Post-acute care company Amedisys (NASDAQ: AMED) will be growing its referral network to include more non-institutional providers due to a shifting patient mix brought on by COVID-19. The pandemic has led to a drop in referrals from institutional health care providers, but created an uptick among other organizations that transition eligible patients to hospice.
The company’s facility-based patient census fell to 35% during the third quarter of the year from 43% in the prior year’s quarter; non-facility business rose to 64% in Q3, up from 57% during the same period in 2019. This trend has prompted Amedisys to employ new outreach strategies as the company steps up its business development workforce with 73 new hires.
“We have leveraged our additional 73 [business development] feet-on-the-street towards two strategies,” CEO Paul Kusserow said on an earnings call. “One: Focus on continuing to steal market share in facilities and to expand our referral base to new non-facility-based accounts, and in all cases continuing to educate all referral sources on identifying the need for hospice earlier.”
Amedisys saw a 9% boost in same-store admissions during the third quarter; a corresponding rise in average daily census will be reflected in fourth quarter results as census data tends to lag behind admissions numbers by one quarter, according to Kusserow, who indicated that he expects strong hospice census growth through the end of the year and into 2021.
Kusserow expressed optimism for hospice in 2021 on the company’s third quarter earnings conference call, citing strong demographic tailwinds and favorable revised rates.
Hospice payment rates will go up 2.4% during Fiscal Year 2021 according to a final rule issued by the U.S. Centers for Medicare & Medicaid Services (CMS). The change would increase annual Medicare hospice spending by $540 million, though providers that do not meet quality reporting requirements will see a 2% reduction to the 2021 per diems, as CMS typically mandates.
Amedisys expects the rate hike, coupled with positive changes to home health reimbursement, to produce estimated incremental revenues of $40 million during 2021.
The payment increase comes with a corresponding 2.4% bump to the aggregate payment cap. The cap limits the overall payments made to a hospice annually. The final hospice cap amount for the FY 2021 is $30,683.93. The 2020 cap was set at $29,964.78.
“Positive rate updates are increasingly impactful and meaningful to our business and position us well for top- and bottom-line growth in 2021,” Kusserow said. “The 2021 rate updates for both home health and hospice are just a small piece of why we continue to be increasingly excited about what the next few years appear to have in store for our company.”