revenues Under the Medicare home health prospective payment system, we are paid by Medicare based on episodes of care. The performance obligation is the rendering of services to the patient during the term of the episode of care. An episode of care is defined as a length of stay up to 60 days, with multiple continuous episodes allowed. A base episode payment is established by the Medicare program through federal regulation. The base episode payment can be adjusted based on each patient’s health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers, and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. Medicare reimburses home health providers under the Patient-Driven Groupings Model. Under the Patient Driven Groupings Model (“PDGM”), the initial certification remains valid for 60 days. If a patient remains eligible for care after the initial period as certified by a physician, a new treatment period may begin. Prior to January 1, 2021, we billed a portion of reimbursement from each Medicare episode near the start of each episode, and the resulting cash payment was typically received before all services were rendered. Effective January 1, 2021, this early payment process was eliminated. As we provide home health services to our patients on a scheduled basis over the episode of care in a manner that approximates a pro rata pattern, revenue for the episode of care is recorded over an average length of treatment period using a calendar day prorating method. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the pro rata number of days in the episode that have been completed as of the period end date. We are subject to certain Medicare regulations affecting outlier revenue if our patient’s care was unusually costly. Regulations require a cap on all outlier revenue at 10% of total Medicare revenues received by each provider during a cost reporting year. Management has reviewed the potential cap. Adjustments to the transaction price for the outlier cap were not material as of December 31, 2023 and December 31, 2022. For episodic-based rates that are paid by other insurance carriers, including Medicare Advantage, we recognize revenue in a similar manner as discussed above for Medicare revenues. However, these rates can vary based upon the negotiated terms. For non-episodic-based revenue, revenue is recorded on an accrual basis based upon the date of service at amounts equal to our estimated per-visit transaction price. Price concessions, including contractual rate and other revenue adjustments are recorded as decreases to the transaction price. Hospice Revenues Medicare revenues for hospice are recognized and recorded on an accrual basis using the input method based on the number of days a patient has been on service at amounts equal to an estimated daily or hourly payment rate. The performance obligation is the rendering of services to the patient during each day that he or she is on hospice care. The payment rate is dependent on whether a patient is receiving routine home care, general inpatient care, continuous home care or respite care. Adjustments to Medicare revenues are recorded based on an inability to obtain appropriate billing documentation or authorizations acceptable to the payor or other reasons unrelated to credit risk. Hospice companies are subject to two specific payment limit caps under the Medicare program. One limit relates to inpatient care days that exceed 20% of the total days of hospice care provided for the year. The second limit relates to an aggregate Medicare reimbursement cap calculated by the Medicare Administrative Contractors. Adjustments to the transaction price for these caps were not material as of December 31, 2023 and December 31, 2022. For non-Medicare hospice revenues, we record gross revenue on an accrual basis based upon the date of service at amounts equal to our estimated per day transaction price. Price concessions, including contractual and other revenue adjustments are recorded as decreases to the transaction price and thus reduce our Net service revenue . |
Cash and Cash Equivalents | Cash and Cash Equivalents— Cash and cash equivalents include highly liquid investments with maturities of three months or less when purchased. Carrying values of Cash and cash equivalents approximate fair value due to the short-term nature of these instruments. We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the creditworthiness of those institutions, and we have not experienced any losses on such deposits. |
Restricted Cash | Restricted Cash— Restricted cash represents cash accounts maintained by a joint venture in which our joint venture partner requested, and we agreed, that the joint venture’s cash not be commingled with other corporate cash accounts and be used only to fund the operations of the joint venture. |
Accounts Receivable, Net of Allowances | Accounts Receivable, Net of Allowances— We report Accounts receivable, net of allowances from services rendered at their estimated transaction price, which takes into account price concessions based on the amounts expected to be due from payors including federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, workers’ compensation programs, employers, and patients. We estimate the value of Accounts receivable, net of allowances based upon historical experience and other factors, including an aging of accounts receivable, evaluation of expected adjustments, past adjustments, and collection experience in relation to amounts billed, current contract and reimbursement terms, shifts in payors and other relevant information. Collection of Net service revenue we expect to receive is normally a function of providing complete and correct billing information to the payors within the various filing deadlines. The evaluation of these factors involves complex, subjective judgments impacting the determination of the implicit price concession assumption. In addition, we compare our cash collections to recorded Net service revenue and evaluate our historical allowances, including implicit price concessions, based upon the ultimate resolution of the accounts receivable balance. Our Accounts receivable, net of allowances While revenues and accounts receivable from the Medicare program are significant to our operations, we do not believe there are significant credit risks associated with this government agency. We do not believe there are any other significant concentrations of revenues from any particular payor that would subject us to any significant credit risks in the collection of our accounts receivable. Accounts requiring collection efforts are reviewed via system-generated work queues that automatically stage (based on age and size of outstanding balance) accounts requiring collection efforts for patient account representatives. Collection efforts include contacting the applicable party (both in writing and by telephone), providing information (both financial and clinical) to allow for payment or to overturn payor decisions to deny payment, and arranging payment plans with self-pay patients, among other techniques. When we determine all in-house efforts have been exhausted or it is a more prudent use of resources, accounts may be turned over to a collection agency. The collection of outstanding receivables from Medicare and managed care payors is our primary source of cash and is critical to our operating performance. While it is our policy to verify insurance prior to a patient being admitted, there are various exceptions that can occur. Such exceptions include instances where we are unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid, and it takes several days, weeks, or months before qualification for such benefits is confirmed or denied. If actual results are not consistent with our assumptions and judgments, we may be exposed to adjustments to our Net service revenue and cash collections that could be material. Changes in general economic conditions, business office operations, payor mix, or trends in federal or state governmental and private employer healthcare coverage could affect our collection of accounts receivable, financial position, results of operations, and cash flows. Subsequent adjustments to accounts receivable determined to be the result of an adverse change in the payor’s ability to pay are recognized as provision for credit losses. The majority of what historically was classified as provision for credit losses under operating expenses is now treated as an implicit price concession factored into the determination of Net service revenue |
Property and Equipment | Property and Equipment— Maintenance and repairs of leasehold improvements and equipment are expensed as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We retain fully depreciated assets and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement, or disposal, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the Consolidated Statements of Income. |
Leases | Leases— We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. We do not account for lease and non‑lease components separately for purposes of establishing right-of-use assets and lease liabilities. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize lease expense for these leases on a straight-line basis over the lease term. |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net— We are required to test our goodwill for impairment at least annually, as of October 1 st , absent any triggering events that would accelerate an impairment assessment. The Company may perform interim impairment tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or an indefinite lived intangible asset below its carrying amount. Potential impairment of a reporting unit is identified by comparing the reporting unit’s estimated fair value to its carrying amount. We recognize an impairment charge for any amount by which the carrying amount of the asset exceeds its fair value. The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative assessment for its reporting units and perform a quantitative test as of the measurement date of the test. We assess qualitative factors in our home health and hospice reporting units to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative goodwill impairment test, we would estimate the fair value of our reporting units using generally accepted valuation techniques including the income approach and the market approach. Fair value under the income approach is determined by discounting to present value the estimated future cash flows of each reporting unit. Significant assumptions are incorporated into the discounted cash flow analysis, such as estimates of revenue growth rates, timing of de novo openings, forecasted operating margins, the weighted average cost of capital, and terminal growth rates. Fair value under the market approach utilizes the guideline public company methodology, which uses valuation indicators, including market multiples of earnings before interest, taxes, depreciation and amortization, from other businesses that are similar to each reporting unit and implied control premiums. Changes in general economic and market conditions impacting these assumptions could result in goodwill impairment charges in future periods. When we dispose of a home health or hospice agency, goodwill is allocated to the gain or loss on disposition using the relative fair value methodology. We amortize the cost of intangible assets with finite useful lives over their respective estimated useful lives to their estimated residual value. As of December 31, 2023, none of our finite useful lived intangible assets has an estimated residual value. We also review these assets for impairment whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. We capitalize the costs of obtaining or developing internal-use software, including external direct costs of material and services and directly related payroll costs. Amortization begins when the internal-use software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred. |
