Key Takeaways SEM formed a JV with Vibra Healthcare to operate Southern Kentucky Rehabilitation Hospital in Bowling Green.The 76-bed facility provides acute inpatient rehab for stroke, brain injury and spinal injury patients.The deal supports SEM's rehab growth strategy as revenues rose 4.7% in the first nine months of 2025.Select Medical Holdings Corporation (SEM) has entered into a joint venture (JV) with Vibra Healthcare to enhance access to inpatient rehabilitation services in Southern Kentucky, marking ...

Accessibility StatementSkip Navigation BIRMINGHAM, Ala. and LAKE WORTH, Fla., Dec. 2, 2025 /PRNewswire/ --Â Today, Encompass Health, the nation's largest owner and operator of inpatient rehabilitation hospitals, announced the opening of Encompass Health Rehabilitation Hospital of Lake Worth. The 50-bed inpatient rehabilitation hospital is now accepting patients. Encompass Health Rehabilitation Hospital of Lake Worth exterior The more than 55,000-square-foot, freestanding hospital provides essential rehabili ...

Core Insights - Encompass Health Corporation (EHC) has expanded its partnership with Vanderbilt Health to build a new 40-bed inpatient rehabilitation hospital in Lebanon, TN, expected to open in 2028 [1][5][9] Facility Details - The new hospital will feature private patient rooms, a large therapy gym with advanced rehabilitation technologies, daily living suite activities, an in-house dialysis unit, a pharmacy, and a therapy courtyard [2] - Specialized care will be provided for patients recovering from serious illnesses and injuries, including strokes, neurological disorders, traumatic brain injuries, spinal cord injuries, amputations, and complex orthopedic conditions [3] Operational Impact - The facility aims to enhance patient recovery speed and improve health outcomes for residents in Wilson, Smith, Trousdale, and Macon counties [4] - EHC's expansion aligns with the increasing demand for inpatient rehabilitation services due to a rise in patients with serious health conditions [7] Financial Performance - In the first nine months of 2025, EHC reported revenues of $4.4 billion, reflecting a 10.6% increase compared to the same period in the previous year [6] - EHC's share price has increased by 13% over the past year, outperforming the industry average growth of 1.9% [8]

Core Points - Encompass Health Corp. plans to build a 50-bed freestanding inpatient rehabilitation hospital in Fishers, Indiana, expected to open in 2027 [1][3] - The new facility will cater to patients recovering from various debilitating conditions, including strokes, brain injuries, and complex orthopedic conditions, providing specialized nursing and therapy services [2][3] - The hospital will feature private patient rooms, advanced rehabilitation technologies, and various amenities to enhance patient care and recovery [3] Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the U.S., with 172 hospitals across 39 states and Puerto Rico [4] - The company is recognized for its high-quality rehabilitative care and has received accolades such as being named America's Most Awarded Leader in Inpatient Rehabilitation [4] - Encompass Health aims to expand its presence in Indiana to meet the growing demand for inpatient rehabilitation services [3][4]

Core Insights - Encompass Health and BSA Health System have opened the Rehabilitation Hospital of Amarillo, a 50-bed inpatient rehabilitation facility aimed at enhancing access to rehabilitation services in the Texas Panhandle region [1][4]. Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the U.S., with 172 hospitals across 39 states and Puerto Rico [5]. - BSA Health System is the largest healthcare employer in the Texas Panhandle, operating a comprehensive healthcare system that includes a flagship 445-bed hospital and various specialized centers [7]. Facility Details - The Rehabilitation Hospital of Amarillo spans over 54,000 square feet and provides rehabilitation services for patients recovering from strokes, brain injuries, spinal cord injuries, amputations, and complex orthopedic conditions [2]. - Patients will receive a minimum of three hours of intensive therapy five days a week, along with 24-hour nursing care and frequent physician visits [2]. Strategic Importance - The new hospital is expected to more than double the region's capacity for inpatient rehabilitation, providing a dedicated care destination close to home for local patients [4]. - The facility is designed with patient needs in mind, featuring private rooms, advanced rehabilitation technologies, and various amenities to support recovery [3].

