Earnings call transcript Q1 2023

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Operator

Good morning, everyone and welcome to Enhabit Home Health & Hospice’s First Quarter 2023 Earnings Conference Call. [Operator Instructions] Today’s conference call is being recorded. [Operator Instructions] I’ll now turn the call over to Mark Brewer, Enhabit Home Health & Hospice Chief Investor Relations Officer.

Mark Brewer

Thank you, Julianne and good morning everyone. Thank you for joining Enhabit Home Health & Hospice for our first quarter 2023 earnings conference call. call Officer; Barb Chief and the and our Financial on Executive Chief Crissy me today Jacobsmeyer, are President Officer. With Carlisle, our

also a statements, our earnings supplemental earnings find begin, forth the last filed related of set with we if the are do information, which investors.ehab.com. are already Before the page available On SEC on X you Form X-K will first at the safe supplemental release, the have quarter are the information website harbor and you on not of copy, Page release.

filings, make During from the once our call, discussed statements, Form our read projections, encourage could cause XX-Q, subject we each them. many and in that the are subsequent uncertainties will reports to uncertainties, risks on SEC estimates beyond available of filed. actual and website which is company’s forward-looking the the and on results including quarterly materially are company’s We are of differ risks Certain Form and XX-K to expectations control. you which which to

to only undue We not You current not forward-looking these are undertake of duty on projections, and information presented place other today. cautioned reliance which based estimates, on estimates events to update future guidance as are of and speak the forward-looking a do statements.

measures. Our supplemental information include financial and call non-GAAP this discussion on certain will

a follow-up the end to supplemental question one we everyone to measures, like Reconciliation the adhere that one the the most available directly ask of allow such to will question at measure in For release. everyone to GAAP the comparable information rule question. remind I’d earnings and to is

feel additional question, to the you rejoin If an queue. please have

Barb. the I’ll that, call turn With to over

Barb Jacobsmeyer

way Nurses payers. sources quality our morning, our every everyone. better nurses to It I’d for who Week care moment families, alongside Thank acknowledge this during like our continue referral to to for move caregivers and each patients deliver care and in to patients, a support the the you, other strong staff We particularly our cost-effective provide day who us. our required a long-range believe all for remain growth firmly high-quality take to wherever professionals and clinicians, a significant, quick nursing the the Mark. credit joining that can consistently is care Good home, providers outcomes. Thanks help they call to and the potential is for deserve manner. will home

one recruitment payer two critical results Let’s progress quarter and continue the in our as to talk of innovation of and clinical retention now XXXX, for factors about make staff. our we success

with pleased our are productive We the agreement a made most has significant progress innovation a and been team. for start May became that X. payer national in both effective our the year The payer with The busy have update is we areas. executed of time

are excited to Our these and branches patients historically accept they ready decline. had to

home-based this reach, to we deliver alongside addition X. payer, have for executed X care. which look working agreements In with solve that national these May effective accessibility for both to of We to conveners and went challenges patients forward conveners national

who The competitively pay is need the timely role post-acute of convener total to primary for overall create a access of the to They providers can of high-quality networks understand high-quality care. to cost care. lower

new not but down certain regional as only must them our drive we agreements. teams local with patterns these and sales date, local operations teams payers finance to to strategic agreements. we for admission and transparent to towards team why and time have in visiting XXX our and take the We where information traveling been replace members important analytics of deselect branches. data covering change field present branch To direct how believe the our teams sit I Our visited leaders. and new it’s have to to to and be national have we collaborated executive referral with produce go

remaining and through reinvest home negotiate time them the on them of these in sincerely is and operations we our there sales our other better did the spend leaders We remind people and of tough contracts. the how to walking the but affects technologies. these remind of they at impact our we this for our this decision employees quality to have. on not create and thank us the care We ability We office these not decisions, making difficult a acknowledge need to our decisions patient provide side payers the on tough for rely focused

quality confident our which the reinforce value will are and below payers particularly XXX the the points basis rates, clinicians our average, drive, our continue conveners. to to outcomes strong are We the low readmission national

put This per annually. adjusted financial EBITDA $X perspective this approximately any driving additional for X% move improved by every regional growth. To of volume our the to average million rate visit admissions of is change non-episodic current or you, our new of national agreements impact under outside in one

in In our payer recruitment XX drove success we A home pool net full-time new first XXX retention clinical in with in success of and nursing continued in continued our the innovation, candidate nurses addition staff. and to increase hospice. quarter, with health have our XX full-time

rate to full-time sequentially, XX.X% Our decreasing vacancy XX.X%. from points basis improved XX

with occurred health. capacity their impact ramping patient home up are capacity orientation the We health of census in hospice locations constraint to beginning and X see a XX of constraints result our quarter of these the ended staff XX home locations and only as new We to growth caseloads. completing at levels.

