LHCG - Earnings call transcript Q4 2020

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Operator

Good day, and welcome to the LHC Group Fourth Quarter and Year End 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Eric Elliott, Senior Vice President of Finance. Please go ahead.

Eric Elliott

good and Tom, you, morning, everyone. Thank to call for like welcome December you conference earnings Group's LHC the XXXX. to XX, I'd fourth ended quarter would our that our like quarter supplemental on issued earnings Results last page. the and We section Quarterly of release information on to Relations have we I highlight the posted Investor some night, also can this transcript copy the XX-K release, supplemental The of call the this of deck on as well earnings be when available ultimately page. as a found a and

deck on supplemental year significant first among Our the our includes and impact performance, on quarter full The assumptions. monthly of XXXX trends. amount sector the guidance of detail COVID-XX detail, breakdown

the well. We breakdown reconciliations of five and quarters statistics adjustments our have reconciling same-store included are non-GAAP also of included as trailing to schedules revenue all of

will information this our today. remarks reference We in

minutes expect and Chairman for Dale Chief Keith Financial today's Officer President; Q&A. Chief Executive XX allow from prepared run and We Josh Proffitt, Mackel, to Myers, to time for comments Officer. approximately

Before and in we Page our supplemental in to call point made our everyone release X press read of I statements presentation to our statements forward-looking supplemental to you carefully. They financial on to this them apply would in information. our encourage start, like

over Keith I'll turn Now the call to Myers.

Keith Myers

CMS growth year provide in a of key legislation of consideration of the year higher number quarter, permanent enactment home nurse COVID In for XXXX saw of ties potentially setting. among Care benefiting by part over and well flexibility costly making as CMS strategies. the metrics significant the X% more COVID. granted recognizing of of a to unprecedented reform. as homebound waiver CMS, waivers requirement, health in from legislation series that relief is active a the our home groundbreaking operational Home to view certification our sequestration nurse the great We policy in significant of the legislative first sector. quality equipment particular provide that work do healthcare generating plus all home for commitment last the I to practitioners and as differentiated practitioners growth. time. your the important and in into an our entrusted supporting a role you overview as Group how morning and LHC Thank dedication Dale diligently and and operational level Thank want who How on on our work reinforces we all of some of nation's employees it will impacting Josh roles. of of to you, and of you. of delivery an I of is legislative behalf inflation. those me On and and all increasingly sector acknowledge and our our good Eric, It hard every our specific system. for well the touch us provide This as want update and provide strategy the with is of at certify the We're most opportunity improvements XXXX morning, activity Innovative privilege giving for allowing everyone. care our those XXXX these examples to serve to growth to care high LHC home front-line advantages Group, regulatory due health our flexibilities value related wake to proposition for will afforded strategies from first to risk and waivers regarding care

providers encouraging initiative encouraging This this study in and a to earnings a payment to administration level to innovative are policy to a encouraged by We [ph] announced its in and administration more contacts this include in over for has deck. look and initiatives. terms care to language with on by to of we see the to Hospice. This include of advance our a place Association for for and a Medicare rapid to and These XXXX to health rural Advantage be the including We a systems We of are the traditional at access care seniors CMS alternative urging, Care socialize Healthcare calling patient and in field hill on care, Home supplement expansion home budget the year as home on broadly institutional XXXX. references and slide of coverage. summary Home language the with in Quality including begun appropriations Congress models. significant regard, for these home home. choose promoting further, to expected will Medicare in also in industry, more Even legislation, $XXX emphasis supported CMS the risk funds we the Biden have and structure with attached proposals avoid services billion working to pleased positive access which equally report number forward home health detailed playing we partnership care expand and services is our home Congress. for properly which the care National

will Medicare health this services personal care and provide effective skilled remedy benefit services. certified first cost a which home important legislation time the For time would include

many for are to lawmaker We it data give the pace this the We increase services the sources, which XX% affords, high patients and energies, referral positive maintain preferred already few year consideration valuing is while XXXX. lines a highlighting unprecedented partners, hill of and be sources year how with healthcare outcomes. over XXXX for feedback up new referral and we're delivery In been a families, this pleased are up improving simultaneously the shaping year. in Congress be initiative seeing look provided the The out at in care payers post-acute from filed and with our the with backups and they full supported that total in care, believe home are The to higher statement. on patients, quarters risk, benefit, forward sum their advantages cost receiving to the a clinically to emphasis is quality seeing cost appropriate effective on we've to the home it last physician of recognized in reductions double-digit end setting. to patient CMS

take XX% We and than patients with patients. these continue to hospice. quarter began, health more fourth in up and that in XX,XXX number, home in doubling COVID-XX of Since on suspected confirmed treated the the we've pandemic