Impairment of Long-Lived Assets and Other Intangible Assets | Impairment of Long-Lived Assets and Other Intangible Assets— We assess the recoverability of long-lived assets (excluding goodwill) and identifiable acquired intangible assets with finite useful lives, whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset to the expected net future cash flows to be generated by that asset, or, for identifiable intangibles with finite useful lives, by determining whether the amortization of the intangible asset balance over its remaining life can be recovered through undiscounted future cash flows. The amount of impairment of identifiable intangible assets with finite useful lives, if any, to be recognized is measured based on projected discounted future cash flows. We measure the amount of impairment of other long-lived assets (excluding goodwill) as the amount by which the carrying value of the asset exceeds the fair market value of the asset, which is generally determined based on projected discounted future cash flows. We classify long-lived assets to be disposed of other than by sale as held and used until they are disposed. We report long-lived assets to be disposed of by sale as held for sale and recognize those assets in the balance sheet at the lower of carrying amount or fair value less cost to sell, and we cease depreciation. |
Investments in and Advances to Nonconsolidated Affiliates | Investments in and Advances to Nonconsolidated Affiliates— Investments in entities that we do not control but in which we have the ability to exercise significant influence over the operating and financial policies of the investees are accounted for under the equity method. Equity method investments are recorded at original cost and adjusted periodically to recognize our proportionate share of the investee’s net income or losses after the date of investment, additional contributions made, dividends or distributions received, and impairment losses resulting from adjustments to net realizable value. We record equity method losses in excess of the carrying amount of an investment when we guarantee obligations, or we are otherwise committed to provide further financial support to the affiliate. We use the measurement alternative to account for equity investments and measure this investment at cost less impairment plus or minus observable price changes in orderly transactions for the identical investment or a similar investment of the same issuer at each reporting period. |
Fair Value Measurements | Fair Value Measurements— Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. The basis for these assumptions establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: • Level 1 – Observable inputs such as quoted prices in active markets; • Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows: • Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; • Cost approach – Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and • Income approach – Techniques to convert future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing models, and lattice models). Our financial instruments consist mainly of cash and cash equivalents, restricted cash, accounts receivable, accounts payable interest rate swap agreement, and long-term debt. The carrying amounts of Cash and cash equivalents , Restricted cash , Accounts receivable, net of allowances , and Accounts payable approximate fair value because of the short-term maturity of these instruments. There are assets and liabilities that are not required to be reported at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. The fair value of our equipment is determined using discounted cash flows and significant unobservable inputs, unless there is an offer to purchase such assets, which could be the basis for determining fair value. The fair value of our Intangible assets, net , excluding goodwill, is determined using discounted cash flows and significant unobservable inputs. The fair value of our investments in nonconsolidated affiliates is determined using quoted prices in private markets, discounted cash flows or earnings, or market multiples derived from a set of comparables. The fair value of our Goodwill is determined using discounted projected operating results and cash flows, which involve significant unobservable inputs. |
Noncontrolling Interests in Consolidated Affiliates | Noncontrolling Interests in Consolidated Affiliates — The consolidated financial statements include all assets, liabilities, revenues, and expenses of less-than-100%-owned affiliates we control. Accordingly, we have recorded noncontrolling interests in the earnings and equity of such entities. We record adjustments to noncontrolling interests for the allocable portion of income or loss to which the noncontrolling interest holders are entitled based upon their portion of the subsidiaries they own. Distributions to holders of noncontrolling interests are adjusted to the respective noncontrolling interest holders’ balance. |
Redeemable Noncontrolling Interests in Consolidated Affiliates | Redeemable Noncontrolling Interests in Consolidated Affiliates — Certain of our joint venture agreements contain provisions that allow our partners to require us to purchase their interests in the joint venture at fair value at certain points in the future. Because these noncontrolling interests provide for redemption features that are not solely within our control, we classify them as Redeemable noncontrolling interests outside of permanent equity in our Consolidated Balance Sheets and presents the redeemable noncontrolling interests at the greater of the carrying amount or redemption value at the end of each reporting period. |
Stock-Based Payments | Stock-Based Payments— Prior to July 1, 2022, our employees participated in the Encompass equity-based incentive plans (the “Encompass Plans”). Beginning July 1, 2022, our employees participate in the Enhabit, Inc. 2022 Omnibus Performance Incentive Plan (the “Enhabit Plan”). Enhabit has stockholder-approved stock-based compensation plans that provide for the granting of stock-based compensation to certain Company employees. All stock-based payments to employees, are recognized in the financial statements based on their estimated grant-date fair value and amortized on a straight-line basis over the applicable requisite service period. Stock-based compensation is included within General and administrative expenses on the Consolidated Statements of Income. |
Advertising Costs | Advertising Costs— We expense costs of print, radio, television, and other advertisements as incurred. Advertising expenses, primarily included in General and administrative expenses within the accompanying Consolidated Statements of Income, were immaterial in each of the years ended December 31, 2023, 2022, and 2021, respectively. |
Income Taxes | Income Taxes— We provide for income taxes using the asset and liability method. This approach recognizes the amount of income taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for differences in the book and tax carrying amounts of our assets and liabilities. Prior to the Distribution and Separation, we utilized the separate return approach for the purpose of the Company financial statements, including the income tax provisions and the related deferred tax assets and liabilities. The historic operations of the business reflect a separate return approach for each jurisdiction in which the Company had a presence and Encompass filed a tax return, with adjustments as discussed in Note 11, Income Taxes . Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates. A valuation allowance is required when it is more likely than not some portion of the deferred tax assets will not be realized. Realization is dependent on generating sufficient future taxable income in the applicable tax jurisdiction. On a quarterly basis, we assess the likelihood of realization of our deferred tax assets considering all available evidence, both positive and negative. We evaluate our tax positions and establish assets and liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes on a quarterly basis. |
Derivative Instrument | Derivative Instrument— We are exposed to certain risks arising from both our business operations and economic conditions. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of an interest rate swap agreement. Our interest rate swap agreement is a derivative financial instrument and is used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings. Our objectives in using an interest rate derivative are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use an interest rate swap as part of our interest rate risk management strategy. An interest rate swap designated as a cash flow hedge involves the receipt of variable amounts from a counter party in exchange for us making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. In accordance with Accounting Standards Codification (“ASC”) 815, “Derivatives and Hedging,” we record the derivative in the Consolidated Balance Sheets as either an asset or a liability measured at fair value. The change in the fair value of the derivative designated and that qualify as a cash flow hedge is recorded on our Consolidated Balance Sheet in Accumulated other comprehensive loss net of tax and is subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings. For the year ended December 31, 2023 such a derivative was used to hedge certain variable cash flows associated with existing variable-rate debt. |
(Loss) Earnings per Common Share | (Loss) Earnings per Common Share— The following table sets forth the computation of diluted weighted average common shares outstanding for the years ended December 31, 2023 and 2022 (in millions). A total of 0.3 million and 0.2 million options to purchase Enhabit’s shares and 1.7 million and 0.6 million restricted stock awards and restricted stock units were excluded from the diluted weighted average common shares outstanding for the years ended December 31, 2023 and December 31, 2022 because their effects were anti-dilutive. There were no diluted or anti-dilutive shares for the years ended and 2021. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements— In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting ( Topic 280 ): Improvements to Reportable Segments Disclosures.” This standard provides guidance to improve the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The standard is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a retrospective basis. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes ( Topic 740 ): Improvements to Income Tax Disclosures.” This standard requires disaggregated income tax disclosures on the effective tax rate reconciliation and income taxes paid. This standard is effective for annual periods beginning after December 31, 2024. Early adoption is permitted, and the disclosures in this standard are required to be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Net Service Revenue by Payor Source and Segment | Our Net service revenue by payor source and segment is as follows (in millions): Home Health Hospice Consolidated Year Ended December 31, Year Ended December 31, Year Ended December 31, 2023 2022 2021 2023 2022 2021 2023 2022 2021 Medicare $ 557.4 $ 647.7 $ 701.8 $ 190.5 $ 191.7 $ 204.8 $ 747.9 $ 839.4 $ 906.6 Medicare Advantage 199.2 152.1 117.4 — — — 199.2 152.1 117.4 Managed care 80.9 63.7 62.1 5.0 1.4 3.2 85.9 65.1 65.3 Medicaid 11.8 12.0 14.2 0.7 0.9 1.3 12.5 12.9 15.5 Other 0.8 1.6 1.8 — — — 0.8 1.6 1.8 Total $ 850.1 $ 877.1 $ 897.3 $ 196.2 $ 194.0 $ 209.3 $ 1,046.3 $ 1,071.1 $ 1,106.6 |
