AMED - Earnings call transcript Q2 2019

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Operator

Greetings and welcome to the Amedisys Incorporated Second 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]. Please note this conference is being recorded.

the of to Strategic turn Muscato, host, now President Vice Finance. will conference your over Nick I Mr. Muscato, you may begin.

Nick Muscato

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

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

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

filings, XX-K, including These risks Form SEC factors and our our include and in X-K. uncertainties XX-Q, detailed

Form also be during In GAAP will most call in the a of our today comparable addition, reconciliation any non-GAAP as required our X-K. measures mentioned SEC by G, Regulation measures available to

CEO, call the Paul Kusserow. Thank you. And now turn over to I'll Amedisys

Paul Kusserow

to earnings call. and the quarter second Amedisys XXXX welcome Nick, Thanks,

deliver again our our as I'm on while performance generated four to continuing this once quarter, very strong pillars. strategic financial proud results, very have we of

of will million range which $XXX Our $XXX million, increase $XXX EBITDA increase details $XXX to allowed the to cover remarks. in which performance us his to million guidance our to Scott will from has million

commitment of None outstanding I to you without to Again results one and patients operational, results. possible begins our unwavering providing to clinical, would employees, homes. XX,XXX with all of care strong these our their thank financial be for helping it want to such deliver every our patients. over in

that, we our With into dive strategic right distinction. beginning made of progress within with let’s focus four have areas clinical

Quality For while of stars. stars, had centers four score our Care X.XX QPC care over our the XX% was XXXX October and care Star preview, were centers at of XX we five

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

results. expect do do in our to our change. the our hard to why already and to It's are we continue at we for. is will what improve work performance impressive improving We new to calculation patients will quality we Providing care here our what return that measure and this we scores we prior quality

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

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

growth. a has for of operational people metric our been focus a and of major and as us employer drives onto efficiency, Turnover choice. key Moving quality, area retention

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

satisfied done we to can here, the proud more we counterbalance we be like We leave, lower work are and until understand continue this of working people better reasons with more number scores, not even our diligently more. we on why turnover Much have that stay. to quality but turnover will so

let's Now our on utilization factor training to one provide clinicians appropriate our it them that is that the has move RN skills top efficiency, operational ratio. to with we or In licenses. clinicians provide a initiatives practices operational conduct significant the our in must their One number to encourage with LPN pay deploy our their priority efficiency. XXXX improving which order qualifications they of the Therefore at practice maximize to impact our as and having allows ability of patients. we is this to to care discuss operational needed commensurate visits say care by

fully quarters cost. patient our clinical care LPNs most less of be drivers as the As PTAs care quality. implemented in such, shift and where pay great important and operations in our we This visits of utilization value redesign that more We initiative of to will routine our practices are incredible This be asset outcomes. and our undertaken presents QX. appropriate to should for at clinicians to with all are have not for drive coming a or they patient our our affect great opportunity a efficiency the disruptive the us

quarter In we growth. the was volume key X% fee-for-service had was strong Finally, Medicare another our XXXX. which total quarter growth health quarter X%, admissions total since fee-for-service division metrics, growth driving our is second our of were X%, of home in all strongest and

comps quarter. impressive were numbers X% both up strong the and business X% Hospice In Hospice, year-over-year was very faces admissions up our same-store given ADC every

is to growth Compassionate during QX integrating should drive rates in Care kick higher. and our nicely

in per total impressive Care, hours a X% labor Personal grew tough market. approximately In quarter

X,XXX agencies States. United Last innovative with zip the platform every care industry's week in care code an personal announced we ClearCare, partnership in representing the software leading personal

value payment Health, coordinate Hospice, conversations between to with our with a This using and members to that care. infrastructure. ClearCare innovative their will and the true agencies Medicare ClearCare an in partnership order to Care have as Care care begun patient have in continuum Home Personal relationship to whom establish this a opportunity to the us provide brings we personal Advantage network Our to allows a combined better Amedisys care nationwide help agreement Personal us and Long-term, of efforts plans delivery creates and agencies home. to furthers patients network with recognize services care also continue build

We continue our develops. relationship update will all to as you

There this of Thus work the XX,XXX representing but in in states presents us very to is Amedisys. numerous signed XX with with already we're do the to Care early results about up with. Personal agencies excited opportunities far, lots partnership extraordinary, participate XXX are caregivers having

footprint Bronx, we Tuesday, counties have in us in announced that a definitive more acquire agreement Health New us to regulatory Queens Counties and expands novo Chester, footprint allows additional Turning locations in de specifically, more York This our allow and counties. signed to deal operations M&A. even from desirable conduct New York our Home in will assets York. to to we King locations patients to build New and West expanding

half activity Lastly, we the and anticipate and second active of have XXXX XXXX. more in a very pipeline

favorite update. Home our July the Health regulatory to System moving Perspective On scene. Payment Now topic, and Wednesday, released the rate legislative evolving constantly XXXX XX, CMS

the X.X% as in Bipartisan Congress of expected proposed Market XXXX a by as rule mandated plus update. included First, the Basket Act Budget

X.XX%. adjustments the from chose to to increase Second, behavioral X.XX% CMS

proposal the was largely released PDGM we the rule portion PDGM from late proposed the XXXX. unchanged previous the by As remainder CMS in of expected, of

business prepare continued rigorously continuing success we PDGM. under for our to such, are As

financial hurdles of during CMS Behavioral XXXX. many out operational RAP the Anticipated to pose RAP, small out significant could assumptions, phase Lastly, phase Home along mid-sized payments, and to chose the for Payments Health for with agencies. Request

will our industry one that of competitors over potentially third-party our fact, presenting modeled, with implemented very Health XX% is share. In has market full Home reputable expand consultant us ample margins have to in PDGM if as opportunity proposed negative

be be new should or a model. successful implemented passes under the message me payment PDGM the bill clear, will is either behavioral if here prohibiting Let we assumptions way as be is

focus House the be securing On main Congress additional both supported bipartisan bills. Senate on the continues for legislative and our and front, of industry support to