Our to timeframe, is institutional admissions same sequentially for level, pre-COVID us. have the during the our which also increased and closer project norm

is highlight point, the I'd Bureau spending to by healthcare Economic recent data the of Another like published on data Analysis. U.S. from

showing is spending annual For of a share the going year, second it healthcare greater is home straight health. to

drug was was to that mid all care XXXX. up has low physicians choosing and pandemic by more discharge care the over only was single-digits. costly health prescription X% nursing families, up care demonstrates, clinical of planners care down a that this resulted hospital in Home in exception shift potentially and is home patients, services health congregate the home more higher category What and home physician in referral risk With and with health spending the patterns settings. with

and through One other of of proposition, the value differentiate real able of is range to our our ways LHC potential. our capabilities the we've demonstration time been Group

this You before. heard talk about us

specific I do our I much to of expands. Health Orlando talking transaction ground again, completed and last the Orlando example. ability to X. care April areas on joint strategy about venture length patient Capacity, the to of want reduction in continue We and you on cover grow with won't centered System the through as we're system focus. stay So will immediate August improvement that began but a leave quickly of

placement initiated already scale have home capacity health program are the constraints level We acuity increasing our and that assist COVID. related to to the with of traditional home

In of and addition, underway way and care improvement. and strategies identified we to action have address patient to length stay items

meet increase hospital operations. tailor the seen the we each in challenges comment it XXX% Josh we've provide August COVID. on in result, And over how turn of that, and since is approach despite of another needs a of specific our to with I'll community we to good Josh. growth high-level census partners serve. As This example X to

Josh Proffitt

begin team country prepared done QX good the historic would of pandemic. by and of XXXX from a you, Keith a job the I like and members appreciation of comments extending have in word to acknowledgment my in incredible face the everyone. of and all our sincere across Thank also morning

high never to wavered some safety privilege and It a is yourself and serve in our quality serving from patients. quality on with and time earnings with I organic growth I differentiated our the that are and to that to provide commitment This how evolving, health, spend growth is want as our strategy your more up want true of the service You JVs margin specifics is you wholly-owned begin opportunities, others. up revenue improvement high is frame creating quality Keith growth you much outcomes our comments, to of and strategy producing last and Picking so give new how and how growth growth potential. our around to driving growth. we locations.

is last it sequential sequential key seeing census, institutional positive with takes Dale quarters. and rate you one I We point improving our in community into about progression the the QX want and admissions. this share admissions of are us make three an and that versus also back QX. on a a build trends will from forward data we've trend these Slide over carries growth all QX metrics outlined the on experiencing. There on and details admissions the later are to we for The improvement how episodic underlying non-Medicare up bridge of admissions moment sequentially to results the more XX mix sequential and in

the including to and in pandemic, navigate from As latest continue December we January. spike headwinds the the

health will in for transparency QX, posted sequential we keeping inorganic with the of Medicare saw in Slide our the primary blocks growth to In on of We increase supplemental outline want long-term of philosophy, organic QX. home our with conservative a we as as top strong XX potential. much was a we you census modeling as in a XX.X% can out building that sequential sequential increase see well. revenue which deck, to X.X% Turning trend

of put deck we that layers starting see on will growth different in several XX categories. You the Slide of supplemental the

Let's organic start with growth.

hospice guidance, to As you'll XX% be to are full year also expecting our growth X% admissions XX%. home to we admissions X% from organic see organic to and increase health

XX. in baseline This segments Slide sequential difficulty] providing represent beyond. growth we've [technical in of a XXXX businesses would COVID continued strong these quarterly back built and acceleration through As outlined both that very two for our we've organic breakdown on across

at health we're target over very ranges is in highest admissions confident our for With consecutive which weekly home the strengths of place, since operational year. three had week, weeks the January, last our X,XXX For year. keeping January of per our we end and admissions, averaging

home quality leading differentiated scores organic down has home be. second still but We XX% and or it's have health, higher I'll from a also slide service see a our and from share impactful higher over of the four that we can incremental we by wholly-owned been locations standalone co-located growth that have for and it HCBS earlier. presence, HCBS is physician XX, home able XXX you agencies to how called locations our offering competitors lot referrals, of there and broken the of this growth either even more can be the hospice room out strategy. we've leveraging of will When them. a to And already basis of the compelling, earning our a and point more only to shown JV health On evidenced as XX% for with revenue grow drive co-located through as On to revenue joint market. evidence past only we've smaller XXX years. points than also in averaged with given as in gained Slide the add that hospice annual potential strategy XX, Keith third line co-locating health by ventures

years, growth also average to them $XX an been between of three rates XX% and four the inorganic JVs joint XX growth, With of $XX year to years New us. XX XX% form JVs reaching within revenue past through of to million in have months. with first consistently pursue corporate two and we and profile growth acquired a layer EBITDA Still acquisitions. is another for another thick continue million outside that's of venture the for

to contribution to million If the four transaction ownership. we've XXXX to revenue increase in and We're $XX.X from we with highlight $XX.X acquired annual it What million Excluding contribution revenue after we able in million it Slide can $XXX margin want our estimated M&A $XXX do years. XXXX our XXXX estimated the million also that to we've underlines acquired current from in pipeline the is Almost in is from those outlined look revenue margin acquired compared XXXX in to acquisitions. largest $XXX particular in over the XXXX we've the over the revenue $XXX a and acquired an from and point million past growth achieve, with One I what been targeting total on data at to Family, and revenue that's XX, of our XXXX. annual million.

