AMED - Earnings call transcript Q1 2022

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Operator

Greetings, and welcome to Amedisys' Q1 '22 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Nick Muscato, Chief Strategy Officer. Please go ahead, sir.

Nick Muscato

Thank you, operator, and welcome to the Amedisys investor conference call to discuss the results of the first quarter ended March 31, 2022. press the slides the SEC page our our X-K related Investor of of with filing are website. copy release, and supplemental Form Relations A available on

Chief Amedisys us joining Dave Kemmerly, Government be from [indiscernible] and is call Legal Officer. today's Chris Gerard; on President Speaking and Affairs Executive Chief Officer, also will .

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

Thank be by will addition, Gerard. And available our non-GAAP now measure in CEO, call to Chris a Forms In mentioned you. required President SEC measure call reconciliation over our as XX-Q during comparable I'll most today G, Regulation of X-K. and GAAP and any turn to the XX-K, the

Christopher Gerard

business markets. XXXX resilience in quarter joining to thanks strategy Amedisys and our Today, of driven results, first our that our reflect Nick, us everyone continues which for the differentiate by us. Thanks, to our core announced

I employees. daily. what the lose we but calls give I of These not of people performance focus Amedisys our a do want thank our Before our sight to important business, on of you do measures to to all financial into want get update,

hospice highest fantastic hectic do, this of clinicians We year highs. homes their our of We is all our sincerely of acquisitions exciting has one. the what I a nation's populations. them quality deliver most our of quarantine start staff outstanding on way efforts care to to thankful. clinicians on the new additional been care support enabled the in Our business you our inspiring health a clinicians in truly January. by These X Omicron and patients. signed It frail were and over reached am who saw disrupt We aided saw and The delivering in are inorganic on business discharge our X% home growth. well are to on as rates focus

assets home continue saw at it's a recently XXXX off our acquired of to is tremendous a products hospice amount the We fill in and large interest to we payer start hospital other high -- another indeed. payment and space, proposed acuity for released. roaring rule

the hospice where consecutive On with to X%. This front, the the increased hospice to payments, issued aggregate fiscal on update hospice 'XX March Medicare cap. X.X% payment least rate the the at and corresponding fourth hospice update XXXX, CMS has the payments year XX, year by proposed regulatory increase represents

with wage on to CMS permanent place payment decreases X% In appreciate home update, forward and changes addition wage submitting the year-over-year to health. in at formal providers We performance, let's starting a our jump approach this comments is With of indexes. May. in year's we providers' annual proposing proposed into segment smooth look to also the our hospice rule, cap end that, to to index CMS'

by X%. home the health quarter, admissions For grew total

in the the to call, resulted number of a January be out quarantine, during of Omicron mentioned U.S. over wave early hit on we clinicians record which that in caused lost As last volume our a volume, course this for of the been have captured the over our we episodes X%. first quarter the percent procedures total has Had been volatile as of total patients. would volume a quarter. Elective growth X,XXX

total As saw variants episodes compared as of the decline set electives to Omicron to X.X% pre-pandemic. X.X% in, we

continued today, X.X% Electives And in seen improvement up episodes. number this post-Omicron total have of We surge. about make

For the XX.X quarter, sequentially visits per performed visits X.X episode, down we X.X year-over-year. and visits down

Our improving implementation year. our the We've the focusing and to and we tremendous will LPNs utilization as scores. throughout our continues and and on LPN deliver progress progress constantly PTAs XX% clinical quality of to to utilization Medalogix pay clinical to on of achieved we XX% while continue increase utilization. optimizing we mix On both make our patients, made continue QX, dividends utilization mix, in PTA care our

on moving to hospice. Now

For the year-end. ended the X% ADC BD quarter is XXX count X%. and down quarter, and We budgeted to hospice we of hospice same-store a have to XXX, by down was sequentially with which grow admits FTE grew

we second quarter discussed, made anticipated headcount year. have progress up during great turnover the we last of As ramping after the our in XXXX, BD

last have we more their as as as the number pressured that and into in January In where making We modeled. weeks, we that And than trend our see that guidance, our we you which add a a something in of is levels seen rate discharges. had as being will a to monitoring. continue better-than-expected value quantify new their growth. In XXXX, of the discharges ADC who them, Hospice last a much month tenure. versus production targeted if back increasing to constantly ADC and patients are January XXXX, and XX.X% than To QX, a of grow trend that higher of the a in course see of percent rate. we was the higher translate dying add percent producing now to But and were we process continues, XXXX of we QX in discharge XX.X% This we the experience are year modeled XXXX. discharge sure we're saw ADC rates. highs full moderate not service few In of the the this over saw they we discharges and reps coming of realizing going modeled in later remained on ADC the benefit.

We have number. for ADC XX%, quarter. capacity expectations. from this around call, of hold we impact is discharge we ADC, discharges April excess ADC of were ADC Though our this The as which positive ADC for is in million internal are the elevated returns. seen And a below on continue wind to movement percent behind for clinical $X.X as

average days length of increased from stay census. an percentage to and days on days. discharge XX deaths to XX XX QX from stay by driven days QX fell hospice dropped Our length were These of in in XX of medium decreases

its discuss segment, Now from a quarter. to which performance the in programs high-acuity high performance. Contessa's home-based our I'd during QX strong Contessa, patients with like continued acuity for specializes XXXX momentum care clinical

