Enhabit(EHAB)2024-11-09 15:24Financial Data and Key Metrics Changes - Consolidated net revenue for Q3 2024 was 4.7 million or 1.8% year-over-year [31] - Consolidated adjusted EBITDA increased by 24.5 million [31] Business Line Data and Key Metrics Changes - Home health revenue decreased by 5.2 million or 11% year-over-year, driven by an increase in patient days and higher Medicare reimbursement rates [36] - Average daily census for the hospice segment grew by 6.9% year-over-year [36] Market Data and Key Metrics Changes - Non-Medicare admissions grew by 20.1%, contributing to total admissions growth of 5.6% year-over-year [32] - The percentage of non-Medicare business in payor innovation contracts increased from 19% to 45% year-over-year [17] Company Strategy and Development Direction - The company is focusing on profitable revenue growth and plans to consolidate or close approximately eight to ten underperforming branches by early 2025 [26] - A de novo strategy is being pursued to enter new markets at low capital costs, with three new locations opened and nine additional projects in progress [28] - The company is actively evaluating ways to streamline operations and reduce costs, including outsourcing coding functions [52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth in the hospice segment and the potential for mid- to high-single-digit revenue growth in 2025 [48] - The impact of recent hurricanes is expected to negatively affect Q4 revenue and adjusted EBITDA by approximately $2 million [44] - The company anticipates a continued focus on improving cash collection trends and reducing reserve rates over time [34] Other Important Information - The company has hired a new Chief Financial Officer, Ryan Solomon, who will assume his role on December 9 [55] - The final home health rule from CMS will result in a net payment increase of 0.5%, which is expected to positively impact revenue [23][45] Q&A Session Summary Question: Update on negotiations with UnitedHealthcare - Management indicated that while no agreement has been signed, they are optimistic about the progress and are actively working to shift capacity to payor innovation contracts [57][59] Question: Impact of branch closures on revenue - Management stated that details regarding the revenue impact of potential branch closures will be provided in the fourth quarter call, as some closures may involve consolidation with other branches [64] Question: Cost per visit metrics for 2025 - Management expects to maintain a reasonable range for wage increases and believes that operating leverage will help manage costs as volumes grow [66] Question: Business development tactics for hospice - Management highlighted the expansion of the business development team and the use of data to strengthen referral relationships as key tactics driving success [70]