past, As we is the multifaceted. in pipeline our discussed have

and place business. operational leadership highlights, much in and how years hospice the daily have co-location and acquisitions we and strategic than a We XX% past putting by XX compounded four first years growth several made we pipeline after our JV XX% annual making years percentage XX is our and founding. Slide larger, since with to in As rate intentionally separate hospice the strategy in for tuck-in acquisition breaks growth there executed hospice. strategy our of We've and down of differentiation have Slide co-locations. larger in pipeline, more revenue XX% the composition average had opportunities. you'll XXXX our locations, on changes the and XXXX the in know improve the hospice the in for census

health and by we priority. growth During a as strategy This opportunity pursue saw organically capturing outlook, last foundation models. struggle we building of that's additional will and consolidation the me on you new care that we had we highlighting comments a on XXXX, the conclude the to opportunities occur QX. envision agencies created Closing made stimulus But forestall and that our let XX.X% with to influx still The layer blocks value transition out of our solid continued and as the XXXX. inevitable have market segment PDGM XX% home EBITDA we to back we brought call value-based go this the historic of margins based smaller elimination. growth and RAP this hospice in as February, in now on money with can will in may focused more major believe consolidation share we our If improved strategy.

unique assets transition through in to improve cost. total goal a right lead to to place continued The the value lower and are of We improved care is and overall the have at quality care. value based outcomes

deliver quality patient of care length create have and clinical lower innovation to stay the episodes, We what reduce program time to need the payers and while mix and experience of readmissions, rigorous right based protocols same plans that at the improving outcomes.

of management our reduce also with relationships working [ph] are one the total ACO cost brains and experience and We of value-based only care. that peers with business the size an to of

Medicare the earned by subsidiary third the in the million As evidenced $X.X savings shared quarter. payment,

of of so our to We access to our bear the do to right all across to have national ability level core the bring and provide to footprint. services the care

data drive provider tools sharing and insights. clinical facilitate also actionable in investments partners interoperability with support engagement and and Our proprietary our technology leading decision to

to with full ahead to time all successfully and opportunities there to inorganic to to episodic strategic grow utilization of capabilities. contract was today. wealth of growth and organic, it's these for of ever work a components see our of are move If a payers and All room more necessary look and care

will the to Group, and industry. Our the to the and formation you made on turn results our LHC Dale, add will It color patients beyond. guide of over right of care leader taking XXXX in us guidance. the to a in additional has call opportunities I

Dale Mackel

and good morning Josh you, Thank everyone.

revenue by drivers. we provided consolidated in the deck the earnings customary, on and explanations our lot the on of results, segment supplemental detail margin corresponding quarterly As a and is release

going year guidance would the not adjusted a remarks, exceeded are to clinically as appropriate XXXX. I versus of the XX% up year in the pre-COVID of like light acknowledge and XXXX of We of importance I'm cost-effective and those XXXX. full presented pleased healthcare. with revisit which growing of which to reinforcing end throughout million, our details is the per our the setting versus adjusted challenges high patient QX we in $XXX home per especially my XX% up full that results, While for pandemic share, With share full diluted $X.XX is EBITDA unprecedented preferred, original earnings year

key and our also XXXX earnings guidance. Our year full in supplemental outline release quarter for assumptions first

morning, will remarks discussing prepared my Given this I my most spend time of XXXX guidance. our

will key current for the by deck, health our comments The close I but first, highlighting liquidity important factors Page the highlight and point revenue trends business. XX the I will out broken a will metric in key few growth initiatives. position. our support supplemental strong out we've I my home that to guidance

you we've our revenue where sequential pre-pandemic. consistent episode start improvement – percentage episode made that also Josh institutional to of seen We've COVID As the since climb induced in Medicare will point. per per mentioned, were toward low admits see our revenue back they

LUPA XXXX X%. While since to our May expectations has and percent is maintained in our X% line of with of stability

all pandemic feel metrics Given good experienced in point XXXX. We challenges heading exit about on related XXXX. these the into

health Now start at and adjusted We're midpoint net in XX.X% we're expecting year. increase turning year-over-year X.X% I'll Based on XXXX to we and increase in a since a an revenue, growth with guidance, full EPS, strong increase are we growth last XX.X% the hospice. projecting EBITDA our organic less the in April, have the non-controlling admissions experienced sequential for adjusted interests. both in home

Josh, growth built range. Medicare X% a we've and hospice the home reimbursement X% increase rates by to the XX% perspective, we increase in range, X% Hospice and in health admission be X.X% XX% health mentioned Medicare growth As to expect home also for to rates. a for From