While SNF hospital in X lines care and New a launched business the Mount for Contessa going had the care additional quarter model primary opportunity in and forward. models, also it home-based the quarter segment with first of York, for creating home this first politive Sinai with

were from recruit core which reimbursement As This into referred was accept a limited that integrate the and creates XXX, full and with nursing emissions is to perspective. Total slightly our in reminder, QX Full more X Contessa essential continue the business admissions being patients revenue integration hospital to expectations risk risk, SNF-at-home behind retain top categories. line a operations. we favorable to needed have programs. fall and the it risk models as staff as to infrastructure into

risk have its milestone an mix. Mount made home While meaningful also pleased announce as limited positive versus see and Nassau health relationship contributed to our to acuity has related to in in Contessa's efforts services. reimbursement am deepened full System staffing, been with agency our to that progress shift integration joint I in partnership Health nurse a patients Sinai reached to for into of we on increasing a high existing the venture admitted continue are significant risk. we as programs South Mount number

In Plan Mount home York first palliative health, home partnership in care Advantage to risk-based a include expanding contract also Medicare addition in at its late the with Sinai New January. launched Contessa to

new home-based care this patient at this important going positive We capitalize care Mount see our full home, new palliative offers Sinai is have SNF-at-home offering, integrated the offering. in are program, health, now of a at as forward increasing and for partnership that expand and partnership be which This Through that levels one to in this partnerships transaction, why includes care opportunity financial the and tremendous an structures as a trends in will line a to provide only major to home home. engagement service industry, geographies of seeing strategy we on this truly home hospital kind risk. we business operator continuum reason early beyond contract of

MLR satisfaction in at success these demonstrate expectations Contessa We admitted Moving relative performance programs. on management saw again to metrics forefront. operational to of performance. clinical keeping while favorable patients quality and into continues to the the

Lastly, in we Washington in go-live Contessa with Seattle, this an yet the Health. of the expansion program respect another health announced Mason, to in February commentary collaboration the system underway, existing expected is patients' growth, deal Virginia This closed market. and is later is industry-leading another with currently Franciscan into that homes Implementation Tacoma, year. is

their focused challenges, of deliver the forward With to the force of our Through volatility we We which doing us that of and deliver for launch also the In of us this our so will that, we acutely to State able first did to goal a I'll business they our long financial in partnerships and results more turn consensus. the take modeling have delivered we EBITDA continued internal work our ahead about on through to the operate we excited late clinicians remain financial as the who expect year. marketplace, know and know quarter. performance for I'm QX, to all Each and XXXX. to that, We how the think proud new we over our about our be expectations. and X lines of to this a We we do, we confident is our end quality partnership review what during vesting announced Scott, business us meet remain of and will that look the can own quarter to do follow in quarter. Hershey to Penn street of results QX detailed care care. as summary, toward enable highest in it front of innovatively in produced of face ability differently are

Scott Ginn

Chris. Thanks,

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

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

For were the first $X quarter, $XXX results revenue $XX EBITDA XX% million. on or or as an follows: million. our decreased to $XX million X% basis, adjusted to million grew

Excluding discharge impacted volumes, decreased XXX the which million, Omicron basis to the acquisition decline which points labor revenue percentage was the $X Contessa, of and EBITDA cases surge as was of XX.X%. pressures. of driven January, by in drive EBITDA hospice rates continue a to

XXXX. impact was on this lower increase metric. wage in wage per travel inflation, $X by a percentage a as of declined sign-on EBITDA and in resources, episode only new and that X% and million, an additional wage a EBITDA bonuses, XX.X%, little million gross X% of Medicare points. cost driven margin revenue driven cost increases, for EBITDA of and training down of The of per visits Visits much Difficulty]. per of basis additional with full product Commission pay episode was [Technical and planned a decreased increase rollout offset higher resulting Segment share visit XX%. by G&A planned in XX% $X.XX visits XX approximately $XX $X.XX Metalogix Contessa, an per than development decrease is increased the and to margin of sequentially. Excluding cost impact, or X.X% business the up increases, X%, higher visit cost less the began per mainly was which year-over-year

pressures per was in increase $X and expense. in a decrease labor Our a EBITDA and seasonality and rate related revenue episode in CMS health segment not insurance impact mainly by in million, resulting driven X.X% Omicon enough to and per EBITDA increase the the overcome increase visits episode up to the slight the were of volume

results. segment Now turning our to hospice

and by Medalogix impacted development COVID-XX. $XX Net fixed visits and to resources, effect quarter, a million first million, XXXX, as utilization, Contract million revenue employees was EBITDA additional up the business the on to year $X due to million. excess G&A per year. For approximately of down increased $XX costs X%, revenue $X.XX, million, higher went rollout increases, primarily wage restrictions into adjustments. increases, higher planned driven X, costs travel revenue due $XXX was inflation, day due hospice rates admissions $X due X% with by prior rate wage census. was later increase flat and muse. care increased symptoms was process bonuses associated to prior wage ADC and lower driven in up Sequential performed X% were October by on costs hospice to that today lower by sign-on coming discharge with higher the due to Hospice COVID-XX. declining patients delay our salary of employees planned over dying

an $X million as rate, by elevated spend lower the As benefited QX and Chris rate a exceeded offset CapEx expense positive in discharge cap by driven XXXX from adjustment, G&A costs. our discharge decreased mentioned, EBITDA higher health ADC on decline Segment the rates.

expenses. G&A basis, total our which $X an general to Turning million additional $XXX and or G&A. of was On [indiscernible] added million XX.X% administrative in adjusted total acquisition,

our and down $X year Contessa, sequentially over G&A of the a revenue as percentage was prior Excluding flat million.