Schedule of Concentration of Risk, by Risk Factor | The concentration of patient service accounts receivable by payor class, as a percentage of total patient service Accounts receivable, net of allowances , is as follows: As of December 31, 2023 2022 Medicare 66.9 % 74.2 % Managed care and other discount plans, including Medicare Advantage 27.1 % 21.0 % Medicaid 5.2 % 3.9 % Other 0.8 % 0.9 % Total 100.0 % 100.0 % |
Schedule of Property and Equipment | Useful lives are generally as follows: Years Leasehold improvements 2 to 5 Vehicles 3 Furniture, fixtures, and equipment 2 to 5 Property and equipment consists of the following (in millions): As of December 31, 2023 2022 Leasehold improvements $ 3.1 $ 3.0 Vehicles 29.9 31.3 Furniture, fixtures, and equipment 41.4 38.5 74.4 72.8 Less: Accumulated depreciation and amortization (55.4) (52.4) Property and equipment, net $ 19.0 $ 20.4 The amount of depreciation expense is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Depreciation expense $ 4.3 $ 4.6 $ 5.8 |
Schedule of Finite-Lived Intangible Assets | The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 5 years using straight-line basis Trade names 1 to 5 years using straight-line basis Internal-use software 3 years using straight-line basis The following table provides information regarding our other Intangible assets, net (in millions): Gross Carrying Amount Accumulated Amortization Net Certificates of need: 2023 $ 89.2 $ (50.0) $ 39.2 2022 $ 89.2 $ (41.4) $ 47.8 Licenses: 2023 $ 131.2 $ (93.9) $ 37.3 2022 $ 131.1 $ (80.8) $ 50.3 Noncompete agreements: 2023 $ 15.1 $ (12.6) $ 2.5 2022 $ 14.9 $ (11.6) $ 3.3 Trade names: 2023 $ 7.6 $ (7.6) $ — 2022 $ 7.5 $ (7.5) $ — Internal-use software: 2023 $ 25.9 $ (24.9) $ 1.0 2022 $ 25.4 $ (24.2) $ 1.2 Total intangible assets: 2023 $ 269.0 $ (189.0) $ 80.0 2022 $ 268.1 $ (165.5) $ 102.6 |
Schedule Of Net Income Attributable To Redeemable Noncontrolling Interest And Nonredeemable Noncontrolling Interests | The following tables reconcile the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the Consolidated Balance Sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the Consolidated Balance Sheets, to the Net income attributable to noncontrolling interests presented in the Consolidated Statements of Income, and to the Comprehensive income attributable to noncontrolling interests presented in the Consolidated Statements of Comprehensive Income (in millions): Year Ended December 31, 2023 2022 2021 Balance at beginning of period $ 5.2 $ 5.0 $ — Net income (loss) attributable to noncontrolling interests — 0.2 (0.1) Distribution to noncontrolling interests (0.2) — — Other (1) — — 5.1 Balance at end of period $ 5.0 $ 5.2 $ 5.0 (1) For additional information, see Note 2, Business Combinations . Year Ended December 31, 2023 2022 2021 Net income attributable to nonredeemable noncontrolling interests $ 1.5 $ 1.9 $ 1.8 Net income (loss) attributable to redeemable noncontrolling interests — 0.2 (0.1) Net income attributable to noncontrolling interests $ 1.5 $ 2.1 $ 1.7 |
Schedule of Weighted Average Number of Shares | The following table sets forth the computation of diluted weighted average common shares outstanding for the years ended December 31, 2023 and 2022 (in millions). A total of 0.3 million and 0.2 million options to purchase Enhabit’s shares and 1.7 million and 0.6 million restricted stock awards and restricted stock units were excluded from the diluted weighted average common shares outstanding for the years ended December 31, 2023 and December 31, 2022 because their effects were anti-dilutive. There were no diluted or anti-dilutive shares for the years ended and 2021. Year Ended December 31, 2023 2022 2021 Weighted average common shares outstanding: Basic 49.9 49.7 49.6 Dilutive effect of options and restricted stock units — — — Diluted common shares outstanding 49.9 49.7 49.6 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.7 Accounts receivable, net of allowances 1.6 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.2 Trade name (useful life of 6 months) 0.1 Licenses (useful lives of 10 years) 0.9 Internal-use software (useful life of 3 years) 0.1 Goodwill 28.7 Total assets acquired 32.6 Liabilities assumed: Current operating lease liabilities 0.1 Accounts payable 0.1 Accrued payroll 0.2 Other current liabilities 0.2 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.8 Noncontrolling interests 15.9 Net assets acquired $ 15.9 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) $ 0.6 Licenses (useful lives of 10 years) 0.6 Goodwill 14.3 Total assets acquired 15.5 Liabilities assumed: Other current liabilities 1.6 Total liabilities assumed 1.6 Net assets acquired $ 13.9 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) $ 0.1 Licenses (useful lives of 10 years) 0.1 Goodwill 2.2 Total assets acquired 2.4 Liabilities assumed: Other current liabilities 0.3 Total liabilities assumed 0.3 Net assets acquired $ 2.1 Prepaid expenses and other current assets $ 0.1 Operating lease right-of-use-assets 0.3 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 0.8 Licenses (useful lives of 10 years) 0.6 Goodwill 19.6 Total assets acquired 21.4 Liabilities assumed: Current operating lease liabilities 0.1 Accrued payroll 0.1 Long-term operating lease liabilities 0.2 Total liabilities assumed 0.4 Net assets acquired $ 21.0 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.8 Accounts receivable, net of allowances 0.9 Prepaid expenses and other current assets 0.2 Property and equipment 0.1 Operating lease right-of-use-assets 0.9 Identifiable intangible assets: Noncompete agreement (useful life of 5 years) 1.7 Trade name (useful life of 3 months) 0.2 Certificates of need (useful lives of 10 years) 3.1 Licenses (useful lives of 10 years) 4.8 Goodwill 92.4 Total assets acquired 105.1 Liabilities assumed: Current operating lease liabilities 0.3 Accounts payable 0.2 Accrued payroll 0.8 Long-term operating lease liabilities 0.7 Total liabilities assumed 2.0 Redeemable and nonredeemable noncontrolling interests 3.9 Net assets acquired $ 99.2 The fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in millions): Cash and cash equivalents $ 0.8 Accounts receivable, net of allowances 2.0 Identifiable intangible assets: Noncompete agreement (useful life of 2 years) 0.1 Licenses (useful lives of 10 years) 1.7 Goodwill 8.0 Total assets acquired 12.6 Liabilities assumed: Accounts payable 0.2 Accrued payroll 0.3 Other current liabilities 0.4 Other long-term liabilities 0.1 Total liabilities assumed 1.0 Redeemable noncontrolling interests 2.3 Net assets acquired $ 9.3 |
Schedule of Information Regarding Net Cash Paid for Acquisitions | Information regarding the cash paid for this acquisition during 2022 is as follows (in millions): Fair value of assets acquired $ 3.9 Goodwill 28.7 Less: Fair value of liabilities assumed 0.8 Fair value of noncontrolling interest owned by joint venture partner 15.9 Net cash paid for acquisition (1) $ 15.9 (1) As discussed above, the $15.9 million was funded on December 31, 2021, and is, therefore, included in the Consolidated Statement of Cash Flows for the year ended December 31, 2021. Information regarding the cash paid for the acquisitions during 2022 is as follows (in millions): Fair value of assets acquired $ 1.2 Goodwill 14.3 Less: Fair value of liabilities assumed 1.6 Net cash paid for acquisitions $ 13.9 Information regarding the cash paid for this acquisition during 2022 is as follows (in millions): Fair value of assets acquired $ 0.2 Goodwill 2.2 Less: Fair value of liabilities assumed 0.3 Net cash paid for acquisitions $ 2.1 Information regarding the cash paid for this acquisition during 2022 is as follows (in millions): Fair value of assets acquired $ 1.8 Goodwill 19.6 Less: Fair value of liabilities assumed 0.4 Net cash paid for acquisitions $ 21.0 Information regarding the net cash paid for this acquisition is as follows (in millions): Fair value of assets acquired, net of $0.8 million of cash acquired $ 11.9 Goodwill 92.4 Less: Fair value of liabilities assumed 2.0 Fair value of redeemable and nonredeemable noncontrolling interest owned by joint venture partner 3.9 Net cash paid for acquisition $ 98.4 Information regarding the net cash paid for this acquisition is as follows (in millions): Fair value of assets acquired, net of $0.8 million of cash acquired $ 3.8 Goodwill 8.0 Less: Fair value of liabilities assumed 1.0 Fair value of redeemable noncontrolling interest owned by joint venture partner 2.3 Fair value of equity interest prior to acquisition 5.3 Net cash paid for acquisition $ 3.2 |
Schedule of Pro Forma Information | The following table summarizes the results of operations of the above-mentioned acquisitions from their respective dates of acquisition included in our Consolidated Statements of Income and the unaudited pro forma results of operations of the combined entities had the date of the acquisitions been January 1, 2021 (in millions): Net Service Net Income (Loss) Attributable to Enhabit Acquired entities only: Actual from acquisition date to December 31, 2022 $ 12.1 $ 1.1 Combined entity: Supplemental pro forma from 01/01/2022-12/31/2022 (unaudited) $ 1,093.0 $ (37.2) Combined entity: Supplemental pro forma from 01/01/2021-12/31/2021 (unaudited) $ 1,136.5 $ 114.1 The following table summarizes the results of operations of the above-mentioned acquisitions from their respective dates of acquisition included in our consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisitions been January 1, 2021 (in millions): Net Service Net Income (Loss) Attributable to Acquired entities only: Actual from acquisition date to December 31, 2021 Frontier $ 19.7 $ 0.7 All other home health and hospice $ 0.9 $ (0.1) Combined entity: Supplemental pro forma from 01/01/2021-12/31/2021 (unaudited) $ 1,131.0 $ 111.6 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our Consolidated Balance Sheet, are as follows (in millions): As of December 31, 2023 2022 Assets Current Assets Restricted cash $ 1.8 $ 4.0 Accounts receivable, net of allowances 2.3 2.9 Other current assets 0.5 — Total current assets 4.6 6.9 Operating lease right-of-use assets 0.1 0.2 Goodwill 12.4 12.4 Intangible assets, net 0.9 1.1 Total assets $ 18.0 $ 20.6 As of December 31, 2023 2022 Liabilities Current Liabilities: Current operating lease liabilities $ 0.1 $ 0.1 Accrued payroll 0.2 0.2 Other current liabilities 0.2 0.1 Total current liabilities 0.5 0.4 Other long-term liabilities 0.1 0.1 Total liabilities $ 0.6 $ 0.5 |
Accounts Receivable, Net of A_2
Accounts Receivable, Net of Allowances (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable, net of allowances consists of the following (in millions): As of December 31, 2023 2022 Accounts receivable $ 165.8 $ 150.7 Less: allowance for credit losses 1.1 1.1 Accounts receivable, net of allowances $ 164.7 $ 149.6 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Useful lives are generally as follows: Years Leasehold improvements 2 to 5 Vehicles 3 Furniture, fixtures, and equipment 2 to 5 Property and equipment consists of the following (in millions): As of December 31, 2023 2022 Leasehold improvements $ 3.1 $ 3.0 Vehicles 29.9 31.3 Furniture, fixtures, and equipment 41.4 38.5 74.4 72.8 Less: Accumulated depreciation and amortization (55.4) (52.4) Property and equipment, net $ 19.0 $ 20.4 The amount of depreciation expense is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Depreciation expense $ 4.3 $ 4.6 $ 5.8 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Lease Costs | The components of lease costs are as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Operating lease cost: General and administrative expenses $ 20.5 $ 20.1 $ 19.2 Finance lease cost: Amortization of right-of-use assets 3.1 3.8 6.0 Interest on lease liabilities 0.2 0.2 0.2 Total finance lease cost 3.3 4.0 6.2 Total lease cost $ 23.8 $ 24.1 $ 25.4 Supplemental cash flow information related to our leases is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 16.0 $ 17.1 $ 16.5 Operating cash flows from finance leases $ 0.2 $ 0.2 $ 0.2 Financing cash flows from finance leases $ 3.4 $ 5.0 $ 7.2 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 31.6 $ 10.7 $ 24.2 Finance leases $ 3.8 $ 3.5 $ 4.1 |