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

that impressive and bipartisan co-sponsors XX We House to bipartisan Senate behavioral have and the bipartisan bills. I'm co-sponsors progress for for the Bill think pleased we our enhance have could We made both for XX assumptions announce support increased now Bill.

and that I successfully and transition expertise financial preparation, to the our to scale, us the new resources, clinical closing, PDGM, In operational emphasize regulatory specifically issues, to on position want and legislative payment.

as come summarize, implemented a passes is thrive. is, not To the will only a it. take to To or you survive but Amedisys in when road, PDGM whether bill Yogi Berra, fork quote

XXXX. have our you've continued another you in the start thank all drive we roaring for all see, Amedisys quarter you employees success. this done to Again As to great and had

drives what prove You circumstances the matter that results. continue focusing outstanding to on our patients no

of our performance over take quarter. it With us a will the through more review Scott to that, who detailed turn Scott? for I'll financial

Scott Ginn

Paul. Thanks,

to an quarter growth excellent and pleased open results. we on another six on all currently segments report novos. on and we integration planned very financial across had performance have closed target, CCH continue our April are strategy. deliver three synergies Hospice integrated We and RoseRock I'm on Xst, inorganic impressive We and de

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

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

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

compared segment admissions increase million, to a million up total were up performance. same-store up and a episodic $XXX Turning X%. X%, admissions adjusted total Medicare to were in quarter volumes. by $XX was Health, prior our X% On Home year same-store or X%, up In revenue basis, X% admissions second were driven

per visit total a increase services year increases. revenue was up increased prior prep in costs year visit salary $X.XX up prior per $X.XX planned by cost were to mostly visiting compared visits. compared to clinician Overall driven Medicare X.X%, on X% to

improvement and rate X.X% driven was as all a well utilization. margin in increases payers decline volume across by Gross as

significant of up Segment point margin. basis marks EBITDA adjusted nearly This EBITDA improvement of XX% improvement. quarter in straight was with representing XXX $XX $X fifth the million EBITDA million an margin year-over-year over

recertification visit of basis Home as results quarter G&A second of increased our prior year, XXX which XXXX. XX.X% the revenue is non-Medicare revenue the impacting X.X% points compared for Medicare lower Health include than was segment a to rate XX% flat percentage items Other and quarter was a per

our million RoseRock year, $X day prior increase over daily nearly second prior an our up Compassionate and was $X.XX million, $XX net same-store to turning Same-store was average $XX.XX, Hospice segment acquisition, year revenue of $XX which XX%. EBITDA increase census Care to X% Hospice quarter for revenue Same-store Segment an million up $X.XX. the $XXX over was up Now was day results per was service and X%. include million, up cost were of up up and admissions same-store of per $XXX.XX XX%.

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

impacted the margin second CCH The XXXX acquisition of was by quarter segment in our results. the inclusion EBITDA

Excluding acquisition, our margin for segment the impact EBITDA the the CCH of was Hospice quarter. XX.X%

since pleased year. this acquisition extremely earlier with we performance closed CCH We're the

the Centers we've platform today. mentioned, patients' of last wave Care going to Compassionate achieve million in is our of the centers the our in As live progress on target Currently asset and of Paul Care, the census on care Hospice HomeBase HomeCare XX% synergies. and representing with $XX integration made XX% of substantial

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

XXX Our inclusive margin results prior continued segment as compared with prior were the not they basis pleased over as year progress for our year. improved acquisitions. points are the We're to our of EBITDA

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

$X and acquisition which total The million sales expense G&A is CCH our comprised approximately of to planned quarter driven planned million by million in Hospice the G&A support $XX is in in for in related increase corporate and wage $XX includes and administrative Our remaining increases. headcount the segment. increases

We at puts operations $XX from million quarter in $XX cash which the generated flow for year-to-date. us million

the deliver for million are to XXXX. of track the in We full-year $XXX on range

was and over DSO XX.X and the acquisition. flat was CCH days last sequentially year impacted by

XX.X DSO the days Excluding CCH days acquisition, year. our from which down is was prior X.X

$XXX we end to nearly of million X.X of was At the our the liquidity. leverage second quarter, ratio times approximately have access and

with our four centers, pleased XXXX of front, and late the second additional are to-date quarter. de On opened as we of open progress six care and de novo novo the very end in currently have two

to year. opening targeting are six We additional during the of remainder four the

of deck, to Finally, of million of Adjusted as $X.XX to XX can XXXX Page $X.XX. follows. EPS you as our slide supplemental see ranges our $XXX on we're $XXX guidance and EBITDA increasing million adjusted

full-year First related gains sales, half health, larger control, portion to of investments cost on XXXX in seasonality the performance the XXXX. fleet benefitted XXXX reserve the year from back Workers and pool year strong prior normal of pickup. increases the of and second in identified Besides increased impact Comp wage which vehicle our occur the half our guidance we've half in will also raised

ensure that to Hospice to are We have close and first are minimizing and had to growth, disruption. performance in CCH XXXX a Medicare and and potentially lead continued will an focus the strong growth excellent as admit half ABC The follows: volume trends, outperformance poised improvement year. of this areas of

remarks. please will conclude open the for This our prepared Operator, questions. line

Operator

time, a this session. [Operator Instructions]. conducting At be question-and-answer we'll

Our first Please Brian Jefferies. question question. comes proceed with from your Tanquilut,

Brian Tanquilut

guys. on good quarter. good guidance hit on Congratulations the Hey Scott, stuff. a you morning

the ask just question. me Let

at numbers very good But quarters, the loaded a than the back Street. raising internal amount year's -- first half close you're a guidance by on you're half more look to but half from had two don’t earnings XX:XX. know loaded and beat versus was QX last smaller it I little first as much weighing different I bit front-end obviously progression You QX, your

CCH year your this or expectations? should that of different terms deceleration anything about we in you be Or just So little half? conservatism and the are will more in is back disruption anything really that seeing there this think in is a

