Enhabit Inc. (NYSE: EHAB) is projecting strong hospice growth in the next year fueled in part by investments in technology and workforce development. The company is currently awaiting for the proverbial dust to settle following its victory in a recent lawsuit and the forthcoming new presidential administration.

Enhabit anticipates a “nice bump” in patient census across both its home health and hospice service lines in 2025, positioning the company for stronger growth than experienced in the last year, according to President and CEO Barb Jacobsmeyer.

The home health and hospice provider is in part leveraging technology to fuel its plans, Jacobsmeyer said during the Bank of America’s Securities 2024 Home Care Conference. The company is currently taking a “hard look” at every aspect of its ongoing technology integration heading into next year, she stated. The use of AI, for instance, has helped to reduce documentation redundancies and allow clinical teams to spend more time at the bedside – a move improving both staff satisfaction and patient capacity.

“We’re in a better place going into 2025. The thing that I would say is maybe different in 2025 or [getting] more attention is how we can use technology,” Jacobsmeyer said at the conference. “In particular, how can we use AI as it relates to those back-office type functions? There’s things we can do with scheduling, communication with patients, things that right now take a lot of people and time to do. How can we be more efficient so that our team members can spend the time they need taking care of patients and not doing these repetitive, redundant tasks?”

Enhabit operates 225 home health locations and 110 hospice locations across 34 states. The company’s average daily hospice census in Q3 rose 6.9% year-over-year to 3,622, up from 3,388 the prior year’s same period. This, coupled with the Fiscal Year 2025 payment increase of 2.9%, helped fuel that segment’s positive results.

Employing an updated case management model has aided Enhabit in growing its patient census and stabilizing its clinical hospice workforce. Enhabit in 2022 began leveraging a new case management staffing model to reduce turnover, seeing the strategy bearing fruit in stronger retention, clinical capacity and census growth.

The case management model has allowed the company to focus greater attention on growing its business development and admission department teams with a goal of more timely patient access and faster referral responses, according to Jacobsmeyer.

“One of the best things we ever did was investing in the case management model,” Jacobsmeyer said. “We knew that added some fixed cost, but what we have found is being able to commit to candidates for hospice, that we have the on-call and triage covered. We’ve seen nice hiring and retention in hospice. We do not have clinical capacity constraints.”

The company has seen its hospice census grow across its geographic service region. 

Enhabit’s growth plans include a focus on de novo development. The company has opened two new locations this year, with three more currently waiting for approval from the U.S. Centers for Medicare & Medicaid Services (CMS). Nine other de novos are also on the horizon.

“In some of our CON states, we do see higher growth because you do have a more captive audience [and] not quite the proliferation of competitors in the market,” Jacobsmeyer said. “Our ability to continue to grow that mid- to high-single digits is really going to be based on us being able to be the quick answer to a referral source.”

The opportunity is ripe for home health and hospice providers to advocate for improved support around their services as a new political administration takes shape in 2025, according to Jacobsmeyer. The ability to leverage patient data will be key to illustrating to future policymakers where the greatest areas of unmet needs exist, including some of the most rural and underserved areas that lack sufficient clinical and financial resources, she added.

The ability to demonstrate the value proposition of home health and community-based hospice care to drive quality outcomes and lower costs will be an important part of forming future regulations and reimbursement that foster sustainable growth, Jacobsmeyer indicated.

“The industry has done a better job over the last year or so of really providing data to show the access issues, to show that it is affecting especially in rural markets with some closures” she said at the conference. “If we want to preserve access to the lowest cost setting, then we need to protect that access. We’ll have a new opportunity within the new administration as we talk about how best to use the dollars in the Medicare trust fund to really focus on the fact that if these cuts continue, the lowest cost setting of care is going to be greatly impacted.”

The BofA conference comes on the heels of a recently issued court order stipulating that Enhabit and Encompass Health (NYSE: EHC) receive 43% of future profits from VitalCaring Group and its private equity backers, which include Nautic Partners and The Vistria Group.

The events surrounding the case began in 2022 when Enhabit became a standalone home health and hospice business after its spinoff from Encompass. April Anthony served as CEO of Encompass’ home-based segment at the time, stepping into the same role at Texas-based VitalCaring with its launch in 2023. The company provides hospice, home health, companion and pediatric care, among other home-based services.

Enhabit and Encompass are joint plaintiffs, with the court ordering that 43% of VitalCaring’s future profits be allocated in a trust to benefit the companies. Encompass has alleged that Anthony violated terms of her employment agreement by breaching non-competition and non-solicitation obligations, and for misappropriation of trade secrets.

“The [court] opinion was a very important milestone in this litigation, but the court has not yet entered the final orders,” Jacobsmeyer said during the conference. “I think it is important [that] the judge did write that whenever she was talking about Encompass, she really was including all plaintiffs, [which] does include Encompass and Enhabit. A lot more will be forthcoming, because there’s a lot of work that’s still to be done over the next 30 days … That work has already started.”

The court ordered that all plaintiffs must submit the names of three mutually-agreed upon potential trustees within the next 30 days. They must also file an order outlining the formation and appointee of a constructive trust. If the parties are not able to reach an agreement, each company may file separate proposed orders and outline the differences in a joint letter.

“There’ll be a lot more details that will come out once there is a final order,” Jacobsmeyer indicated.