AMED - Earnings call transcript Q1 2019

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Operator

Greetings and welcome to the Amedisys First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions].

As a reminder, this conference is being recorded. to Vice conference please President like host, to begin. now Muscato, Nick of would turn over the your I Strategic Finance,

Nick Muscato

to related XXXX. on page A Thank Amedisys of are our the welcome available and supplemental copy filing quarter discuss slides of with release, Call SEC and first XXst, you Relations of X-K the our the March to ended Investor press website. results Form operator Investor the the

President Amedisys joining Vice from Dave Executive will Gerard, call and today's Kusserow, Chief Also Chief Counsel President and Paul Officer. Chief on Affairs. us Ginn, Scott and Speaking Government Kemmerly; General and Officer be Chris of Operating Financial Officer is

made statements required call as events uncertainties which number get may our These include risks update cause outcomes our filings, actual our to Before started XX-K, These uncertainties on Amedisys today. Securities to in are like and on subsequent to results call conference company with are SEC securities and to provided statements to Company's applicable including no involve Act. Reform Forms available call Private or under other forward-looking the of reflect such of and and constitute These than the materially differ a would from statements may this may obligation Harbor information today risks laws. based on forward-looking under X-K. statements. assumes factors the detailed that Litigation Safe forward-looking we I this protected statements remind The everyone information XX-Q

Paul GAAP will turn And Thank mentioned during Form our reconciliation a Regulation be CEO, the measure available as Kusserow. to the you. our most non-GAAP In in to SEC addition, required over Amedisys I'll any G, by call call now measure today comparable X-K. of

Paul Kusserow

XXXX. quarter to XXXX that welcome great the And first generated Amedisys I'm have in momentum the call. during report continued we Nick. very earnings of first to XXXX quarter pleased our Thanks,

For to adjusted over million, quarter of $XXX within year-over-year. our quarter homes our I strong with such unwavering our possible With of on of focus, beginning want patients employees providing let's million to in adjusted the of deliver outstanding nothing to our you that care areas the we XX,XXX XX% year-over-year. strategic short their thank up helping $X.XX, is into $XX earnings commitment of four of in share we've dive basis, None to up made and XX% generated be up us would distinction. EBITDA inspirational. progress revenue, this right for performance without whose everyone clinical year-over-year an XX% adjusted Adjusted per results.

Care XXXX score QPC preview, our X.XX. care Patient We at X Quality had the stars. For Star XX of was centers

removed calculate in As in the oral management calculation and drug includes to you will scores. measure no CMS introduced the which QPC longer into well. measure a The used extremely of of meds calculation we education, new star previously measure recall, new a has performed a includes improvement and

satisfied not impressive all would results. to back care are the QPC, on are outstanding measure providing We continue where who and what we we morning the is That with focused with will care but Providing our satisfied the dropped to said, new not we quality were. score slightly and already applaud remain result we of improve our to we being acknowledge our always until our in lead in get of striving driving like patients gets to clinicians to this our out bed industry we switch-up. performance I be every and best us and higher. constantly and

performance generate program to of Value indicates. as this returns continues in financial Health our quality pilot VBP clinical Home Based on focus Our Purchasing,

quality the payment outcomes. way for first from approximately advocate better and very received should drive a continue that as significant and we this CMS we quarter, bonus generate quality nationwide be in $XXX,XXX demo institutionalized We and expanded patient the reimbursement to For strongly tax CMS. drive to savings believe peer

compare shows the Hospice national the Amedisys preview XXXX business, has Hospice all categories. quality outperformed again metrics May once of average measurement seven our For in

We are these to we grow very to quality to and with in improve expect our our pleased in clinical important metrics us Hospice. are and footprint. as continue These quality Hospice results continue to extremely invest

in is and XXXX. us to associates our of extremely another major retaining quality care Moving our we for area to grow. the employer key provide ability choice. metric both is Turnover important Hiring onto and for focus and Amedisys of

of first voluntary approximately XX%. quarter, end As our of was turnover the the

this into are here, We daily we and number continually turnover lower processes to like testing, refining as are our of numbers. strive scores, our we we are done but as science interviewing turnover people more. we working a the have until quality lower to turn our be will even Much work satisfied the not we surveying, proud we

in X% maximize our RN At Therefore, we see In XX.X%. clinicians training to we our we they as nearly of must operational top the progress first commensurate visits in our toward ability of number operational ratio end pay operational direction, the our utilization say to which the goal LPN we our have on license. our care their discuss of One patients. quarter, initiatives qualifications priority appropriate LPN significant clinicians having this to utilization in move practices is by conduct ratio, or for XX%. let's to that practicing that of was mind this ratio. Keep care do factor to improving order Though is improvement our still deploy needed their of LPN utilization saved skills every we the $XXX,XXX. impact to ratio the with move in our at making right Now efficiency. provide that material encourage one with and efficiency, provide has work continue the to in XXXX

all of they presents to to great us great admissions LPNs as we important the pay all ending quarter opportunity utilization quarter is X% appropriate to a of our and home quarters of care This less are and total at it care our drivers our not clinician on the QX. implemented redesign as focus reflects we recertifications. store visits practices a our with coming that sources drive growth strong In We is costs. our clinicians number fully volume at another undertaken volume operations most are the efficiency in growth. be plus division, which disruptive had health patient the of have the more asset outcomes. for be we shift were such, patient This will should As value for incredible and in same

up Hospice, were we With Our everybody growth both now growth well in wish we ADC of Homecare conversion. given our Care have same way convert growth total store Hospice, first Medicare the our integration wave and of and strong third this as Homebase organization and to luck admission making admission store compassionate X% admission same very centers the our year-over-year us numbers of ADC every Compassionate In care care largest our live acquisition X,XXX, is was go Hospice good The under on X% today was up the of country. will quarter. Hospice to comps faces impressive X%, were business X%.