Scott Ginn

I'll Yes, more Brian. bit give thanks a color. little

walk I to think I'll prepared as a through them. and comments couple alluded I you of things heard in my back

start normal just think is I QX to strongest our progression a quarter. from with, I think generally

sequential Going back, of change we've million. $X I think about averaged to QX QX

years, at three last $X the we back year, you up were Going last look and million. if

And at I QX. think we there. a there's -- $XX had from QX think it the as numbers; we Street QX million $XX had we in did QX, QX up million in we're to went The us at I struggle consensus to $X.X million. little QX in

strong our So that think went us QX QX. seasonality and that performance down of in I kind really normal pulling against from to our QX

half of problems that this the So first half started different. a I little of think off looks some gap in and created second and some

versus Looking We year. at to going is we what mean $X.X else on. alluded first about dropped I last half last year, half right. million second you're

units pickups. was more And our turned some off fleet good items, us we were get to $X and vehicles. of Comp Workers' our had calling some some That about I'm about half first we for Comp. specifics And over kind Workers' the that. a get and fleet million. Those opportunity We new combined in in of some had out gains

going guidance we're of another that too to QX. about I calling half. of guidance second from little XX% these $XX in million we in about first the really our the that's called during typically percentages We've we out to closer our for million $X a items And million see in out talked when costs other gives look increase talked about then numbers to we'll year; spent were investments. about we And earlier talked as which half, the the the increase related think we $X consensus there. increase seasonality take have $X got million spend you investments also a pool We the about to I about what QX in We -- kind bit we you first half. talking and in raised plus talked call, from if about what I'm over conservative

Brian Tanquilut

that out things. then, it there's From the final relates rule. rule different other And RAP something a rule from PDGM in back Paul, your rule issued few was How it. know the as like or least proposed is interpretation? to Got November. the and was I final that at the now from

If rule thoughts you me the on some don't itself? mind just give

PaulKusserow

think Again variety the X.XX% lot people a rule I what piece. to think from that -- that's that we through attention things an the so increase can of Brian are Yes, something X.XX% feeling paying utilization on increase is and to was coding assumptions work overcome confident we're -- behavioural that of through or the doing we're costs. labor very a I and

bunch a that while and confident of out there. So and back, we think quite testing been good care we're for have our on centers very been it practicing results so been getting this feeling have we've

and RAP the they XX I down between is pre-funded XX payments though that to was to which the get up CMS paid episode the are a needed days the you going and year XX% think to people to basically is the of fact payroll XX% XX%, eliminating and who make so and XX%. thing the interesting for that that this payment so XX% reduced is way of fundamentally XX% could between be XX%,

When to you is folks shake resources at have of the the borrowing the to amount look industry of which resources going a be lot tremendous this to a sustain the don't that think out. I -- there's

we're will data particularly percent that some could XXs, -- XX% looking prediction which under XXs, case those of this I MedPAC it we so certain rural know think according we accurate be and of is statistics is XXs of the is go one in not these see at and worse. cases are agencies that to up in people be particularly to the going the and some in below zero the of states

will affect it it that this So obviously some to won't to will -- think is us. come going backlash be we there this,

but to a an give consolidate And an of us give industry. for preparing lot opportunity affect our that. share. big to competitors and us anticipate going it opportunity grow we we're this other This to So will it'll is

that cause We in going going are harder of as to to urgency threatened here now folks this we we're signed more just the actually actually a the got is and up. folks also be on who've Congress legislative numbers front of better note the -- who in think today terms to of pushing as Congress the be actually will are

We now and XX Congress have XX representatives Senators. in

people the latest up. much the those So on the fresh be Those are sign easier are signing for press. anticipate that have to we legislation. We off it'll

doing players in this Congress So we're should also it's passed. are to better thing us But the for intensity it the like is going push we people larger to in much think situation we sad this puts which what think but overall the for industry something with increase in the industry get going pass-through to full.

Brian Tanquilut

Paul follow-up your So I and growth growth, seen just of we've I guess the volumes admissions up. about as improvement some firming kind I that already right. think in inorganic mean to the rate admissions,

PDGM you say upper with in, quarter? there's what I And the do where for a I same disconnect the for think or mean little limit ADC kicking of a see of going is admissions question the between Hospice past you sort then, I So is bit potential this that growth? where do guess organic and

PaulKusserow

active. of cleaning this. Yes, I’m been goes on if be he's top-line to up our considerable because Chris turn will working but through because be obviously full it growth balance if I We're on we -- think rate over in sheet PDGM in to think do -- this very already the the anticipation I that going to tracking will

considerably grow Health. will we Home think in I So

then Hospice on very we're is -- doing our what And full. pipeline is we're --

then low-double-digits. to pipe inorganic in you we have good novos in feel if think going which that the push very the we we the pieces to on high-single, combine what organic about and growth we're continue plus de and add So

Chris? So

Chris Gerard

and have With say prior year. to Hey, the I see pleased starting that growth side the put to a Brian. to lot Health it. the in the see to trajectory to Home even we're we Medicare expect really throughout on continue the fee-for-service effort I'm with of results our regards pull-through PDGM, trajectory

the really and And PDGM on be opportunity like of there attrition is the and if it PPS the depend into XXXX kind if implemented and get the we're of going in today. in can nice went to when repeats at from written as into to will industry a growth. is for itself we when starting some results create then of PDGM that some XXXX, that look kind history the we And in shakeout market lot did

to really XXXX. We and open we figure know that number but where exactly of into to think that's going up do a now opportunities put kind will that it trying some haven't create it to we out we're

a So the PDGM, we're from see consistent and just it fundamentals. already into Medicare today growth XXXX increasing of rate, of nice trajectory our track that we from on where regardless is