of we from the cash operations. $XX quarter, generated For million flow

X.Xx. ratio the a delays. end in We driven at from processing the increase leverage CMS unchanged by net of at quarter was Our DSOs did QX sequential see

to corrected cash recover expect be in this QX. issue selections We to in

to last add footprint. and and have X, of centers the of Turning to Texas, earnings The of very closed turnaround. Evolution which Oklahoma Health, call, stated M&A, will as evolution much our in care Ohio acquisition as is we April XX a our signed

the believe the outlook by profitability density to excited growth longer-term the asset are increase We opportunity compelling. our and and for is

have care health the assisted We year. X confident also off deals I'm state with M&A our remain and pleased move that locations North as kick of the adding in XXXX additional to saw on closed signed efforts we home very deal, and the we Carolina. throughout Sealand

we call. would performance we XXXX revenue as during QX EBITDA and ranges, for EPS EBITDA step-up if our from to our which EBITDA be the do QX deck. We are whether we can supplemental reaffirming Normal quarter. so in revenue, to our our found update need business will a of previously and slide monitor XX updates revenue, strategies warranted, are suggest on Page stated EPS guidance evaluate guidance both seasonality throughout our and of We'll QX.

revenue, number a QX sequestration are sequential of this do million expect Contessa While compensation in in million. of at X%, will impact at increase we that million new increase a we EBITDA a be will and long-term headwinds meaningful incentive These $X in year have impact. The increase progression. of items sequential $X $X of the in a which losses return

insurance new headwinds, approximately these million. seasonality to addition costs million to of $X in we a health have $X In normal increase

open headwinds, our Operator, other please line the of We This offset remarks. slightly these operational expect all QX questions. in our increase ends and EBITDA QX. below revenue improvements prepared nearly leaving will for

Operator

Instructions]. [Operator

question Brian Jefferies. Tanquilut first from with is Our

Brian Tanquilut

the Nick first my Chris, on I you. question Congrats for the to quarter and promotion. for on congrats guess

key of or getting in peers middle the your sold. of is obviously, One competitors,

you're Advantage that. point? on your Is give We've at how health. are that So me about maybe of of something anything Is be just of that terms scare you'd about could there had seeing maybe kind they sold. you questions more point in thoughts specific curious concerned of And and or seeing like part anything that reason okay, lot from people are on your say, maybe with potentially what you that Medicare you're the maybe that's this your what that home a business? that

Christopher Gerard

surprise plans with come saw Kindred get as provider And I Kindred. a we announced talking the Other the home. about what mean us. very what in transaction kind space any did vocal I knew we of to also actually mean did is -- absolutely. Brian, to into Didn't wanting about of Humana were with that the

at the look of sense. does back mean of and step you terms when and last capability -- probably in it's having that the So plan, it and of their I can in it, that make home. for for cost to down order their also appreciation pull of actually shows the total care kind levers and patients really their drive in plans care one

announcement several and that and we that But be between we've fairly to the for in about, visit to also business We've per -- a got #X, we So been of we've over that to was relationship order times not care the get us. providers penetration is years very vocal given and the the Advantage change senior really really paid value such the what it drive Medicare Advantage surprise the many stated last to Medicare know accelerating. also Advantage extract to the of that's good and Medicare out today. population, able

with And of that on probably moving not new talked relationships. striking that's in into do Medicare last our we've based about fact the able satisfies earnings sides. the believe And for on actually plans of over regards So a this to around really is referrals we're all been just kind leverage kind of why focused of couple more with our both relationship convert that Advantage we've a capacity the calls clinical place that I constraints. to

-- to anytime so and up that's And lighten soon. going not

still to wanting are in There's plans home. for fair care the more payment really So that. access not

into also there, margins more out really So that we're capacity us have model Medicare of drives soon clinical our wanting with allows we take that Advantage, on a to something of business and existing kind looking more pretty our up announce hope on that and frees at models to actually to new hopefully us to staff.

to couple to business doing we're that's here we relatively going the time, long of a to care. having X of of of to plants really But home leverage hope that hold find does willing in close is terms to same can down accept be our we've fact basically the quality rates. in something cost soon. ground at least with. we're the announce who we're And with game got total matter, that ways have in the care today, what really actually At done them So to drive and and

Brian Tanquilut

you Understand. Scott. maybe a for question follow-up Chris, and

KPIs focused obviously call guys And you the like sequentially. down, can the a it down of in done to? what think staffing good of can bringing terms job visit you're have everyone on staffing voluntary color on turnover you seeing picture minority per and pretty your the on staffing is acquisition? you looks some cost out any Connect you How And side, share Amedisys? where Just you down bring think Anything can you the that RN for that. helps

Christopher Gerard

good you're market Yes. is of not the contract saw would difficult it. of contract can and just health bad that take one visit or year do say the drivers to And contract labor of the I seeing retention, our retention kind is seeing of on to pretty have adding our and utilizing as that Scott of a of I'll dependency staff. far clinical staffing, see really, on our and as result hospice Yes, either in good to visit labor What happen to staff heavier well kind staff. it's well. we're home that, of see flex cost wants trying contract the for key utilization as circumstance best is been so we But your kind clinicians metrics visits I'll we dependence pandemic side if or necessarily anything accommodate staff. trying by on add lower We're thing really tune turnover that is performed our a which quarantines during We results you're a a some around unique that when in to some of shortage hiring of thing this or today. total about cost $X.X to

companies. is So can needed, the one turn to kind these and multi-month in investment allow on signing staffing that you capacity really on versus as just clinical hiring into up our actually us for retaining dependency contracts with staff, our of our us time should soften

are there. that is to That's some level. kind in some QX think and down kind it saw back us bonuses to of having better a inflation got we've starting the more in little softening we get out absolutely realistic sign-on discipline around are that allowing the QX. of And A see to -- it. lot I wage bit coming happened the a of

we're we've per manage one translated unlocking X% and then that going side the in able math we because to the on well Scott on like think be through we And health is X% cost cost increase of in retention a have increase bit can demand. do hasn't seen as but So some utilizing that through labor so walk as our our a of ways thing per to a by new in little visit, episodic it home episode. staffing

of So that walk kind Scott, real quickly. just through

Scott Ginn

Yes.

