Amedisys(AMED) - 2023 Q4 - Annual Report

Company Operations - Amedisys operates 521 care centers across 37 states, employing approximately 19,000 staff and conducting over 10.6 million visits for more than 469,000 patients annually[15]. - The company operates 233 home health care centers and 55 hospice care centers across 19 states and the District of Columbia, with specific licensing and regulatory requirements in place[52][54]. Financial Performance - Medicare accounts for approximately 73% to 75% of Amedisys's net service revenue over the last three years, highlighting the company's reliance on government payors[15]. - The base 30-day payment rate for Medicare home health services increased from $1,901 in 2021 to $2,032 in 2022, then decreased to $2,011 in 2023, and is projected to rise to $2,038 in 2024[37]. - CMS estimates a 0.8% increase in payments to home health providers for 2024, resulting from a 3.0% payment update offset by a -2.6% permanent adjustment due to PDGM implementation[37]. - The hospice payment rates for fiscal year 2024 will see a 3.1% increase, with the aggregate cap amount raised to $33,494[42]. - Approximately 30% of managed care contract volume allows for additional payments based on achieving specific quality metrics[41]. - Non-Medicare payors reimburse at rates ranging from 90% to 100% of Medicare rates, depending on negotiated terms[41]. - High acuity care payments are derived from health insurance plans and health system partners, with fixed payment rates for 30-day or 60-day episodes of care[46]. - The total amount of outstanding debt subject to interest rate fluctuations was $371.9 million as of December 31, 2023[251]. - A 1.0% interest rate change would cause interest expense to change by approximately $3.7 million annually[251]. Quality of Care - The Quality of Patient Care star average across all Amedisys providers was 4.35, with 96% of care centers rated at 4+ stars and 36 care centers rated at 5 stars[20]. - Amedisys's high acuity care segment, established through the acquisition of Contessa Health, allows for inpatient-level care in patients' homes, improving patient satisfaction scores to over 85%[25][26]. Mergers and Acquisitions - Amedisys acquired the regulatory assets of a home health provider in West Virginia on January 20, 2023, as part of its growth strategy[29]. - The company entered into a merger agreement with UnitedHealth Group on June 26, 2023, which will result in Amedisys becoming a wholly owned subsidiary of UnitedHealth Group[31]. - The company divested its personal care business on March 31, 2023, focusing on home health, hospice, and high acuity care segments[24]. Workforce and Compliance - Amedisys's workforce strategy emphasizes attracting and retaining qualified caregivers, with a focus on competitive compensation and career development opportunities[32]. - The company faces challenges in the labor market, particularly in recruiting clinicians, as demand for healthcare services continues to exceed supply[32]. - The company maintains strict controls over coding, clinical operations, billing, and compliance to adhere to Medicare requirements[47]. - The company is subject to periodic audits by Medicare, which can result in adjustments or overpayment determinations based on compliance with coverage guidelines[39]. - The company is subject to various federal and state anti-fraud and abuse laws, including the False Claims Act, which imposes penalties for submitting false claims for payment[59][63]. - Compliance with the Health Insurance Portability and Accountability Act (HIPAA) is mandatory, with civil monetary penalties for violations ranging from $137 to a maximum of $2.067 million for multiple violations in a calendar year[70]. - The company must adhere to Medicare participation regulations, which include conditions of participation that affect the quality of care and patient outcomes[53][55]. - The company has dedicated internal resources and external parties to ensure compliance with applicable federal, state, and local laws, as well as accrediting organizations[57]. - The company faces potential liabilities, including civil and criminal penalties, if it fails to comply with applicable laws and regulations, which could adversely affect its operations[58]. - The company is actively monitored by state licensing agencies to ensure compliance with medical care standards and safety regulations[57]. - The company’s compliance and ethics program is designed to meet all applicable federal and state laws, ensuring adherence to industry standards[59]. Regulatory Environment - In 19 states, a Certificate of Need (CON) or similar approval is required to establish and operate home health care centers, which can impact the company's expansion plans[51][54]. - The Home Health Value-Based Purchasing model will expand to all 50 states starting January 1, 2023, with a proposed maximum payment adjustment of 5%[80]. - The 2024 Home Health Final Rule is expected to result in an 0.8% increase in payments to home health providers, driven by a 3.0% payment update and a 0.4% increase for outlier payments[81]. - The permanent adjustment for the 2023 Final Rule included a -3.5% reduction to reimbursement based on behavior changes from the implementation of PDGM[81]. - The Review Choice Demonstration for Home Health Services allows providers to choose between pre-claim review, post-payment review, or minimal post-payment review with a 25% payment reduction[77]. - The Improving Medicare Post-Acute Care Transformation Act requires standardized patient assessment data reporting, with penalties for non-compliance resulting in a 2% reduction in market basket prices[75]. - The Targeted Probe and Educate Program aims to reduce claim denials and educate providers, with up to three rounds of claims review possible[78]. Corporate Responsibility - The company is committed to diversity and inclusion, with women comprising over half of its Board of Directors and various Employee Resource Groups established[33]. - The company is committed to transparency regarding its environmental footprint and climate-related risks, with strategies reviewed by senior leadership[84]. - The company faces competition from local health care providers and non-profit organizations, competing primarily on service quality and personnel availability[85].