And Hospice side. on the

the kind dip mentioned had So of bit that and stay. average kind same pace. a function QX pace and you average a reminder which where of for kind markets we've markets, census. last admits length in between our that admits. admits happened in the little decline length in the of we grow stay think the year-over-year out was the a than will -- at AD seen of really legacy on in ADC faster of years historically The length several really in at And disconnect our in deep we've same actually business ADC inverse of stay. will almost a our our of a ADC our as gone And legacy and average level we've We increase of a doubled our

our and years. double-digit acquisition have around de locations. have we to next expanding to still the really industry really in that would novo per have good our CCH our the those take say high mid -- of that locations for think growth that realistic we in So we we market really share mid-single-digits the is But for now that year, legacy X% some I think opportunity about we markets. But opportunity couple is our

well. see business still we blended So Hospice nice growth as a our trajectory for

Operator

is question Matt William from Please Larew, question. with next your proceed Blair. Our

PaulKusserow

Matt. Hi

Matt Larew

Thanks morning. good the question. for Hi taking

the and long-term the ClearCare just how capabilities so there then given continuum payers is strategy how some come other of sort care. of predictive the have some through quickly of ask analytics are is agencies near-term contribution? of about with also it and And into any of partnering to Medalogix opportunity onboard the wanted with for working broader fits First kind across whether there of

PaulKusserow

Yes, actually question. nice

it. results got just the some press. hot off appreciate in just we again We So

So we're caregivers up representing now to agencies XX XXX in XX,XXX states.

we're So now The if shows people be but key in doing is, to that correct delighted And demand successful is working. is it this five geographic going be it still we've didn't with sign want partnership got we've it those up months the that the Access, the of access, shows there's days. couple we been with that. We're working building incredible for to would numbers. think it next

The place. people this some age goes really saw allow clinical the that care you to personal care at occurred strategy we is combined were of in when Humana. care us to continuum to behind combined palliative -- with and need it back We hospice with

acquisitions both As take at we up plus XX and and to hold have we together in the to to rollup assets do and thought cover turnover footprint long between business rates very looked to some to then it into the can XXX got Hospice, we'd on and four thought our Home companies Health of and difficult we would be started do too the very difficult percent. were these if and acquisitions of amount these

producing that is out quality. -- good these are very good companies that there players believe we So there

network. all we're players. would And if and you for in our comfortable something unify and it these that looked process buy partner also can't you should we So --

in of now make offers we what And that the Hospice so belief can all actually have Health, is which players Personal and so told Home combine technology us those we're managed our we care and networks our which process has experience that can the Humana. building is been by doing through Care, at these networks in integrating what together

plus needs have if like have you together, daily activities clinical results. extraordinary things continuum these to of of all and you wonderful take you That can living of care care can a assets drive

how build And our is is we believe so that's and there anybody ClearCare the very it's think approach else it sure network, to that happier to we then to folks duplicate. obviously plan care But for exciting optimized a beneficial this them different and with us. continuum to those they're build very be an to will to overall be be to very relationships couldn't launched. into make to these is going It's continue hard out to but integrate this we

Chris Gerard

Hey Matt. Chris. I regarding on is your add question This just that to opportunities. will near-term

XXX,XXX in patients that our needing will be well needs. as year access benefit to As caregivers a Home the ages our they're these in that discharging Home or multiple of mentioned XXX in today XX,XXX Health. XX, future we're Paul that care Health all as overlap with patients to multiple the assigned is conditions personal markets have Average agencies, from Home Health have many ongoing patients them comorbidities

relationship on these utilize to individuals to And see going with home, able predictive two and as continuum hospitalizations across we be the going what's in precise predicting care is functions then preferred so things the like like that data so that share So the settings, with more that's real Medalogix to provider to we better the well. opportunity. can and that that that the this starting get to more patient between and outcome utilize deep in we're near-term get on in have potential a actually really going

continuum sign-ups. then us we able to ClearCare Medicare full plans to the XXX of of see near-term with out from be kind the a organizations real to So end the a opportunity the game able response for And being see the franchisee Advantage have demand we really reaching we tremendous home. in to see care the and meet

Matt Larew

that you held maybe ask the than up you Okay, ADC degradation with And more then on wanted a into Scott detail. expected, think great. more the CCH, all than I I Kim Thanks for came little little a fold to expected.

had to laid and the from So still you to comfortable moving out the whether Homecare, over a wanted EBITDA terms in HomeBase just get a of today way with CCH? contribution XXXX you XXXX feel starting sense with find targets of your

Scott Ginn

comfortable. Matt. I feel Thanks very Yes

We on employees what's job. teams the as very integration from an excited that -- CCH a Everybody going are has came well tremendous aboard. within done that our about as

As you way mentioned we would with love today. we the fought

when platform the $XX of that HomeCare is stand excited as considering and get so now close we'll that we is company really million on Xst, that entire So that about on ability strong we and think to range our we XXXX. we're by in tremendous right HomeBase our which get February opportunity is into

where lot pleasantly get think A in as planning into as to but happy and work I were of very, us with are. that when talked we went we optimistic and QX. surprised about So we very here

PaulKusserow

think Matt just been to quality -- and way along then organization when happens shows it They've what with wonderful them. and resources I then all you adding the we're buy clearly people. quality a you

to So but resources we clinical development resources that resources, think mostly pretty with the careful that addition numbers get these business we we'll of think comfortably.

Matt Larew

Is level just kind how or and forward? And should we related up, D&A modeling to to moving we year-over-year. of acquired expect intangible about sequentially some with thanks. Okay in just with continue the the stepped D&A of in question to that and assets an of real QX that terms the quickly Scott should just think line that of CCH accounting

Scott Ginn

be out for below for QX be Yes, QX. each and you following the that million you're $X of is to it's well CCH. the range million -- slightly do what the $X.X remainder exactly We'll the to probably looking of in right; price with would that in

Operator

Robert next proceed question. Baird. question Our from Gillmor, Please with comes Matthew your

Matthew Gillmor

of Chris, in guys. X% the thanks metrics I growth to the and the mentioned the acceleration to about ask fee-for-service volume question. side. Hey Health for think, wanted some I you Hey Home

give that maturing relationships that there? their hit the for sense maybe BD is drove that softer then the a and of bit you research and on So hires can what's the just a us driving kind and little if what's what outlook thing

Chris Gerard

in and on years to we've equipping job they over momentum stage still you function We they that's to level. them the XXXs some some our feet yes as kind up to to pull-through thanks, opportunity got start Yes, Yes, and been of of into location see street. at doing XXX acceleration really we there accelerate BD hey, getting the Matt. tenured where on are starting growth, couple We remember continue of that of of low gain ago, and down the the maintaining it. better kind it's of a a so were our

our We strategy haven't really changed much.

