Amedisys Back in the M&A Market After COVID Recovery

Amedisys, Inc. (NASDAQ: AMED) anticipates more hospice merger and acquisitions in 2020 despite raging COVID-19 headwinds. Recovering from a drop in referrals and rising COVID-related costs during the first and second quarters, the company expects their hospice segment to grow consistently in coming years.

The company has been very active in the M&A market. Acquisitions drive Amedisys’ hospice segment growth. The home health and hospice provider has helped set an industry trend towards bullish expansion into end-of-life care.

“We anticipate 2021 to be a very good year,” said CEO Paul Kusserow in a presentation at Baird’s 2020 Global Healthcare Conference. “We are back in the market in terms of M&A. We will pay off our AseraCare deal by the end of this year. We have cash to go out and continue to do acquisitions. We anticipate that once the government pulls back on its subsidies that we’ll be back in the market for home health, as well as hospice.”


Amedisys purchased Texas-based AseraCare Hospice for $235 million in the second quarter of 2020, expanding to the provider’s 190 locations in 35 states and reaching an additional 14,000 patients daily. Growing patient volume will be an important indicator exiting Q3.

“COVID did not impact the admission volume or the census volume as significantly in hospice as it did at home health,” said Amedisys Chief Operating Officer Christopher Gerard. “Both are continuing a consistent rebound. Our census is up over 10% from that [Q2] trough. Hospice census dropped about 2.2% and climbed back up from there to where it’s at an all-time high.”

The AseraCare deal was part of the company’s three-pronged hospice growth strategy that includes large acquisitions, smaller tuck-in transactions and the building of four de novo hospice locations. The transaction followed the January purchase of Asana Hospice for an undisclosed amount.


The company turned its focus on expanding its hospice footprint in part due to anticipated disruption in the home health arena resulting from the new Patient Driven Groupings Model (PDGM) payment structure for home health.

“We’re working through the noise of COVID and getting the other piece of PDGM,” said Scott Ginn, Amedisys’ chief financial officer. “We’re really trying to comb through our pipeline and get some larger opportunities. We’re trying to really focus on finding some kind of larger regional or even some larger than that type of players out there and it’d be better for us to do one or two larger deals and a bunch of small ones.It’s time to kind of let those show what they can do with some acquisitions.”

The longer-term vision for the company will extend beyond home health and hospice to include palliative and personal care, according to CEO Kusserow.

“Largely on the payer side I think we need to own and be good at four areas of home health, hospice, palliative and personal care,” said Kusserow. “We’re developing approaches to all four of those. We’re focused a lot on palliative right now, and will probably continue to expand palliative care. We believe these are all the best places to be for our company to become an aging-in-place company. The 10,000 people a day in the Baby Boomers coming through are predominantly picking Medicare Advantage. For the next 20 years, it’s going to be about what they want the most, and they want to live at home and age in place.”

Companies featured in this article:

, ,