![]() Investor Presentation Leading Home Health & Hospice November 2013 clinical quality innovative care models better communities Exhibit 99.1 |
![]() Forward-looking Statements This presentation may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions about our business that are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those described in this presentation. You should not rely on forward-looking statements as a prediction of future events. Additional information regarding factors that could cause actual results to differ materially from those discussed in any forward-looking statements are described in reports and registration statements we file with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, copies of which are available on the Amedisys internet website http://www.amedisys.com or by contacting the Amedisys Investor Relations department at (800) 467-2662. We disclaim any obligation to update any forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based except as required by law. 2 www.amedisys.com NASDAQ: AMED We encourage everyone to visit the Investors Section of our website at www.amedisys.com, where we have posted additional important information such as press releases, profiles concerning our business and clinical operations and control processes, and SEC filings. We intend to use our website to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. |
![]() Company Overview 3 Overview • Founded in 1982, publicly listed 1994 • 499 care centers in 37 states • Over 14,000 employees • Projected revenue in 2013 of approximately $1.2 billion Amedisys Home Health Care Centers (405 locations) Amedisys Hospice Care Centers (94 locations) Locations current as of 9/30/2013 |
![]() Business Segments 4 Business Segment % of Revenue Reimbursement Type HH - Medicare 64% Paid episodically (over a 60- day episode of care) HH – Non-Medicare 15% 67% paid per visit; remainder paid episodically Hospice 21% Mainly Medicare; paid at a daily rate 1 Revenue mix based on 3Q13 revenue |
![]() Estimated Market Share – Medicare Revenue 5 Note: Estimated market share of total 2011 Medicare reimbursement |
![]() 6 Home Health/Hospice Medicare Spend Home Health Source: CBO March 2013 Baseline report (10 year CAGR) Hospice Source: 2011 actual hospice spending with growth rate based on “Other Services” section of CBO March 2013 Baseline report (10 year CAGR) Population growth estimates provided by Tetrad; CAGR is for 2012-2017 (5 years) Compound Annual Growth Rates (CAGR) Home Health Expenditures = 4.4% Hospice Expenditures = 5.2% 65+ Population = 3.6% 75+ Population = 2.6% |
![]() Medicare Reimbursement 7 • 2014 final rule (rebasing) • Sustainable growth rate legislation (Doc Fix) • Co-payment proposals • Hospice rebasing (U-shaped reimbursement) • Nursing home reimbursement Reimbursement Considerations Reimbursement Considerations |
![]() Favorable Long Term Trends • Compelling demographics • Patient preference • Low cost of care delivery • Increased payor and hospital focus 8 Inpatient Hospital LTAC IRF SNF Hospice Home Health Average Cost of Stay $11,700 $38,664 $17,398 $11,728 $11,321 $5,257 Average Length of Stay 5 days 26 days 13 days 27 days 86 days 120 days Average Per Diem Cost $2,388 $1,470 $1,338 $431 $132 $44 Source: MedPAC March 2013 report; hospital information is for inpatient facilities only and is estimated based on patient discharges |
![]() Traditional Home Health and Hospice 9 Current Business Dynamics Issues • Fee for service based • High volume / low margins • “Retail” relationships • Patients with multiple conditions and physicians • Poor coordination / communication • Misaligned incentives • Minimal data interchange • Regulatory limitations on services • Limited physician coordination |
![]() Future Trends 10 Home Health Coordinated Care Management Patient Home Hospice Post-Acute Facilities Payors Physicians Hospitals • Aligned incentives • Data exchange • Communications • Care Protocol • Outcome focused • Value driven Informal Care Givers |