the Though both we ADC EBITDA, EBITDA Homecare business to spend disruption grow Hospice weigh they The all similar expand inorganically expect this and them implementation substantially Homecare and Compassionate XXXX. year. will year business profiles hours the down compassionate there across the Homebase excited opportunities at some Homebase business to discussed now first in we're our Care, care footprint. have growth grew evaluating integrated converting has scale the current will and total of about us here. and year length, grow at the Care's thrown we and will trajectories centers our margin Personal quarter next be anticipate to investments and approximately both we've half we this position is XX%. to XXXX everything As to most of options We're In evaluating for per and and allow organically similar team

with acquisition Healthcare, will less nine of Home nice very Oklahoma. with Health out RoseRock Xst, has our in Turning Assets to Oklahoma. strong a on which times Hospice completed to RoseRock another be a M&A, in assets than deal overlap synergies April It we multiple. Tulsa, sourced is privately turn the

acquisitions We welcome all to our and RoseRock are priority Hospice new other we for delighted remains as our look of on caregivers ideals. Tulsa. Capital Care deployment of Compassionate

also the year. excited about novos between up We and are de seven for process nine novo and have planned ramping de our

in will to and/or processes outsize best to disciplined and multiples. to avoid very our do remain our M&A We continue auction pay function

XX have the those have Now Act senators to we of Congress focus earlier the the group scene. pleased and seven year. up to that now report from legislative on Home the remains Payment co-sponsors regulatory of up XXXX with signed conversations our that Along of in Health and PDGM senators I'm lines CMS. moving as the original introduced Innovation bipartisan

Given Labor Committee, also on industry's Senate policy the the It Education, co-sponsors country. and noteworthy Home members for on spectrum the Pensions political helps and today's this throughout Aging. bipartisan nature The to Special policy the Washington, how Committee on that Health Senate Health fronts committees. Committee showcase across ability Senate is many the is in the key Finance the divisive support of secure many agencies important of

adjustments based based on making behavioral legislation observed on evidence would change this provider of As for assumptions rate and in you'll recall, behavior. from only prohibit a allow adjustments CMS

have Congress We and the remain Hospice, providers as introduced the members $XXX payment X.X%. our position possibly year of is to dialog week. XXth, to update as in the possible as Based this sector. of the House rule be and the update XXXX support for includes best an we in House, advance with April Hospice will increase you proposed companion Senate soon also to of the in bipartisan This many staff, which market fiscal that months. expect seen million the on Hospice we a of several over this basket next for may confident legislation on be CMS an released bill by Also, overall later

align of costs, industry with differences the the to the this it benefit. with restructuring use and that methodology. While CMS plans has positive support any some may sum, for goal are positive we is we the update see payment still Medicare our determine a of we that proposal payments restructuring have working our proposed we of how Hospice a In Hospice through to expanded move for as potential impacts

Medicare is All for beneficiaries positive and Amedisys. of for this

and can As quarter we all drive are had thank for Again employees success. all you you've see, start to Amedisys off the great you done a roaring the to another XXXX. to in

quarter, results. who will Scott. Scott, review our to through it the of prove patients continue more financial You over focusing With to take drives that that detailed outstanding on performance will us turn our I for a

Scott Ginn

very I'm to Paul. quarter results. another excellent Thanks, pleased report of

For XX% increase in $X.XX increase $XX quarter basis, XXXX we delivered $XXX of on income revenue, the net of a compared of share, million $X.XX an or an GAAP first diluted million of XXXX. to per on

For Slide one-time in statement line items or that characterized items supplemental the impacted by or provides each and income adjusting income quarter, expense our of regarding results as we these our have impacts. the detail results temporary GAAP non-core slides were nature. XX our items adjustment

adjusted EBITDA increased $X.XX on quarter $XX of XX% were as XX% share. basis, our over EPS as and revenue million. $XX million. EBITDA $XXX an to follows. or to $XX $X.XX Revenue basis or the percentage million per increased million For grew or points increased a XX% XXX results to

sequential approximately I These want $X decreased million, increased and improvement gains seasonality Health on basis, $X XXXX. related in million, health results, resources costs sale of our acquisition, comment Xst from quarter to $X items. added Before a adjusted the million, which February items in of added EBITDA. support fourth million of were by segment recorded adjusted EBITDA Care in planned growth closed reimbursement On Compassionate Home to on Sequentially, vehicles increase turning $XX an EBITDA. $X offset the on the fleet increases some million to

or X% store Medicare were basis, increase X% that in pre-corporate up million, On Now X% store and home a X%, expenses segment X%. compared same million admissions results up up by turning health to volume. were total mind segment revenue are a driven and Keep in were $XXX to performance. year, quarter our prior total our same was episodic adjusted admissions up admissions first $XX

the up compared the points episode nearly XX%, EBITDA increased X.X%. Medicare to in per revenue significant XXX and than to able of XX%, the a points marks in year-over-year The increase per revenue prior their improvement. while items Our basis results visits $X.XX and Home basis point episode, our EBITDA XXXX rate are segment XXXX. was rate was $XX raises of straight to revenue per Overall which were levels raises per Other G&A down of X.X% first $X.XX Home was basis was include $X.XX. of performance. our home segment's EBITDA increase X% million reducing quarter. was quarter improvement G&A our health Visiting to in XX year with $XXX spend. compared impacting recertification a cost team inclusive patients. X% segment of cost increase acuity despite Medicare a of year-over-year Health by driven was of increase adding adjusted the $XX impressive inclination for our This to in congratulations X.X% XX% visit prior Sincere up August is margin $XX utilization. year of inclusive Xst which quarter for visit at up million, overall year was prior that on only results was margin. The fourth revenue compared in support Segment XXX representing Health million the the effective an in lower increase

Now our Hospice to turning segment.