a staffing. per efforts and productivity a X.X% locations resulted New health in optimization to staffing and and the around cost year-over-year home core physicians from in increase X% per cost improved visit With XXXX. team’s posted been quarter increasing volumes, decline in X these have in sequential increase visit

increased and the an triage patient dedicated implementation impact to quarter four due additional the labor, case drove The per the case on-call per X%, while our quarter one. of Sequentially, the of management resources, primarily X, of quarter in For use basis model in management the year-over-year. created added of were that fixed cost than points day X,XXX days hospice, costs XX.X% has increase and increase contract cost model with day year-over-year. in lower less

We continue critical our these drive patients recruitment resources to retention referral needed source. a accept our are and diverse more from to ability to and believe

the to and two Hospice The a it quartile of top to I the recommend each our scored likely am completed also work work drivers. place and excited of engagement to with health care and question, share the is and a in first completed. that inclusion. that feel, employee recently was part-time it their to full-time little Enhabit meaningful of you fit and of you as top Enhabit when comes do these & engagement benchmarks Health how organizational was our on national our about staff above health survey care specifically Home response care. would the top employees health We survey the in drivers X% the places were diversity us of we XX%

our progress de at this a continue Evansville, our the case have strategy. In to track model, hospice quarter making are continued is de have with in locations provider acquired our growth novo and We additional novos to agency which Indiana, strides novo activity our health March, innovation open staffing, quarter and survey two on to we in and towards In payer we home one, we With sites management number. strategy. success are increased a two, de other XX in opened obtaining believe hospice year. we prerequisite we

quarter results I’ll discuss to and guidance. turn it our that, With one over to Crissy

Crissy Carlisle

continued million $XXX.X was for net estimate million sequestration the $XX revenue down revenue decreased Consolidated and X.X% payers resumption Thanks, home or health Barb. non-episodic first the to in approximately $X.X the shift more million year-over-year. year-over-year. We of quarter,

claims items increased line, which adjusted the year-over-year, million included primarily bottom a both to due While expenses, stand-alone with fall group EBITDA, general being decreased employee increased and incremental to these associated directly company. $XX.X costs and administrative also medical of

our In total in episodic admissions a Health reduction year-over-year continued admissions Home in growth admissions. offset increased non-episodic strong as X.X% segment,

the admissions contracts quarter episodically. that episodic the sequentially driven Medicare have year-over-year, they represents pay increased by episodic XXXX. This new Advantage growth X.X% quarter first the of since decreased While our XXXX, experienced from of we fourth first

of grew basis approximate health XXX increase of XX% our sequential point XXX increase an point an visits. fourth payer mix on This represents quarter the basis visits approximate total impact first In was approximately over non-episodic the and this the shift of revenue home year-over-year approximately XXXX. first XXXX, $X million the quarter. We quarter EBITDA estimate to of during adjusted and our

demonstrating we discussed, improved with significant we are to as rates. payers Barb progress our value negotiate making agreements new As proposition

increase in XXX a cost offset group per rise and group Our the increased claims cost basis employee medical productivity clinical year-over-year points. in by labor increases, The approximately impact as improved per claims. year-over-year medical contract visit X.X% and optimization of merit market impacted employee visit

our referral admissions, stay. decreased number achieved with from increase Hospice of segment, We their of to tend to due be diversification patients result length deaths in care our admitted In of in while from census coming lengths than an decline the in days intentional This the average in is facility XXX later a the of our daily of stay XX had directly X sequential we shorter of range more census a the part our the in X.X% of sources admissions average X.X% as quarter in fourth was XXXX. daily in the coming and of facilities sequentially. journey. This expansion to number increase admissions hospice to

cost implementation Barb driver of in increase model mentioned, of per the the primary the year-over-year day. management As is the case