per on recall our it to together. on call, so how cost about is of align we saw as episode last a at visit cost talked -- pressures You'll our inflation and episode, that speak, we in so what versus per total those metric our cost these we look

certainly, with a said, I manageable X.XX about of that's help with that reduction just brings cost that visit that if our coming math the clinician I'm my here. increase. said, to total about X.X% Mattheisen of I down the would about if think per business certainly, per want VTE math, up a numbers in a a -- cost recheck X% per cost in using X% X.X% our Chris rate offset at today, in level, VPE decline out number. that's which, as And about base really gate you X% a episode increase our and kind doing And you look we're that in visit as

a prison I ability little it. more our a we're weren't we to manage surprised think as people little were

here we We'll around called felt continue I we think in the can good line that, that and with would of be to the But the that out we on help would Chris for game most key factors points number where part. kind that hard other of work cost. shows why it the utilization thought out contract the way. and be feel mitigate and we

Operator

with is from next Larew William Our Blair. question Matt

Matthew Larew

bit And to to you're and want question line maybe then the what cost that less trying Could of still utilization onerous on you're more at to obviously, as just extent, you Are finding good metrics some staffing of visit you're us staffing running additions. Chris, that?. the little per Or much end. ramp the side. I follow rates? contracts of contract a gave labor today? up some signing us you're with use you can perhaps these Brian's give on doing our negotiate you favorable connect to agencies you contract links as around

Christopher Gerard

Yes. Yes. Good question.

came a of happened couple with when up to our strong, ended quarantine. clinicians in we what So Obviously, things on of on about QX. think about X% Omicron

So health on but to do strained, was other the care we entire agencies labor, to also the same. contract had depend strained. Hospitals were heavily ecosystem having were

their really lot So the drive on points leverage and to contract kind gave there's a up a lot of the agencies it of of price that. competition,

we level. So saw that

to in started of this was guaranteed kind that thing contracts. emerge QX XX-hour Another concept of

So regardless our to the occasions, some payment on guarantee services. for had XX-hour we utilization a contractor, of of those

also And then things that also go have we're option with our we pricing XX-hour PRN give the society first previous kind starting table for utilization. Connect started, talked markets the that has to piece XX% And about reasonably. kind and the -- and last lot accepting since around Omicron And our that in sign. then looking I'll And staff, we that. is demand is, think that of still last launched these of you down off to utilization we're good say that in of pretty is be calls also is the the a But for our I'd not on seen guarantees is us. about to the come which contractor. So statistics X down, today come versus staff. to XX% has a to earnings is, as RN absolutely as-needed X piece, a we've

business utilization XX% around lot our And a our that we've our about staff. skilled had of of so initiatives internal seen PRN about X% increasing business. skilled go And of we've from of to

of staff us obviously to when them. on W-X these to kind that's able So be visits our winner for own a we utilize need

Matthew Larew

all That's the just you'd a bit be back on sign for of And maybe update half could into with tracking, helpful. to It deals. XXXX? Mount obviously, full particularly revenue CONTESSA, going to I revenue glide sounds loaded, Sinai are behind contribution where a Okay. maybe maybe encouraging, future appropriate but But on the expected. think then expectations obviously, you just us path what maybe always about year and was how think,

Scott Ginn

Yes.

good Scott. this So there is dramatically. Matt, our We changed we has around -- how we pretty nothing feel still really really -- get and

that's Originally, half would said where XX% the in said we've XX% XX% second think XX% before first we the the we I'm and and think around revenue number half second I of of that first sorry, in half kind first. today. come in that in the in half or --

only a So it's moved little bit.

signed because of quarter cost revenue As regulatory here I saw get of not kind in deal, was the acquisition they we a that think first in had that we before, it which of closed the about lot did line you delay that they said when us that an around X signed months. delays, the

will that coming start So revenue. That's month through. around somewhere $XXX,XXX $XXX,XXX a probably in to

of see at So to We in them. into still it's about going will the good remain build-out a drag, talked and be that the And the first in second most the year. the and be half into that we XX% the of about could continue XX% half EBITDA number a to revenues for second.

perspective. for really the haven't So up transaction, where moved we off our there a up number this -- ends belief there's hold our even little with a full in year

Operator

Our Bank. is next Deutsche with from question Justin Bowers

Justin Bowers

quarters, some under for initiatives working innovative to your plans. piggyback the to the initiatives talked the -- kind and with belt but products to of your MA how MA just new question little shaped a on market? bring Contessa earlier, want on and has is you how with of Contessa those to some some a that been the now And ability couple package I kind there it's and differently, I'm about maybe of of and ask you're dialogue curious

Christopher Gerard

Yes.