HHS is The to of reflects entirety in is extended service indicating of year the LTACHs EBITDA positive place that be past letter suspended and current approximately to our $XX the governors a only to assumption we of a through million emergency is for XX.X% the net set through XX.X% revenue for are reflects April $X public and a line. has would and XX, December sequestration XXXX, won't although XX.X% that a remain we expect this in health for If sent expiration G&A of of it margin PAG XX.X% assuming revenue. range gross likely its date projecting million extended of We full-year are earlier impact revenue XX. range XX, March incremental to

you bridge quarter Page holidays progressive XXXX. out first I QX QX I as at our have to we to first with around from Looking are; will point by in that point QX January. results, in the we a supplemental XXXX and start XX we seasonality to typically guidance reported to will quarter a the the the slower biggest fourth compared provided have year XXXX bridge the the differences experience followed

health can and trends this You weekly the We've the the see to-date the Page our on XX clinicians for broken reflected first home in on quarter. We've also fourth of of the supplemental. tracked down quarantine. quarter percentage

the the can averaged had Clinicians a through slide, and X.X%, high impact XXXX post same on the COVID into wave X% quarantine exacerbating a holiday census. from approximately and recent the You QX accelerated but of had to January of that real admissions impact. on of QX holidays see seasonality further and for

assumption have every our quarantine first clinicians XX,XXX percentage expected trended to the unique and point taxes the home back affect that experienced average associated February XX. due higher visit come note, hours. occurring be of compared up of other admissions, Two QX. XX,XXX is back than higher new quarter, year X.X%. closures over now and activity, is week in On billable we closures on a managed XXX during with variables year community-based the and first, service payroll with the care the agency low to health daily majority revenue winter the severe early QX. with weather in above to down to The Next census from This of million February home and QX January on positive the we X per has

stock. Second, we the vesting to excess rate have lower from a the of due effective restricted benefit tax tax

first the are rate quarter. to will effective We COVID last our for XX% is tax XXXX with to make to of the related The I comment forecasting guidance XX.X% expenses. respect

adjust We will treat of numbers. out did our XXXX we in how these expenses and consistent them with

our be $XX For XX through estimating related of first expected million incurred XXXX quarter. details XXXX, year on supplement. we the million COVID are are all relating in to which of $XX to to guidance Pages costs XX Again million currently million X pertinent of full our is to covered XX

Lastly, I to our balance highlight want sheet.

million were the and nearly federal previously net which latter of announced and Funds the payments Relief the to of liquidity We of we return Provider intend have Medicare $XXX total advanced that's to government.

outstanding led million of third in quarter in improvement which in XX million quarter fourth quarter. great the improving to first XXXX sales XX to adjusted was days also and XX has cash strides We in This as continued they're the our compared made down flow, in free days $XX to days our of day third a in $XX quarter in XXXX. the strong with QX the compared

position, and colocation liquidity M&A an free us pursue in as on to positions pipeline Our well XXXX, debt well virtually cash execute the continue as strong no strategies active flow to forward questions. open our Thank the you. we as Josh are to to ready Operator, floor progresses. look year That mentioned earlier. concludes for prepared reporting on remarks. the that We activity

Operator

question ahead. [Operator Please And Scott first with from comes Instructions] Stephens. go Fidel the

Scott Fidel

and there's a the First question appreciate just color deck, you in lot slide there. the in interested gave all

over course visits and If per visits the year? cost you your could around maybe just you're that us and us the thinking terms about maybe embedded of and thinking for sequencing if then of in help about the can trends out also how in 'XX for how that XQ and you guide think the progresses XXXX flush

Josh Proffitt

start into Dale visits what of hand and Great. trending and it kind on get level, we're of to a but I'll and high there. Josh. is details This kind to costs visit off Thanks, I'll just the at the Scott. per seeing trends

pleased episode, when as concluded visits due where variation PDGM of we're projected and through we've per very see There because transition, we the you with you with bit of the landed As year, going look a could at COVID be that. still our kind you little can that and really throughout visits with to we've ramping three I this also planning we've our approximately emphasized and But per virtual episode missed QX, just under up our see visits VPE as in so PDGM would throughout added COVID phase highlight ended our up well. execution XX.

our with So in so is which from around XX VPE is prior combined virtual running year. total in-person or XX, down

we're I just place So like just before Dale in really add to from the a per good to talk feel a I about visits also cost perspective. I'll off it visit. hand

all you connected performance very put strong like team As to Dale? monitor our and on and the in we quality predicted we that side and track of performance the just know, when pathways to clinical our outcomes model continue very kind quality place, the see closely progression. care outcomes in

Dale Mackel

Scott. we've that I at place. Josh as in looked very Thanks, XXXX Yes. would are good mentioned, VPEs we sustainable add terms assumed that reinforce our that, and - we and of

