Amedisys Poised for 2020 Hospice Growth

Hospice, home health, and personal care provider Amedisys Inc. (NASDAQ: AMED) is poised for further growth in the hospice space during 2020 thanks to admissions growth, acquisitions and de novo activity. 

In the third quarter of 2019 Amedisys hospice segment revenue rose to $162 million, a 57% increase over Q3 2018. The segment’s EBITDA rose 47%. Major contributors to these results were the acquisitions of Compassionate Care Hospice (CCH) and Tulsa, Okla.-based RoseRock Healthcare. The company is expected to release fourth quarter results in the coming weeks.

“We bought three hospices last year to bulk up our hospice [segment]. We are really good operationally, and so we are growing. We’re building good sales functions, and I think you are going to see stronger growth from our company,” said Amedisys CEO Paul Kusserow at the J.P. Morgan Healthcare Conference in San Francisco. “The industry itself is growing, with home health between 2% and 3%, and hospice a little more than that. We should be looking at well above those numbers. That’s what we’re going to be focusing on very strongly this year: How we continue to outgrow the industry.”


The company kicked off the new year with further acquisitions, closing its purchase of Asana Hospice for an undisclosed amount on Jan 1.

Asana Hospice, which operates eight locations in Pennsylvania, Ohio, Missouri, Kansas and Texas, has an average daily census of 540. Following closure of this transaction, Amedisys hospice portfolio will rise to 146 locations in 33 states.

“We like the hospice business. We have basically doubled our hospice business organically. When we bought Compassionate Care in February (2019), that was a good size acquisition for us,” Kusserow said. “We estimated that we were going to come in at about 12 to 14 of EBITDA. We clearly beat that in [third quarter 2019], and so we anticipate better results.” 


Amedisys is also working to make itself more attractive to Medicare Advantage plans by emphasizing efforts and messaging related to reductions of hospital readmissions. Though this work would most immediately benefit the company’s home health care business, it would also position Amedisys well for the Medicare Advantage hospice carve-in demonstration expected to launch in 2021.

Through Medicare Advantage, the U.S. Centers for Medicare & Medicaid Services (CMS) contracts with private insurance companies to provide coverage for Medicare beneficiaries. CMS recently opened the application period for the program. The carve-in, according to CMS, is intended to increase access to hospice services and facilitate better coordination between patients’ hospice providers and their other clinicians.

“We want to be partners with managed care. Managed Care is growing at 7% a year; fee-for-service growing at 1%. What plans are most concerned about from a cost perspective is they don’t want people going back to the hospital after you have taken care of their members,” Kusserow said. “We are really trying to drive this down, because if we can be differentiated in this way that applies directly to their bottom line.”

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