Amedisys Expanding Palliative Care Operations

Amedisys Inc. (NASDAQ: AMED) has continued to grow its hospice segment despite facing COVID-19 headwinds earlier this year. This expansion deepens an industry-wide trend toward service diversification and a lean towards value-based programming.

The company is citing rising demand for palliative care as an impetus for moving into that space.

“Palliative care is a nice area for us,” said Paul Kusserow, president and CEO of Amedisys at Future, a recent event from Hospice News sister site, Home Health Care News. “Palliative is an area we’re growing in pretty aggressively. We’re finding that palliative care is something that our clients, customers and referral sources are asking for very aggressively. In order to provide that we need to go out and build it, and we have been. We’re currently doing this on a de novo basis, and we’re looking for various assets.”


Kusserow reported that Amedisys currently operates 12 sites providing palliative care, with plans to add an additional two undisclosed locations and continue future growth. The company’s acquisition of AseraCare Hospice this summer contributed to further expansion into the hospice and palliative care sectors.

“We’re not insubstantial in the palliative area,” said Kusserow. “We have a person from AseraCare who’s wonderful at palliative that’s been leading that effort. We also have a person at Amedisys who is doing a nice job there.”

The purchase of AseraCare Hospice for $235 million was a big stride forward for Amedisys’ palliative care plans, which Kusserow told Home Health Care News in April were becoming “increasingly important” to the company. The deal was in line with record-high valuations circulating the hospice space. Dollar amounts for hospice transactions surged in 2019, with hospice M&A activity leading the charge against similar markets such as home health care. Hospice M&A valuations are expected to continue climbing in coming years as larger providers absorb smaller hospices and capitalize on industry consolidation trends.


Currently hospices provide about 50% of community-based palliative care in the United States, according to the Center to Advance Palliative Care. Palliative care has grown prominently in the hospice space with many providers launching that service line as a strategy for success in value-based programs and to build new revenue streams. Several providers have seen a lodge into palliative services as central to engaging patients further upstream and moving them into hospice earlier in the course of their illness after they become eligible.

Widening Amedisys’s palliative care services will be a key driving force of further hospice growth as well, according to Kusserow.

“We believe that palliative gets people into hospice sooner and grows hospice,” Kusserow noted. “We’ll see that [growth] on the other end of hospice, and also be helpful to our home health efforts. I think people are looking at hospice as a place to go, particularly the people in the private equity world, and that’s driving the multiples up to a very high level. The multiples in hospice are high at this point. The prognosis for hospice payment is still pretty good for the next seven or eight years. We get high synergy value because we’re now a large hospice player. Most hospices are growing at about half our growth rate.”

Diversifying interdisciplinary services to include palliative care has been a rising tide in the business of hospice as providers seek strategies to participate in forthcoming value-based insurance design (VBID) payment models. Beginning in January 2021, the U.S. Centers for Medicare & Medicaid Services (CMS) will add a hospice component to the Medicare Advantage VBID model. Intended to improve Medicare Advantage beneficiary care through greater care coordination and reduced fragmentation, the hospice benefit has been attracting insurance payer interest and driving referral partnerships across the industry. 

Growth in the palliative marketspace could lead to cost-saving opportunities for hospice providers branching out into serious illness care.

“The problem with palliative is economics,” said Kusserow. “The issue is that you generally lose money on it, but we’re looking out for our patients and our referral sources to minimize that. We think we found an economic formula for that on a break-even basis. When you have chronically ill patients that are going to continue to need care, the idea is that we need that element, particularly with the growth of Medicare Advantage. As Medicare Advantage continues to grow, it allows us flexibility to use combinations of these care. Right now fee-for-service doesn’t allow that flexibility. Value-based purchasing turned out to be a big successful pilot that has strong rewards for quality. We do well by it and get good bonuses from it. We think that this is something that the industry should be supporting and something that should go out nationwide.”

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