I a about around and a of pandemic labor the labor in our was if our tell lot contract managed impact big contract therapists labor because hospice, full-time look than contract our topic COVID health but is we've say assumption carry quite single-digit because a to into you I'll like come the sense into was back industry think XXXX. continue XXXX, perspective, home we cost-per-visit throughout we pretty I isolated and benefit that last is, XXXX, around and a we throughout normalized going a and a increases. them few you from So salaries normal brought LTACH visit, rather one we've model I year that getting year-over-year highlight that, on low and impact our From increase in where really with a think full on assumed changed our at things I'll things, well a will, PDGM, that we When with mainly that's pretty we brought the impact been and per unit. of changed would material we've therapy around costly. salary,

rates, We our material the XXXX. So we've to be LTACH, in really skilled nursing, a We those saw not tune been the in impact impact hardest hospice the where in rates to and I mean contract labor home the that's labor of and XXXX. cost find able impact XX% manage and by are on increases to contract it component quarter material has us there about that's terms million business year-over-year in place million to $X it biggest expect health about we us comes or structure. been the of our Where impacted. it $X.X being impact in well don't annually

essentially that least back XXXX, that the assumed at that in we've first So continues the temper into half to XXXX. we half expect of and of

Scott Fidel

revenues of we between maybe $XXX that activity million does about in And just ultimately think has gave hospice annual is intrigued you pipeline it and for you been million helpful hospice of interested in that represent M&A to to in in balanced that $XXX sort laid rent weighted around the the Thanks. how of Thanks out that want would as health. playing Interested disclosures it. that targeted would more much my how be or the just it got hospice home weighted do that was targeting, just was around at out that Okay, XX%, the will terms it acquisitions statue question. towards follow-up just hospice annual just that I be thing out towards in just all M&A about One from detail. you're flash be just slides you us maybe if about think M&A up. and and and pipe

Josh Proffitt

Josh. is This Scott. Yes,

can either comments a quite some would on active that We've I of of think really the have been of been about wanting right just be we see them mix commented we market. to deck think close pipeline year. That's or you in are or that the to that in a time, So but some we about closer you'll sizable lines we've in that diligence segment, I a in learnings in staff diligence at have hospice to now out you the our current of hospice our in that I prepared you come co-location service wouldn't time couple further in so if in composition hospice, high supplemental fairly million some see company talking develop just and we've see to expect our that and our I mix, you our volume for with the XX% mix pleased M&A, hospice, of tell balanced and and if more over you but home our see percent and mix tell now of our clearly, strategy. it's also opportunities we active opportunities throughout and on. what of grow more health might discussions pipeline. hospice really the approach XX% in able balanced a I'll you have and had XXX necessarily QX we're my together good would as so that hospice already even XX our information on trajectory been within the or of platform

half we on looking bringing larger that did So really at, deals last in in addition hospice back in of we're year. we're tuck-in some to the deals focused like some also

Operator

ahead. The comes go Brian from Tanquilut next with Please Jefferies. question

Brian Tanquilut

I'll Josh, admission right. guess, I trends, ask about

you're guess there as impact - So And negative business. in obviously quarter, the negative guidance. X% Medicare I I QX, mean, is related in I that that for to the positive there seeing X% anything or

like at you XXXX week to level, per get it to Looking XXXX kind seems XX% to hit need it trends, range. of X% like that admission up to current

that or that can number walk this get to plan So us you through up the to admission level? strategy

Josh Proffitt

Thanks. Brian. Yes,

could and signaling that almost saying the have week So, along that of the of just we a vibrated saying had really over up north started been what we've to between fuel in would most back all the we've get pandemic really get back really rate admissions in QX, X those the through have X,XXX weeks - our as a weeks we've QX start admissions general. part, we in been And week in January, per QX, been strong and whole be I'll into really the throughout in transparent very our the where life moved then XXXX XXXX near mark, and week with trend and that, several guess to XXXX, up even XXXX for growth. if I we run

period over and Medicare in As of improvement been closely, am lot, to watching growth a it revenue experienced, been I've saying what that then in hard into of Medicare we've even one of that I because it's team is we've as of and sequential XXXX one of is other the thing kind kind some kind relates proud success real incredibly period XXXX. the measure

interpret So look at and too out much organic comps of those.

QX there would from continuing So I to QX improvement we're you that to see tell to with period kind a standpoint, sequential seeing really we're and and QX period what then pleased from of over QX.

I'm never The pleased the ability we've non-Medicare our rate episodic grow is other area a very before, done with business. to at

Medicare equivalency. non-Medicare that see episodic You pays almost in growth at bullets on decks XX% in and our

feet focusing then still going plan kind all kind just of that So as X we've pointing XXXX in rather direction one be. for of point mix would Medicare only is then lastly, and of to the this reasons, mix stage either force standpoint, at of I been there street of a got an for not And really hitting with increased and getting is that we a on on to securing because QX confidence year even in with in the we point, you that how blend growing overall episodic our February And year, are by put but Brian, expected be of sales job going things the to single our to requisitions. being X other being emphasis to last the probably goal and kind be set QX the being to process varying to a through double year of the in an Right to by where from extreme high contracting in gives interviewed what at feet to on we've with somewhat it went, but XX increasing X%, double-digits and already QX of - in hanging now contraction in our this done us XX. some the X% XX know it has on digits, from street. which team on-boarded comps through low and that of we open of our induced and have COVID COVID then better has QX great X contracts, those, of in soft, XX% QX, kinds of high the but our

growth on to and scheduled incremental give quarter. XX% more additional that back an on growth for end. fuel to in this we've hit XX% our And street the already really So out track to feet we're QX

