Chris Gerard, CEO of Amedisys Inc. (NASDAQ: AMED), is leaving the company as of today. Chairman and former CEO Paul Kusserow will return as chief executive.
Gerard was “terminated without cause,” according to a filing with the U.S. Securities & Exchange Commission. This generally means that the termination was not the result of any misconduct.
The company has begun a search for a permanent replacement, with Kusserow taking helm on an interim basis.
“We are confident that under Paul’s leadership, Amedisys will continue to have a future of profitable growth, innovation, top quality and consistent performance,” said Julie D. Klapstein, lead independent director of Amedisys, in a statement. “Paul’s growth and innovative mindset is a critical and stabilizing force to the company. His experience, along with his passion, makes us confident that this will serve Amedisys well during this time.”
Kusserow retired as CEO effective April 15 but remained chairman of the board of directors. Kusserow’s first tenure as CEO began in 2014.
During his time leading the company, Amedisys’ market capitalization rose to more than $5.3 billion from $900 million. Under Kusserow, Amedisys also expanded its care continuum from home health and hospice to include palliative care, personal care, hospital-at-home and skilled-nursing-facility-at-home.
“I am looking forward to returning as CEO and building on the excellent foundation we have at Amedisys,” Kusserow said in a statement. “We are going to continue to build upon the foundation that has made Amedisys the best home health company in the industry – all driven by our extraordinary group of caregivers and our relentless focus on providing the best care for our patients.”
Amedisys did not give a specific reason for Gerard’s departure, but the change in leadership may be reassuring to some investors, according to Brian Tanquilut, equity analyst in health care services at investment banking company Jeffries LLC.
“Given the track record that he had established with investors and his deep knowledge of the company, as well as the turnaround that he had successfully implemented in 2014, Paul’s return, even on an interim basis, will most likely be viewed positively by investors,” Tanquilut indicated in a research note.
The company had a rough third quarter as labor shortages constrained its ability to take on new patients, contributing to lower-than-expected revenue growth and falling stock prices. Year to date, the company’s stock has fallen nearly 50%.
Amedisys’ net service revenue reached $558 million in Q3, up 1% from the prior year’s quarter. The company’s hospice segment accounted for $198.7 million, up from $197.5 million in Q3 2021.
Factors such as the return of 2% Medicare sequestration and a 62-cent increase in costs-per-visit also impacted earnings. The rise in per-visit costs was driven by wage inflation and sign-on and retention bonuses.
Shortly after the announcement of Gerard’s departure, the company reaffirmed its full-year guidance for 2022, including anticipated adjusted net service revenue between $2.224 billion and $2.230 billion.
“We are on track to meet the guidance range that was previously released,” Kusserow said. “We look forward to producing predictable results that will instill confidence in our shareholders.”