Schedule of Supplemental Consolidated Balance Sheet Information | Supplemental Consolidated Balance Sheet information related to leases is as follows (in millions): As of December 31, Classification 2023 2022 Assets Operating lease Operating lease right-of-use assets $ 57.5 $ 42.0 Finance lease (1) Property and equipment, net 9.9 10.1 Total leased assets $ 67.4 $ 52.1 Liabilities Current Liabilities: Operating lease Current portion of operating lease liabilities $ 11.8 $ 14.0 Finance lease Current portion of long-term debt 2.5 3.1 Noncurrent liabilities Operating lease Long-term operating lease liabilities, net of current portion 45.7 28.1 Finance lease Long-term debt, net of current portion 3.1 2.1 Total leased liabilities $ 63.1 $ 47.3 (1) Finance lease assets are recorded net of accumulated amortization of $20.0 million and $21.3 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 2022 Weighted Average Remaining Lease Term Operating lease 5.8 years 3.5 years Finance lease 2.7 years 1.8 years Weighted Average Discount Rate Operating lease 6.7 % 4.7 % Finance lease 4.7 % 2.9 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of December 31, 2023 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2024 $ 15.0 $ 2.7 2025 13.9 1.6 2026 11.1 1.0 2027 8.1 0.7 2028 5.3 — 2029 and thereafter 17.8 — Total lease payments 71.2 6.0 Less: Interest portion (13.7) (0.5) Total lease liabilities. $ 57.5 $ 5.5 |
Schedule of Maturities of Finance Lease Liabilities | Maturities of lease liabilities as of December 31, 2023 are as follows (in millions): Year Ending December 31, Operating Leases Finance Leases 2024 $ 15.0 $ 2.7 2025 13.9 1.6 2026 11.1 1.0 2027 8.1 0.7 2028 5.3 — 2029 and thereafter 17.8 — Total lease payments 71.2 6.0 Less: Interest portion (13.7) (0.5) Total lease liabilities. $ 57.5 $ 5.5 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in the Carrying Amount of Goodwill | The following table shows changes in the carrying amount of Goodwill for the years ended December 31, 2023 and 2022 (in millions): Home Health Hospice Consolidated Goodwill as of December 31, 2021 $ 911.7 $ 277.3 $ 1,189.0 Acquisitions 38.5 26.3 64.8 Impairment (109.0) — (109.0) Goodwill as of December 31, 2022 $ 841.2 $ 303.6 $ 1,144.8 Acquisitions 2.7 — 2.7 Impairment — (85.8) (85.8) Goodwill as of December 31, 2023 $ 843.9 $ 217.8 $ 1,061.7 |
Schedule of Information Regarding Other Intangible Assets | The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows: Estimated Useful Life and Amortization Basis Certificates of need 10 years using straight-line basis Licenses 10 to 20 years using straight-line basis Noncompete agreements 5 years using straight-line basis Trade names 1 to 5 years using straight-line basis Internal-use software 3 years using straight-line basis The following table provides information regarding our other Intangible assets, net (in millions): Gross Carrying Amount Accumulated Amortization Net Certificates of need: 2023 $ 89.2 $ (50.0) $ 39.2 2022 $ 89.2 $ (41.4) $ 47.8 Licenses: 2023 $ 131.2 $ (93.9) $ 37.3 2022 $ 131.1 $ (80.8) $ 50.3 Noncompete agreements: 2023 $ 15.1 $ (12.6) $ 2.5 2022 $ 14.9 $ (11.6) $ 3.3 Trade names: 2023 $ 7.6 $ (7.6) $ — 2022 $ 7.5 $ (7.5) $ — Internal-use software: 2023 $ 25.9 $ (24.9) $ 1.0 2022 $ 25.4 $ (24.2) $ 1.2 Total intangible assets: 2023 $ 269.0 $ (189.0) $ 80.0 2022 $ 268.1 $ (165.5) $ 102.6 |
Schedule of Amortization Expense | Amortization expense for other intangible assets is as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Amortization expense $23.5 $24.5 $25.1 |
Schedule of Estimated Amortization Expense for Other Intangible Assets for the Next Five Years | Total estimated amortization expense for our other intangible assets for the next five years is as follows (in millions): Year Ending December 31, Estimated Amortization Expense 2024 $ 23.0 2025 $ 15.7 2026 $ 12.4 2027 $ 11.3 2028 $ 8.0 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Outstanding | Our long-term debt outstanding consists of the following (in millions): As of December 31, 2023 2022 Credit Agreement— Advances under revolving credit facility $ 180.0 $ 190.0 Term loan facilities 367.1 387.9 Finance lease obligations 5.5 5.2 552.6 583.1 Less: Current portion (22.5) (23.1) Long-term debt, net of current portion $ 530.1 $ 560.0 |
Schedule of Principal Payments Due on Long-term Debt | The following chart shows scheduled principal payments due on long-term debt for the next five years (in millions): Year Ending December 31, Amount 2024 $ 22.5 2025 21.4 2026 21.0 2027 490.6 2028 and thereafter — Gross maturities 555.5 Less unamortized debt issuance costs (2.9) Total $ 552.6 |
Schedule of Carrying Values and Estimated Fair Values of Long-term Debt | The carrying amounts and estimated fair values for our long-term debt are presented in the following table (in millions): As of December 31, 2023 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 180.0 $ 180.0 $ 190.0 $ 190.0 Term loan A facility $ 367.1 $ 354.4 $ 387.9 $ 356.6 Finance lease obligations $ 5.5 $ 5.5 $ 5.2 $ 5.2 |
Stock-Based Payments (Tables)
Stock-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The grant date fair values of stock options granted were estimated at the grant date using the Black-Scholes option‑pricing model with the following weighted average assumptions: For the Year Ended December 31, 2023 2022 2021 Expected volatility 53.0 % 28.3 % 28.4 % Risk-free interest rate 4.1 % 1.7 % 1.1 % Expected life (years) 6.0 7.8 7.1 Dividend yield — % 1.9 % 1.9 % |
Schedule of Stock Option Activity | A summary of our stock option activity for employees specifically identifiable to the Company and related information is as follows: Shares Weighted Average Exercise Price per Share Weighted Aggregate Intrinsic Value Outstanding, December 31, 2022 222.2 $27.07 Granted 64.1 $15.30 Expirations — $— Outstanding, December 31, 2023 286.3 $24.44 6.8 $— Exercisable, December 31, 2023 172.2 $26.66 5.6 $— |
Schedule of Nonvested Restricted Stock Shares Activity | A summary of our issued RSAs for employees specifically identifiable to the Company is as follows (share information in thousands): Shares (In Thousands) Weighted Nonvested shares at December 31, 2022 454.2 $ 25.54 Granted — — Vested (147.8) 28.14 Forfeited (28.8) 25.85 Nonvested shares at December 31, 2023 277.6 $ 24.12 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of our issued RSUs for employees specifically identifiable to the Company is as follows (share information in thousands): Service Based Performance Based Shares (In Thousands) Weighted Shares (In Thousands) Weighted Nonvested shares at December 31, 2022 362.0 $ 30.34 — $ — Granted 719.0 12.84 452.1 17.24 Vested (222.9) 18.18 — — Forfeited (107.4) 23.94 (63.8) 17.24 Nonvested shares at December 31, 2023 750.7 $ 18.11 388.3 $ 17.24 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The significant components of Income tax (benefit) expense are as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Current: Federal $ 0.2 $ 14.3 $ 22.2 State and other — 2.8 4.3 Total current expense 0.2 17.1 26.5 Deferred: Federal (9.3) (3.9) 7.9 State and other (2.3) (0.4) 0.7 Total deferred (benefit) expense (11.6) (4.3) 8.6 Total income tax (benefit) expense related to continuing operations $ (11.4) $ 12.8 $ 35.1 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of differences between the federal statutory tax rate and our effective tax rate is presented below: For the Year Ended December 31, 2023 2022 2021 Federal statutory tax rate 21.0% 21.0% 21.0% Increase (decrease) in tax rate resulting from: State and other income taxes, net of federal tax benefit 3.1% 1.8% 3.3% Impairment of goodwill (10.6)% (49.1)% —% Distribution deferred tax adjustment —% (23.7)% —% Other, net (0.9)% (0.2)% (0.6)% Effective tax rate 12.6% (50.2)% 23.7% |
Schedule of Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities are presented in the following table (in millions): As of December 31, 2023 2022 Deferred income tax assets: Operating lease liabilities $ 13.2 $ 9.6 Accrued expenses and allowances 3.0 4.7 Stock-based compensation 3.2 2.7 Interest expense 13.1 2.8 Other deferred income tax assets 0.3 0.8 Total deferred income tax assets 32.8 20.6 Deferred income tax liabilities: Intangible assets (32.0) (35.7) Operating lease right-of-use assets (13.3) (9.6) Property, net (3.7) (3.9) Other deferred income tax liabilities (0.9) — Total deferred income tax liabilities (49.9) (49.2) Net deferred income tax liabilities $ (17.1) $ (28.6) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The activities of the cash flow hedge included in Accumulated other comprehensive loss for the years ended December 31, 2023 are presented in the following table (in millions): Cash Flow Hedge Balance as of December 31, 2022 $ (0.7) Unrealized gain recognized in other comprehensive income, net of tax 1.3 Reclassified to interest expense, net of tax (1.1) Balance as of December 31, 2023 $ (0.5) |
Schedule of Derivative Assets at Fair Value | The fair value of derivative assets and liabilities within the Consolidated Balance Sheets are presented in the following table (in millions): As of December 31, 2023 2022 Current Assets $ 0.7 $ 1.0 Long-term liabilities (1.3) (2.0) Total $ (0.6) $ (1.0) |
Schedule of Derivative Liabilities at Fair Value | The fair value of derivative assets and liabilities within the Consolidated Balance Sheets are presented in the following table (in millions): As of December 31, 2023 2022 Current Assets $ 0.7 $ 1.0 Long-term liabilities (1.3) (2.0) Total $ (0.6) $ (1.0) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information | Selected financial information for our reportable segments is as follows (in millions): Home Health Hospice For the Year Ended December 31, For the Year Ended December 31, 2023 2022 2021 2023 2022 2021 Net service revenue $ 850.1 $ 877.1 $ 897.3 $ 196.2 $ 194.0 $ 209.3 Cost of service, excluding depreciation and amortization 439.0 435.5 423.5 96.6 90.1 90.4 General and administrative expenses 240.6 238.5 244.2 63.4 65.2 62.6 Other income (0.2) (0.9) (1.6) — — — Equity in net income of nonconsolidated affiliates — — (0.6) — — — Noncontrolling interests 1.4 1.8 1.7 0.1 0.3 0.1 Segment Adjusted EBITDA $ 169.3 $ 202.2 $ 230.1 $ 36.1 $ 38.4 $ 56.2 |
Schedule of Segment Reconciliation | Segment reconciliations (in millions): For the Year Ended December 31, 2023 2022 2021 Total Segment Adjusted EBITDA $ 205.4 $ 240.6 $ 286.3 Non-segment general and administrative expenses (128.7) (102.0) (102.5) Impairment of goodwill (85.8) (109.0) — Interest expense (43.0) (15.0) (0.3) Depreciation and amortization (30.9) (33.0) (36.9) Stock-based compensation expense (8.9) (9.2) (3.6) Net income attributable to noncontrolling interests 1.5 2.1 1.8 Other income — — 3.2 (Loss) income before income taxes and noncontrolling interests $ (90.4) $ (25.5) $ 148.0 |
