Leaders with Almost Family (Nasdaq: AFAM), one of the largest home health providers in the nation, are optimistic in light of recent payment and policy developments—specifically, that the home health groupings model (HHGM) will not take effect in 2019.
“On the regulatory front, we feel we, in collaboration with others in the industry, have made a meaningful breakthrough in our work with CMS [the Centers for Medicare & Medicaid Services] and other policy makers,” Almost Family President Steve Guenther said Tuesday, in a press release announcing the company’s third quarter 2017 earnings.
After a home health industry outcry, CMS recently put an indefinite pause on the proposed HHGM payment framework, which could have cut Medicare reimbursements by as much as $950 million starting in 2019. Now, CMS has stated it will collaborate with home health stakeholders as it reforms the payment system going forward.
“We very much look forward to working with policy makers to help shape the next phase in the evolution of the Medicare home health payment system,” Guenther said.
Home health stocks skyrocketed on the news that HHGM would not be implemented, and Nashville-based Almost Family got a further boost after announcing its quarterly results. AFAM shares were up 5.37% at the end of the day Wednesday, at $53.95.
The provider’s large joint venture with Community Health Systems (NYSE: CYH) is proceeding smoothly, AFAM Chairman and CEO William Yarmuth stated in the press release. The JV is is contributing to year-over-year gains, as net service revenues were up 21.1% compared to the third quarter of 2016, reaching about $194 million.
Adjusted EBITDA did take a $3.3 million hit due to impacts from Hurricanes Irma and Harvey, and came in at $14.6 million.
Almost Family also reached a milestone in implementing the Homecare Homebase technology platform. As of Nov. 7, all its home health branches had converted to the system, and Almost Family has begun to experience “meaningful operational efficiency gains” as a result, according to the earnings release.
These gains are expected to be reflected in fourth quarter results, although there might also be continued negative effects from the hurricanes, the company noted.
Written by Tim Mullaney