So, emerge was some of quickly say Justin. the a we MA utilizing thing that model saw with plans out of a kind there. palliative I would kind risk-based internal one capabilities of to launch Contessa's

So going us. York we will we're for be starting line line contributing we sometime that to New think QX. that announced and sizable we in to top announced strong driver one, in the able top then this another it's to the one going quarter have And a to get actually be be

So from staying home, or would plan's receive normally and for for of them can that the it's -- having being in also high to that help care identify of the type in a hospital that plans able around but than still identifying in patients land staff the to patients in more them more the perspective, home work home could it's into who to acuity prevent levels care now can those starting care hospitalizations. evolve a of in care

in as we this the step So see direction. a

health we still dots at hospital are game. that, home, see do that's not end But connected between of hospice, care, palliative All home the SNF-at-home. the

manage us setting kind plans able that actually and of into going And does we bounce the them care population take to trust be are like kind of to to a home in see of hospital. companies high-risk kind so that really letting when materialize, the versus their

soon hold stages, it's the sign. care, I after of encouraging say would of early emergence the but a our still acquisition, say very would it's so So I risk-based

Justin Bowers

out are guys operating mean environment but follow-up. of struggling seen smaller I'm of it one that well, I as long more. if imagine that's executed impacting challenging multiples? just And we've M&A operators some kind an then in And how ever. about curious as a time, as a And there little quick and just can I you very environment as the

Christopher Gerard

Yes. Yes.

of First, but operating of the I'd analyst spoke recently actually we is quote there clinical market that's some the able still an right And advantage have this of out able patients. said environment sophisticated the actually focusing chop What you starts or to think of as some and and out that seeing with take tough be and there. businesses comment. I things, good kind of through very out it operationally think taking very, having And right to a companies of are operators less the challenging, the there it's on again spot capacity sound the I share the kind that there we're navigate on now. we'll out take to be solid kind is to

we're focused right the things. So on

a an started of without kind some due of even clinical see competitors sell it's be happening clients our fallout that agencies of but Smaller companies like companies, actually some and high smaller having out it be may quietly the yet, lot happening to comes could diligence. when within to pretty for there us insight We not option times, them out because the us of the a to there. and haven't have bar

in feel to the effect of provider is of by there. lot right times, what early start to still them see is size end year, to. and And see an attrition start get happening next a sudden, a of the wage end to time I so of opportunistic, suspect think making the And companies the I out successful is their all of and of this actually are up established where kind bigger some that you of we scale a pressures well model to additional business, it's and But cumulative Medicare to going of again, I not there's an of of and kind which ultimately you can you're now. we be for start to be of that leverage numbers penetration. I'd think going kind going really tougher more avenue that want to kind just see some inflation, the away, as and will labor sequestration this year, Advantage the just transact roll-up to like in.

Operator

Our question with is John from Ransom next James. Raymond

John Ransom

MA their you're drive an understand it's at. seems such this us yourself And trying if help be a shoes, to a you kicker? deal or also been look put and fee measured for and just discount? in willing of high that things subside? for please a pretty X of mind a think if you'll visit come at atomic it has yet is Is upside, now years the about with talking would it downside your or it at been while so, on? more Is changed And you it do with home thing, to just us to health. Maybe a Or what And a still like getting X one help Could what obvious is payer you contentious level? they're in that just You've like with to done. kind what that?

Christopher Gerard

Yes.

around of I we're model. So that kicking of say the more case a rate kind would concept is

per products admission to other So utilize such it's allows logic metal that model us telehealth, tools be to as going things. a and

is PDGM UM, really stay good And in with because past those maintain way but the drive right way. per right the to drive level for a So admission on conveners over not that for are outcomes in kind but PPS a drive of should that doing economics fair patients, who quality and we've over treat time patients for of us for do utilization couple patient, what down there years seen same and we the of some patient, patients. is of the the really patient treat way this that it down the visits in those working they length patients visits

guarantee strong, clinical we the basis quality manage can we'll with we outcomes. rate length a patients is us episode the bit, strong will basically for case those allows happen lock stay and day business if and plan with but for a What So a drive that down actually also oversight. will starts X discount management in of to

to we'll take And will the will tighter guarantees, utilization attractive will plans around the as more by is guarantees. them of the of we'll managing into that's ability be we timely there a to be is there of be And margin business. take see there also their rate be little going to well. a they to bit we're that provider we care call. lock there what there their see business, getting as kind when to what's that able going expansion guarantee out And sizable then more hospitalization So that really business, of initiation of gives type

Medicare not high right And in we're to We margins. to it per-visit expect to business now Medicare think on get that, is our range all. of don't XXs, fee-for-service to for but today. which into it's XX% going it fair XXs do we that the get most Advantage low So low we can

of actually So acceptance historically they've to and rate on day that, more a and margin and discount expansion, plan gets see plans, what in type we into of and providers for guarantees we all the paid, off access as deliver got outcomes us X the they rate. quality of care, that proposition And if hospitalization of the value constituents, our and a then to that business, creates the more want patients. like as well the around we more will lean

Operator

Our next Andrew UBS. question from Mok is with

Andrew Mok

sustainable And ask to visit like lower plan. the episode, think sounds drivers at levels? the BPE slightly do It the ahead XX.X. you is tracking finished quarter? Wanted quarter of BPE were about per at of What that's in these

Christopher Gerard

Yes. Yes, Andrew.

think some mix sustainable, did and in takes. episodes were do So shift QX We there in that puts our yes, it's we some see #X.

we a shorter side, visits, So did require visits. skilled rehab see and business that saw length-of-stay patients, nursing our some on in skilled we the bump positive did not

business And little drive per so we saw that a bit. episode down

billing cost our $XX line. the business kind actually us internal episode, about drove to million our And back -- So per $X higher from down which little sorry, episode, missed that come a we revenue saw which was down bit, of loss and in lower in about but our target LUPA an I'm little actually by therapy down higher -- But QX. -- periods, bit top rates also was a we what episode. per a bit that nursing was little

calibrated Metalogix it kind most summer, product seen is visit launching this everything going patients. that's give us off recommendations recommendations actually the the data for provide into recent value have us some new based piloting later normal to of don't back mix intra-episode business now incremental the still of are there going opportunity any rate, to that suggests right that's of some the Medalogix we've we in give to patient. a we're normalized which we that So providing kind

the could be help that on episode And faster patients this do those that business very what the road episode. and need calibrate during visits. they our to patients changer. a So also a game us it identify appropriately is can more But are will much recovery per identify real-time

new precise, going XX.XX -- little we XX the episode you maybe that in we is visit see think over product settle time, to below the rate. a bit really comes today. it per out, could down where in But as it it's get So XXXX, to the for drop