Schedule of Additional Detail Regarding Revenues by Service Line | Additional detail regarding the revenues of our operating segments by service line follows (in millions): For the Year Ended December 31, 2023 2022 2021 Home health: Episodic $ 661.2 $ 738.0 $ 781.5 Non-episodic 179.2 128.0 102.0 Private duty (1) 9.7 11.1 13.8 Total home health 850.1 877.1 897.3 Hospice 196.2 194.0 209.3 Total net service revenue $ 1,046.3 $ 1,071.1 $ 1,106.6 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Allocation of Services from Encompass to the Company | The allocations of services from Encompass to the Company and stock-based compensation are reflected in General and administrative expenses in the Consolidated Statements of Operations as follows (in millions): For the Year Ended December 31, 2023 2022 2021 Overhead allocation $ — $ 7.7 $ 16.7 Stock-based compensation $ — $ 2.5 $ 3.6 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 01, 2022 $ / shares | Dec. 31, 2023 USD ($) state segment $ / shares | Dec. 31, 2022 USD ($) $ / shares | |
Class of Stock [Line Items] | |||
Number of states in which entity operates | state | 34 | ||
Number of reportable segments | segment | 2 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Stock conversion ratio | 0.5 | ||
Finite lived intangible asset | $ 80 | $ 102.6 | |
Deferred tax liabilities | 32 | 35.7 | |
Allowance for credit losses balance | $ 1.1 | 1.1 | |
Encompass | |||
Class of Stock [Line Items] | |||
Deferred tax liabilities | 31 | ||
Trade names | Encompass | |||
Class of Stock [Line Items] | |||
Finite lived intangible asset | $ 135.2 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Net Service Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Net service revenue | $ 1,046.3 | $ 1,071.1 | $ 1,106.6 |
Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 747.9 | 839.4 | 906.6 |
Medicare Advantage | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 199.2 | 152.1 | 117.4 |
Managed care | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 85.9 | 65.1 | 65.3 |
Medicaid | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 12.5 | 12.9 | 15.5 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 0.8 | 1.6 | 1.8 |
Home Health | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 850.1 | 877.1 | 897.3 |
Home Health | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 557.4 | 647.7 | 701.8 |
Home Health | Medicare Advantage | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 199.2 | 152.1 | 117.4 |
Home Health | Managed care | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 80.9 | 63.7 | 62.1 |
Home Health | Medicaid | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 11.8 | 12 | 14.2 |
Home Health | Other | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 0.8 | 1.6 | 1.8 |
Hospice | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 196.2 | 194 | 209.3 |
Hospice | Medicare | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 190.5 | 191.7 | 204.8 |
Hospice | Medicare Advantage | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 0 | 0 | 0 |
Hospice | Managed care | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 5 | 1.4 | 3.2 |
Hospice | Medicaid | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | 0.7 | 0.9 | 1.3 |
Hospice | Other | |||
Disaggregation of Revenue [Line Items] | |||
Net service revenue | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Concentration of Risk, by Risk Factor (Details) - Accounts Receivable - Credit Concentration Risk | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | ||
Concentration of patient service, accounts receivable | 100% | 100% |
Medicare | ||
Concentration Risk [Line Items] | ||
Concentration of patient service, accounts receivable | 66.90% | 74.20% |
Managed care and other discount plans, including Medicare Advantage | ||
Concentration Risk [Line Items] | ||
Concentration of patient service, accounts receivable | 27.10% | 21% |
Medicaid | ||
Concentration Risk [Line Items] | ||
Concentration of patient service, accounts receivable | 5.20% | 3.90% |
Other | ||
Concentration Risk [Line Items] | ||
Concentration of patient service, accounts receivable | 0.80% | 0.90% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Property and Equipment (Details) | Dec. 31, 2023 |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Furniture, fixtures, and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Furniture, fixtures, and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Finite-Lived Intangible Assets (Details) | Dec. 31, 2023 |
Certificates of need | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 10 years |
Noncompete agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 5 years |
Internal-use software | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 3 years |
Minimum | Licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 10 years |
Minimum | Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 1 year |
Maximum | Licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 20 years |
Maximum | Trade names | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, useful life | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule Of Net Income Attributable To Redeemable Noncontrolling Interest And Nonredeemable Noncontrolling Interests (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Balance at beginning of period | $ 5.2 | $ 5 | $ 0 |
Net income (loss) attributable to noncontrolling interests | 0 | 0.2 | (0.1) |
Distribution to noncontrolling interests | (0.2) | 0 | 0 |
Other | 0 | 0 | 5.1 |
Balance at end of period | 5 | 5.2 | 5 |
Net income attributable to nonredeemable noncontrolling interests | 1.5 | 1.9 | 1.8 |
Net income (loss) attributable to redeemable noncontrolling interests | 0 | 0.2 | (0.1) |
Net income attributable to noncontrolling interests | $ 1.5 | $ 2.1 | $ 1.7 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Diluted or anti-dilutive shares (in shares) | 0 | ||
Basic (in shares) | 49,900,000 | 49,700,000 | 49,600,000 |
Dilutive effect of options and restricted stock units (in shares) | 0 | 0 | 0 |
Diluted common shares outstanding (in shares) | 49,900,000 | 49,700,000 | 49,600,000 |
Options To Purchase Enhabit Shares | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Diluted or anti-dilutive shares (in shares) | 300,000 | 200,000 | |
Restricted Stock Units (RSUs) | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Diluted or anti-dilutive shares (in shares) | 1,700,000 | 600,000 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Millions | 12 Months Ended | |||||||||
Dec. 01, 2022 USD ($) | Nov. 01, 2022 USD ($) acquisition | Oct. 01, 2022 USD ($) acquisition | Dec. 31, 2021 USD ($) | Jun. 01, 2021 USD ($) acquisition | Dec. 31, 2023 USD ($) acquisition | Dec. 31, 2022 USD ($) acquisition | Dec. 31, 2021 USD ($) acquisition | Jan. 01, 2022 | Nov. 30, 2021 | |
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions | acquisition | 1 | 4 | 2 | |||||||
Goodwill expected to be tax deductible | $ 50.5 | |||||||||
Non material acquisitions | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions | acquisition | 1 | |||||||||
Payment to acquire business | $ 3.1 | |||||||||
Joint Venture with Saint Alphonsus System | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payment to acquire business | $ 15.9 | $ 15.9 | ||||||||
Equity interest acquired | 50% | |||||||||
Caring Hearts | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase price | $ 13.9 | |||||||||
Caring Hearts | TEXAS | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions | acquisition | 4 | |||||||||
Hospice | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase price | $ 2.1 | |||||||||
Hospice | ARIZONA | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions | acquisition | 1 | |||||||||
Southwest Florida Home Care, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total purchase price | $ 21 | |||||||||
Heart Of The Rockies Home Health Joint Venture | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest acquired | 50% | |||||||||
Hospice Of Southwest Montana Joint Venture | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest acquired | 90% | |||||||||
Frontier Home Health | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest acquired | 40% | |||||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 4 | |||||||||
Frontier Home Health | Home Health | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions | acquisition | 9 | |||||||||
Frontier Home Health | Hospice | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of acquisitions | acquisition | 11 | |||||||||
Baptist Outpatient Services, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest acquired | 29% | 29% | ||||||||
Encompass Health Home Health of South Florida, LLC joint venture | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity interest acquired | 80% | 80% | 51% | |||||||
Goodwill expected to be tax deductible | $ 96.3 | $ 96.3 | ||||||||
Increase in goodwill as a result of remeasurement | 8 | |||||||||
Gain as a result of remeasurement | $ 3.2 |
Business Combinations - Schedul
Business Combinations - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 01, 2022 | Nov. 01, 2022 | Oct. 01, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Jun. 01, 2021 |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 1,061.7 | $ 1,144.8 | $ 1,189 | |||||
Noncompete agreements | ||||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 5 years | |||||||
Internal-use software | ||||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 3 years | |||||||
Joint Venture with Saint Alphonsus System | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash and cash equivalents | $ 0.7 | |||||||
Accounts receivable, net of allowances | 1.6 | |||||||
Operating lease right-of-use-assets | 0.3 | |||||||
Goodwill | 28.7 | |||||||
Total assets acquired | 32.6 | |||||||
Liabilities assumed: | ||||||||
Current operating lease liabilities | 0.1 | |||||||
Accounts payable | 0.1 | |||||||
Accrued payroll | 0.2 | |||||||
Other current liabilities | 0.2 | |||||||
Long-term operating lease liabilities | 0.2 | |||||||
Total liabilities assumed | 0.8 | |||||||
Noncontrolling interests | 15.9 | |||||||
Net assets acquired | 15.9 | |||||||
Joint Venture with Saint Alphonsus System | Noncompete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.2 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 5 years | |||||||
Joint Venture with Saint Alphonsus System | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.1 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 6 months | |||||||
Joint Venture with Saint Alphonsus System | Licenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.9 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years | |||||||
Joint Venture with Saint Alphonsus System | Internal-use software | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.1 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 3 years | |||||||
Caring Hearts | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 14.3 | |||||||
Total assets acquired | 15.5 | |||||||
Liabilities assumed: | ||||||||
Other current liabilities | 1.6 | |||||||
Total liabilities assumed | 1.6 | |||||||
Net assets acquired | 13.9 | |||||||
Caring Hearts | Noncompete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.6 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 5 years | |||||||
Caring Hearts | Licenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.6 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years | |||||||
Hospice | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 2.2 | |||||||
Total assets acquired | 2.4 | |||||||
Liabilities assumed: | ||||||||
Other current liabilities | 0.3 | |||||||
Total liabilities assumed | 0.3 | |||||||
Net assets acquired | 2.1 | |||||||
Hospice | Noncompete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.1 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 5 years | |||||||
Hospice | Licenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.1 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years | |||||||