believe of nursing clinical that sources success XXXX, productivity our quarter productivity full-time Similar not contract nurses who going labor recruitment to will throughout onboarding of reduce our to referral to resulted contract third We increased and now forward. keep first us during the the quarters have use allow period. strong use labor of fourth capacity in at and and that we nurse improve full were full-time

year-over-year, Our group increased due as primarily home a general incremental employee administrative increased and claims. and expenses company incurred approximately costs to million medical stand-alone $X office

of accompanied Page shown XX allocation earnings our Encompass net the slides million, For XXXX, of quarter $X.X overhead the was from release. that first supplemental as the Health on

first incurring and up we as Encompass services company of the Health recorded $X.X as in are their agreement costs have well the team costs associated For with our of we transition we quarter stand-alone XXXX, ramp to resources. costs These include expenses million.

we from and In income million free Adjusted free payroll generated the first during related a cash refund $XX the quarter to quarter. in timing during million XXXX. flow over tax flow, to cash the regards of $X benefited overpayments

and continue generate million expect adjusted We cash $XX flow between in of to XXXX. $XX million to free

our slides. We supplemental XX the quarter the of metrics included is sheet. net of now transition Page and X.Xx. exited debt liquidity leverage on Let’s to Information the balance on with

Our not credit our requires agreement X.XXx. that ratio exceed

is it than reductions EBITDA adjusted in changes in to sensitive debt. to more is ratio leverage Our

previously, noted XXXX. calculation and replaced we’ve quarters to in strongest in from As quarter-to-quarter the the trailing be to XX-month were we of lowest of is be of the first expected The half in steep. quarters expect be the XXXX year the ramp what by XXXX EBITDA adjusted of will

While to our XX our decreased decreased $XX our we March approximately amount credit million. constrains December adjusted pressure net This XX-month limiting draw revolving can our is our from effectively EBITDA facility. This pressure million on XX, leverage. $XX also debt liquidity on by the approximately on trailing leverage putting

of including $XX.X hand, financial support to on of is $XXX.X cash liquidity, we had which As and we of believe obligations. March available operations XX, our sufficient million million

revolver million the XXXX and we X post on reminder, $XX required spin-off deferred of acquisitions have to the our Encompass revolver for quarter made borrowing that term Act once a Health, our As when million CARES only million drawn loan. during funded repaid a from $XX $XX on funds. fourth and we in today, payments tax made million of related $XX payment payroll we’ve Through

we our current compliance financial be Our forecast continue indicates in to will covenants. with

our when are pressures proactively evaluating continually credit compliance under appropriate. covenants the negotiate our with expected such the all steps agreement if we and Given appropriate needed leverage earlier, mentioned take closely and to we’ll covenants and

Let’s turn guidance. to now

the would year, knew headwinds the year XXXX to be were be half and going previously, from noted the steep. the As this quarter-to-quarter ramp in we we we stronger first in of stated

$XXX in improvements Advantage just claims, of XXXX. shy medical our $XXX our guidance increase million. includes expect adjusted to the rates of and of staffing results Given throughout Medicare employee We our improved quarter constraints, combined XXXX we internal group see expectations. that with to one With in bottom our contracts were expansion capacity maintain line reduced EBITDA our million

new transition expected weaker national to sequential and first Given of the the higher episodic slightly quarter in admissions our non-episodic end range and clinical contracts home results, smooth of trends and the than quick assumes in health regional in improved accelerate, admissions the hospice. productivity payer

will open for line we the questions. that, With

Operator

comes ahead. from first Our from go Jefferies. Please Instructions] Brian Tanquilut question [Operator

is line open. Your

Brian Tanquilut

you gains for but I of guess, you improvement get Hey. QX? share the to from into what the Good in confidence for sequential morning. you have kind comes the year Crissy, seasonality QX, us cadence your on your for the know of versus to visibility is the numbers business, and the And the and thank that with make tell to can investors confidence like there year? if where I – comment you them level get feel can to maybe from same the but

Crissy Carlisle

Yes.