Financial Data and Key Metrics Changes - Revenue in Q3 2025 increased by 9.4%, with year-to-date revenue growth of 10.6% [4] - Adjusted EBITDA grew by 11.4% in Q3 2025, contributing to a year-to-date growth of 14.5% [4][12] - Q3 adjusted free cash flow decreased by 8.2% to $174.2 million, primarily due to a $55.8 million increase in working capital [14] - Free cash flow increased by 16.5% to $582.5 million, with an increased full-year adjusted free cash flow estimate of $730 to $810 million [14][15] Business Line Data and Key Metrics Changes - Q3 community discharge rate was 84.6%, with a discharge to acute rate of 8.6% and a discharge to SNF rate of 6% [5] - Total discharges increased by 5% in Q3, with a 3.3% increase in net revenue per discharge [9] - Q3 same-store discharge growth was 6.8%, the highest since Q2 2021 [10] Market Data and Key Metrics Changes - The demand for inpatient rehabilitation services remains significantly underserved, particularly as the U.S. population ages [6][8] - The Medicare beneficiary population is projected to grow significantly, with one in five Americans expected to be aged 65 or older by 2030 [6][7] Company Strategy and Development Direction - The company plans to open two additional 50-bed hospitals in Q4 and expects to add approximately 127 beds to existing hospitals in 2025 [6][12] - The company has a pipeline of 14 announced new hospitals with 690 beds, with more than 40 projects in the active pipeline [9] - The strategy includes maintaining a balance between de novo hospital openings and bed expansions to meet the growing demand for IRF services [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market for IRF services, citing a unique position to add capacity in response to unmet needs [18] - The company has not seen any negative impact on referral patterns despite external challenges and remains proactive in communication with partners [62] - Management noted that the overall occupancy rates are on an upward trajectory, with expectations for fluctuations based on capacity additions [60] Other Important Information - The company successfully converted its ERP system to Oracle Fusion without significant operational disruptions [9][55] - The average age of Medicare beneficiary patients is 77 years, with the 75-plus population growing at approximately 4% [7] Q&A Session Summary Question: How should we think about the accelerated bed addition plan impacting volume growth going forward? - Management indicated that the increase in bed expansions reflects the strong performance of de novos and the unmet need for IRF services across the country [18] Question: What level of capex as a percent of revenue should we be modeling to maintain discharge growth? - Growth capex this year is estimated at about $580 million, with an average cost of $800,000 per bed addition [20] Question: What is the target occupancy before expanding a facility? - Facilities typically consider expansion after reaching 80% sustained occupancy, with private room hospitals able to operate efficiently at mid-90% occupancy [22] Question: Did anything surprise you in the quarter versus expectations? - Management noted no surprises other than retro payments and a property assessment, with overall performance aligning with expectations [26] Question: How has the payer mix evolved in Q3 compared to the first half? - Medicare and Medicare Advantage both saw growth, with managed care increasing by 9.2% [28] Question: What are the implications of the Medicare landscape changes? - Management believes that a slowdown in Medicare Advantage growth could lead to greater opportunities in fee-for-service, which pays at a higher rate [40]

Core Points - Encompass Health has opened its 25th rehabilitation hospital in Florida, specifically in St. Petersburg, to address the increasing demand for inpatient rehabilitation care [1][2][3] - The new facility spans 57,000 square feet and offers comprehensive rehabilitation services for patients recovering from various serious conditions, including strokes and spinal cord injuries [1][2] - The hospital features 50 private patient rooms, advanced rehabilitation technologies, and various amenities designed to enhance patient recovery and comfort [2][3] Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the United States, with a total of 171 hospitals across 39 states and Puerto Rico [4] - The company has been recognized as America's Most Awarded Leader in Inpatient Rehabilitation for six consecutive years by Newsweek and Statista [4][8] - Encompass Health is also ranked among Fortune's World's Most Admired Companies and Forbes' Most Trusted Companies in America [4]

Core Insights - Encompass Health has opened its first rehabilitation hospital in Connecticut, named Encompass Health Rehabilitation Hospital of Danbury, which is a significant expansion for the company in the Northeast region [1][4]. Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the United States, with a total of 170 hospitals across 39 states and Puerto Rico [5]. - The company is recognized for providing high-quality rehabilitative care and has received accolades such as being ranked among Fortune's World's Most Admired Companies and Forbes' Most Trusted Companies in America [5]. Hospital Features - The new Danbury hospital has 40 beds and spans 50,500 square feet, offering essential rehabilitation services for patients recovering from various serious conditions [2]. - Patients will receive a minimum of three hours of intensive therapy five days a week, along with 24-hour nursing care and frequent physician visits [2]. - The facility includes private patient rooms, a therapy gym with advanced rehabilitation technologies, an activities of daily living suite, an in-house dialysis suite, and recreational areas [3].