Southwest Florida Home Care, Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Prepaid expenses and other current assets | $ 0.1 | |||||||
Operating lease right-of-use-assets | 0.3 | |||||||
Goodwill | 19.6 | |||||||
Total assets acquired | 21.4 | |||||||
Liabilities assumed: | ||||||||
Current operating lease liabilities | 0.1 | |||||||
Accrued payroll | 0.1 | |||||||
Long-term operating lease liabilities | 0.2 | |||||||
Total liabilities assumed | 0.4 | |||||||
Net assets acquired | 21 | |||||||
Southwest Florida Home Care, Inc | Noncompete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.8 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 5 years | |||||||
Southwest Florida Home Care, Inc | Licenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.6 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years | |||||||
Frontier Home Health | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash and cash equivalents | $ 0.8 | |||||||
Accounts receivable, net of allowances | 0.9 | |||||||
Prepaid expenses and other current assets | 0.2 | |||||||
Property and equipment | 0.1 | |||||||
Operating lease right-of-use-assets | 0.9 | |||||||
Goodwill | 92.4 | |||||||
Total assets acquired | 105.1 | |||||||
Liabilities assumed: | ||||||||
Current operating lease liabilities | 0.3 | |||||||
Accounts payable | 0.2 | |||||||
Accrued payroll | 0.8 | |||||||
Long-term operating lease liabilities | 0.7 | |||||||
Total liabilities assumed | 2 | |||||||
Noncontrolling interests | 3.9 | |||||||
Net assets acquired | 99.2 | |||||||
Frontier Home Health | Noncompete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 1.7 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 5 years | |||||||
Frontier Home Health | Trade names | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.2 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 3 months | |||||||
Frontier Home Health | Certificates | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 3.1 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years | |||||||
Frontier Home Health | Licenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 4.8 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years | |||||||
Encompass Health Home Health of South Florida, LLC joint venture | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash and cash equivalents | 0.8 | |||||||
Accounts receivable, net of allowances | 2 | |||||||
Goodwill | 8 | |||||||
Total assets acquired | 12.6 | |||||||
Liabilities assumed: | ||||||||
Accounts payable | 0.2 | |||||||
Accrued payroll | 0.3 | |||||||
Other current liabilities | 0.4 | |||||||
Other long-term liabilities | 0.1 | |||||||
Total liabilities assumed | 1 | |||||||
Noncontrolling interests | 2.3 | |||||||
Net assets acquired | 9.3 | |||||||
Encompass Health Home Health of South Florida, LLC joint venture | Noncompete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 0.1 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 2 years | |||||||
Encompass Health Home Health of South Florida, LLC joint venture | Licenses | ||||||||
Business Acquisition [Line Items] | ||||||||
Identifiable intangible assets | $ 1.7 | |||||||
Liabilities assumed: | ||||||||
Intangible asset, useful life | 10 years |
Business Combinations - Sched_2
Business Combinations - Schedule of Net Cash Paid for Acquisitions (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Dec. 01, 2022 | Dec. 31, 2021 | Jun. 01, 2021 | Dec. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 2.7 | $ 64.8 | |||||
Net cash paid for acquisition | $ 2.8 | 36.3 | $ 117.5 | ||||
Joint Venture with Saint Alphonsus System | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of assets acquired | 3.9 | ||||||
Goodwill | 28.7 | ||||||
Fair value of liabilities assumed | 0.8 | ||||||
Fair value of redeemable noncontrolling interest owned by joint venture partner | 15.9 | ||||||
Net cash paid for acquisition | 15.9 | ||||||
Payment to acquire business | $ 15.9 | $ 15.9 | |||||
Caring Hearts | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of assets acquired | 1.2 | ||||||
Goodwill | 14.3 | ||||||
Fair value of liabilities assumed | 1.6 | ||||||
Net cash paid for acquisition | 13.9 | ||||||
Hospice | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of assets acquired | 0.2 | ||||||
Goodwill | 2.2 | ||||||
Fair value of liabilities assumed | 0.3 | ||||||
Net cash paid for acquisition | 2.1 | ||||||
Southwest Florida Home Care, Inc | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of assets acquired | 1.8 | ||||||
Goodwill | 19.6 | ||||||
Fair value of liabilities assumed | $ 0.4 | ||||||
Net cash paid for acquisition | $ 21 | ||||||
Frontier Home Health | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of assets acquired | $ 11.9 | ||||||
Goodwill | 92.4 | ||||||
Fair value of liabilities assumed | 2 | ||||||
Fair value of redeemable noncontrolling interest owned by joint venture partner | 3.9 | ||||||
Net cash paid for acquisition | 98.4 | ||||||
Cash acquired from acquisition | $ 0.8 | ||||||
Encompass Health Home Health of South Florida, LLC joint venture | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of assets acquired | $ 3.8 | ||||||
Goodwill | 8 | ||||||
Fair value of liabilities assumed | 1 | ||||||
Fair value of redeemable noncontrolling interest owned by joint venture partner | 2.3 | ||||||
Fair value of equity interest prior to acquisition | 5.3 | ||||||
Net cash paid for acquisition | 3.2 | ||||||
Cash acquired from acquisition | $ 0.8 |
Business Combinations - Sched_3
Business Combinations - Schedule of Pro Forma (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Southwest Florida Home Care, Inc | ||
Business Acquisition [Line Items] | ||
Net Service Revenue | $ 12.1 | |
Net Income (Loss) Attributable to Enhabit | 1.1 | |
Net service revenue, combined entity | 1,093 | $ 1,136.5 |
Net (loss) income attributable to the Company, combined entity | $ (37.2) | 114.1 |
Frontier Home Health | ||
Business Acquisition [Line Items] | ||
Net Service Revenue | 19.7 | |
Net Income (Loss) Attributable to Enhabit | 0.7 | |
Encompass Health Home Health of South Florida, LLC joint venture | ||
Business Acquisition [Line Items] | ||
Net Service Revenue | 0.9 | |
Net Income (Loss) Attributable to Enhabit | (0.1) | |
Net service revenue, combined entity | 1,131 | |
Net (loss) income attributable to the Company, combined entity | $ 111.6 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - VIE, Primary Beneficiary - entity | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Number of entities consolidated | 2 | 2 | 2 |
Minimum | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage | 60% | ||
Maximum | |||
Variable Interest Entity [Line Items] | |||
Ownership percentage | 90% |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current assets: | ||||
Restricted cash | $ 2.4 | $ 4.3 | ||
Accounts receivable, net of allowances | 164.7 | 149.6 | ||
Total current assets | 210.1 | 211.8 | ||
Operating lease right-of-use assets | 57.5 | 42 | ||
Goodwill | 1,061.7 | 1,144.8 | $ 1,189 | |
Intangible assets, net | 80 | 102.6 | ||
Total assets | [1] | 1,433.6 | 1,526.8 | |
Current liabilities: | ||||
Current portion of operating lease liabilities | 11.8 | 14 | ||
Accrued payroll | 38.5 | 35.5 | ||
Other current liabilities | 40.7 | 40.7 | ||
Total current liabilities | 137.7 | 132.9 | ||
Other long-term liabilities | 1.3 | 1.9 | ||
Total liabilities | 731.9 | 751.5 | ||
VIE, Primary Beneficiary | ||||
Current assets: | ||||
Restricted cash | 1.8 | 4 | ||
Accounts receivable, net of allowances | 2.3 | 2.9 | ||
Other current assets | 0.5 | 0 | ||
Total current assets | 4.6 | 6.9 | ||
Operating lease right-of-use assets | 0.1 | 0.2 | ||
Goodwill | 12.4 | 12.4 | ||
Intangible assets, net | 0.9 | 1.1 | ||
Total assets | 18 | 20.6 | ||
Current liabilities: | ||||
Current portion of operating lease liabilities | 0.1 | 0.1 | ||
Accrued payroll | 0.2 | 0.2 | ||
Other current liabilities | 0.2 | 0.1 | ||
Total current liabilities | 0.5 | 0.4 | ||
Other long-term liabilities | 0.1 | 0.1 | ||
Total liabilities | $ 0.6 | $ 0.5 | ||
[1]Our consolidated assets as of December 31, 2023 and 2022 include total assets of variable interest entities of $18.0 million and $20.6 million, respectively, that cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2023 and 2022 include total liabilities of the variable interest entities of $0.6 million and $0.5 million, respectively. See Note 3, Variable Interest Entities . |
Accounts Receivable, Net of A_3
Accounts Receivable, Net of Allowances (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 165.8 | $ 150.7 |
Less: allowance for credit losses | 1.1 | 1.1 |
Accounts receivable, net of allowances | $ 164.7 | $ 149.6 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 74.4 | $ 72.8 | |
Less: Accumulated depreciation and amortization | (55.4) | (52.4) | |
Property and equipment, net | 19 | 20.4 | |
Depreciation expense | 4.3 | 4.6 | $ 5.8 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3.1 | 3 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 29.9 | 31.3 | |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 41.4 | $ 38.5 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Mar. 31, 2023 |
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, renewal term | 11 years | |
Minimum lease payment obligations | $ 71.2 | $ 19.8 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease, term of contract | 1 year | |
Operating lease, term of contract | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Finance lease, term of contract | 11 years | |
Operating lease, term of contract | 11 years |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
General and administrative expenses | $ 20.5 | $ 20.1 | $ 19.2 |
Finance lease cost: | |||
Amortization of right-of-use assets | 3.1 | 3.8 | 6 |
Interest on lease liabilities | 0.2 | 0.2 | 0.2 |
Total finance lease cost | 3.3 | 4 | 6.2 |
Total lease cost | $ 23.8 | $ 24.1 | $ 25.4 |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Operating lease | $ 57.5 | $ 42 |
Finance lease | $ 9.9 | $ 10.1 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Total leased assets | $ 67.4 | $ 52.1 |
Liabilities | ||
Operating lease | 11.8 | 14 |
Finance lease | $ 2.5 | $ 3.1 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Operating lease | $ 45.7 | $ 28.1 |
Finance lease | $ 3.1 | $ 2.1 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt, net of current portion | Long-term debt, net of current portion |
Total leased liabilities | $ 63.1 | $ 47.3 |
Finance lease, accumulated amortization | $ 20 | $ 21.3 |
Weighted Average Remaining Lease Term | ||
Operating lease | 5 years 9 months 18 days | 3 years 6 months |
Finance lease | 2 years 8 months 12 days | 1 year 9 months 18 days |
Weighted Average Discount Rate | ||
Operating lease | 6.70% | 4.70% |
Finance lease | 4.70% | 2.90% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Leases | |||
2024 | $ 15 | ||
2025 | 13.9 | ||
2026 | 11.1 | ||
2027 | 8.1 | ||
2028 | 5.3 | ||
2029 and thereafter | 17.8 | ||
Total lease payments | 71.2 | $ 19.8 | |
Less: Interest portion | (13.7) | ||
Total lease liabilities. | 57.5 | ||
Finance Leases | |||
2024 | 2.7 | ||
2025 | 1.6 | ||
2026 | 1 | ||
2027 | 0.7 | ||
2028 | 0 | ||
2029 and thereafter | 0 | ||
Total lease payments | 6 | ||
Less: Interest portion | (0.5) | ||
Total lease liabilities. | $ 5.5 | $ 5.2 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 16 | $ 17.1 | $ 16.5 |
Operating cash flows from finance leases | 0.2 | 0.2 | 0.2 |
Financing cash flows from finance leases | 3.4 | 5 | 7.2 |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | 31.6 | 10.7 | 24.2 |
