Nick Westfall is stepping down from his roles as chairman and CEO of VITAS Healthcare and executive vice president of its parent company Chemed Corp. (NYSE: CHE).

During his 16-year tenure Westfall served as VITAS’ president, senior vice president of operations and COO. VITAS President COO Joel Wherley will succeed him as the company’s new president and CEO.

Departing to pursue personal and professional opportunities, he will remain at the helm until Dec. 1, 2025 to ensure a smooth leadership transition, the company announced in its earnings report on Tuesday.

“Nick has evolved, transformed and cultivated the organization to be well-positioned for the future and has elevated VITAS’’ leadership in the industry. We thank him for his service and wish him well in his next pursuits,” Chemed President and CEO Kevin McNamara said in a statement. “We look forward to Joel’s leadership of VITAS. His deep knowledge of our industry and organization leave him perfectly suited to lead VITAS’ continued success.”

Founded in 1978, VITAS provides hospice and palliative care across 15 states. The company’s largest geographic footprint spans several counties throughout its home state of Florida.

VITAS has recently seen a mix of patient admission and payment capitation issues that have hindered its growth.

The company’s growth slowed during the second quarter, with net revenues reaching $396.2 million, a 5.8% year-over-year increase. Its adjusted EBITDA totaled $66.8 million in the quarter, essentially “falling flat,” the company stated in its earnings report. VITAS’ modest revenue increases were in part driven by a 6.1% climb in days of care provided in Q2.

The hospice provider saw “two terrible months” in regards to slowed patient admission volumes during April and May 2025, McNamara said during Tuesday’s earnings call.

VITAS average daily census volumes reached ​​22,318 patients in Q2, a 6.1% yearly rise. Its average length of stay rates hit 137.1 days, up from 100.6 days in the same period last year. The company saw a total of 17,545 patient admissions in Q2, a 1.2% year-over-year improvement.

VITAS in its earnings report indicated that a shift in its mix of high-acuity patient volumes negatively impacted revenue growth by 71-basis points in the second quarter. An additional factor was the accrual of $16.4 million in Medicare capitated billing limitations during that time period, a significant rise from $1.4 million in Q2 of 2024. These considerations led to a negative revenue growth rate by 379-basis points.

VITAS reported that it would exceed the aggregate payment cap by $22 million for the Fiscal Year (FY) 2025.

The cap issues are rooted in the company’s Florida markets, which represented $4.8 million of its liability. The company also cited that a “catch-up entry” of $9.5 million was required to recognize the Medicare cap billing limitation in Florida from the first six-months of FY 2025. An additional $2.1 million was recognized in relation to VITAS’ other geographic service regions, mainly its California markets.

“The fact that we’re starting with an approximately $22 million hole to get out of explains why 2025 is so unusual,” McNamara said. “While the second quarter of 2025 resulted in disappointing results, we remain optimistic about the overall prospects. VITAS is in the process of adjusting their patient mix in Florida to ensure Medicare cap issues do not persist past 2025. This will cause some disruption in VITAS’ operating metrics, but positions them to return to a consistent higher growth rate for the long term. We’re talking about small changes, small improvements. We just have to refine our efforts [to] be more than adequate.”

VITAS is employing more intentional admission processes as part of its efforts to offset capitation concerns, according to McNamara. Efforts include taking on fewer patients with longer anticipated lengths of stay and ramping up its sales and referral tactics to ensure more timely and efficient responses.

Nevertheless, the hospice anticipates growth on the horizon. The company recently received regulatory greenlights to expand in Florida. The organic growth is projected to mitigate its overall aggregate cap risk.

The new certificate-of-need approval will help VITAS to “right size” its patient mix in the state, Chemed CFO Michael Witzeman said during the earnings call.

A more active acquisition pipeline could also come into play, as will the potential for “significant share buybacks,” Witzeman stated. The company’s most recent move came with the 2024 purchase of Covenant Health and Community Services for $85 million. The acquisition marked VITAS’ entrance into the assisted living space and in the Alabama market while expanding its geographic presence in Florida. Average daily census and admission volumes rose following the deal as well.

“VITAS is spending night and day working on getting a good running start on the new CON,” Witzeman said. “We would love to make acquisitions that are at the right valuation on the VITAS side, in the right location. We continue to monitor and have those conversations. There’s a bit of a long lead time for those. We’re not going to just buy things to grow. We’re contacting organizations … to see their appetite for making such a transaction.”