Core Viewpoint - Encompass Health Corp. and BSA Health System have announced a joint venture to establish a 50-bed inpatient rehabilitation hospital in Amarillo, Texas, aimed at enhancing rehabilitation care in the community [1][4]. Company Overview - Encompass Health is the largest owner and operator of inpatient rehabilitation hospitals in the U.S., with 169 hospitals across 38 states and Puerto Rico, providing high-quality rehabilitative care [5]. - BSA Health System is the largest healthcare employer in the Texas Panhandle, operating a comprehensive healthcare system that includes a flagship 445-bed hospital and various clinics [7]. Hospital Details - The new hospital will focus on patients recovering from serious conditions such as strokes, brain injuries, and complex orthopedic issues, offering 24-hour nursing care and various therapies [2][3]. - Facilities will include private patient rooms, a therapy gym with advanced technologies, an activities of daily living suite, and an in-house dialysis suite [3]. Strategic Importance - The partnership is expected to enhance acute care capacity in Amarillo and improve the level of rehabilitation care available to the community [4]. - The hospital is projected to open in late 2025 and will be part of Encompass Health's ongoing expansion efforts in Texas [4].

Financial Data and Key Metrics Changes - Revenue for Q2 increased by 12% to $1.46 billion, while adjusted EBITDA rose by 17.2% to $318.6 million [13][7] - Total discharges for Q2 increased by 7.2%, with same-store discharges growing by 4.7% [7][13] - Net revenue per discharge increased by 4.2%, benefiting from a decrease in bad debt expense to 2% [13][14] - Adjusted free cash flow increased by 30.5% to approximately $186 million, bringing year-to-date adjusted free cash flow to approximately $408 million, a 31.7% increase from 2024 [15][16] Business Line Data and Key Metrics Changes - Neurological conditions and stroke discharges grew by 126.7% in Q2 [8] - The discharge community rate was 84.8%, with discharge to acute and SNF rates at 8.5% and 5.8% respectively, outperforming industry averages [8][11] - The company opened a new 60-bed hospital in Fort Myers, Florida, and added 26 beds to an existing hospital in Q2 [9] Market Data and Key Metrics Changes - The demand for inpatient rehabilitation services is significantly underserved, particularly as the U.S. population ages, with the Medicare beneficiary population projected to grow substantially [10] - The average age of Medicare beneficiaries is 77 years, with the population aged 65 and older growing at a CAGR of approximately 3% [10] Company Strategy and Development Direction - The company plans to open five additional hospitals and add 30 to 50 beds to existing hospitals by the end of the year [9] - The company is increasing its 2025 guidance for net operating revenue to between $5.88 billion and $5.98 billion, and adjusted EBITDA to between $1.22 billion and $1.25 billion [18] - The company continues to focus on treating complex medical conditions and developing best-in-class clinical protocols [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the demand for inpatient rehabilitation services remains considerably underserved, with a focus on treating patients with complex medical conditions [10] - The company is optimistic about future growth, citing favorable demographic trends and an increase in Medicare reimbursement rates [12][10] Other Important Information - The company repurchased approximately 232,000 shares for $24.7 million and announced an increase in its quarterly dividend to $0.19 per share [17] - The company has a favorable leverage and liquidity position, with net leverage at two times and approximately $100 million in unrestricted cash [16] Q&A Session Summary Question: What are the occupancy rates and comfort levels for single bedroom facilities? - Management indicated that occupancy in Q2 was 76.6%, up 210 basis points year-over-year, and that stabilization above 80% would prompt consideration for future bed expansions [22][24] Question: What is the company's stance on quality ratings and initiatives? - Management stated that any changes in quality initiatives did not make it into the final rule and expressed willingness to support quality measurements that are agreed upon by the industry [27][28] Question: How does the company share quality results with stakeholders? - Management shares quality metrics such as discharge community rates and patient satisfaction scores with joint ventures and referring physicians [32][34] Question: What is the story behind the increase in managed care pricing assumptions? - The increase is attributed to growth in the VA Community Care Network, which now comprises almost 18% of the managed care business and pays at Medicare CMG rates [38] Question: What are the expectations for EBITDA in the second half of the year? - Management expects to incur most preopening and ramp-up costs in the second half, with guidance reflecting potential increases in bad debt and other costs [42] Question: How is the company addressing benefits expense growth? - Management noted that benefits expense per FTE increased by 18%, driven by high dollar medical claims, and indicated that strategies are in place to manage these costs [100] Question: What is the outlook for outpatient visits and pricing? - Outpatient visits increased by 8% quarter-over-quarter, attributed to a good book of business in remaining facilities, despite a reduction in the overall footprint [124]