Brian Tanquilut

the assets that. I with Now guess do heavy in space are mean, who from that. what home of into Very mean be the looking obviously that does the with for move home ground strategic is nursing seeing in the how are - Brookdale at helpful. industry I and how I how on question and very I seeing HCA it appreciate are the Florida. is competing you, guys you coming Keith, acquisition you to mean Florida you that a either or your AHCA Texas? perspective nursing going my

Keith Myers

thanks, not for asking imagine you're first might that might, And question. person just. Well, as you question Brian that the

did ACAS, lot on back we then. I've strategy venture with that a done very that the joint working a lonely hospital XXXX business of upfront November pretty said may hospital close bit some better Florida in first for and lot can't venture HCA, our joint with a have that work place We and a I of validation markets hospice we've of a the when of think XX of of I but relationship that so have there, including

we've come long So We've come. a way.

it view to lot that through we just patient re-hospitalization help strategy, and right if will of other through the every venture do we acceleration business partner view but quality and every a validate on positive venture I rates, full it drive we hospital I'm scores, I a joint the the ACA or where it's day. to do satisfaction we like I'll blocking that with the few in our And a a with receive a really, guy partner as tackling, just we business our earn that a as have option, discharge partners of So hospitals do that customer already so call think that view positive are service. glass joint I I'm that. as half mean

Operator

with Please The comes Suisse. from next question go Rice Credit ahead. A.J.

Robert Moon

Rob lot I labor. you of you Rice. in pressured market hearing from contract cost haven't wondering, attract volumes is because to the seen and been staffing of from staff some for of last on This Thanks also couple know We've A.J. the on for taking I was use just have volumes. a pressure said the any over positions my Moon that been you a have seen of to fill contract those the help limit improve the pressure just you to that labor some volume to didn't months? Have staffing question.

Josh Proffitt

Yes, is that take one. Josh. this I'll definitely

to rate was the of rather, employees the employees the on So fourth the Part we that and early census in point answer high January - a beginning quarter, in quarantine, and see headwind end X% of of hitting went even the about you up in yes. the of X%. frontline first of X% December created short our - is from to dip of run what the toward a

week-over-week with out the added getting trend see down, pressures, back vaccinations past post-holiday So and Very entire of will. to that just also country. to to trend that impacted the last to if surge rolling the pleased be that X.X% down you COVID partly continuing staffing just partly week and

thing to just putting I all you into staffing that would in the we point efforts is have other The been general.

front infrastructure about your market growth. you've to volume and that also but and consolidation adding have to on take got street to We And share talking gain the sales of feet workforce us. standpoint, it's take that this not opportunity be clinical been in about only increasing from additional a

XX%, of QX, to And in hired turnover rather we QX to down of X largest had of history saw then for home alone, service - higher about down went new health decreased we our in January staff hires of back we clinicians. So in in our home our health in in in had back hires an new voluntary And percentage company's month line. single we the we which XX%. QX, point clinical increase XX.X%

So spikes talent this to the think my with all tip staff thing departments face in or pressures of really upcoming of be recruiting I'll last pandemic the is notion real across the occur to our adding and I'll say our in and But future acquisition I forward-thinking our the of operators industry. is, as cap growth. staffing

Dale Mackel

able to on have As in period Josh when referenced labor the referenced in Rob, and low comments pretty of add contract prepared X%, clinicians we around is to relying of because of when well time you're really that on we And my some Yes. remarks, Dale. we labor I on then you Clearly, this is X%. those to contract were quarantine, fill right? gaps. quadruples had previous XXXX manage would that in amount a goes, to

periods, extended staff. much So with don't to see right? pressure. we pockets manage now back see better we're able our X.X%, do when we But to does down it small So we're that

We've contain to to there's labor. of time. that pressures manage cost contract it's not the it So no from able and small been periods there it

Robert Moon

thorough. That Great. was

I me. million million from in payments and for upside expected in some that there and expected, there like at flat and that conservatism be half, it if assuming guidance, payments. or more back there? we chance MSSP half more the one QX, guess, have rate adjusted the in When in I is ex any the than look will up Just that MSSP $XX back back of it's $XX EBITDA I out COVID rate Is QX, looks of I kind EBITDA kind take the clear subside

Dale Mackel

we probably some I upside Yes. - mean, I there. there's think believe

is. clearly, of there uncertainty get, good I COVID and refer the used back feel appropriate more and guidance, the we to just actually opportunity a of feel think I in it of as right? now had to some has appropriate. So and - we can of to March it this With COVID, December that around normality guidance, We higher height it's persisted we think that at April, guidance, the look in COVID more we the January, amount reflects emergence it given uncertainty. right? And we

that on upside. some correct So that be could I believe perspective is there your

Operator

question Andrew comes Barclays. next from ahead. go The with Mok Please

Andrew Mok

trends QX? at home provide same to I the December The for the Slide volumes in health you time context the dynamic early that looks Can a XX. surprising is on QX volume COVID strongest somewhat were into cases progression wanted follow-up on surged. because and more that it bit monthly like

Keith Myers

Yes.