all as I and they my two contract new gets script. that effective The of of Barb earnings Xst. as convener part closing our well So, new remarks kind back was of became contracts, think it the earlier mentioned May to the national that release

are into former the teams those contracts looking XX at shift and of working And or our historic so into replacing performance days with contracts to we contracts. those contracts

too it’s and quickly to So, know a we that little can smoothly early transition. how make

to As of mentioned, one of $X under regional these our adjusted or current new annually. X% can that contracts, move for one million Barb EBITDA every historic that’s of non-episodic visits contracts we national of

you Now and it’s before – even it’s of adjust But Xst, significant it big a into went on impact, those result so again, effect May that’s to growing have timeline a a as contracts. focused that. we

that’s one of year. bigger the the rest the drivers of So, of

we side recall to the one for our of national them. a more had referral sources, contract that addition, benefits contract, of national or In episodic a benefits that when other become we is one-stop admissions, historically, shop a

And take provide so more we direct again their when to you can these need. that more patients to go in you and tend say are now you they patients, episodic of because also meeting

is far. the we nurses believe are we to and place Again, with continue factor that that’s then things the we point and can focused noted, clinical need. that we growth we have as productivity thus some a And regards we reached how has one in of that comfortable in the So, we last full-time capacity hospice of episodic in staffing hospice. the the on accelerate of are seen that that have

what did again, for from in the X% trending stay reduction consideration nursing to out that the we contract we with the that as is guidance And cost are comfortable so through of hospice we included And knowing seeing rest contract you see X% begin improved day. that But have. guidance to capacity trending that quarter that go why consideration. the down per can we year. given the clinical first we X% labor usage, and productivity We now but labor X% full-time take that’s up to

Brian Tanquilut

you right? from in That as about guys So, – in the – about makes lot how of the then a the maybe, number. of know are how will thinking and is that of lot out? are Barb, you some think part be Encompass, walk headwinds like the if over sense. folks of I decoupling focused kind we there trend where how bottoms past, us whole have admissions Maybe the volume is can how And thinking talked or about or that the maybe course I evolve of should you the through a situation admissions year on about

Barb Jacobsmeyer

the getting what of in that kind was the volume are Health. from But Crissy Encompass it stability I Well, think mentioning. to we Sure. raising we just are goes

on a to this out that key our our are that focused and year last referral all sales for helpful to sources, the a you was what at which be end can saying on be of us year we provider. would One included the things team going the for of that had we wholesome focus other provider for early better more Health, Encompass you, so payers the of

And regional markets make that local so or a pretty – there because that have significant some are payer a difference. big will

or well now I again as to national, on okay, go to an take in a regionals us long other list of more on earn provider facility, think these let more Health it’s the a to new help to us of patients. and be is be able And for really focus so getting that as going gives the the good say, for of Encompass us can go fee service, and ability that whether that

Brian Tanquilut

Thank Alright. you, Got guys. it.

Barb Jacobsmeyer

Thanks.

Operator

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

is line Your open.

A.J. Rice

Hi quick everybody. like of much seem That there of does Maybe this trends, MA this was them you a or to like not any revenue first less in current normalized rest from contract? payer the national get the sort contract re-contracting? and volume re-contracting the had before up with it given per in previously? me, think for the were to clear you What from were impact rate volume to it’s do the not about new know ask the X.X% the also, quarter. them How about I incremental, from getting today. are do you your therefore, you trend profitable you talking with not year looks And you just visit get is

Barb Jacobsmeyer

contract. markets, is a they the one lives in will we of one. that And national all this have I but So, top say it five – new is payers. our of actually,

some markets, for in seeing is that some we our very So, were of contract but network, of a there us. were little this new out national

A.J. Rice

rest that Okay. thoughts year? Any per revenue visit the might the trend X.X% on and the over of how

Crissy Carlisle

It’s are contract XX total days this in days, place has this again, business at of even all something we point. monitoring. been calendar A.J., not for that

these new find contracts. referrals referral in and the hands historic into transitioning appropriate our regional they so start these leaders the patients in and the tools these sources, – tools presidents have of can We branch put that the field find

quickly it’s and can doing the at possible, to So, everything as timeline too early to just as anything point. adjustment efficiently but we’re tell on make in we this that

Barb Jacobsmeyer

were And There We on with move way go they the for are sources a working business. those of are these basis. the so the the That have some to needed have turning physicians that this will markets, then consistent take us certainly these because to in that patients. historically, and that can we already referral volume faster. other have branches that patients quicker that they care some be teams take find after facilities will

A.J. Rice

number, there on jumped this to day, management that? costs the hospice how wonder going can rest does And case is lot of out that I But to there model. or business I this was just understand. comfort to – move I per just reversion is else the way so roll per at year. start helping point? was know guess the MA. assumption of of per if and visit revenue modest on more much slightly increasing trend any the increased I in The is sort much for you anything is I see off the we on cost a trying natural to XX%. your like parse of the revised how a some sounds get it to that’s It when day in