CCH increase $XXX of $XX XX%, store as in prior acquisition. year, revenues up same again daily segment EBITDA deck, of EBITDA census million increase up million, from prior to X% due mind cost does was an expense. service quarter Hospice Keep up Segment not was quarter $X call mainly was first acquisition. per XXXX and in the an increase of includes segment admissions the quarter, to million. first our slide XXXX CCH $X over The we include and million acquisition inclusion X% corporate includes margin any of impact the approximately in day X% year, of of up X%. day basis out were reimbursement results. the EBITDA up to Net an XXX was G&A points $XX XX% million, $XXX.XX CCH was average of benefited our segment and in down revenue first the the For store Same per over $XX.XX. up The

factor with segment which routine Hospice levels mix consistent versus is when XX%, expense and calculation care. with EBITDA other in include Our our competitors was you in private of industry providers them many results the including past lower-margin of of around and both in line margin our business G&A our

million added $XX.X in in quarter, $X.X in the For the million consolidated added EBITDA for costs, which EBITDA CCH Hospice acquisition corporate million acquisition segment. $X.X a revenue in That and in million resulted net contribution. $X.X

CCH's of quarter. EBITDA We with extremely in first two-months are contribution during the ownership pleased our

As a Homecare margin growth to CCH along expansion reminder, XXXX we converting and are to support investing during Homebase. with in

of conversion way ways in is plan the to conversion four the today. starting Our complete first with

the and take As and such, during quarter fourth second we on anticipate levels census this average disruption to the daily deterioration third of margin effect and quarter our to in year. pre-acquisition return

quarter and in $XX Care the first approximately grew revenue by XX%. million Personal billable segment in Our generated hours

acquisitions, not look to Our Personal XXXX. grow and as inorganic Care continue prior year of during business to are comparable partnership inclusive we to opportunities via our results

million total was flat Turning On XX administrative to of points was prior and revenue revenue. to XX.X% basis our an general basis, or expenses. as Total and G&A year a adjusted compared of G&A percentage sequentially. total down $XXX

which and the and down RoseRock $X.X to we Hospice. to to slight expense closing, is cash in in prior in the G&A $XX of for and million total quarter, opportunities. was continued and growth is DSO generated million million $X.X X.X corporate increased to million the the flow comprised for approximately which available $XXX for have by $X in additional which acquisition, relates X approximately from ratio to year. quarter over times leverage collections flat million work and deploy acquisition. days related cost CCH CCH sequentially we includes impacted an XX.X liquidity, Subsequent approximately the CCH inorganic slow operations Our of We will

On target provide the we throughout progress the year. as de and novo are front, on will updates we

$X.XX you million $X.XX. of slide first our are are our adjusted to the Finally, we guidance XX $XXX page $XXX and million we reaffirming to as deck, $X.XX with revenue on our see can supplemental Overall, to billion adjusted XXXX are with for pleased EPS EBITDA ranges of quarter. we where of billion, $X.XX

to QX year, Homebase. remainder As want will out everyone of and we QX we and enter the grow I of remind roll the to CCH the of Homecare following. contribution planned disruptions as see invest

heavily health have is practice questions. half higher seasonality fee and XXXX that our raises by the weighted second the resources, of of conclude and remarks. year $XX PDGM the throughout impacted open de the will more The staffing prepared pay This for we remainder Operator, line changes of are million the spend please model identified security, additional year. novos the and for for

Operator

question of Jefferies. with Thank your comes with [Operator instructions] you. from question. Our line the first Brian Tanquilut Please proceed

Jason Plagman

He Hey for guys, on the under it's this weather Jason morning. Plagman is Brian.

question, you're reiterate strong decision year? other baking or in a parts there that remainder to conservatism is XXXX cause is momentum your of fundamental in of the to the trend, in the guidance, slow expressing moving dose confidence would First given that that the are your healthy

Paul Kusserow

but years we we Scott we ago Sure. make want guidance going sure of to couple to of and let started to most I'm answer a always that, give had. that

this with So we it clearly away. are we quarter, really happy blew

CCH Homebase, positive, some take very on CCH you think we we some place, that XXX Scott I for to we elements I'll projected in so of what about ADC points we feel slowdown we than guidance. as hope let had didn't fill but on everybody could guy ADC, have in are other and the but we we in thought have month so of into also came good integration stronger postponed got of we a preparing we a the Homecare through much some particularly ideas we there, what surprise that our doing on that terms is EBITDA thought see we'd we terms move above

Scott Ginn

Thanks, Paul.

think through the where we are I guidance feel one year certainly positioning for about full being a for the giving quarter only really great year. recently of ourselves just rest

what that I at. roll-out the just around timing think of when say looking CCH are I issues the issues, we're

of million If million you month, it sort rate so $X.X there. at $X.X a EBITDA strong really in at look delivered run

in talked factoring we ADC holding. As our as opportunity There disruption Paul that. levels outperform the is said, on We're really are a certainly about.