And it are up. out go and it's seems reps ramp deeper time to all now the coming to us pockets working be well. -- have There's new for still that starting also pretty we on to just

see we keep So that pay continue a machine stabilization of this that going and now a for is there. dividends, it'll we're lot to to working

when respect. finger there we our have on, two and nurses in the could some admission was seem in it could we growth our of put like patients, anything started at on associated been didn't had research looking wasn't of actual softening with that acuity of and be any And that change well. looking somewhat side, the the utilization on quarters in we last quarter, it, research that really as We a it into

that But little bit soften driving but We to did there's we're off. underlying it normal return this see anything that pattern, of normalize expect that's kind a we that. just of and not see don't to the far kind really

Matthew Gillmor

Paul of commentary helpful. sort approach I that's Got from then indifferent And it, PDGM. different been companies some about of could the there's if sort to

and of strategies pressure under is for looking terms to Can of some under some of offset your pressure? what that to of some you XXXX on especially rate see the Amedisys And help the of this of PDGM us in the to the offset the employ remind side. you ability just behavioral the you how -- are at some opportunities sort

PaulKusserow

Sure.

And various And appropriate bundles call. to have behavioral on areas we CMS But doing the is think opportunities But there that coating have on believe coding centralized -- folks we buckets three we've some there -- think on make I this is the we're will what three assumptions. properly. working has be there highlighted. working that sure basically been we XXX I and the on that have this. in been we set it there been

to believe there. going So we there's some be

episodic have the of do management also but an can so our in largely on utilization utilization of also that on basis. We working appropriate what's terms we been Medalogix with level own

get that everywhere, so individuals what utilization let's then a we Paul that congestive So parse to opportunities what patients there are heart on than can we as found heart for there's do the Paul congestive specific this congested him believe by level, category, out, same the maximize having -- Paul and as things he really opportunities as take there we we're rather results. still we'll able as say we some particularly has optimize specifically so needs having versus just care, we individually this put

we thing our needed in thing we our nursing with with had and this from labor is four-and-a-half on last the The particularly particularly mix work believe of ago here other therapy. labor started list all kind as that came years to we that a perspective, and we on physical

that be we practice utilizing can top aggressively of going we We routine where at use a there's places we instead and dial so pretty everybody we're PTs. opportunities license. the believe And visits our on So that can other LPNs. also optimize believe to of the moving PTAs have that of there's that lot

say the to. that I'd gets where are we to we all easily it put together, we believe So when need it us those levers

everybody asking soon that should I the think question can get you is how be there.

coding a think I get we can from quickly. there perspective

be Chris, anything this add have utilization relatively longest been will the from now the I to of don't labor think optimization. force it I to know doing through going work if Scott piece that. little that we're we've but already quickly on and you the

Chris Gerard

Oh, it's okay.

Scott Ginn

you covered No, well. it

we're about sure in just mean hard this, ready on that talk I and think we're -- this. can to about, Nothing rule us new we'll we've that a as talked on job the has been great lot changed about we I leverage that go. Paul do this for working -- the a confident making you very

Chris Gerard

The So the this good CMS we've one on been about did thing that talked we've -- thing early. good practicing, is they this. been

months. over this practicing So been on nine for we've

who's got feel good to we've very and So we devoted a very this. this large team on

take very we So this seriously.

believe still scenario we come worst will case out fine. So

Operator

from John question question. your next Raymond Our Ransom, Please with James. proceed is

John Ransom

this for sorry airport. Hey, noisy

that drill talked taking per project. you have visit full question. I one last with your into guys down out Yes little more episode to Just pilot about bit think a

we the episode versus cost think about on XXXX -- next think cost about, whatnot inflation So straight guardrail math can can get do in year you from timing that's $XX, a per just you're per episode what much and XXXX that that and much considering get to how basis? up if how -- about done is good you a

Scott Ginn

one Well probably back I talked think certainly about go I between be you you'd I at there. think what what think perspective, we you've combination can from we'll looking of and through two and a visit that see

$XX from your clinicians from And talking that $XX you're from of look if a an roughly number $XX episode from you So is then looking that differential. a using $XXX. mix anywhere about basis -- it

that if probably is XX between those another shift probably $XXX. So you're at looking bucks so -- in two dollars roughly

John Ransom

can the XX% in we on -- Okay, than three pure two some Maybe of granularity to XX you what gave know, get up the easier and we make And the get as maybe to pieces buckets piece. that two. and that's the number of coding can lot April modeled. about the terms are behavioral guys then, of more talked ENCOMPASS we other

as a of just buckets? per look walking terms of X% around the an something if that. maybe through three or like mitigating pure just what's Amedisys should for mitigation How pure we're in those episode behavioral for you're So number we think at -- you X about modeling revenue that

Paul Kusserow

working John. patient. patient X%, that historically around think uncomfortable modeling perspective, I little X% think by I've I two. tougher from have I'm I through that walking mean one a But through now. been change we're talked mean Yes, that we historically and conservatively where using behavioral That's not right still we're

I that. through perspective, around right. sure end year through lot the a think to the think going can from better patient, energy probably it that But we've having each view of towards we a a got of around will work you we're close making diagnosis but spend

Operator

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

Paul Kusserow

Hey, Kevin.