I keep hate again, mean, drum. I the So beating to

Looking be at can comps a skewed. little the organic

a And of a bit back our think strong admissions most then lower of but But little of we activity dipping in coming to so helped December. started 'XX. December into down of and I January. of kind we the hurdle more 'XX, really to up. quarter with had had it a started So overall January, that picked We the jump census in February, impact spike in in end from

hopefully, But winter the of the can kind of you XX, of that that was kind will. So kind you early kind January, look really the if of gives if you make weekly some effect late then helps progression. admit at phenomenon really sense Slide occurred December through see, you've got it. in of And February. you But that

You to see X,XXX X,XXX. the first January Christmas under week then was of was down week, and down obviously,

of December, early in back in was as which it it holiday January. as COVID. So And the well then X,XXX, still and of started weeks December is up X,XXX, then dipped couple hard both climbing last

Operator

Bowers question with Bank. next comes from Deutsche The Justin

Justin Bowers

Welcome aboard, Dale.

historic a taking -? your EBITDA like, of that So of of in EBITDA over there mid- that teens back, the plus is And and market off; business organic three at just kind above-average grown you three kind XX% continue reason the cash step last have you any growth, next, high tailwinds, north your guys the can't or the looking Is compound years? then over throws to to the grow why years. the

Dale Mackel

expectation. think I our that's

it health the to able And information what fair assessment. a we when do think it our that's business or of of back the hospice again, strategy, integrate JV to, goes And with be wholly and home around I with owned. think we're I inorganic some you it whether robustness into we shared the our models.

us said time a robust that opportunity growth. we're And so, it's think kind Josh of - to probably We not I better think yes, prepared with as a in or remarks, his continue for company absolutely.

Joshua Proffitt

our the that of EBITDA, is guide an this is additional you assume I mean, doesn't and at if Josh. it year, this Justin, adjusted growth any midpoint Yes, XX% almost look even in absolutely, inorganic.

additional in there's that. incremental no acquisitions So

we bought could in revenue. improvement deck in XX that to extrapolate million And that the out. a year, on a Slide questions to I continue be addition apply that years just to market lot I But you consolidator inorganic that point sustainable upon to and other our if - I continue see to upside we're growing come you close year. would $XX I won't and we last to execute that as for our is if years had we can point acquired you spend some this really opportunities the even business. So the that there's shows inorganic you tell targets, in the that grow get of And time last further definitely would would to we experience the going four we've you so the over

Justin Bowers

but hasn't with of about the a hands their it had in still been LifePoint Got they've left kind And world. is it's Can an one obviously, life off-line. while, hop the of rest JV? relationship some think just provide - they the on know And update greenfield the before all just I I one it. - with there's I that? on full talked - much opportunity quick But you there. us and along how

Joshua Proffitt

on because Board health Justin, that had we I they get you we question. out that I'm with the front execution from the we you that within, and footprint us. list kind wasn't in one, know me. have do short in now, together because LifePoint of but I of just LifePoint, recent but tell with welcome don't I partly engaged got the are, But that Board back so to month-to-month most home be and with us. hospice growing was the until And not definitely on of in and our can grow consummated exactly both asked meeting our joint it. back the you, multiple glad in that to time on we to that expecting that a XXXX opportunities the space in is continue most with out. going circle we - venture day-to-day, of venture, I to our Board of with greenfield I've and the the source, to and front where had But joint and were size and it's markets are week-to-week, of working JV that engaged

on So left but a in lot excited to got report opportunities back Justin, to one, still you of it's it. that

Operator

America. [Operator Instructions] Next from Bank comes of Gajuk question Joanna with

Joanna Gajuk

my right? follow-up question, non-Medicare revenue, XX%. Very episodic talking growth, about first, strong So the

volumes contracts how probably Is renegotiating talk on talk the existing So there? that terms are contracting? where what still Medicare from it's there to mix, Advantage contracting? you about is but suspect episodic of can of kind more you Are And winning much is payer about in I - are room under exactly a there grow just happening those your with visit MA you can fronts dip? you Or contracts? you these

Joshua Proffitt

new XXXX, seen contracts bit and done volume few a growth quite you've them. even a a the episodic to a how to partners forward. And more with already in But I both. and we tag then it's had we We of XXXX job. have so that us background want engage that handful Dale he's payor in. within bringing his innovative Joanna, secured to going With or from our experience experience, thought so good

of growing the within episodic. them per converting visit had. job share from So on a done and to focusing of pointing that already ones we've And the we better then kind

PDGM kind on XX-day is on of payment think ranging toward, now easier a the that form episodic of And having level growth. you right multi-pronged, even it partners conversations with I our level, of paying kind even we're now I if for and period. how of them engagement the we've And high is be is a would everything to episodic. payor a innovation tell might that experienced will, move in the at So of from you, lot now

month on So certain on instead member that are payment per going now a are got payment period. per got based XX-day that discussions of a going it's rate case period, then you've you've on, XX-day discussions And diagnosis groups. more

about So progress really the there. to you Dale, add? want excited

Dale Mackel

Yes.

