Amedisys CEO: Contessa Could Double Footprint, Expand Palliative Care

A forthcoming deal and new hospital system partnerships stands to potentially double Contessa’s footprint through the end of this year and into 2022. Contessa is a subsidiary of Amedisys (NASDAQ: AMED), which acquired the company in June for a total consideration of $250 million. In the midst of this expansion, the company has plans to further build out Contessa’s palliative care services. 

Contessa Health is a Tennessee-based company that provides hospital-at-home and skilled nursing-at-home services. Amedisys purchased the company in conjunction with efforts to expand their range of high-acuity services.

“Contessa just inked another substantial deal we’ll be announcing in a week or so and is actively evaluating partnerships with 13 additional health systems,” Amedisys CEO Paul Kusserrow said in a third quarter earnings call. “This will create an opportunity to more than double its footprint. In terms of partnerships in operation, we’re way ahead of our growth goals for 2021 and 2022, which is very encouraging.”

Among Amedisys’ plans for Contessa is expanding the company’s home-based primary care and palliative care businesses, Kusserow said.

Contessa recently entered a joint venture in Michigan with Henry Ford Health System to provide high-acuity home care services as well as palliative care. The company in February launched a palliative care enterprise in partnership with Mount Sinai Health System in New York City, also branded as Palliative Care at Home. The company reportedly has a pipeline for similar partnerships that includes more than 100 hospitals in 28 states.

Contessa has seen substantial growth during the COVID-19 pandemic as more health care has moved into the home due to reticence among some patients to seek institutional care and hospital capacity remains strained.

Company-wide, Amedisys’ net service revenues rose to $553.5 million during the third quarter, up from $544.1 million from the prior year’s period. The company’s hospice segment took some punches from COVID-related headwinds as cases of the virus surged, particularly the delta variant. Q3 hospice segment revenues saw a decline to $195.5 million from $199.7 million in the prior year’s quarter.

The hospice segment also saw average daily census dip to 13,272, from 13,953 in Q3 2020. This is largely occurring because of an influx of COVID-19 patients who pass away within a short period of time, according to Kusserow. Consequently, Amedisys discharge average length-of-stay fell to 94.5 days from 96.8 days in Q2. Median length-of-stay dropped to 24.3 days from 25.3 days.

“The one thing that’s materially different from what we were talking about a year ago on the growth rates in hospice is the pull forward of deaths and the acceleration of deaths that COVID has actually caused,” Kusserow said. “When you look at 2021, the hospice utilization market declined versus an expected growth, and it’s still going to be negatively impacted next year. The market is shrinking a little bit or not growing at the pace that we were expecting when we rolled out our 2021 plan.”