said that Really $XX want us CCH, complete million to positions just giving I for the $XX we we be the think guidance will rest feel of view and data gave really that end, when QX. disruption more pushing a good that side at get the we toward get we, top some that. to million that's year really this quarter after around of good of

Paul Kusserow

I got our on, which bringing very to novos, continue have Care Yeah. integration though that give to self-imposed got a we've the think it's so has to our continuing to our considering to people nice continuing do been the I de far of job We to we feel all business quite drive Compassionate Compassionate do going will here extraordinary. in. Care who've create integration distinction and and little. our will done with a changes credit say in our a lot be business

have to-date, results So we've there. I think continue well should if well the as integration good we done to do as on we

Jason Plagman

What then help sense. full can range you slight growth that you still is And year? X% from deceleration previously the drive X%, Medicare and back that the to Okay that X% into QX. for that expectation makes targeted a

Chris Gerard

Chris. it's little selling the of of lot of was of Yeah, dip funnel of a did we feel see in FTEs, say We a and that QX, being Not the that line lose XX We're hopefully decline where number business of had we top about we incremental top able day bit even will on sequentially true that. in an range. that should our the mover, that, day-to-day, deliver, was that that good it to kind really we've on a a holding little out that to slowdown QX very to incremental much in day, in not back-up day, that of needle field did the to we in bit but I are be. end number. rebuilt of actually X% sight have X% team to guys. Hi, clear on driving quarter, FTEs in QX a a we

that goals good think I fundamentals very about for our good So and are feel still we XXXX.

Operator

the Please from William with Our Matt your with next proceed comes line question. Larew question of Blair.

Paul Kusserow

Hi Matt.

Matt Larew

morning thinking little the wanted guys. back good context on of CCH I here. in but the bit guidance, to Hi, more a circle

outperformed in you hit obviously, leaves first to and quarters to the in you have XX So the here to three achieve that quarter amount next lighter that XX.

you of had asset about and and margins you've or $XX the can delay HCHB of in-house to then, conversion in million since help slight in here the in $XX Scott, million contribution pacing So 'XX EBITDA anything you've us seen CCH? does think confidence in maybe XXXX from your change

Scott Ginn

we'll I I'll how is to if don't a about three optimistic we and on add modeling impactful would to. expect be exit last start see point then that you of To it 'XX our at I and and or will come very be think look quarters. at we we're quarter key looking range be delay our the rest the really in at am what of the that's your easy delay our feel looking but get that the of where at lot just what $X it, to Yeah, QX point, still $XX the exited won't that we of number that and back-end the pretty looking for end $XX will for million we loaded, be. back so we we math QX disruptions and about QX was QX We'll in top did million in 'XX, our for just CCH. I QX million, the the out relative think our look with through in strong starting rated. strongest if to

Matt Larew

business, guess, a for now And away Okay. you versus from ago. personal business. that the year guidance switching interesting magnitude way might which expect scale a X% but margins you EBITDA of just gears of I kind sense might care then or the breakeven profile isn't TTM this Can of targeting of Fair achieve you, alluded be onto some perhaps around has to couple to us to maybe, attached a enough. expand over of next years that growth that you and you the be scale? to give would how what Clearly, margin

Paul Kusserow

that's acquisitions Well, a doing a team is great here, there all job. question, gone Matt. Yeah, they've nice four we've done The management well.

about live So at. coming, we been very have we from there legislation unskilled need need to independently with their we what we there's then making about but for obviously care, at good plans Advantage CMS, sure of talk know do to feel we're an where know coming care rules ability has home. of they personal maintain understanding out I what all been look What that some to people that though legislation, as the don't the and Medicare chronically have

daily So of activities living.

we deals seeing Advantage When able we're to this is and to things. plans. talking anticipate more we also plans capitation some doing ability of come CMS, is very at possibly anticipate there's out. Advantage of to important. to more for this, fund Medicare we capitated Medicare This going look with with So are be going be these We

deals, looking at conversations. there where good in we're we've areas constantly Medicare what out So where Advantage had particularly is we're doing

give coverage, that out better have Hopefully hard we're get and of and we're much to to buy look also looking of XXX out various we're without at XX,XXX this alternatives. come of They're at will at solutions. without ways go lot buy the where to and figuring of get to next is coverage actually a buy actually we I states coverage some looking those that spending us time months, couple very with to having so there where in lots these to for trying things out answers coverage some So there in having business. us will There plans. players

this feel don't but most we it. there? a close and out, national have currently From conversations, So of aiming but coverage profile the anything it about to miss ultimately trying would margin that I what like, we I Chris, or perspective, for. And good lots are we is it look that's do to having thing important model we're did what know

Chris Gerard

No.

kind on core got longer-term to I of think the you've going Care strategy, Personal our business. back it

we're X% margin a there. margin. a As which core of unemployment just do of behind the We see we've the deals rate. our We're we're got lot kind a a additional from you contribution Feel mentioned, about up prior bit to integration managing opportunities a like getting of better of little predominantly some labor wage Massachusetts, perspective business. in minimum kind and is historically of difficult just market, low us, kind

we drive as and a can retention we bigger, strategy and and caregivers if there focus our and get we continue can So Paul bit on more to our the of little broader to recruiting focus there work is then line see on of kind mentioned. really bottom better,

Operator

comes with Gajuk from Please with question. the question Our of next Bank your proceed of America. line Joanna