Barb Jacobsmeyer

– not basis the A.J., points a where at of little color some the are was quarter. of this So around full operating put productivity, that. that the over nurse in XXX think of it so to onboarding level, nurses impacts just will capacity their try clinical I The all

was case then And a that driving that. XXX medical contract that else XXX to kind those had basis impact around is retain of hospice cost of part call of permanent group have quarter. nurses and on another nurses, model points – are management during and was part that a points sector. because The also and of is the basis biggest able triage attract You Everything the that labor of our factors. dedicated structure in to being a is it the

we come down part we have will that that then areas to productivity fixed increase and that will to our come of And So, nurses increase of seen. it stay. we will now that other volumes, as a matter just these cost start structure clinical like have you

A.J. Rice

Alright. a lot. Thanks Okay.

Operator

Perse from comes Please question Sachs. Our next go Goldman from Jamie ahead.

line Your is open.

Jamie Perse

morning. Good you. Thank Hey.

or anything the national your the on And expectations, contract came incremental call Can that then and secondly, you help either give process process out contracts just to around any note, just does on the of this details a national accelerating again. how partner with there? in focusing contract, of terms terms of negotiating or you incremental the related Just existing in your payers? versus rate the how renegotiation in structure there

Barb Jacobsmeyer

specifics will we at give lower enter renegotiated, episodic. Well, contract are get Sure. discount have but to contract, if seeing I new not kind can we an on to a our zero been is – saying can’t on to say what what consistently either at willing XX% unless them XX% contract, think of per XX% on on And visit. we or a the first, we on discount a new come we or a episodic of are a in I

So, that’s regional and contracts. new been pretty convener consistent as on any the national of the as well the

from if want goal that serve we us and and the only to that patients I going to mentioned, but to and move can we then be those national to are renegotiate historic much just lower these discount than those continue rates. back be as so to higher the we with come paid have us away quoted to serve to regionals both say, patients, And able a is, what going payers, you use is paying for fair

Jamie Perse

Thank helpful. if Just what there was, of the cost color the they any the us And there second rate the relief a home that’s just really Can year you. you terms half then health for the $XX. and help Thank would bridge just on of visit in trend from in Okay. you. to per year? declined sustainable $XX be trends, last cost are of seeing you rest what

Crissy Carlisle

Yes.

productivity. what improvement an So, drove was much cost of in the QX

was my able is to point points, script the through market the improved in also So productivity XXX Productivity and recruitment, well. the so that’s making the cost medical clinical about field. in retention that them again, basis increased said and offset it staff out, XXX merit impacting visit think basis that as volumes I year-over-year, group I factors. I per other will points

cost take you about are per if talking in health. well-controlled visit home So, that a out, you then

Operator

next from Cassorla Citigroup. question go Our from Please comes Jason ahead.

is open. line Your

Jason Cassorla

X% growth, you Maybe I I in context are question. that that just half of Thanks. guess cost to a home Great. assuming guess X% follow-up in health the accelerates visit on of per the the backdrop? year? Are around given you at quarter, being you where kind that your claim of X% expectations to in the given versus medical ex Just prudent those the X% are the X% back guide.

more color that front be would any Just around helpful.

Crissy Carlisle

Yes. Absolutely.

watching We results group because are earnings medical definitely recall in that as our closely quarter results. the noted well we costs that our fourth also QX as

in I we have think retain about also talked is that make markets that visit adjustments guidance that where included have will staff. recruit we there we in market to order to for cost be have and per that the other consideration recognized is thing and

high-growth that In we just again, in need of areas those doing are we that of to fact, the where in believe adjustments. some we now process make

to and yet that’s guidance the where thing one that’s is. come why it So, consideration is

Jason Cassorla

we an front? generate have Okay. you And it could over to that idea really just just – new help of But an going commentary and time? move the EBITDA. realistic frame what that idea of us you be to give And X% maybe to national Thanks. a so on you threw I volume that the regional. that move could easy around it How to X% a can of of benefit and kind what back like follow-up, then be maybe out X% size for over could move us or know