Finance leases | $ 3.8 | $ 3.5 | $ 4.1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Schedule of Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 1,144.8 | $ 1,189 | |
Acquisitions | 2.7 | 64.8 | |
Impairment | (85.8) | (109) | $ 0 |
Goodwill, ending balance | 1,061.7 | 1,144.8 | 1,189 |
Home Health | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 841.2 | 911.7 | |
Acquisitions | 2.7 | 38.5 | |
Impairment | 0 | (109) | |
Goodwill, ending balance | 843.9 | 841.2 | 911.7 |
Hospice | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 303.6 | 277.3 | |
Acquisitions | 0 | 26.3 | |
Impairment | (85.8) | 0 | |
Goodwill, ending balance | $ 217.8 | $ 303.6 | $ 277.3 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 unit | Jun. 30, 2023 USD ($) unit | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) unit | Dec. 31, 2021 USD ($) | |
Goodwill [Line Items] | ||||||
Number of reporting units | unit | 2 | 2 | 2 | |||
Impairment of goodwill | $ 85.8 | $ 109 | $ 0 | |||
Goodwill | $ 1,144.8 | 1,061.7 | 1,144.8 | $ 1,189 | ||
Accumulated impairment losses related to goodwill | 109 | $ 194.8 | $ 109 | |||
Home Health Reporting Unit | ||||||
Goodwill [Line Items] | ||||||
Impairment of goodwill | $ 109 | |||||
Reporting unit, percentage of fair value in excess of carrying amount | 7% | |||||
Hospice Reporting Unit | ||||||
Goodwill [Line Items] | ||||||
Impairment of goodwill | $ 85.8 | |||||
Reporting unit, percentage of fair value in excess of carrying amount | 5% | 15% | 15% | |||
Goodwill | $ 303.6 | $ 303.6 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Schedule of Information Regarding Other Intangible Assets, Net (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 269 | $ 268.1 |
Accumulated Amortization | (189) | (165.5) |
Net | 80 | 102.6 |
Certificates of need: | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 89.2 | 89.2 |
Accumulated Amortization | (50) | (41.4) |
Net | 39.2 | 47.8 |
Licenses: | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 131.2 | 131.1 |
Accumulated Amortization | (93.9) | (80.8) |
Net | 37.3 | 50.3 |
Noncompete agreements: | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15.1 | 14.9 |
Accumulated Amortization | (12.6) | (11.6) |
Net | 2.5 | 3.3 |
Trade names: | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7.6 | 7.5 |
Accumulated Amortization | (7.6) | (7.5) |
Net | 0 | 0 |
Internal-use software: | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 25.9 | 25.4 |
Accumulated Amortization | (24.9) | (24.2) |
Net | $ 1 | $ 1.2 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, Net - Schedule of Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 23.5 | $ 24.5 | $ 25.1 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets, Net - Schedule of Estimated Amortization Expense for Other Intangible Assets (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 23 |
2025 | 15.7 |
2026 | 12.4 |
2027 | 11.3 |
2028 | $ 8 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 5.5 | $ 5.2 |
Long term debt including current maturities | 552.6 | 583.1 |
Less: Current portion | (22.5) | (23.1) |
Long-term debt, net of current portion | 530.1 | 560 |
Line of credit | Enhabit Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 180 | 190 |
Line of credit | Enhabit Credit Agreement | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 367.1 | $ 387.9 |
Long-term Debt - Schedule of Pr
Long-term Debt - Schedule of Principal Payments Due on Long-term Debt (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Amount | |
2024 | $ 22.5 |
2025 | 21.4 |
2026 | 21 |
2027 | 490.6 |
2028 and thereafter | 0 |
Gross maturities | 555.5 |
Less unamortized debt issuance costs | (2.9) |
Total | $ 552.6 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Nov. 03, 2023 USD ($) | Jun. 27, 2023 | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 02, 2023 USD ($) | Sep. 29, 2023 USD ($) | Oct. 31, 2022 USD ($) | Oct. 20, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Principal borrowings on term loan | $ 0 | $ 400,000,000 | $ 0 | ||||||||
Borrowings on revolving credit facility | 0 | 190,000,000 | 0 | ||||||||
Distributions to Encompass | $ 0 | $ 654,900,000 | $ 154,100,000 | ||||||||
Interest Rate Swap | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Derivative, notional amount | $ 200,000,000 | $ 200,000,000 | |||||||||
Derivative, fixed interest rate | 4.30% | ||||||||||
Enhabit Credit Agreement | Line of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Distributions to Encompass | $ 566,600,000 | ||||||||||
Letter of credit | Enhabit Credit Agreement | Line of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | 75,000,000 | $ 75,000,000 | |||||||||
Term Loan Facilities | Second Amendment | Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum leverage ratio | 6.75 | ||||||||||
Debt instrument, maximum permitted total net leverage ratio | 1.15 | ||||||||||
Term Loan Facilities | Second Amendment | Credit Agreement | Debt Instrument, Covenant Period, One | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 6.50 | ||||||||||
Term Loan Facilities | Second Amendment | Credit Agreement | Debt Instrument, Covenant Period, Two | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 5.75 | ||||||||||
Term Loan Facilities | Second Amendment | Credit Agreement | Debt Instrument, Covenant Period, Thereafter | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 4.50 | ||||||||||
Term Loan Facilities | Enhabit Credit Agreement | Credit Agreement | Debt Instrument, Covenant Period, One | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 5.25 | ||||||||||
Term Loan Facilities | Enhabit Credit Agreement | Credit Agreement | Debt Instrument, Covenant Period, Two | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 5 | ||||||||||
Term Loan Facilities | Enhabit Credit Agreement | Credit Agreement | Debt Instrument, Covenant Period, Three | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 4.75 | ||||||||||
Term Loan Facilities | Enhabit Credit Agreement | Credit Agreement | Debt Instrument, Covenant Period, Thereafter | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maximum permitted total net leverage ratio | 4.50 | ||||||||||
Term Loan Facilities | Enhabit Credit Agreement | Line of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 400,000,000 | $ 400,000,000 | |||||||||
Principal borrowings on term loan | 400,000,000 | ||||||||||
Percentage of outstanding principal payable in equal quarterly installments | 5% | ||||||||||
Maximum leverage ratio | 4.50 | ||||||||||
Interest rate | 8% | ||||||||||
Revolving Credit Facility | Limited Waiver | Maximum | Wells Fargo Bank, National Association | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 350,000,000 | ||||||||||
Revolving Credit Facility | Limited Waiver | Minimum | Wells Fargo Bank, National Association | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 230,000,000 | ||||||||||
Revolving Credit Facility | Second Amendment | Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 220,000,000 | $ 350,000,000 | |||||||||
Debt instrument, basis spread on variable rate | 0.25% | ||||||||||
Revolving Credit Facility | Enhabit Credit Agreement | Line of credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | 350,000,000 | $ 350,000,000 | |||||||||
Borrowings on revolving credit facility | $ 170,000,000 |
Long-term Debt - Schedule of Ca
Long-term Debt - Schedule of Carrying Amounts and Fair Value of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Line of credit | Enhabit Credit Agreement | Carrying Amount | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | $ 180 | $ 190 |
Line of credit | Enhabit Credit Agreement | Carrying Amount | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 367.1 | 387.9 |
Line of credit | Enhabit Credit Agreement | Estimated Fair Value | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 180 | 190 |
Line of credit | Enhabit Credit Agreement | Estimated Fair Value | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 354.4 | 356.6 |
Finance lease obligations | Carrying Amount | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | 5.5 | 5.2 |
Finance lease obligations | Estimated Fair Value | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | $ 5.5 | $ 5.2 |
Stock-Based Payments - Addition
Stock-Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted (in shares) | 64,100 | |||
Share-based compensation arrangement by share-based payment award, award requisite service period | 6 years | |||
Granted (in dollars per share) | $ 15.30 | |||
Stock options exercised | $ 0 | $ 0 | $ 0.1 | |
Stock based compensation tax benefit | 0.9 | 1.8 | 0.9 | |
Fair value of stock options vested | $ 0.3 | $ 0.8 | $ 0 | |
Encompass | Management | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares issued in period (in shares) | 47,000 | |||
Options granted (in shares) | 22,000 | |||
RSAs and RSUs | Encompass | Management | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares issued in period (in shares) | 128,000 | |||
Options | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
Share-based compensation arrangement by share-based payment award, award requisite service period | 3 years | |||
Granted (in dollars per share) | $ 8.35 | $ 7.01 | $ 7.79 | |
Stock compensation expense | $ 0.4 | $ 0.3 | $ 0.1 | |
Share-based payment arrangement, nonvested award, option, cost not yet recognized, amount | $ 0.6 | |||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 22 months | |||
Dividend yield | 0% | 1.90% | 1.90% | |
Restricted stock | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock compensation expense | $ 3 | $ 3.3 | $ 1.7 | |
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 23 months | |||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ 4.4 | |||
Granted (in shares) | 0 | |||
Granted (in dollars per share) | $ 0 | $ 22.74 | ||
Vested in period, fair value | $ 4.2 | $ 1.3 | 2.5 | |
Restricted Stock Units (RSUs) | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock compensation expense | 5.5 | 5.6 | 1.8 | |
Vested in period, fair value | $ 4.1 | $ 3.8 | 2.8 | |
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||
Performance Based | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 26 months | |||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ 1.4 | |||
Granted (in shares) | 452,100 | |||
Granted (in dollars per share) | $ 17.24 | |||
Total shareholder return performance condition percentage | 20% | |||
Free cash flow performance condition percentage | 80% | |||
Performance Based | Minimum | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Vesting percentage | 0% | |||
Performance Based | Maximum | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Vesting percentage | 200% | |||
Service Based | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 22 months | |||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ 6.9 | |||
Granted (in shares) | 719,000 | |||
Granted (in dollars per share) | $ 12.84 | $ 22.12 | ||
RSAs and Stock Options | Encompass | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Stock compensation expense | $ 0 | $ 1.1 | $ 2.3 |
Stock-Based Payments - Schedule
Stock-Based Payments - Schedule of Share-Based Payment Award, Valuation Assumptions (Details) - Options | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Expected volatility | 53% | 28.30% | 28.40% |
Risk-free interest rate | 4.10% | 1.70% | 1.10% |
Expected life (years) | 6 years | 7 years 9 months 18 days | 7 years 1 month 6 days |
Dividend yield | 0% | 1.90% | 1.90% |
Stock-Based Payments - Schedu_2
Stock-Based Payments - Schedule of Share-Based Payment Arrangement, Option, Activity (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Shares (In Thousands) | |
Beginning outstanding (in shares) | shares | 222,200 |
Granted (in shares) | shares | 64,100 |
Expirations (in shares) | shares | 0 |