Kevin Ellich

to but Lot's guys. comment is. pipeline wanted your some great to if what's as RAP about about Brian's back through color but does going industry indeed market and go your about to do to with on PDGM the the go especially share you question when that Hi impact talked Paul the been this think payment, you gave to

Paul Kusserow

think world have going is this impact to Chris for going important the be. have after will to what I it's really Chris I think is talk I what understand specifically I'm generalities. talk I this because to to going to mean

So to world he's some give going examples. real you

we've a in states, I NOK got the we've with certain information we partnership state-by-state out some come on and think have -- has that basis. it extrapolated in on

margin. get we on way able percentage maybe zero basis these it. severe some be think there's world. XX%, states we of to XX% are agencies their to really Home Health XX%, some So below up a state-by-state that what know the of to through margin be folks work zero going And will But

to going employees. for and question a are to the do agencies these their are patients they they're they find to handoff place have small are what Now their mom-and-pops going if is if payroll, miss

do acquisitions, wouldn't Chris has situation and we us might folks So we that is on potentially have to thought our before. would for ideal an this because be have through to based do an been Other acquisition.

And is that we're first much, scenario larger the Our from of us the better think is much of out thought I a industry. there the one we're X.X% growth. for players market but

should I long-term, us be. for So think people

If think this judged think half be more it we should the I also look half in seems industry. that's market gain of opportunity to themes the push I really And wants out think share. to here this to the one something opportunity. seems CMS that's at CMS and through I is people -- be we always this use the we does go glass consolidation on be as that full because this to empty underlying How there should glass do versus will

market we at grow think point. we really should that So share

there\s a pendulum think also --- a effect. We it's

out there. we So be that will enough there think noise

don't know, industry away I the for we So that you this doing years. last if if where Chris, a believe through want they've will there fall probably they this will goes at to? that period XX stop in which been be cutting

Chris Gerard

Yes, quickly I will through walk just mechanics little a real the bit.

very size the majority limited vast cash just them and medium think have small no typical step and of to Home have reserves of capacity. size Health about the borrowing of agency back you they They If first to are kind agencies. the limited

that becomes possible. funding revenue really payroll cash exercise an as turn quickly as you into have So to

to today's under $X,XXX that's day XX. by So $X,XXX on admit patient be environment, $X,XXX episode Medicare a to typical you if that going patient loaned essentially you around

not to if to XX% kind you $X,XXX be to So care really same RAP. $XXX $X,XXX you've got only versus take to XX% the going third, And only seeing you're is XX XX on and payroll That's of to which XX patient, going the that about day the took really $X,XXX. that's getting days because then close of payment expense. of another $XXX. you're to you're really even $X,XXX day into your half PDGM of another XX-day Under half until cover episode

days. in $X,XXX $XXX collected today's XX under versus only you've and XX day at first you're $X,XXX So environment to the

to I've is see these through. in way we got imagine, don't it likely and wasn't us really you somebody uncommon unfortunate really So happen, these navigate but providers in as quickly can't event be able these very that's It's you transition patients agencies payroll can the you saying, to it very make the the hire does for early to phone these and can patients, that get happened XXXXs PDGM. a clinicians, what going that's to help scenario this bigger difficult for be a that to call got from I can I've something like under

PaulKusserow

about one-time through briefly this if impact RAP the you talk what goes do want Scott, potential the to perspective? of

Scott Ginn

Yes.

XX-ish for basis, a for well think but million disruption We're capacity one-time of at it's what we significant every looking Medicare. us if of a maybe you maybe but So for more would to number little a the you're looking $X it revenue in on day days can kind be exactly do X.XX day you're are of about we higher. per be efficient for levered, it would course positioned us a was we plenty how probably at

to to that. overly really with Chris it's to. certainly talked It issues won't and about but we're will have So deal some something be paying Paul as smaller disruptive our around the players attention plans long-term

Kevin Ellich

more back that wanted clinicians to additional would to so now have Just patients off patients clinicians, just take to you add existing have example guys to or go on in take more do the hand smart do the you on add have event maybe your Chris's to you the the guys to capacity and think to workforce?

Paul Kusserow

pay So when us that up we significantly will for practice we when through admissions that think And I we're question. that's talked a that change our about open us. great clinician or for QX, implementing that incapacity get in the for

built-in have to some we opportunity could from building which we're create but good patients up But will today incrementally for and already we're now. not capacity right internally we're our of capacity already ideal. things wave that clinicians practice be employers add So additional pay will that open also us enough doing could optimizing an a potential that significant there be wave, internally

Kevin Ellich

in into Thanks, press Premier detail wanted go to services. the acquisition expansion a guess guys wasn't then lot you the I Paul. back There announced other And -- care just the Home your release. of Health to

to of help could is terms around behind see to you give numbers it it you can any there wanted big put in detail if and us Just out? any how is

Scott Ginn

the We the did on counties. it’s of to Yes, the actually number. any got liability three we in so kind provider we number, CONs legacy just -- provider have it's don't exposure purchase actually those not

counties So plan. giving our is us doing and expansion de of novos three this those that's part to do in an what is opportunity

came than business other be operations. York opportunity the it will our assets go a for us New good expand no with CON but no So to

Chris Gerard

we buy de those to our opportunities do if have of we a Kevin talked the opportunities just those is What novo do we what this like anyway get would you as into we'd so. strategy, is but we of markets. certainly look growth about to for a there said inorganic territory if part we CONs, started in kind from perspective

Paul Kusserow

we when buy we in don't Kevin. like certain We like this we way, And numbers the provider tail areas. get that

optimal because which purchase But an would high to us this issues So in familiar with don't if demand liability have relatively get provider bought we for can the we’re area get with. that an the we numbers. we was we

Kevin Ellich

makes and what what the are you what turnover. about you're to some you lastly you Got the talk why -- leave? that the voluntary guess people I do then main sense. And about can combat things to it, And of tend reasons that previously you guess talked guys are I doing you

Paul Kusserow

Sure.

