After signaling things might not be going so well in a preliminary financial result, Amedisys Inc. (Nasdaq: AMED) added a new executive amid a mostly dismal quarterly earnings release.
For the third quarter of 2016, Amedisys, the nation’s second-largest home health care provider, reported net service revenue of $361.6 million, compared to $326.4 million in 2015. While revenue increased, Amedisys saw little growth in its home health division, high expenses and faced weather-related challenges during the quarter.
These factors have impacted the company’s stock price, which has tanked since executives warned investors the company’s earnings per share took a hit. The company reported earnings per share of $0.34, shy of the $0.44 anticipated by analysts.
The Baton Rouge, Louisiana-based company named Christopher Gerard as its new chief operating officer (COO), effective January 3, 2017. Gerard will replace Daniel McCoy, who will remain in his current role until January 3, 2017. Prior to joining Amedisys, Gerard served as vice president of the south central region for Kindred Healthcare’s (NYSE: KND) Kindred at Home division. He has also served as COO for Kindred at Home, and was the co-founder, president and CEO of IntegraCare Home Health.
“Chris has built an impressive track record of strategic, operational and financial accomplishments over the past two decades,” Amedisys President and CEO Paul Kusserow said in a statement. “He has proven to be a successful and trusted leader, and his wealth of health care industry experience will be a valuable asset as we continue to accelerate growth. I am very pleased to have him join our executive team.”
The announcement is just the latest in a string of shifts at the executive level. Amedisys CIO Martin B. Howard left the company October 31. The company also recently hired a new chief clinical officer, Susan Sender, RN. In addition, CFO Ronald “Ronnie” A. LaBorde announced plans to retire earlier this year. The news seemed to spook investors, and the company’s stock price dropped 13% at the time.
The company is still engaged in a search for a new CFO, and LaBorde will stay on until a replacement has been found, Kusserow said during a quarterly earnings call with analysts Friday.
Amedisys saw another harsh decline in share value this week as a result of its quarterly earnings report.
While Amedisys experienced an increase in revenue compared to the same time period last year, the company had several challenges that negatively impacted it.
A company-wide implementation of a new software system, HomeCare HomeBase, has caused the high expenses and operational disruptions often associated with a large-scale change. The implementation is expected to be completed by the end of the year, with a 60-day drag that will last into the first few months of 2017, executives said. The software transition has been an ongoing initiative for some time. The expenses related to the implementation are likely to end soon.
“It’s difficult for folks to get bills out immediately while learning a new system,” Kusserow said Friday. “…While we will finish on the dot at the end of December, there is a 60-day post implementation piece that [may] affect performance, but it’s a small group of care centers.”
Since Dec. 31, 2015, Amedisys has experienced a $37.5 million increase in net patient accounts receivable due to the HomeCare HomeBase conversion.
The implementation wasn’t the only drag on the company, which saw only 1% growth in its home health Medicare new admissions. However, its hospice and personal care divisions were bolstered during the quarter.
While staff was undergoing training with the new system, Kusserow admitted there may have been some “missed opportunities” to handle additional volume at some care centers.
During the quarter, bad debt expenses hit $1.2 million above recent trends, while health insurance expenses rose $2.5 million above seasonal levels.
Executives also placed some of the blame on recent natural disasters in Baton Rouge, Louisiana, where flooding devastated the area and impacted roughly 30% of employees between its corporate offices and care centers. Amedisys co-founder and former CEO Bill Borne was identified among flood victims.
Looking ahead, Amedisys expects many of its quarterly challenges to be somewhat mitigated once the HomeCare HomeBase implementation is completed. However, the home heath provider will still face new challenges through the end of the year and in 2017, including a cut for Medicare home health payments.
Amedisys’ share price dipped more than 13% by end of trading Friday.
Written by Amy Baxter