Barb Jacobsmeyer

on a quarter. with days it, is we I this say, been to that to that did I think Sure. does what difficult. when my quickly are away. XX other able are x because of is the was the If going one this, I a it the branches say for What at tools more this at end the relatively only calculator. of field, there that branch do level local they move have I provided second us payer of being the be will because will very we Again, that would provide it this into to quick have color of lot this tools we me to is turning x

is from some think than available in I national more hard of And there these, branch-by-branch It is and to management. So, it’s some definitely markets a a again, there say others. level. – lives

a are to But company-wide have we for we going the provided I quarter. a them tools the better feel the field second much by this of end branch for realize move So, XX%, x makes if that from difference XX%, ones, what I these boy, my to significant business a me to of have those from can – new XX% at local think to level.

Jason Cassorla

Thanks. Okay.

Operator

Our next America. of from Please comes Bank Joanna question Gajuk from ahead. go

is open. Your line

Joanna Gajuk

Good taking the morning. questions. Thank you for

on the So, the the follow-up book business I guess are of first MA is and X% you talking about.

of non-episodic? look that So, can at of versus episodic book book what percent when is you MA business, we remind us just your

Crissy Carlisle

you XX% be remainder basis, say revenue anywhere quarter to of now, right XX% our episodic our I and – in Joanna, given So, total payer the look from non-episodic. would Medicare Advantage on a mix, revenue, when would a be would at our

Joanna Gajuk

my I health guess of in And other expectations you. the for a proposal, your rate Thank upcoming home proposal. terms Okay. question Medicare

to you see in their when behavior recruitment? adjustment So, to expect proposal and what it do comes also

Barb Jacobsmeyer

be Sure. half the see I don’t rules. we the think proposed other that surprised would to in

come permanent. they to been half would for implement they of temporary lay the ‘XX top it when XXXX. There was we the basket a be has rate possible So, market over how surprised It’s has if in other the I given would of behavioral be applied, we out the error years. forecast few cuts were last correction if on but the the they think part of sort been the that will industry through, of would to of be at of CMS of propose I – look schedule that any some think adjustment other half surprised requested

So, that is to CMS prior going something proposed that rule OMB. was sent to to the

other So we get half. anticipate again, the

we market I sort critical what is them. be going with what’s basket think of get do to

Joanna Gajuk

Thank you.

Operator

from Mok UBS Financial. [Operator Instructions] from ahead. Our next Please question Andrew comes go

is line Your open.

Andrew Mok

on back straight morning. Good organic A XX% down negative hospice new stabilize, implementing? what step you start you business, hospice, take when seventh were a will growth. do quarter, case you the volume I And do the questions admissions and the evaluate think Hi. to especially double-digit that think admissions are respect weakness the you same-store in of which of When management system is sustained attribute that to couple quarter that with to?

Barb Jacobsmeyer

Sure.

field the to really as the there model didn’t referral those take is been of that. the some sales the was the referral we have. we coming model on referral a And and we because to the increase to to as facilities, in first a that just those within Because headcount for many that going the But it’s in quarter. admissions of hire the think the was referrals local be things. critical coverage of management good We that, the top sources, of going is go did ability getting to in sales to have referrals now need you sources if able there something increase allow case greater proactively case I to in to was that get staffing with hard past sell a XX again, that of hours from staffing had timely. attrition management do really out combination each diversification it began when of markets. to So, are had the accept us and because place Obviously, going not to better a replace we something salesperson the did we in not

Andrew Mok

was of patient on fourth was underlying length would X% X% going you seem when sequentially on in result Got down the Can what’s quarter, patient us days Thanks. it. hospice, even up help that indicate the and sequentially here to admissions discharge And then stay that though four was down understand days. up days up? from in components

Barb Jacobsmeyer

Sure.

about discharges And to were admissions. only up your so up what sequential point, – not of admissions only half our were and

length That of would one more our grow. So, stay day that XX XXX anticipate came heels days that X really in would having ADC to deaths of range. the on

heels are that day that in you long of X that this movement. many But you admission expect discharge was stay, had that stay then to would more that have with So, lengths not even within and that ADC days, when see our you are actually patients to able the of XX was right, die sequential that you length service. on discharge though died on of up, bump

Andrew Mok

it. Got

Okay. more. to and make And am just am in that I I squeeze assumption use one that the going as an last to opportunity here

increased right help G&A pulling your Thanks. understand most million investing in are the the quarter-over-quarter pressure million a is are staff corporate investment at increasing and peers when cuts the G&A when all on $X decisions business, reimbursement horizon? you Can there additional back-office us of you year-over-year. With why G&A and $XX back. time the in Your is here