Andrew Mok

might the you expenses, about to it. higher about incentive with number on of Got the here? then And drivers And I think $X were that million run a corporate Can down reduction? good they rate million thought understand $XX comp number year-over-year. from is the cost help reset us accruals. that

Scott Ginn

LTI. did some We We favorable for lower us. things had Yes. break some have

back up. commentary. build will kind that think I I that my of have in

into builds kind here So of next quarter. that number

of with additional some spend delays. back held have Contessa that some kind G&A You on

numbers, on set budgeted all well to we're So internally, go our up bit we use a we I think creeps certainly, below -- which that forward. us we number as this. But managing

the building down good to So said in be we'll to where I our thought But keep was I to from from numbers. feel step-up originally going we G&A do a there's that here I QX. be it going QX think

Operator

is from next Capital Our Markets. with Matt BMO question Borsch

Matthew Borsch

Yes, me? -- can first question hear you

Christopher Gerard

Yes.

Matthew Borsch

Okay. Great.

from just demographic if you've and noticeable can do your boomers baby do Regarding -- passing that reaching track wave age the ages allowed home of some was I analysis. health patients, curious any you to the pickup way XX. seen you any in

Christopher Gerard

Yes.

age XX demographic, you when old. I oldest it about changed still today that -- stayed XX, services -- It's the XX the -- So baby think are over the average typical But years. into not think aging baby our patients are there. years boomers serve. consistent that about our is we boomers pretty that It's

volumes expect services. of terms So we hit e in our utilization that for typical kind the from patients. starting think demographic our see our of to is demographic of And to come that -- we

we've of baby the how that's in building cost-effective the capacity take to tailwinds industry a the on tail there be business the just about right got will why care boomers, at demand last. on clinical think to doorstep, on. we're optimistic setting about you that out right it's then focus our long the is so That's going It bit. because and this and and in -- kind the to So

Matthew Borsch

as on Right. to preference this increased And care if compared setting track as I'm for factor, really anecdotal maybe amongst you -- the before. than that the the data just went curious the any although that. is And generation the established more home evidently other is that a one

Christopher Gerard

specific don't home, normally learn but a or bit we with of a that the got a what would SNF longer. the data, stayed boomers even during the care non-baby in landed that hospital lot did have in We have in a little Yes. pandemic

with that that's availability another those an up We Absolutely, to setting of setting. care we identified offered a -- that's we then is patient XX% seeing at Contessa. somebody see rate when absolutely versus an have versus eyes potential rate home acceptance the to them. home hospital a adoption patient. high are the in whenever And opening institutional over being very And an it's in-facility as the

feel more the companies more the lot and like there a and well. capabilities focused there's on emerging out home of home that are we increasing So in as

you're to time, this over see baby understand boom actually of take them really think going to that just to generation that. what's of I advantage and start So to kind available

Operator

Sarah James Our next Barclays. is from with question

Sarah James

I out talking wanted point about there. to go tough back to that it's

I about is and that area market one So patterns think referral shifts. share

to that your you seeing share local in are of guys hitting referral consistent or patterns? are And able impact the market more be probably mom-and-pops With any staffing the help? harder, challenges that in have availability may you provide

Christopher Gerard

X volume is of last from per also And having get we're out able in the into that and them in of new we is into upside great a hook patient and account. and of lose or then What kind to we referral is we the question. lot actually penetration the gain to we of we and and typically, accounts that those we've pretty closely leverage per Yes, watch over access and more us what a many quality a it's and that service. significant that of years us track And actually customer noticed accounts we get many our quarter couple quarter. terms accounts number getting -- our how how source and do refer

on window is worked a their past. it bit And had of of in just in they've a and does favorite take of not ability really the staff sometimes, their they've with it it little inconsistent function that Is and their And agency little very agency have a to their opportunity anymore. for creates patients referrals, us.

we in agency smaller to more past targeting to of approach utilize and identify in able to loyal where Our goal the in kind really we our to opportunities very, in vulnerable, be been they've knowledge some may more utilizing there to now be data get the those like very best can purposeful targeted that. mom-and-pop out how claims is feel accounts we

the clear having volumes are many and hopeful most grow. it's market is really kind troubles we that where of right we're the in capacity able taking continue our environment. time. share in information see really to not total of of it of some today staffing competitive that expect generally, we're But good because lot the to that feel show the taking some penetration markets I'm But a have, look also or to And if and to going the today. about share now, we're of we when over those and I actual be are really clinical at of some times, out that results of there, market not we markets, So we with

Sarah James

any Great. other payers, a are share the that in of established aspect market the of you've When about contracts your setting just county? seeing see particular up And change a with share talk care that in early . shifting. the market where you and value-based you then you examples

Christopher Gerard

Yes.

going in on our And Nashville yet. that rate model commitment think we deal business. So relationship. plan up because share more the does happen, that take holding we case be that to commitment when be I of But of market deepening mean, it's hasn't . to there's materialized do that to into going that and that really kind significant shift on

we of what is referral seen -- deals, more that Wherever today do there opportunity we out has place, business business. While is rates hospitalization other of some in Medicare see upside visit on XX% of some the have patients. we of flow there relationships out about agreements those outcomes per and kind now into Advantage in we our our struck sort for our have have based

sign want good visit and time work you're is So not really see when wanting and we we to to go still a we to happen -- not the it's just and if likely where aggressively discount going create that capacity providers. have willingness happen there's -- that to contract work there's limited you to see we've side, a because to as have the got frankly, the clinical per a kind of of over going got economic make partnership, cancellations that both take sides to environment going that a model is we to just on to out to And we're with have the an to but going see be will more what of business. some change significant a game