not the lowest management similar But industry, human a -- we're if we're we're you when think capital believe the it. better more they lowest to they the are. a stay, longer company, to patients. better in asset the know our close our I companies to the the look very the we we -- at very way staffing productive to care we're they they methodologies, in the more people The better deliver have

as important -- to it's they're us keep make as for possible around good So people delivering care. great productive people that around and sure being

leaves, So we at every this when somebody look week.

in interesting is we're understand to want of leaves we of particularly a spending why, the of natural lot. time do when very is trying nurses, doing our kind around we're the is it we're lot move we think some So a it particularly work somebody lot And area actually what now. clinicians, nurses of to of a

proactively can leave start can make is don't. somebody to and potentially what do when we to predict they going to we then sure So

build work models. be with and some that predictive on really we're working able we're So to IBM doing to interesting

be We good. that'll think

that over you Home Is have someone that Health when clinician, not oriented joins We carefully. a also it. seen is think very, improve that to fixing to opportunity who there. this over And We've be we we're particularly very seen need we've and important. an and it's they someone very

Grail is it. But of spending lot to It's get time think below the XX%. do for a can we us we our and and effort we're and Holy it goal on

Operator

Bank your question Gajuk, America. next question. Joanna is of Our from with Please proceed

Paul Kusserow

Joanna. Hi

Joanna Gajuk

squeezing thanks Hi, you. here. me for Thank in

So so commentary guidance. first the couple of I guess the on follow-up, on

line trying expectations Just off. I and models the actually QX is was that So say Street were about were in with internal how guess to clarify it? to your what thinking are you you

model performance essentially I half your guess right it the to for raising you're versus that is better it? the first about So in way think

Scott Ginn

with we're QX I say our certainly outperform it that did to would some models and internal extent. happy

relative half, second been there. performance comments So half. we My good had to some first still more

to to bit did you Some Comp of those a were QX. fleet million have around I've Workers elements in vehicles those talked related those more in little $X and

about helps I've So QX that's talked that certainly kind how but of it. yes,

Joanna Gajuk

much then of in number the to you did I of PDGM terms the you All behavioral right. a And X% I and of are hear But commentary assumption in on right. offset. want able I guess don't to terms understand hard it put how

you You're then the like the is assumption the something the that choosing understanding of and call, is in of start is way be to to kind doing? of code the bigger based on portion kind straightforward adjust will providers the related terms relatively essentially but labor about offsets that it pain other behavior about my terms talking or will of of that which especially higher that big of that that coding something X% be on is CMS that's piece Is saying can cost in X% think quickly. you because provider what the thinking

Paul Kusserow

CMS so think new And good about they I news say as coming rule. as working for on just been a did long Yes, I early this out on time. we've wouldn't because that's quickly this the

is commentary that So we've it been relative. time, working long around on our

you when X:X. to kick think I over

be that to it. or But to X:X. look we're and to think move will pretty we'll of sure move the of piece of quickly going prepared clinicians rollout The we're may think kind that's I ready on more talking harder more mark right cost utilization we elements have little the that we there. about that we'll to hit be piece probably the getting bit it to as make I get a to

So have that's thoughts. you commentary don't that. been our know of kind what any I has if Chris around

Chris Gerard

that which are I it I mean of behavioral and think laid [ph] has of adjustments think kind terms this coding, out. comorbidities help. will the CMS I management loop in maybe

think done will we all X:X. work I that have by

on We've it time. for been some working

don't that's put I is that is coding has is question opportunity there it how out a much XXX% the real is, real. big that believe we happening think out and that of of CMS

path. there have adjustments when there the I essentially well already other behavioral work But the is buckets three And think CMS or I done we think down we've either but around lot the opportunity have done three providers of that be on comes, a feel or same will work laid way. the the X:X. areas, out, X:X the

phase I over in think of will early relatively be the the episode business preps. actually But on course will the management, kind labor the next XXXX. management one of

we RNs course optimizing of that at and that. like in happen XXXX. ready go And then the over to LPNs for of be will feel Medalogix, So we'll the to labor mix from beginning the year the PTAs

Joanna Gajuk

up. that So I guess just to wrap

you've terms about market How of the you come So think year-over-year discussing enough. gaining outside Home might and opportunities that should we would when think just versus XXXX with of of the you think that this throughout XXXX on PDGM. then EBITDA been it's Health share organically in PDGM, call potential what impact of terms inorganic in

could talking EBITDA? you Home about think and Health of you that you these are actions In offsets terms grow organically

Scott Ginn

be few we'll as that. Excellent. over any think working well offset on months that We'll we grow next organically that put that'll help a to certainly the number over of

half basically fourth to we back think the probably year, growth. quarter we we to were flattish think get with I the positive

overcome if talk we as But the we But that like will can some offset this business grow opportunity our good we'll this. an continue of formulate we to to we we impact think we we'll on and any be to feel have that impact XXXX. the headed thoughts to still So QX.

Paul Kusserow

our there sort is various centralized out. those The then covers. how looking sophisticated at centralized been results Joanna, it's scenarios at We ranges, we practice and think operation based doing coding looking what Yes. in thing good and have been we've very scenarios on have with are our

are there coding on opportunities side. the there But

and We as think that don't So we're XXX%. trying said, Chris it's to. just

good neutral. say But opportunities to side, is some neutral budget XXX% is X%, for will I assumes us. this correct. on think codes won't not is be I think there who truly So there. and It them But I Anybody that I coding CMS think wish be luck. it budget from not out the

Operator

question Company. next from The Sutherland, Bill with question. is Please your Benchmark Our proceed

Paul Kusserow

Hey Bill.