![]() Strategic Plans • Shared service care centers • Patient care management • AMS3, next generation operating system • Bundled payment initiatives • Hospital partnerships – Established 3 new joint ventures in 2013 – Actively involved in 2 ACOs 11 |
![]() Shared Service Model • All care centers organized into shared service centers – 63 shared service centers planned – Completed by the end of 2013 12 Quality Care Operational Efficiency Leadership • Centralized functions (on-call, intake, scheduling) • Scheduling efficiency • Specialty clinician productivity • Clinical resource support • Consistency in care delivery/training • POD leadership supporting all care centers • Improved leadership turnover coverage |
![]() Patient Care Management 13 • “Right Care. Right Time. Right Place.” • Centralized support – Local clinical decisions – Exception reporting • Recertification review – Attainment of patient goals – Physician orders or medication changes – Hospitalization during episode • Utilization focus – Reduce care plan variability – Patient outcome driven |
![]() AMS3 Operating System • 4Q13 Development complete / implementation begins • Migrating to .Net platform Existing platform sun setting • Benefits of proprietary system – Low incremental spend – Ongoing flexibility and customization • Enhancements over existing system – Greater clinician productivity – Superior clinical management engine – Care center efficiencies – Interoperability – Billing efficiencies – Expect $10-$15M in net annual savings after fully rolled out 14 |
![]() Capital Expenditures 15 PeopleSoft IT Security AMS3 Development |
![]() Bundles – CMS Bundled Payment for Care Initiative 16 MD Spending 14% Hospital Discharge Bundle Spending - $10,000 to $15,000 per bundle • CMS to set target price for relevant services during bundle • Participants share savings and “at risk” for costs greater than target • Amedisys is participating in five bundle sites – 57 home health care centers across all sites – Agreed to terms with ~20 hospital partners; negotiating with additional partners – 2 sites “go live” on Jan. 1st with the remaining 3 sites starting on Apr. 1st Model 3 – 90 Day Post-Acute Bundle |
![]() Performance Initiatives • Business development staff investment • Clinician productivity improvement • 50 care centers identified for exit in Q1 – 27 closed – 6 sold – 6 retained – 11 under letter of intent or definitive agreement to be sold • Overall, negative contribution care centers represent a $5 million quarterly drag on EBITDA in Q313 – Of these, we are closing or consolidating 19 with quarterly combined losses of $1 million 17 |
![]() DOJ Settlement and Financing • Agreement in principle to pay $150 million – No admission of wrongdoing – Looking to avoid expense and distraction of ongoing litigation • Negotiating settlement agreement and corporate integrity agreement – $115 million due at time settlement agreement is signed – $35 million due six months afterward – Funded with cash on hand and revolver (credit facility amended to accommodate settlement) 18 |
![]() Summary Financial Results 19 ($ in millions, except per share data) 2011 (1) 2012 (1) 3Q12 (2) 3Q13 (2) Adjusted Net Revenue $ 1,464 $ 1,488 $364 $302 Gross Margin % 46.7% 43.5% 43.2% 41.8% Adjusted EBITDA $ 157 $ 103 $26 $9 Adjusted EBITDA Margin 10.7% 6.9% 7.2% 2.9% Adjusted EPS $2.29 $1.08 $0.28 ($0.01) 1. The financial results for the years 2012 and 2011 are adjusted for certain items incurred in 2012 and 2011 and should be considered non-GAAP financial measures. A reconciliation of these non-GAAP financial measures is included as Exhibit 99.2 to our Form 8-K filed with the Securities and Exchange Commission on March 12, 2013. 2. The financial results for the three-month period ended September 30, 2013 and September 30, 2012 are adjusted for certain items totaling $144.9 million and $1.0 million, respectively, and should be considered a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure is included as Exhibit 99.2 to our Form 8-K filed with the Securities and Exchange Commission on November 12, 2013 |