Operator

SVB Our from with next question Mayo Securities. is Whit

Benjamin Mayo

lower quarter of the in prepared the you quarter. in than a about being your kind second snuck comment Scott, remarks first

a headwinds. cited number I think you of

get us know, implying of year I the think most you're and half, half. the to at the tailwinds XX% in second Are for looking I ballpark, the the of kind full ramp that second point specific half I there of just in you those. second any don't can earnings

increased So is B? gives the confidence on us bridge A there us point that anything to point from to you point can

Scott Ginn

Yes.

as biggest sequestration. I go pieces, won't thing think out back to there, -- I to I I able be called having think to certainly them the out and but the again,

QX. in QX to bridge QX got to that deal the You've with and to QX

us, a positive really [Technical rates Difficulty]. bit ADC, But So from noise the little really improve hospice that's discharge the on really certainly of seen that's us. for and point, we've

Christopher Gerard

revenue That's QX. in coming episode delta in $XX mentioned I that down. Well, per

So far in sides QX. bit coming up revenue per so a rep

pulling levers as So that good those we're cost well. are

So there's some momentum to of in for kind the to areas build us to think continue of the year. material that going some Yes. we is contribute

Scott Ginn

this just there to And are closed now, of too, but somewhere from and revenue, that in we thinking the combination around get just contemplating of two line perspective, $XX annualized an from numbers any million basis aren't top right deals. out They a two. those those

quarter. to in So through you'll start that the . next come see

Benjamin Mayo

is That's this the a a onetime? good point. And said million, you -- accrual, -- just recurring back is million yes. to whatever could maybe expense? the you $X this if And self-insured a $X on Or

Scott Ginn

new typical -- cost items. That's out We're I if as of our remind from you other generally say kind self-insured. just just That's and move a of would from you're I QX Yes. in to items typical just it the look -- QX. called kind to of through people, separate thinking as That's where the that's investors And deductibles, visit X of the build at some numbers not I to a really to new. moves, out, that build. spin. People I called kind hit the

say would progression. that's -- that's kind normal So . of I a

Benjamin Mayo

like one. just plan dollar what's issue. helpful. year? labor cost because of you're environment where Okay. to right amount a now. isn't an I'm that's like I'm it like could Can you what be COVID just contract last that the for the looking And could potentially go and on dollar maybe away ask last stranded share No, one what your about trying an in think And was sort it I spending that of a at in so much amount

Scott Ginn

Yes.

of our is. So if you what about kind think spend

So of date. fair from last you're a -- talking of of this million on QX down million money about visits say, to QX amount contractor type $XX down number for to to almost $X at X.X spending on would That year the number is a contractor us. continues I visits, raw type around there, $X-ish, year. go XX% of

down. continues to that come So

with continue at to were that last X.X% number includes the right utilization to Omicron. year, at and that X.X% now, somewhere January was We expect elevated drop. We the

see the of that rate raw tail both tail number to off we continue So and out visits. in

X.X So that we're $X.XX and work get I about that math will how continue using trend. that million visits will on is the exact think to to $X But number.

Benjamin Mayo

this like a math. sorry, year we this this to is do a Is I'm much normal all enough what talk. I there way is? offline, this think can simple This like contract about spent maybe just year plan for labor take maybe I'm last just not what our can we has quick to and year.

Scott Ginn

-- year. would utilization Yes. if pull is you We'd of that our visit numbers I visits right going X.X% that we to of a -- about the at our like million we as would X.X%, roughly that quarter, think type exit say about X.X% to down using the that now. into number X.X we're

. would So of just think I that way. it

Operator

Bank next America. Joanna from Our Gajuk question of is with

Joanna Gajuk

I have questions. two

The first a is follow-up.

for can you net hiring guess, -- rate terms the in guess, the quarter? of are like terms you of slow, metric the in guess, a I So this I about, give I tracking, in it's but typically, quarter? was there hires the new some probably January, were very exit talking of say, April the kind things of or is trends still us how,

Christopher Gerard

Yes.

is this So thanks, Chris. Joanna,

XX% in capacity, So which our internal but turnover target by We about we with we first on quarter, the -- well. our down excited our targets for and build actually month historical we helped set hiring were rate, actually turnover QX, were did of by about quarter. came us which And that. our for

different. April, in not far it's materially So

that down that with There as we we So full-time bonuses, order clinicians possibly very maintain around with trying have get on we're down as and be we're driving as double need competitors also demands know markets then fight to our to door. well. turnover to the in to in capacity we about our on efforts hire about some are also, that we have high specific have that with XXX -- that look turnover part-time able discipline to as still can. very sign-on excited we of that And nurses But to hard today's meet to we that. and much kind builds [indiscernible] actually

good about feeling So [Technical that Difficulty]. pretty

Joanna Gajuk

The right direction you improving, as said?