Crissy Carlisle

Sure.

positions time we that at less and back us not people the us year-over-year. branch other that’s need think ability the field, in That’s to and in this on more we director headcount, clarify adding in of I staffing having our open have point the Andrew. place So, back-office office administrative year-over-year, increase fill meaning members to

is So, are we I the And course, company about about factor. of being significant costs. portion back-office medical talk a to are standalone a those the then, standalone what role we that’s – of cost playing improved a incremental also the of that. in Group staffing increase talking think in when

Andrew Mok

Great. the Thanks for all color.

Operator

go have A.J. a Suisse. ahead. Rice from Credit And Please we question from

open. line Your is

A.J. Rice

the he try I I Andrew more one. be last might With would figured saying here. time one

here, I Let – me ask I will too. actually, two ask

conveners will provide the do having that incrementally And just what On the move contracts, volume versus it your the will you part planner you? can through referrals to and the will that us What how renegotiated convener think – significant discharge rely of of walk planners you quickly you that your How about we impact and think volume? think how should so results? contracts? incremental the more on discharge

Barb Jacobsmeyer

Sure.

there So, are it that just refer the they so times convener, the are others, are post-acute of to conveners. working companies and provide as administrators, behalf the with providers. remember, health benefit they independent is on do And plan risk-bearing that different them some services

lower So, care. who their of to the really providers overall guide cost goal high-quality care is can proven to

work help So, patients – directly providers. particularly sure make get facilities to the that payer do from right that those they the the with to

fragmented and really been a as historically, creating going think kind in the about only go high-quality as focused that role have played of the have payers to. If network. health necessarily narrowing on And is, down it, patient not a network, you home who conveners should these

conveners it’s so to And patients really alongside get the the working to us our services.

Crissy Carlisle

And then new that just not important I it’s contracts. These add would to that renegotiated. remember are these are

contracts contracts better of new a of are as more all both And payer We well new of in as these are – national convener lot they the contracts, the they improved and time and have those, rates. about rates. importance spent talking

A.J. Rice

maybe would to there I know it. ask Okay. be follow-up but and don’t will other – I say that my And about what it, is

you in at having So, look landscape you looks it the United obviously, like buy are And to the going competitively, continue they LHC. got to bought have if market.

Humana got being have active. Kindred You under

joining and up. Now, Care announcing you have they Option got Amedisys are

any big that trying you that’s public you deals at over to you there where need the partner whatever? watch your accomplish what’s a of market about forward and have you As about you are are etcetera, go Have some everything availability of the having willingness and point and and do standing or to – are – last to or these because independent room of you with in deep-pocketed last independently? the Is at more one to seen work sort with? thinking etcetera, of guys of changes mentioned, vis-à-vis the the Crissy, in whether people aligned have future, some covenants, you you deals to

Crissy Carlisle

in on Well, announcements I various think difficult industry. transactions the and it’s speculate A.J., to

this types on strategy. payer on say recruitment those of company We executing just strategy We our on as speculate of staff all are That’s innovation and focused really as and about don’t well our we can those. retention operating items.

A.J. Rice

More or months your deals competition was ago six for about the as in not or it mind? really, same

Crissy Carlisle

down, that quarter home reimbursement recently even health XXXX year. stated a recently transaction this was that quarter the a received lot read trends on investment lowest the was of reports The that of that have having of fact that in first down communities significantly quarter first remember information lot of since the I deal to the Well, with uncertainty. XXXX. M&A do the been

remember think high too And bid-ask the Also, buyer between important. are spread that and just that’s I sellers right so now.

A.J. Rice

lot. Okay. Alright. Thanks a

Crissy Carlisle

you. Thank

Operator

further questions. back the no turn Brewer like call over closing would have to remarks. I Mark for to We

Mark Brewer

so you operator, Thank much, call and we appreciate our joining today. everybody

our a we a there of call to on recap reminder, you replay months Have of look quarter day. earnings. be in XXXX our a forward when second couple the will to talking we great website, and a As available

Operator

conference you participation. concludes Thank This today’s call. for your

now You may disconnect.

Enhabit (EHAB) 10 May 232023 Q1 Earnings call transcript