![]() Home Health Segment 20 ($ in millions, continuing operations) 3Q12 (1) 4Q12 (1) 1Q13 (1) 2Q13 (1) 3Q13 (1) Medicare Revenue $227 $224 $213 $205 $194 Non-Medicare Revenue $63 $56 $50 $46 $43 Total Revenue $290 $280 $263 $251 $237 Gross Margin % 41.8% 42.1% 42.6% 42.8% 40.6% Contribution $31 $28 $27 $26 $17 Contribution % 10.7% 10.0% 10.2% 10.2% 7.0% 1. Results as reported in our Quarterly Earnings Release Form 8-K for the quarter ended Sep. 30, 2013 as filed with the Securities and Exchange Commission on Nov. 12, 2013 |
![]() 21 Home Health Operating Statistics Medicare 3Q12 (1) 4Q12 (1) 1Q13 (1) 2Q13 (1) 3Q13 (1) Admissions 47,429 47,730 50,117 47,825 45,481 Same store admissions growth 1% 1% 3% 0% (2%) Recertification rate 43.2% 39.9% 37.8% 36.4% 37.1% Revenue per episode $2,864 $2,846 $2,778 $2,831 $2,822 Visits per episode 18.9 18.4 17.5 17.7 17.3 Non-Medicare Admissions 23,469 21,209 21,675 18,283 17,884 Visits 535,280 465,248 423,903 381,770 359,822 1. Results as reported in our Quarterly Earnings Release Form 8-K for the quarter ended Sep. 30, 2013 as filed with the Securities and Exchange Commission on Nov. 12, 2013 |
![]() Hospice Segment 22 ($ in millions, continuing operations) 3Q12 (1) 4Q12 (1) 1Q13 (1) 2Q13 (1) 3Q13 (1) Total Revenue $74 $72 $67 $65 $65 Gross Margin % 48.6% 48.4% 47.1% 47.2% 46.5% Contribution $16 $14 $12 $13 $12 Contribution % 21.3% 19.3% 17.6% 19.6% 18.9% Operating Statistics Total admissions 4,667 4,629 4,957 4,655 4,352 Same store revenue growth 13% 3% (5%) (11%) (13%) Average daily census (ADC) 5,592 5,381 5,071 5,006 4,917 Average length of stay (ALOS) 102 106 103 99 98 1. Results as reported in our Quarterly Earnings Release Form 8-K for the quarter ended Sep. 30, 2013 as filed with the Securities and Exchange Commission on Nov. 12, 2013 |
![]() 23 Summary Balance Sheet Assets Dec. 31, 2012 Sep. 30, 2013 Cash $ 15 $ 44 Accounts Receivable, Net 169 111 Property and Equipment 157 160 Goodwill 210 208 Other 180 232 Total Assets $ 731 $ 755 Liabilities and Equity Debt $ 103 $ 71 Other Liabilities 174 157 DOJ Settlement Reserve 0 150 Equity 454 377 Total Liabilities and Equity $ 731 $ 755 Leverage Ratio 1.10x 2.68x (1) Days Sales Outstanding 42 32 ($ in millions) 1. Total debt in leverage ratio calculation includes reserve for $150 million preliminary DOJ settlement |
![]() 24 Liquidity 1 1. Availability under revolver of $143 million 2. Scheduled debt repayments include $4M per quarter of term loan payments and $40M of principal payments related to senior notes 3. Other cash flows for 2012 include refinancing costs associated with credit agreement signed on October 26, 2012, retirement of long-term debt and acquisitions. ($ in millions) 2012 3Q13YTD 2013F Cash Flow From Operations $ 69 $94 $ 105-110 Capital Expenditures 48 29 40-45 Debt repayments 2 29 32 56 Cash Flow, Net (8) 33 4-14 Beginning Cash 48 15 Other 3 (25) (4) End Cash $ 15 $44 |
![]() Guidance 25 (Continuing operations only. $ in millions, except per share data) 1Q13 2Q13 3Q13 YTD 2013 Guidance Revenue (1) $329 $316 $302 $947 $1,240-$1,250 Adj. EPS – Earnings Release (1) $0.15 $0.18 ($0.01) $0.32 Legal Costs (1) $0.04 $0.03 $0.02 $0.09 Adjusted EPS - Guidance $0.11 $0.15 ($0.02) $0.23 $0.20-$0.25 1. Results as reported in our Quarterly Earnings Release Form 8-K for the quarter ended Sep. 30, 2013 as filed with the Securities and Exchange Commission on Nov. 12, 2013. Based on 31.7 million diluted shares. |
![]() Investment Rationale • Favorable demographic trends • Positive attributes of home based care • IT infrastructure/scalability • Clinical quality and innovation • Strong liquidity and capital position • Market share capture opportunities 26 Efficient Core Business Care Mgmt Solutions |
![]() Contact Information Tom Dolan SVP Finance and Treasurer Amedisys, Inc. 5959 S. Sherwood Forest Boulevard Baton Rouge, LA 70816 Office: 225.299.3391 Fax: 225.298.6435 tom.dolan@amedisys.com 27 |