Ending Outstanding (in shares) | shares | 286,300 |
Exercisable (in shares) | shares | 172,200 |
Weighted Average Exercise Price per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 27.07 |
Granted (in dollars per share) | $ / shares | 15.30 |
Expirations (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | 24.44 |
Exercisable (in dollars per share) | $ / shares | $ 26.66 |
Outstanding, Weighted Average Remaining Life (Year) | 6 years 9 months 18 days |
Exercisable, Weighted Average Remaining Life (Year) | 5 years 7 months 6 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 0 |
Exercisable, Aggregate Intrinsic Value | $ | $ 0 |
Stock-Based Payments - Schedu_3
Stock-Based Payments - Schedule of Nonvested Restricted Stock Units Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restricted stock | ||
Shares (In Thousands) | ||
Beginning balance (in shares) | 454,200 | |
Granted (in shares) | 0 | |
Vested (in shares) | (147,800) | |
Forfeited (in shares) | (28,800) | |
Ending balance (in shares) | 277,600 | 454,200 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 25.54 | |
Granted (in dollars per share) | 0 | $ 22.74 |
Vested (in dollars per share) | 28.14 | |
Forfeited (in dollars per share) | 25.85 | |
Ending balance (in dollars per share) | $ 24.12 | $ 25.54 |
Service Based | ||
Shares (In Thousands) | ||
Beginning balance (in shares) | 362,000 | |
Granted (in shares) | 719,000 | |
Vested (in shares) | (222,900) | |
Forfeited (in shares) | (107,400) | |
Ending balance (in shares) | 750,700 | 362,000 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 30.34 | |
Granted (in dollars per share) | 12.84 | $ 22.12 |
Vested (in dollars per share) | 18.18 | |
Forfeited (in dollars per share) | 23.94 | |
Ending balance (in dollars per share) | $ 18.11 | $ 30.34 |
Performance Based | ||
Shares (In Thousands) | ||
Beginning balance (in shares) | 0 | |
Granted (in shares) | 452,100 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | (63,800) | |
Ending balance (in shares) | 388,300 | 0 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 17.24 | |
Vested (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 17.24 | |
Ending balance (in dollars per share) | $ 17.24 | $ 0 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) plan | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Retirement Benefits [Abstract] | |||
Self insurance, net of employee payments and stop-loss recoveries | $ 48.1 | $ 41.5 | $ 41.5 |
Current self insurance reserve | $ 8.4 | 7.5 | |
Number of plans | plan | 1 | ||
Defined contribution plan, maximum annual contributions per employee, percent | 60% | ||
Defined contribution plan, employer matching contribution, percent of match | 25% | ||
Defined contribution plan, employer matching contribution, percent of employees' gross pay | 3% | ||
Share-based compensation arrangement by share-based payment award, award requisite service period | 6 years | ||
Defined contribution plan, cost | $ 2.3 | 2.2 | 2.4 |
Defined contribution plan, amount forfeited to fund matching contributions | $ 0.4 | $ 0.3 | $ 0.2 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax (Benefit) Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 0.2 | $ 14.3 | $ 22.2 |
State and other | 0 | 2.8 | 4.3 |
Total current expense | 0.2 | 17.1 | 26.5 |
Deferred: | |||
Federal | (9.3) | (3.9) | 7.9 |
State and other | (2.3) | (0.4) | 0.7 |
Total deferred (benefit) expense | (11.6) | (4.3) | 8.6 |
Total income tax (benefit) expense related to continuing operations | $ (11.4) | $ 12.8 | $ 35.1 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 21% | 21% | 21% |
Increase (decrease) in tax rate resulting from: | |||
State and other income taxes, net of federal tax benefit | 3.10% | 1.80% | 3.30% |
Impairment of goodwill | (10.60%) | (49.10%) | 0% |
Distribution deferred tax adjustment | 0% | (23.70%) | 0% |
Other, net | (0.90%) | (0.20%) | (0.60%) |
Effective tax rate | 12.60% | (50.20%) | 23.70% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Increase to deferred tax income tax liabilities | $ 6,000,000 | ||
Payments of social security taxes | 14,900,000 | $ 14,900,000 | |
Deferred payments of social security taxes | $ 0 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred income tax assets: | ||
Operating lease liabilities | $ 13.2 | $ 9.6 |
Accrued expenses and allowances | 3 | 4.7 |
Stock-based compensation | 3.2 | 2.7 |
Interest expense | 13.1 | 2.8 |
Other deferred income tax assets | 0.3 | 0.8 |
Total deferred income tax assets | 32.8 | 20.6 |
Deferred income tax liabilities: | ||
Intangible assets | (32) | (35.7) |
Operating lease right-of-use assets | (13.3) | (9.6) |
Property, net | (3.7) | (3.9) |
Other deferred income tax liabilities | (0.9) | 0 |
Total deferred income tax liabilities | (49.9) | (49.2) |
Net deferred income tax liabilities | $ (17.1) | $ (28.6) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) | Oct. 31, 2022 | Oct. 20, 2022 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 200,000,000 | $ 200,000,000 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flow Hedge | |||
Balance at beginning of period | $ 770.1 | $ 1,478.3 | $ 1,389.8 |
Unrealized gain recognized in other comprehensive income, net of tax | 0.2 | (0.7) | 0 |
Balance at end of period | 696.7 | 770.1 | $ 1,478.3 |
Interest Rate Swap | Cash Flow Hedging | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | |||
Cash Flow Hedge | |||
Balance at beginning of period | (0.7) | ||
Unrealized gain recognized in other comprehensive income, net of tax | 1.3 | ||
Reclassified to interest expense, net of tax | (1.1) | ||
Balance at end of period | $ (0.5) | $ (0.7) |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Derivative Assets and Liabilities at Fair Value (Details) - Interest Rate Swap - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Total | $ (0.6) | $ (1) |
Current Assets | ||
Derivative [Line Items] | ||
Current Assets | 0.7 | 1 |
Long-Term Debt | ||
Derivative [Line Items] | ||
Long-term liabilities | $ (1.3) | $ (2) |
Contingencies and Other Commi_2
Contingencies and Other Commitments (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency, estimate of possible loss | $ 0.2 |
Accrued legal fees | 9.9 |
2024 | 5.6 |
2025 | 1.3 |
2026 and thereafter | $ 0.5 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 state location segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of reportable segments | segment | 2 |
Number of states in which entity operates | state | 34 |
Home Health | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 34 |
Number of agencies | 255 |
Number of agencies with sole ownership | 244 |
Number of jointly owned home health locations | 11 |
Home Health | Minimum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 50% |
Home Health | Maximum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 81% |
Hospice | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 24 |
Number of agencies | 110 |
Number of agencies with sole ownership | 106 |
Number of jointly owned home health locations | 4 |
Hospice | Minimum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 50% |
Hospice | Maximum | |
Segment Reporting Information [Line Items] | |
Joint venture, ownership percentage | 90% |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Selected Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Net service revenue | $ 1,046.3 | $ 1,071.1 | $ 1,106.6 |
Cost of service, excluding depreciation and amortization | 535.6 | 525.6 | 513.9 |
General and administrative expenses | 441.6 | 414.9 | 412.9 |
Other income | (0.2) | (0.9) | (4.8) |
Equity in net income of nonconsolidated affiliates | 0 | 0 | (0.6) |
Noncontrolling interests | 1.5 | 2.1 | 1.7 |
Home Health | |||
Segment Reporting Information [Line Items] | |||
Net service revenue | 850.1 | 877.1 | 897.3 |
Cost of service, excluding depreciation and amortization | 439 | 435.5 | 423.5 |
General and administrative expenses | 240.6 | 238.5 | 244.2 |
Other income | (0.2) | (0.9) | (1.6) |
Equity in net income of nonconsolidated affiliates | 0 | 0 | (0.6) |
Noncontrolling interests | 1.4 | 1.8 | 1.7 |
Segment Adjusted EBITDA | 169.3 | 202.2 | 230.1 |
Hospice | |||
Segment Reporting Information [Line Items] | |||
Net service revenue | 196.2 | 194 | 209.3 |
Cost of service, excluding depreciation and amortization | 96.6 | 90.1 | 90.4 |
General and administrative expenses | 63.4 | 65.2 | 62.6 |
Other income | 0 | 0 | 0 |
Equity in net income of nonconsolidated affiliates | 0 | 0 | 0 |
Noncontrolling interests | 0.1 | 0.3 | 0.1 |
Segment Adjusted EBITDA | $ 36.1 | $ 38.4 | $ 56.2 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Non-segment general and administrative expenses | $ (441.6) | $ (414.9) | $ (412.9) |
Impairment of goodwill | (85.8) | (109) | 0 |
Depreciation and amortization | (30.9) | (33) | (36.9) |
Noncontrolling interests | 1.5 | 2.1 | 1.7 |
Other income | 0.2 | 0.9 | 4.8 |
(Loss) income before income taxes and noncontrolling interests | (90.4) | (25.5) | 148 |
Operating Segments | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Total Segment Adjusted EBITDA | 205.4 | 240.6 | 286.3 |
Corporate, Non-Segment | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Non-segment general and administrative expenses | (128.7) | (102) | (102.5) |
Segment Reconciling Items | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Impairment of goodwill | (85.8) | (109) | 0 |
Interest expense | (43) | (15) | (0.3) |
Depreciation and amortization | (30.9) | (33) | (36.9) |
Noncontrolling interests | 1.5 | 2.1 | 1.8 |
Stock-based compensation expense | (8.9) | (9.2) | (3.6) |
Other income | $ 0 | $ 0 | $ 3.2 |
Segment Reporting - Schedule _3
Segment Reporting - Schedule of Additional Detail Regarding Revenues by Service Line (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | |||
Net service revenue | $ 1,046.3 | $ 1,071.1 | $ 1,106.6 |
Home Health | |||
Revenue from External Customer [Line Items] | |||
Net service revenue | 850.1 | 877.1 | 897.3 |
Hospice | |||
Revenue from External Customer [Line Items] | |||
Net service revenue | 196.2 | 194 | 209.3 |
Episodic | Home Health | |||
Revenue from External Customer [Line Items] | |||
Net service revenue | 661.2 | 738 | 781.5 |
Non-episodic | Home Health | |||
Revenue from External Customer [Line Items] | |||
Net service revenue | 179.2 | 128 | 102 |
Private duty | Home Health | |||
Revenue from External Customer [Line Items] | |||
Net service revenue | $ 9.7 | $ 11.1 | $ 13.8 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Allocation of Services from Encompass to the Company (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
General and administrative expenses | $ 441.6 | $ 414.9 | $ 412.9 |
Overhead allocation | Related Party | |||
Related Party Transaction [Line Items] | |||
General and administrative expenses | 0 | 7.7 | 16.7 |
Stock-based compensation | Related Party | |||
Related Party Transaction [Line Items] | |||
General and administrative expenses | $ 0 | $ 2.5 | $ 3.6 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
May 31, 2021 | Jun. 19, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | $ 441.6 | $ 414.9 | $ 412.9 | |||
Medalogix, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Payments to acquire investment | $ 2 | |||||
Related Party | HCHB Agreement | Homecare Homebase, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | $ 3 | 6 | ||||
Related Party | Medalogix Analytics Platforms | ||||||
Related Party Transaction [Line Items] | ||||||
Cost of service, excluding depreciation and amortization and General and administrative expenses | $ 4.5 | $ 4.6 | $ 3.6 | |||
Affiliated Entity | Medalogix Analytics Platforms | ||||||
Related Party Transaction [Line Items] | ||||||
Cash received | $ 2 | |||||
Gain as a result of transaction | $ 1.6 |