Aveanna Healthcare Holdings (Nasdaq: AVAH) is propelling growth of its home health and hospice segment through strategic payer relationships, bolstered sales and referral teams and a growing patient census.

Aveanna’s has seen consecutive periods of slow but steady financial and clinical improvement across its hospice and home health business line. The company has recently taken a more bullish approach to organic growth of this segment.

Much opportunity exists within the home health and hospice space, despite an evolving mix of regulatory, reimbursement and economic challenges, Aveanna CEO Jeff Shaner said in an earnings call on Thursday. The company anticipates accelerated growth of this segment through boosted clinician and sales hiring, patient admissions and payer partnerships, he said.

“Even in a tough macro-environment for home health [and hospice], we continue to thrive, and I feel confident our team is positioned for volume growth,” Shaner said during the earnings call. “We bolstered our sales team [and] even layered in some additional growth-oriented positions at home health and hospice. We feel really good about where we are in mid-Q2. I think you’ll hear us be incredibly robust. The model is dialed in as tight as I’ve seen it in the last 26 years.”

Atlanta, Georgia-headquartered Avenna’s geographic footprint spans 34 states. The company provides adult and pediatric hospice, home health private duty nursing and medical solutions, among other services.

Aveanna’s overall revenue reached $559.2 million during the first quarter, a 14% year-over-year increase. Its adjusted EBITDA for Q1 was $67.4 million, a 93.1% rise compared to the same period in 2024.

The company saw growth across all of its business lines. Its home health and hospice segment revenue reached $56.7 million, a 3.9% year-over-year increase. Aveanna’s private duty services revenue hovered at $460 million, seeing a 16.5% million increase compared to Q1 last year. Its medical solutions segment brought in $42.5 million revenue, a 3.6% year-over-year rise.

Aveanna’s home health and hospice revenue growth was predominantly driven by patient census growth. The company saw 9,700 home health and hospice admissions in the first quarter. Its home health and hospice Q1 gross margin reached 54.2%, up 1.1% compared to the prior year’s period.

Aveanna’s “right-size” approach to expanding its home health and hospice segment involves focusing on building up relationships with preferred payers that reimburse on an episodic basis, said Matt Buckhalter, CFO at Aveanna. This episodic focus has accelerated the company’s margin expansion and improved its clinical outcomes by more than 70%, Buckhalter indicated. Aveanna anticipates adding three home health- and hospice-related payer agreements in the near future, he added.

Strong reimbursement avenues are a key to sustaining and growing its home health and hospice services as demand swells, Buckhalter stated.

“We’re pleased with our, and representing our continued focus on cost initiatives to achieve our target and margin profile,” Buckhalter said during the earnings call. “This really gives us the underpinning to grow home health and hospice of that nature and get back to organic growth of our business. We’re really excited about where we are on the preferred payer strategy, and how it’s flowing through our clinical and financial outcomes … and just making us a stronger company.”

Aveanna’s expanding hospice and home health business has largely included a focus on organic growth and tuck-ins across its existing geographic markets. Acquisitions could make up a larger portion of its strategy on the near horizon, according to Shaner. The company has been less active on the M&A front in recent years, taking a cautious approach to growth, he previously indicated.

Aveanna’s acquisitions this year have included the purchase of Thrive Skilled Pediatric Care (SPC) in April for an undisclosed amount. Acquiring the pediatric home-based care provider expanded Aveanna’s presence across seven states, two of which were new geographic service regions for the company. The transaction is expected to close in the second quarter and anticipated to enhance Aveanna’s strategic growth plans in home-based care, he indicated.

Strategic acquisitions, quality improvement and organic growth will each play a role in the company’s home health and hospice outlook, according to Shaner.

“This [acquisition] fits the spirit of what you should think about us doing in the future,” Shaner said. “We will do as many Thrive-type acquisitions as we could do, both in home health and hospice as well as private duty services. Our clinical outcomes are off-the-charts fantastic in our home health and hospice [with] a 99.8% [Consumer Assessment of Healthcare Providers and Systems (CAHPS)] rating. It’s just a great place for us to be. We are at the top of the clinical ladder in both hospice and home health, and incredibly proud of it. It’s really just now about growing smart admissions.”