Joanna Gajuk

question. the taking for you Thank morning. Good

just one by about Homecare So month. push the of the the to the later and guess comment I rollout back coming guidance first, to Homebase

it about what's the better So but amount quarters. past be that saying numbers are push like to of the the at QX, to between in I I'm guidance QX, the cost it's because you than we now the reverse. to the the essentially are in because tends would kept seasonality intact, QX what talking going seems guess QX change for looking from

thinking the QX. you through year. I'm but about ramp-up comment any I can color progression kind your give the just So the us there on of appreciate on QX, QX the versus of

Paul Kusserow

I'm one, Joanna. to this let take going Scott Scott

Scott Ginn

Yeah.

the off May using multiple and of most the if with, when forth. we the start on because that training through you when started think they've computers Xst would before day I of even that's got is just really and disruption we said kicking dealing which but so that were come they that's timing it, month

start seeing So disruption you early there.

if you really would with So seeing would one started some moving have that in you and it's just March. noise before

that. we have So didn't

So timing that would us. to just that tell you more would than disruption it's impactful I anything, of be

Joanna Gajuk

cost about So we're of here? magnitude talking

Scott Ginn

Yeah.

continue We our plans for kind in bit in one and QX we're did area come on of all, also that's we little on through not positions results. being that have little much and here to really us bit head QX our sales, see a add some probably plan this not actually our is cost helped of behind other around leadership

Paul Kusserow

Yeah.

thing expected. months as this other again the think they in what we more came -- we basis two plus expected. we with and it was. Joanna first way is saw I what them outperformed that first a with a that monthly few outperformed is the in months We ADC the wonderful The we we saw on EBITDA we double XXX thought thing than have

much it. into So we're stronger we We than this heading heading into be thought. would

optimistic So some got that's We've we're cushion going here there. in.

I think us So too. for

have integration a our I think done teams great job.

that looking experience But I falling thus those Hospice Compassionate Homecare own much they to I asset people The go they here a definitely hopefully on stand-alone far, to Homecare getting has The through we're well. well better lot minimal Homecare we to basis pleasant a our we've, think system initially based has to disruption really base is thus on we a Homebase. calculations expected. we wanting difference out company We Homebase. performed a and on is having move they it's of of what think than the our forward very own the turned more when enthusiasm performance far Care have with basis, converted Homebase. on on surprises as the better integration the so were had was gone stand-alone on that apart,

we very disruption what about you're feel about into but being those be we moving play seeing conservative conservatives. So good and it, of are this some can results in the of

Joanna Gajuk

And if in quarter. well. health results the I on did may, the home Obviously second question actual exceptionally segment

or points what flagged we that that XXX margin much could you than or to I faster, the have of So thought margin average being drove you was so flag well so as else revenue guess year-over-year anything is there explaining health? improvement essentially in terms faster basis growing home so much of in the

Paul Kusserow

to want handle you that? Chris,

Chris Gerard

us starting really capacity some actually a our strategy it's perspective true the to and growth and kind see the field the just strategy starting think chewing top couple the We've line, line years a holding is now of perspective. to growth on on been leadership generate of our true I to into the over top having line. last of for indicative that bottom and No, from growth to incremental

happen clinician more this environment, LPNs for our mix PDGM, I productivity year of see area have think that so us or now, expect to as around today's and between in our so results not that's available disruption where more see PTAs, the solid our focus and are is we our RNs we're are for that to around will similar whole the we as fundamentals move as pool that and and PTs but forward. there we the well there that a PDGM there's lot investments with some throughout parent but still levers under we

Scott Ginn

may Yeah. just I for this our strong. if is segment margins too add. Joanna, I'll at look not you mean home health our even XX.X% Scott.

the look go on back just if been, so least quarters on about to the most Episodic of so Private are basis of out $X.XX add the where those more XXX of is that improvement Medicare, gross did our rest you lines We differential more all eight guess of points somewhere the continue line three If about because that's we little range Service of this improvement, XXX is I and there. efficient to on up at it's that line. Fee Per Private bit the about which ahead in points. you well Visit, only performance cost to really rate of year-over-year, $X.XX as basis be raise that coming as exciting for visit we've margin, is was that on see, per margin you'll performance roughly well up, relative efficiency The relative

you're X%, continue segment. seeing set upward margins So to move total in that to we're able as long as our that in that volumes

So for excited Health what deliver really about that really, us. segment Home

Joanna Gajuk

you the back Thank for I'll outperform. go that to question. definitely Yeah, the queue.

Operator

comes from Gillmor question proceed Baird. next your Robert with line with question. Our the Matthew of Please

Matthew Gillmor

I to using education going to in about how Medalogix you had start the and think be was just you've some how to from you're talked care formulate hoping PDGM plans you're I one guys. help to all under care plans. Hey, past get I going those developing about question.

So care maybe and business? going then you're understand means that that process how today in Medalogix how for us help just developed sort of of get plans to use and the sort what

Chris Gerard

has the think that's Chris. about of it's Yeah, question. a XX last reimbursed. Matt, how great if Homecare years And been you Hey,

it kind a I really for patients the of in look disease some pathway. of think primary at build disease basically are of out a range plans. same episodes more More but into care almost specific, launched driven diagnosis settling with broad how can of you

utilizing individual to patients think of and plan outcome look a kind about at is there's a but XXXX if this we lot of right that of with get more COPD into kind those really less care really pathway variability patients, care the says individuals plan. sell and the pathway of the on an into you a driven and So a XXXX to plan admitting right and

helping for right also and and exposes the number that Now patients. if patient getting drive specific variabilities. right the to It's nursing their Medalogix which very very drive science visits skilled therapy for other really at looks look us factors that all a identify you and at of and characteristics more between the is patients, of take helping us data the around specific mix really really

typically really the be to really to clinicians still kind an kind really industry The So right level that color? I some but so a collectively settled to clinicians that is we get situation, this little to this routine think hope going also disrupt appropriate how to have work patient the outcomes business as and is in right a that I industry to patient get see and very prevail of draw get pattern, judgment about the of challenges outcome. us differently helping this will specific. you of for us more to challenge into bit the little to

Matthew Gillmor

really it. Appreciate No, interesting. that all I And that's had. was

Thank in you. hop back I'll So queue.

