Financial Data and Key Metrics Changes - VITAS net revenue was $407.7 million in Q3 2025, an increase of 4.2% compared to the prior year period, driven by a 2.5% increase in days of care and a 4.1% increase in Medicare reimbursement rates [12] - Adjusted EBITDA for VITAS, excluding Medicare cap, totaled $70.4 million, a decline of 3.8% year-over-year, with an adjusted EBITDA margin of 17.0%, down 157 basis points from the prior year [13] - Roto-Rooter revenue increased by 1.1% in Q3 2025 compared to the same period in 2024, with residential plumbing revenue up 8.2% [7][8] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,714 in Q3 2025, a 5.6% improvement from Q3 2024, with hospital-based admissions at 44.5%, the highest since the pandemic [5][6] - Roto-Rooter branch residential revenue was $150.9 million, an increase of 3.4%, while commercial revenue totaled $55 million, up 2.8% [13][14] - Revenue from independent contractors declined by 4.7% in Q3 2025 compared to the same period in 2024 [14] Market Data and Key Metrics Changes - The average daily census for VITAS was 22,327 patients, an increase of 2.5%, with hospital-directed admissions up 10.4% [17] - The average revenue per patient day for VITAS was $205.08, an increase of 298 basis points year-over-year [12] Company Strategy and Development Direction - The company is focusing on increasing hospital-based admissions to mitigate Medicare cap billing limitations, with expectations of no cap limitations for the Florida program in 2026 [6][16] - Roto-Rooter is implementing operational initiatives to improve margins and stabilize growth, with a focus on managing costs effectively [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fourth quarter, anticipating it to be the best quarter for VITAS due to seasonal factors and new rate increases [23][24] - The company is optimistic about returning to a predictable growth trajectory for Roto-Rooter, despite current margin pressures [11][15] Other Important Information - The company expects to open a new location in Pinellas County in early November 2025, which is anticipated to contribute positively to growth [7] - Management reiterated guidance of $22 to $22.30 per share, excluding non-cash expenses and other discrete items [16] Q&A Session Summary Question: Insights on demand and cost trends for Q4 - Management noted that Q4 typically sees higher demand and margins for both VITAS and Roto-Rooter due to seasonal factors [22][24] Question: Thoughts on receivables and cash collections - Management indicated that elevated DSO is primarily a timing issue related to Medicaid payments, not a deterioration in collection efforts [30] Question: Outlook for 2026 margins and growth rates - Management stated that the fourth quarter will inform the strategy for 2026, with expectations of revenue growth in the 8% range and margins around 17.5% to 18% [36][40] Question: Competitive dynamics in Roto-Rooter - Management highlighted improved competitive dynamics, with a shift towards paid leads resulting in better lead generation and potential margin recovery [44][46] Question: Sustainable margins in Roto-Rooter - Management believes that Roto-Rooter can achieve long-term EBITDA margins of 25% to 26%, despite current pressures from marketing costs [54] Question: Clarification on VITAS's Medicare cap liability - Management explained that the strategy of increasing hospital admissions and the current reimbursement environment gives confidence in managing Medicare cap liabilities [66][69]