Rising Admissions Drive Amedisys Q1 Hospice Results

Rising hospice admission numbers led Baton Rouge, La.-based Amedisys Inc. (NASDAQ: AMED) to robust earnings in the first quarter of 2019. The rise in admissions includes both same-store and those associated with acquisitions.

Same-store hospice admissions for Q1 2019 rose 5% to 9,711 patients, up from 6,933 in the first quarter of 2018. Average daily census for the company’s hospice segment was up 8 percent, rising to 9,982 from 7,214.

The census increase was driven in part by the company’s most recent acquisition, including the $340 million purchase of Compassionate Care Hospice, which operates 53 hospice locations nationwide.

“With our acquisition of Compassionate Care Hospice we now have an average daily census of 9,982, making us the third largest hospice organization in the United States,” CEO Paul Kussarow said in a conference call. “The integration of Compassionate Care is well underway, as our first contingent of care centers to convert to [the company’s electronic health records system] goes live today.”

The Compassionate Care acquisition brought in $35 million in revenue in the first quarter and added $4 million in adjusted EBITDA, the company reported.

Overall revenue for the hospice segment reached $138 million, up 41 percent from Q1 2018, which includes the impact of the Compassionate Care acquisition. The segment also benefited from an approximately $2 million increase in Medicare payments.

The company expects some disruption as a result of ongoing Compassionate Care integration efforts, beginning in the second quarter, but anticipates a rebound in the third quarter as integration reaches completion.

“We do expect our 4th quarter to be our strongest quarter relative to Compassionate Care,” CFO Scott Ginn explained. “Though we anticipate the Home Care Home Base implementation and investments will weight down Compassionate Care’s 2019 EBITDA, they will position the business to for similar growth trajectories and similar margin profiles to our current hospice business that allows to us to substantially grow EBITDA both next year and in 2021.”

Not yet reflected in the company’s revenue is its acquisition of Tulsa, Okla.-based RoseRock Healthcare for an undisclosed amount, which closed on April 1.

“RoseRock is another privately sourced deal which with synergies will turn out to be less than 9 times multiple and has nice overlap with our home health assets in Oklahoma,” Kussarow said.

In addition to strong financial performance, Amedisys reported that their hospice operations outperformed the national average for all seven measurement categories in the Hospice Compare May 2019 preview of quality metrics.

“We are very pleased with these results and expect our clinical quality to continue to improve in hospice,” Kussarow added. “These quality metrics are extremely important to us as we continue to continue to invest and grow our hospice footprint.”

Growing the footprint continues to be a top priority for the company during 2019. Kussarow indicated that Amedisys was on the lookout for other deals similar to RoseRock and Compassionate Care.

Company-wide revenue including all segments totaled more than $467 million for the first quarter, with a profit of $31.3 million. The company indicated it had net income of 95 cents per share. Earnings, adjusted for non-recurring costs, came to $1.11 per share. Amedisys shares have increased 9% since the beginning of the year.

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