Operator

Ellich of Please Our next with with Craig-Hallum. question question. comes your proceed from line Kevin

Kevin Ellich

Hi Hi, taking thanks Paul. for questions. guys, my

and or as de novo openings home it, nine timing missed previously of to then said So to XXXX, planned health going and/or I seven know in provided but you've have they're with these open? when to you hospice this if if are don't I the all

Paul Kusserow

let hospice, you I'll mainly -- Sure, but under it's give five about home Scott and Scott has hospice but been about I'll the it's think all have details. I -- health, three it's Scott,

Scott Ginn

looking. more this that's that We've one we're is hospice, right, weighted we opened late got heavily about that's open still year. Yeah, last

are inpatients we're The expand getting other will and other take see stages have in excited ones looking really we to signing just a We're to bit some stay of in are licensing on all we various actually little on ones at track that on right that, but leases. It the it. ability how about now. sitting with place on may number that we -- track the get

Kevin Ellich

it, and sorry, go then and Got Scott Paul. ahead,

Paul Kusserow

want little you de just novos? bit of economics Scott, to Yeah. the talk about a

Scott Ginn

hikes breakeven us month on eight price XX about kind it started rate to those mean probably six I of a generally to their burn Yeah. annual it's about a months get $XX,XXX on months. good

which Compassionate numbers footprint go some Care kind some and opportunities eye on out that good opportunities numbers so gives into new Texas, really our acquisition, and so build is coming Chris the of of off operated an into provider about really we're where before, we've on branches, to got us provider that territories, some some expand great front. So excited has opportunity

Kevin Ellich

do I helpful. be will will impact going the then industry. an on That's how, the hospice you ask Paul. And have it. soon as to update what the was guess think update you I how to That's X.X% for guys to you Got exactly the what for you?

Paul Kusserow

provisions there XX% into they were into for it. probably is impacts. Scott but take and or specific we're of still going let I'll care, us a about good continuous again care GIP is be routine hospice do. where -- of I the calculating let feeling There into dollars the impact which about We're think I'll allocating X% industry in in was what is most so the and hospice go we little and give some think to about more think it, I I

being more but I industry, the of care reflective think of that sure more their lot care an very but We because of a make the that who it other is it, make there resources want there they perform less people inpatient a specialty. general do are some of are and in covered. who to continuous are We increase of and routine absorb people

Scott Ginn

Thanks just To add on. Paul.

put is and on we on could numbers instead you some out Some number about. slightly people there of higher provider still what put it's differential right of get with is There number be say CMS in there. would that and right goes that they are wage around what lag and X% band now out that talking depending that that

rate that effective So Xst. still feel good. that about Excited we get October would increase

Paul Kusserow

Yeah.

So it's a positive, a good one.

Kevin Ellich

Yeah.

days about Sounds good. if then Scott, it up three talked ticked you sequentially. more may. one And I DSO,

moderate as what it then the really is going drove think think that's that all CCH that you to I is year and do and goes on?

Scott Ginn

I do.

million There were that track our opportunity. of that's The slowed think DSO more a from we're feel is us I for about still still first about, think issue. flow good days cash guide an type $XXX dark in I quarter January Medicare that I to down. going is give on ops. kind some that.

lot we So you a saw loss cash a had out little door at relative of bit acquisition. then the the DSO and to

And now will than moderate news the flip ours lower much to that is the on cycle well see So now it under billing as is start and good CCH internally. that on. then right

CCH on on cash relative we'll in I centers care ways, I in getting our and So said, do this as flow them Homecare, get four Homebase. platform some to will get I as pickup

we that some get we see place. in to So of waves look will as

Operator

proceed [Operator question. instructions] your with Our next Patrick Barclays. Please question Feeley line with comes from of

Patrick Feeley

last better we it think do or I'm right next that? what curious little was go last year How utilization high of the can XXs -- first LPN was mentioned quarter. where that XX% number about quarter You two. And to XX% this think handy. just the about have than is way year you kind of that if the quarter the over in

Paul Kusserow

that about think if can very up $X.X a XX-XX I two interested license that could or it some we're that's there's go I though that Mainly best it. to that. way LPNs of we Is it each to the Yes, about like that year if next good the I the know are percentage RNs get we're XX care don't the obviously the point to believe be about is we XX, we to something not into a a would so there natural talked at higher? XX-XX their top would for mix in. very about we see what there out probably and that's something so high providing are ratio higher? think getting can that's interested million, make as reflects I that in important very of be us, sure not Is gets specific more Chris year, it wouldn't range? this possible of possibility practicing Yes.

