LHC Group CEO: CMS Shouldn’t Disrupt Home Health Care’s Momentum

When it comes to the Patient-Driven Groupings Model (PDGM), anything that would put patient outcomes at risk should be off the table, according to Keith Myers, chairman and CEO of LHC Group Inc. (Nasdaq: LHCG).

Myers discussed the Lafayette, Louisiana-based LHC Group’s ongoing operations and PDGM plans Tuesday while speaking at the RBC Capital Markets 2019 Health Care Conference in New York.

The CEO also voiced support for the recent PDGM-focused Home Health Payment Innovation Act.


Introduced in February, the Home Health Payment Innovation Act (S. 433) targets the payment overhaul’s widely opposed behavioral assumptions. Specifically, S. 433 would require the Centers for Medicare & Medicaid Services (CMS) to make behavioral-based payment adjustments to the Medicare home health benefit based only on hard evidence and observed data.

A House companion bill was introduced in May.

The legislation has received industry-wide support on Capitol Hill from LHC Group and other home health providers, who mostly support PDGM but aren’t seeking to stray away from budget neutrality.


“A decade ago, home health didn’t have the tailwind that it has today,” said Myers “Everybody knows that health care is moving to the home now, and to make a perspective behavioral cut before changes in behavior have been observed is unprecedented. That hasn’t been done in any other rule change, and then to do it in the lowest-cost setting at a time when we have momentum moving patients downstream from high costs settings … why would you want to disrupt provider segments?”

Ahead of PDGM, LHC Group will be implementing mitigation strategies in the event that changes aren’t made to the upcoming payment model, according to the company.

“We are working on the policy side of going through the now new 432 [case-mix] categories and looking at our historical data, redistributing [the existing 153] into this 432, looking at the clinical pathways that produce the outcomes that we have and looking for areas where there might be some opportunities to gain efficiency,” Myers said.

Using lower-cost clinicians for certain visits without reducing the number of “patient touches” is one idea that is being touted as an option, as well as changes to LHC Group’s staffing mix.

“On the nursing side over the past five years at legacy LHC Group, we’ve done a really good job of using more extenders, using more LPNs instead of RNs and using more PTAs,” Myers said.

During the presentation, Myers also discussed the completion of the Almost Family merger, which was originally announced in 2017, in addition to the company’s overall growth opportunities.

LHC Group and Almost Family became the second-largest U.S. home health provider when the merger officially closed last year. The deal was an all-stock transaction with an implied value of $2.4 billion.

Joint ventures also remain a big part of LHC Group’s strategy moving forward.

“JVs continue to be a sweet spot of us,” Myers said. “I think in many ways if we had our preference the majority of the acquisition growth we have would come from JVs.”

While hospice isn’t currently a major part of LHC Group’s business, the company has plans to grow that business line. LHC Group’s hospice business accounted for more than 10% of its total revenue in Q1 2019.

“We are very bullish on hospice,” he said. “The goal is for us to build out that hospice platform over time and have hospice in every market where we have home health.”

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