Two home health care companies were upgraded from “underperform” to “neutral” Tuesday, leading to improved stock prices and home health sector outlook, BusinessWeek reports. Home health providers Gentiva Health Services and Amedisys both received upgrades from Robert W. Baird & Co. analyst Whit Mayo, seeing an uptick in stock prices as a result.
Shares of Gentiva Health Services Inc. jumped Tuesday after a Robert W. Baird & Co. analyst upgraded shares of Gentiva and another home health company, although he said the sector still face a variety of major risks.
Analyst Whit Mayo upgraded shares of Gentiva and Amedisys Inc. to “Neutral” from “Underperform,” saying the stock prices have declined to more reasonable levels in recent weeks. However Mayo said the home health sector will remain at risk since Medicare could change its reimbursement payments later this year, and the sector will remain vulnerable to federal budget cuts, particularly after this year’s elections.
Home health agencies are already adjusting to previous cuts in Medicare payments. They are also being investigated by several regulatory agencies: in October the U.S. Senate said the companies artificially inflated the number of visits they made to some patients in order to trigger larger payments from Medicare.
Mayo also rates shares of Almost Family Inc. and LHC Group Inc. “Neutral.”
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Written by Elizabeth Ecker