Chris Gerard

Yeah.

in typically the QX tight So of band year but stayed half Patrick, XX%. I last and don't last of the over can year, have we've exact XX% that say I the pretty a to

us top As our obstacle in at kind that's of Paul an as having of the antiquated is of we change pay our us going field pay license the to mentioned undergoing industry, way utilization clinicians. Paul with the have for we little bit biggest That mentioned. practice materially working more moving an really our of kind and line their internal we're in move a of prepared kind remarks, clinicians

internal So to we've some work things to. got

run as tight this. throughout year now, XXXX free this on move very the this be strategy to us, that the beyond be moving it We practice the some and working and to should and of in have undergoing see we in is anticipate will pay XXXX, but to pretty feel will a don't up rest significant change. for up around We've positive but see long us we the been really that, but like almost a clear but path we where four materially I do a for get XX% of movement we coming north industry

Patrick Feeley

considerations I'm maybe to in if Are versus employing and that the and like differences differences skill-set Got past that. follow-up any And you be of make just sort any on just might things looking turnover it, one RNs, it LPNs curious maybe the more there it's there thanks. cost that manage see similarly, as back RNs push higher might out it whether any from and then LPNs easier be. or any see the and moves putting from or versus Thanks. in plans more you do either difficult direction whoever sources referral business that more

Paul Kusserow

admits, push so and kind your back OASIS we I the and certainly and conditions complex we discipline post the mean making RNs of doing for there industry are research, fall right intention I with really that hospitalization don't required kind business, and full of of of no, to the your we're your be we'll are see highly patients your reassessment, of line think some using your there. Yeah, wounds has your into kind your in continue complex that. as changing needed have patients well sure some settled of your a will discharges, Obviously and skill as the level complex that higher

right of skills challenged. on the labor, LPNs RN industry, kind to XX routine just be complex are like of of use years that my the highly is of not is the plus experience revisits business do based stuff. kind this So like the working having kind in of the higher They in to

this and of rates that this is need will be and positive think kind in get retention terms just of through. a I actually turnover RN we that something So to for LPN us and

Chris Gerard

Right going that before with there LPNs be I've that and be LPNs what will RNs my that RNs. turnover but drive harder experience more making Yeah. below a PTs, now this Patrick, and that general. we're aiming And through level shown we than they sure are to to out here. in been that's and will as need RNs Same expect have keep PTAs and also, move occur turnover what figuring want little down. that and for we we they're less

Patrick Feeley

it. Got guys. Thanks

Paul Kusserow

Thanks it. Pat. Appreciate

Operator

with Please comes with question. from Dana question Stephens. of proceed Hambly line your Our next the

Dana Hambly

good Hey, morning.

price, where I in now but your kind for if like mentioned good ask were weaker started something you wondering a I'm know disappointed. guidance I feel to certainly I ratings call the it stock got the I and on you raise recovered the of wouldn't didn't explanations star that. stock As and but has and you missed comment had just comments you the little bit you

just I'm last of else anything you're time if that versus we this I So saying quarter? there that last wondering fundamentally that talked anything was on kind changed missed quarter

Paul Kusserow

We're that mean as little well. as a well. I No, watching confused we are

great. So a it looks phenomenal wasn't quarter. It

out last being and what's sure invest there and I trying just are that doing we're usual if talking a and conservative as to things you've of but we're out couple of as about ahead what's but we're that make by here. and still over-deliver talking with you to bumming people you that, maybe we're us little we're think there, years, we what the that's do seen hopefully out that the tend will we know in some about,

think think saying I to probably fact a our guidance why got stock didn't we we that idea the the and we I the just been issues as the that. there's questions revise do some on reason is and I've aren't going think of I lot think I is with

we're of to analysts things and and don't why we're guys you last do. So up. but what folks if obviously, that who our to revise we're a investors they up to way as are first our the the hype year issue, things calls and big to push to guidance do and say the We're point are respect made we and quarter night, make going readdress so, this going the quarter sorry, the going doesn't in was second continue it what we going issue at we're asking but to believe isn't

Dana Hambly

makes maybe All of that kind are House any legislation that rule end you comments. sense. mentioned Paul. reason optimism assumptions? actually right. CMS Paul, a in making proposed week might its the by something That bill after and and appreciate of the that this behavioral way is the for expectations address the what And I there then into the that have would of

Paul Kusserow

good feel CMS that. here, he's particularly to on to he government and Yeah. good Affairs we GC is turn Legal fill about Counsel, our in where very and Group, but our it very legislatively, Dave with but I'll of are, are very, I Dave Head Kemmerly, over let about going we you our I'm where

Dave Kemmerly

on very thing prohibit behavioral to are to top I'd perhaps ability of optimistic first we Dana, Yeah, legislation the say about is use pass our assumptions. the

be of to the number from the author with. Republican So Bill, talked expect expect Democrat more there it to to co-sponsors fact for House on week only Senator we've week Alabama you're now push Since last is next Republicans have to be allow Key introduced will specifically bill Collins and the The and on. to the to we'll portion, that. we Terri lead next sign Democrat. and familiar Senate co-sponsor we Sewell a there's Democrats

that, got in Republicans/Democrats with Senate co-sponsors Collins. was bill Senator in now introduced on seven we the XX from co-sponsors Again up Our February, previously. as six we've have

we've to co-sponsors bills the and to So the steps working will that are add of lot continue next a really with. got those we're we

We Senate the expect to House the side. and on sign fairly on soon

built and and there'll which and of will a different to is is the on we the try will we year, over year year nature. the lot we've to be will in with actually opportunities we last half built expect House we and both of expect this this insert from the the We and have these lot support latter not Bipartisan staff and the that to built, Senate the as what understand the legislation move the is and then have year opportunity this of key number to committee latter so those vehicles work bills, to we've the a again continue language of of sides on the along half legislation come year key just for a staff, and this understanding in

a industry like certain about aligned efforts, not so on we it's we're art, So but in we we're language, it, aligned are. it's the we we aligned our feel where process, on on an is The good feel the we're aligned really advocacy bills, confident. this,