Bill Sutherland

quick. did delivery? this. think network this management got from the relationship, and Hey to of keep you're out running the that basically care and you I the to ClearCare quality not know like everyone to about a you the mean Exciting terms you so lunch how to here How Paul real be setting going of control; levels contracting You're sorry you do of able directly up care? on but when with Thanks. I experience have kind demand quality maintain

Paul Kusserow

and that. then through let where the can ClearCare we software largely it's going let monitor Chris. we the will I’m But some have And to quality Chris do navigator delivery. but that's I

Chris Gerard

it. with already talked to Like commit already have this, level of satisfaction, going when there Yes, timeliness as factors communicate patient against join to these some about up well. hey able be of we've created we they that operators have it’s that some Bill. other requirements when up be Paul signed the the It'll measure in be service care, to initiation XXX we'll got with agencies to have timely patient,

So it's event say that many can a and not agencies good want that. patients, these start function do to that quality in metrics with just each this of other. to The and on deliver of fail is certain news network in overlap have the I to actually you part of they be receiving you

ones to have transition list those forth. that kind patients are provide better personal of going the the when that quality a care, kind be opportunities these we're some be going of if to of back in at it and to gives So tiered markets to starting are the us higher relationship

Bill Sutherland

assume I signing up So you you're agencies get footprint. guys where the

Paul Kusserow

but Yes. get Also Personal don't my this no sense of we a frankly if if footprint there do a one as the initially a obviously it. into want can business we with nationwide that. building do Care and have is we to future is else look where we Network opportunity has can footprint to where ClearCare But potential we partnership it done

Chris quality some make we be and valuable but is and initially, where out is from we've to we care there incorporated sorting in will that personal and a would So we it therefore want large those them very large be from hold will business some take determine particularly reach. contracts right. sorting important seen who delivery He sure and put what what will contracts we rigorous scenario about in warm we to contracts which away this process fundamentally those contracts. stay to know any players Again, have large just body that to want

Bill Sutherland

next of runs you're on the begin that and process probably way the so Is remainder impact to that all some to the we obviously year numbers think about the And up in through setting of year. it? see this

Paul Kusserow

Yes. on Yes, we where -- particularly some franchisees are franchisees a some now to all the on are a in people, mode who of hope spending controls time taking larger which place and have that of other in like. who we meeting bring we doing the with lot I'm calls, which do bringing with sign-up of road on the

have with care then to pilots combine data from in to work some in And from we combined can in that ClearCare lot have that ultimately and in going we're be also lines where of we're getting those we then do we're HomeCare markets and end of to be so technology data moving going that we're doing the September of we're a three with So doing the work the so that business. test HomeBase that. coordinated we -- have we can all doing

do a to our big fall. to going for that's So this -- be list on big

Chris Gerard

as with these these us each to some with relationships grab to Only this growth Health again thing that up for relationships Chris. these Hey I'd opportunity Bill agencies is add this to providers these from signing materialize perform does start other. that is incrementally Home we an create Medicare to

see to to So of we and going flow patients. generate additional hope expect some see we that to that's

Bill Sutherland

real as quick, too. watching get sense as intelligence push? legislative just one of any the states sense And makes timing any last Paul, these from your That far as you unrelated one

Paul Kusserow

Head to is Government, I’m worse we're better going Yes, but things he let about as on you Dave feeling side, the to about it so. of a to talk it our here bit PDGM got

David Kemmerly

those XX since we're XX were we Same three the thing up That's on got out. the and XX. Paul proposed Senate. or XX the XX the expand House now proposed came rule came up to me co-sponsors and to largely Those in the out. House that's XX XX let the to first Yes, added rule Senate in about from the added We've in in earlier. XX talked since something House in four from

feel we some So momentum there.

didn't rule the So hurt us.

probably jumpstart it us helped our fact In momentum.

important evenly on between we're it's also and And to between Democrats. is almost split note Republicans

We that also have Finance House and Ways XX are Senate co-sponsors. members and six Committee members Means

we So key the got those are people to have. everyone co-sponsors. want but right We

So Extenders is sometime fall. timing Medicare we this to we'll vehicles window they're vehicles going recess XX. certainly all December the be Surprise -- package. and in but big but like Bill be for pricing, billing, working on sometime the till I in looking to September/October/November think predict hard that It's at realistically be looking will drug fall But that you're

we where are. feel But good about we

So more wrong of parallel to in came go the have rule it's way. got Congress strategy. out a our more We've little just a since gotten Nothing's valuable on strategy. assumptions and momentum changed

as So a had now. before argument not and equally compelling if we compelling greater

keep So working. we'll moving, keep we'll

today on You what Paul and to team operationalize heard Scott doing this. and all Chris the and were preparing

on to get some the assumptions. continue We from relief try path behavioral legislative to

the So part know you. are, thus surprise helps latter we five year. won't don’t if in We've left of that it got really you, the months I

Paul Kusserow

shape Yes The in being urgency now we're to. going but today good but increased. we're is so

on us negative it and numbers to should really big saying whopping you that the gives letter this think agencies in to good, generating of XX% are Home Maine. signed yes that that's the a rethink of portion a SIMA, State in and about Susan then of over some Collins margins So says we example the Health table data for fair there's we've going been be

be Susan see wow should this. and So say about Collins love you up really to worked go we'd

David Kemmerly

is to access create areas. especially that bottom assumption Yes, issues in surprisingly and potential is line Paul not rural saying urban behavioral what

areas But certainly create access everywhere. high those is card So but and in that's in problems interested interested maintaining for probably calling in Congress quality everyone. I’m to care expanding access

if today. So the as goes would written implemented that rule is this impede

Paul Kusserow

Yes.

So question. this so the for to it's good. fire, little a Thanks fuel adds the

Operator

the reached of have call We over back I session. turn Kusserow question-and-answer the now And closing Paul for end remarks. to the will

Paul Kusserow

doing a appreciates And to Thanks. on joined you're results. on again good I'd need and our care of Thanks has what call ever thank the much. who Taking everyone our doing. everyone I updating forward or our Have these Appreciate Keep delivered in purposeful people of during to today. hope it. call so a you October. wonderful the the fantastic who day. everyone. thank also us we to work we next want most, quarterly results who like us look all the day progress evolving road people and on earnings

Operator

conference. today's This concludes

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

Amedisys (AMED) 1 Aug 192019 Q2 Earnings call transcript