Christopher Gerard

Yes.

then still -- last go this of was our 'XX. turnover year, year, nursing want and ticked down targets, where top we it QX on in And as but So today. well . X% from it's down we to lower is right than

Joanna Gajuk

Difficulty]. [Technical question my And

Scott Ginn

rules. Rule relates to it as impacts our

that those good to what's it the ability feel in you number at the for rates up. go Federal mean, hospice payment market market suggests around I at update, We we are and in pure the X% update to going similar continues data the type the would expect any into a based our move expectation. to that So the other of up range -- in to [indiscernible], on market that absent be about X% surface, number, health basket would came the if on of noise, basket Xs. home look kind but on Register

it the is and a certainly the industry all other step doesn't in direction, piece. seeing, on right talk that for that about I'll Dave that about but the is let will the good good increases news surface feel us. Certainly, . cover be in I So

David Kemmerly

model moved January late moved you'll have in the on health behavioral 'XX, the the when didn't Yes, indication X, know, between behavioral front any Joanna. Having additional statutorily on assumption end. end, of we XXXX, as they regarding be behavioral to a home recall. CMS in distinction budget said distinctions any what's neutrality, achieve from assumption SNF. a they're you We front PDPM prohibited that, to there from factors had cuts to with to early assumptions proposed have Unlike cuts as of the or When payment SNFs because rule. 'XX, inclusion don't sharing are going PDGM, couple us

the there's CMS surprising of So a spend $XXX March Congress SNF about an I somewhere home indicates decrease think to in -- was $XXX report it that a around, in X%. I or and increase was [indiscernible] MedPac came XXXX, around million on think, CMS. And which It X.X% independent spending it's Second, And MedPac around in studies equated XXXX. X contrary, there home decline not actually health independent XXXX million. found health one versus spending to found in in in

So a big there. difference

spending consistent did a XXXX million, in $XXX Secondarily, the in and also industry, the about a Dawson Davanzo found of decrease which they study commissioned was finding. by somewhere with that, MedPAC around

studies neutrality in a spending positive out SNF X the in say versus changes got out rules. proposal SNF make there rule, put actually budget kind say, versus see in proposed too, you've there they their decreased methodology XXXX that that So 'XX. at 'XX I'd the On note, did what CMS of in look taking some a you'll the

did they their on So methodology. move a to willingness show

OMB, unified, with prepared and legislative regulatory conversations that the CMS, industry that year some staff. and we year budget members neutrality we the consider fully included that in they include similarly congressional get would already the that with are So engaged last obviously, CMS comments we Congress, gave are path assumptions the And this behavioral that strategy And we'll finally, and to on with again. say down in there if go in event expect ones proposed industry I'd rule. and

especially and know as see and don't the we that in historically, typically, mean mean there, like rates, be line is for rule through but think handle what's might a to us bottom read you don't is going any SNF not and rule things proposed. -- or But behavioral that for are So we us. what interesting deal it to final reasons lot with proposed of something feel cuts around change. that there's rules, know between can you we And know, we

And comfortable those comfortable anything, we Scott, to our with the if or kind in data, we position Chris? feel avoiding cuts, of and proposed. block they're feel of so

Scott Ginn

that's think I No, fair.

Operator

A.J. question with next Credit Rice is from Suisse. Our

Albert Rice

of couple A guess. I questions,

decline. a like about QX, Your were you XX%. ratio LCN In looks

in to QX. do this still can for making XX% something in to just is And about there the you slightly above XX.X% labor that situation? You're the noise you Was dynamics LPNs? those about get year? Omicron pick Or is it up harder think

Christopher Gerard

visits your think on Yes. your We there's quarantine. had of clinicians QX X.X% don't calibrating at that anything when in you

Quarante. ends when So sometimes you on to our LPMs utilize were had

half are about care by the you tougher feel But business of for lower episode our So our first visits episode the that of also per of and -- resumption discharge the we works, XX optimize when provide be kind of your LPN reserver visits to our north utilization, nursing barring like emission right in other you puts drop But per surge we we visits visit go and kind that. and clinicians have an our a of visits that an are that of done think quarantine. to utilization. oasis episode visits visit, our feel actually patients that in about XX% the about good way an LP any said, RN. it get with the per episode, The on now, we can on bunch is at or

Albert Rice

in the little Okay. of that some their because issues the you've you referrals alternatively, was gotten though, have question side for nursing a the any stayed hand, know X know in that's from Are the of on sort tougher. a other home follow-up have hospice then home helped is homes. pandemic And side, nursing while. the would I And to opportunities And of on around through on it's hospital I in back the health the maybe sort home those nursing to the Are you Or home? referrals still you are happening get hospice that? good respect referral to or? the of and diverted and been the again? capture source able progress? with that getting What's to for then

Christopher Gerard

good is nicely nursing right that getting over homes to we're we mid- see opportunity have in the home our health. will, And for and occupancy to then the able health to strong are deepen in maybe I'd suggests that nursing goes they well facilities are means hospice nursing them it a on you home relationships. we've can and as suggest still the to where think for absolutely data kind time, we that say event to have we're we within us, can being our facilities relationships home of on pie census, been shrunk business with were What below the in past still see home that maintain on mid-XXs Well, occupancies pre-pandemic, diverted that's the where do getting home, pretty it the the if build still, side but we that incremental opportunity us home from going the has the on relationship. the patients side. just where that nursing is I And to share which now, also that home market taking the

does occur business would than an nursing hospitals. the for opportunity -- us recovery say us threat a more that of the from see see when it losing for I and home So actually we do we more it upside

Operator

like we end the closing call would session. question-and-answer reached for Gerard I to gentlemen, of have the turn remarks. and to the Ladies Chris And back

Christopher Gerard

the Yes. to in to on everyone Peter, today. you all once you you. thanks on joined everyone quarter the look performance. of I Amedisys deliver seeing . weeks. thank I strong Thank the our Thank road us have forward well, to and to who coming you, again, call and And helped stays another who employees hope

Operator

Thank conference. concludes you. This today's

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

Amedisys (AMED) 28 Apr 222022 Q1 Earnings call transcript