Home Health Stocks Bounce Back After HHGM Spooks Investors
There is still plenty of alarm over the Home Health Groupings Model (HHGM) among providers, but investors appear to have calmed a bit since the Medicare payment overhaul was first proposed in July.
The market value of the three largest publicly traded home health companies increased 7.42% in August, after falling 19.57% a month earlier, according to the Home Health Index from M&A advisory firm Stoneridge Partners.
Lafayette, Louisiana-based LHC Group (Nasdaq: LHCG) saw its share price climb 12.69% in August, while shares of Baton Rouge, Louisiana-based Amedisys (Nasdaq: AMED) rose 10.30%.
However, Louisville-based Almost Family (Nasdaq: AFAM) experienced a 1.52% decline in its share price. Still, the company is up 10.43% year-to-date.
“Home health companies rebounded in August after regulatory concerns marked the previous month,” said Stoneridge President Rich Tinsley, on the firm’s website. “The sector continues to have an ‘up’ year relative to the stock market.”
Those regulatory concerns focused on HHGM, which the Centers for Medicare & Medicaid Services (CMS) floated with a potential 2019 start date. The overhaul of the Medicare payment system for home health agencies would include numerous changes, such as shortening the standard episode of care from 60 days to 30 days.
Shares plunged after CMS issued its proposed rule on July 25.
Since then, home health industry groups have pushed back against the proposal. Advocates for home health interests–including the Partnership for Quality Home Healthcare, which is chaired by LHC Group CEO Keith Myers–were optimistic following meetings with federal and state lawmakers last week.
Written by Tim Mullaney