$39 Million Repayment Order Prompts Restructuring at Amedisys

Baton Rouge-based Amedisys (Nasdaq: AMED), one of the nation’s largest home health care providers, has been slapped with a request by a Medicare contractor to repay nearly $39 million in overpayments, according to a public filing.

While Amedisys is appealing the allegations, it estimated the potential range of loss between $6.5 million and $38.8 million on Tuesday.

At the end of August, the company received a Request for Repayment from Palmetto, a Medicare administrative contractor (MAC), for an alleged overpayment of $34 million at its Infinity Home Care of Lakeland, LLC, location, which includes the Winterhaven, Tampa and Bradenton, Florida care centers—the Lakeland Care Centers.


Amedisys also received a request for payment for $4.8 million from overpayments at Infinity Home Care of Pinellas, LLC, which includes the Clearwater, Florida, care center, Pinellas Care Center.

Amedisys acquired both centers at the end of 2015.

The letters from Palmetto were based on statistical extrapolations performed by a Zone Program Integrity Contractor (ZPIC), a contracted Medicare auditor. The claims used in the extrapolation method range from January 2, 2014 to September 13, 2016 for Lakeland, and between January 2, 2015 and December 9, 2016 for Pinellas.


Amedisys disputes both the allegations, stating they “lack merit,” in a public filing. Amedisys filed appeals of individual claims used to calculate the extrapolated overpayment and will “aggressively challenge” the method that determined the overpayments.

At the same time, Amedisys also announced it will close four Florida home health care centers, consolidate another three home health centers with others in the same markets and implement a restructuring plan in its home health segment. These actions will incur approximately $2 million in costs during the third quarter of 2017 and $2 million to $3 million in the fourth quarter. The actions will also be completed in the fourth quarter of 2017.

Amedisys projects that the plans announced Tuesday will bring $7 million to $9 million in annual improvements in EBITDA.

By end of day trading Tuesday, Amedisys’ stock had dropped more than 3%, hovering $54 per share.

Written by Amy Baxter

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