Paul Kusserow

say so a this I that I'd say eight got the get that's months what to good something bill once expect we Dana, here's amount House time. I'd drops, attached to of So

So and will it. attach hopefully Congress we legislation pushing can start through some

looking is with what It's for any So of in again we're going to half again. to at don't come that. occur probably back rule they're in proposed out that. this to do remember, point the going some there changes probably and we're year, the rule looking that's CMS -- to latter going expect so the We

and cure work heavy thus or lobbying for back summer of hope the should them even of though will get the with We have rid hope when pair progress with to So rule continue before legislative to them assumptions. before good get the CMS. some drop. the optimistic to far CMS tell to and CMS we or the November during had behavioral We've within and I'm very so to the that a confines

Dave Kemmerly

assumptions CMS we our Paul Yeah. about we behavioral to the Dana to for as behavioral track, with reach to on they assumptions, few On mandated them budget neutrality. PDGM, Paul, know, mentioning and parallel a with leadership continue there they time work concerns thanks but of that. that as Budget are other Bipartisan utilize by specifically a a mentioned, lot can -- spend things Act talking track you

from the lot two of around final coming assumptions others so the behavioral when and industry tracks, could see a in lot see the proposed -- about movement the rule, soften about expect don't to see early others proposed of are but us of out of with regulatory. CMS they November, rule legislative to we you'll them those However, rule between a a comments necessarily lot time talking you discussion and that, and so and and we and

Dana Hambly

guys. Appreciate Thanks. it

Paul Kusserow

Dana. Thanks

Operator

Our next line Capital Please question. Frank proceed Morgan your with of the RBC question with comes Markets. from

Frank Morgan

so on late, hopped I Hey apologize. morning. Good

it, a for? Just the legislation about because that in will offsets, what legislation to widely are or use question Dana's used they specifically of Will follow-up specifically there. behavioral industry ask the legislation prohibit is

Dave Kemmerly

on those X% behavioral Yeah, a use end of would the question. year. behavioral the will of move good adjustments smooth if assumptions downside is it of end back it front there X%, a prohibit Frank, to on maximum it will and and

of to the short end. kind long behavioral that's on assumptions of and Yes, it. front So prohibition use the

Chris Gerard

don't change to that's X% per one if sort purely get a is will me assumptions on goes it year through, that So because will behavior, thing, exist cut. behavior. thing it of can't And I and good believe future a but this the X.XX% other limited be which into obviously of on this be on then this proven

would would important cut I generally people than and So in be And been used X%. X% the more behavioral it's if be know have anything is it's been X%. no past, that also assumptions that think when between

of X.X% norm. way And so so that's, the the out is

that outside that making So we're a also of the way CMS It's norm. too. aware

Frank Morgan

Got you. Advantage two Medicare quick sort parts there. And question just of related really MA question, then real my is

was a doing I proposal demo the some out Just, a know time I about Hospice put projects caravan ago there benefit. think some into of for Medicare Advantage

arrangements off. relationships any any Just updates are MA Thanks. any color risk taking you payers. hop you and having have of I'll with then around type that or about

Paul Kusserow

Okay. Thanks, Frank.

that but are using we're reduce around risk XX by robust case revolving to states. hospitals relationships small case repayers relationships keep encouraged medication our the ability largely in of They're with and going yeah, one and readmissions scores quality specific adherence. with them. to They a four different small and help risk that -- to the up clear, we've our risk in well think, pretty got I types very relationships we've but certain

perspective. with and going be we that what from say relationship risk point about those we're bigger are these well, results at to Clearly now that. we're conversations payers We're are by these should taking well. okay, using a trending that what are So encouraged having talking we is

believe to proposal with encouraged sharing to Advantage taking has. because we performance things, change industry this again, is we're on Hospice of something for game risk game payments talk far for needs service. So these gain be need need that CMMI about that or below our the change and are We some the I'll and doing. about let the Dave so pay that their to Medicare fee we

Dave Kemmerly

VBID program there's XXXX January VBID about XXXX, plans represents MA in XX to the participating program in 'XX XX I which Value-Based VBID that so of in will VBID in the all XX offer states, be year all states in CMMI be the permitted in Program. VBID any but available the there's announced XX carve about the this states of plans plants or XXXX beginning will Insurance in Hospice more in hospice on think voluntarily Currently Yeah, benefit. participate being as in benefits. can Design

So but ways watching we're it's that closely. out, a

Paul Kusserow

still to analyze mean so is all from trying perspective, this and we're out industry what the to Yeah, this is days. watching itself so industry Frank, industry actually the getting would early an figure trying what means

Dave Kemmerly

But remember voluntary the for mandatory. the thing it's not to plans, there it's key

Operator

and the the the end closing back Ladies would like to call and CEO, Kusserow to and gentlemen, of have remarks. for we President turn session Paul question-and-answer reached I

Paul Kusserow

ever evolving the Take work like much, everybody what wonderful the road August. I today. these need people thanks you We day great who very what call do. thank superlative thank also listening. during look the our for earnings has doing, or of us process forward Thanks taking We we all care in Hector. and next doing hope quarterly everyone and day. delivered on to want that's everyone Keep really on purposeful to our updating have our a a you're who care to us people joined results. most call on the I'd again who

Operator

concludes today's conference. This

disconnect your at participation. time. lines Thank may You for you your this

Amedisys (AMED) 2 May 192019 Q1 Earnings call transcript