I Josh a contracts under is Joanna, but of I think well, It's Josh couple reinforce what from both. a contracts. covered Absolutely, mix said. the things, would of gaining new say existing as growth really as it coming payor well share

so And we're excited so of go, we we lot runway to have about think obviously, that. there a

we conversations and episodic Josh right? on As care. opportunities we're home it, is in, the case interested that really continuum take around, more What going want variance opportunities, right? forward, where of of PMPM rate receptive Case and kinds are of the continuum that payors as that the care, We to, we home health models of whole health mentioned, on right? exciting look rates, -

the and puts on and with, responsibility risk accountability that the those the together. and do as situations, us, we efficiencies it comfortable administrative as so under And well we're performed business very well creates which to

become some there's in a free you to start off gold like away we things so from no required And standard, and cases. get

you number win win-win we've both we're So of a excitement it's that of parties. conversations a are beneficial able that's to going - both lot when to with a to how got these and parties, on

Joanna Gajuk

That's very helpful color.

discounts. MA close guess, per episode, loop, visit? used can so that We I of rate Just per average, to talk to talk about big kind you about

along average, to So on you, how far are closing that gap?

Dale Mackel

said the an three we years. X% I made about deck, last XX% our year-over-year, In over think Yes. we've improvement

as So very look to it's work that. we we episodic you said, Medicare equivalent. business, When continue the at right, on

of we very QX per had we're sequential happy actually a there. visit So The to QX improvement X.X%. areas,

continue that. reimbursement. a real So our we that's per of honestly, to on on some of payor. that it's contracting, focus But that's converting different is, we of while form work mix some there to of work that, But visit

Joanna Gajuk

but maybe introduce. make the sense. topic I if ask, may a follow-up, new And I to guess, just That

Congress. doing signified It some type. one could the You in like I you're guess legislation work like already seems mentioned be of that And home that a hospital systems. introduced with

the talk the you can to to like Seems at well as do So about Home equipped providers would proposal? better this. least something that Chose actually be wants larger me

additional in that? in will and with have home is participate but programs Would you to concept, how like add care more - fact capabilities that, color be markets? So LHCG great. Any your positioned around to this, personal in

Keith Myers

question, that that Keith. for I'll Thanks Joanna. take is one. This

heard us quite now, you about speak home have while a For SNF all and diversion. significant

the foundation back would transportation, guaranteed back SNF in we way services, may has we supplies XX-day started in Some would it. built a food, that it. then. didn't legislation the if in-home at from utilization. first would a recall, work did home reduce addition is be Added that to have for Home is it personal reserved that Choose In into But the system qualify skilled proposed, New Choose that's And episode it we eligible acute years required. they to who to and as include savings of you health though, of time-limit are a many placement that it that, after That's for necessarily. Health patients on Orleans SNF a be care, pilot remote and a XX-day care ago then, monitoring how that's it discharge for Ochsner Hospital. Home episode ways, legislation The

we've the to care it's and it. other very feel It's about the that benefit food but we - is the transportation think good personal I and huge. been doing, So adding work

with So the the back faced of OSHA. we parts early these one determinants were initiating sorry. challenges I'm in days of social the

- what Let Care. me And - you is asked about personal

Joanna Gajuk

actually you to thinking need coverage have to like Or be have enough are And participate? Yes. you more? you able whether to

Keith Myers

the Yes, hospice, on which big on us, short not care is personal the by contract, business national state the strategies. I'm either much has answer is We're challenging sorry, Medicaid into Yes, state of yes. I'm And built reimbursed unlike care missed. on because the I I'm been following if health is largely home co-located for or personal Medicare sorry contracts. that.

personal So would health. co-located care drive of in home us benefit for expansion this more markets

Joanna Gajuk

All to you talk consideration that of of right. incremental the out XXX Thank revenue to about it's XXX color. you But expect part it the when for year. sounds you like

Operator

like now Keith turn any to over back to I closing This conference concludes our Myers question-and-answer remarks. for session. would the

Keith Myers

the we're everyone, please And always, Okay. thanks, Thank call. you, for And in into know to Operator. as calls. dialing that you available between anytime

appropriate Team. will the of again. with Management questions, member Eric Elliott, and Thanks you contact have connect the If you any he

Operator

attending Thank for The conference is you presentation. concluded. now today's

disconnect. You may now

LHC (LHCG) 26 Feb 212020 Q4 Earnings call transcript