One of the nation’s largest home health providers, Amedisys, Inc. (NASDAQ: AMED), hit a high note in revenue at the end of 2015, despite industry headwinds.
Amedisys reported net revenue of $337.3 million for the last three months of 2015, a 12.6% jump from $300.5 million during the same time period in 2014. Net income for the quarter from continuing operations beat estimates, reaching $13.4 million compared to $9 million during the 2014 period.
Executives were bullish on the forecast for 2016 based on the results, telling analysts during an end-of-year earnings conference call that its recent integration of HomeCare HomeBase’s management technology was still in transition but moving along as planned. The company also said it was unfazed by reimbursement cuts last year.
“We are extremely pleased with our results in the fourth quarter and 2016 overall, as we continued to demonstrate strong organic revenue and earnings growth,” said Paul B. Kusserow, president and CEO of Amedisys.
The company recently announced two notable home health acquisitions—Florida-based Infinity HomeCare, which was completed at the end of 2015, and Massachusetts-based Associated Home Care, which was announced in February and is the company’s first personal care acquisition.
Kusserow told analysts during the call Wednesday that Amedisys still has a strong pipeline of acquisitions for 2016. Late last year, the company noted it had more than 300 deals in its pipeline.
“We’re looking aggressively at other geographies right now, largely from requests from referral sources,” Kusserow said.
Heading into the second quarter of 2016, Amedisys executives pointed to the company’s share buyback plan. Its board approved a $75 million buyback plan in December 2015. To date, Amedisys has purchased $17 million in shares.
Preparing for Future Models
Executives continued to emphasize the company’s focus on quality outcomes, with goals to boost star ratings to four stars across all operations by the end of 2017. The company has been very vocal about its heavy bets on the importance of quality outcomes in the greater context of a shifting payer system.
About 29% of Amedisys’ home health operations are in states where value-based purchasing pilots are underway, according to Kusserow.
Executives are also looking ahead to new proposals from the Centers for Medicare & Medicaid Services (CMS), including a potential preauthorization requirement. Of the five states that could be included in the CMS’ preauthorization pilot, two are “significant” for Amedisys, CFO Ronnie LaBorde said Wednesday. Operations in Florida and Massachusetts would be greatly impacted should the requirement come to pass.
While the requirement is only in proposal form for now, Amedisys executives said they will be involved with CMS on the issue and noted its potential impact.
“I would say it’s not imminent,” said David Kemmerly, senior vice president of government affairs and interim general counsel of Amedisys. “We will comment on this. There’s great concern across the industry, primarily on the impact on quality of care. We will engage directly in conversations with CMS on this.”
Written by Amy Baxter