Amedisys Inc. (Nasdaq: AMED) posted strong Q1 2019 financial results on Tuesday, with home health revenues buoyed by a 6% rise in same-store total volume.
Despite a solid quarter, the company’s stock values were down 6.21% nearing end-of-day Wednesday, trading at $119.88 per share.
Headquartered in Baton Rouge, Louisiana, Amedisys held a conference call with investors Wednesday morning to discuss its Q1 results.
“The question we are getting the most following the call is, ‘What did they say that has the stock down so much?’” Dana Hambly, an analyst with independent financial services firm Stephens, told Home Health Care News in an email. “My view is that the stock sell-off boils down to this: Amedisys is a high-valuation stock that didn’t raise guidance despite the significant [first quarter] outperformance. From a fundamental perspective, I thought the quarterly results were very good in both the home health and hospice segments.”
Overall, Amedisys’ first quarter 2019 net service revenue increased by about $68 million, jumping to $467.3 million compared to the $399.3 million the company netted in Q1 2018.
Meanwhile, Amedisys’ Q1 net income checked in at $31.3 million, an increase from the $27.2 million the company reported in the same period last year.
As one of the largest home health, hospice and personal care providers in the country, Amedisys’ footprint spans 471 care centers in 38 states and the District of Columbia.
“I am very proud of our first quarter results as we continue our momentum into 2019,” Amedisys President and CEO Paul Kusserow said during Wednesday’s conference call.
Amedisys is keeping recruitment and retention top of mind in 2019, according to Kusserow. The company’s voluntary turnover was 17% in the quarter, he said, noting Amedisys’ is currently refining its people processes with the goal of lowering the turnover rate even further.
Home health revenue increased 9.2% to $310.1 million on the quarter, with Medicare revenue increasing 4.1% to $213.4 million.
Home health same-store admissions saw 6% volume growth, while Medicare admissions growth increased by 2%.
“I didn’t hear anything on the call to suggest that the company has any new concerns or issues to deal with that we didn’t already know about,” Hambly said. “I expect similarly strong performance through the balance of the year.”
On the regulatory front, the Patient-Driven Groupings Model (PDGM) remains the focus of Amedisys’ conversations with Congress and the Centers for Medicare & Medicaid Services (CMS), according to Kusserow.
Amedisys is working with a group of 11 bipartisan senators who have co-sponsored a PDGM-related bill known as the Home Health Innovation Act. That number of senators is up from seven, reflecting the widespread report the home health industry has on Capitol Hill.
“The industry’s ability to secure bipartisan support of members across the political spectrum helps showcase how important this policy is for home health agencies throughout the country,” Kusserow said. “It is also noteworthy that the sponsors sit on key committees, the Senate Finance Committee, the Committee on Health, Education, Labor and Pensions, and the Senate Special Committee on Aging.”
If passed, the legislation would prohibit CMS from making rate adjustments based on behavioral assumptions, only allowing adjustments based on observed evidence of a change in provider behavior.
Amedisys also anticipates that a bipartisan companion bill will be introduced in the House as early as this week, according to Kusserow.
In addition to its home health results, Amedisys also posted strong numbers for its hospice and personal care lines, with hospice seeing same-store admission growth of about 5%.
The company has rapidly grown its hospice presence in the last year, most notably through its $340 million acquisition of Compassionare Care Hospice, which closed in February.
Amedisys’s exposure to accelerating demographics and strong secular tailwinds — including patient, payer and provider preferences all aligned towards the home — should support total volume growth in the company’s markets at least in the mid-single digits for the next decade-plus, William Blair analyst Matt Larew wrote in a note shared with HHCN.
“Overall, this was an impressive quarter with strength throughout the business and upside on every relevant financial metric,” wrote Larew, who described Amedisys’ recent quarter as a “blowout.”