Encouraged by Legislative Tailwinds, LHC Group Considers Personal Care Expansion

From the halls of Congress to the desk of President Joe Biden, home health providers have been generally encouraged by the federal government’s increased focus on home-based care.

In the present, that sense of encouragement comes from billions of dollars in funding for home- and community-based services (HCBS), plus regulatory waivers for telehealth, paperwork requirements and more. Longer term, though, in-home care providers are hopeful that pro-home policies will mean more patients, ultimately leading to more opportunities and stronger bottom-line results.

LHC Group Inc. (Nasdaq: LHCG) Chairman and CEO Keith Myers on Thursday specifically cited legislative tailwinds as one of the areas that offers the most opportunity for the company moving forward.


“We view 2021 as the beginning of a new, extended period of perhaps unprecedented opportunity for LHC Group,” Myers said during LHC Group’s Q1 earnings call. “That’s in part due to the heightened awareness in the wake of COVID of our full range of capabilities as a high performing in-home health care services provider organization with a national footprint.”

The future may be bright for LHC Group, but the Lafayette, Louisiana-based company has still faced its share of struggles over the past year. In the first quarter of 2021, for example, LHC Group recorded roughly $12 million in COVID-19 expenses due to costs associated with personal protective equipment (PPE), medical supplies, hazard pay and health insurance claims.

It expects to spend around that number for the remaining three quarters total, if not less.


This isn’t the first time that Myers has expressed his bullishness on the opportunities that lie ahead in 2021 and beyond for home-based care and LHC Group. He believes his company is in the right place to capitalize on some of the key developments since last spring.

“[That optimistic 2021 view] is also due to legislative and regulatory tailwinds, including innovative waivers from CMS flexibilities for remote certification of home care telehealth and continued legislative relief from the 2% sequestration cut throughout the remainder of the year,” Myers said.

LHC Group delivers home health, hospice and home- and community-based services in 35 states and the District of Columbia. Its network includes 537 home health locations,120 hospice locations and 124 HCBS locations.

The company’s net service revenue totaled $524.8 million in Q1, a 2.3% increase compared to $512.8 million during the same period in 2020. Organic growth in home health admissions decreased 0.4% year over year, but increased by 5.9% compared to Q4 2020.

Non-medicare episodic organic growth in home health admissions increased by 22.6% year over year.

In terms of legislative advocacy efforts, LHC Group continues to tout its “Choose Home” initiative, which aims to create a new payment pathway around 30-day episodes of care for SNF-eligible patients at home. Part of the plan would be focusing on social determinants of health of those patients, all in order to hopefully reduce cost of care.

“We are particularly encouraged by the administration, the Senate and the House’s focus on ways to improve coordination of the traditional Medicare home health benefit with Medicaid in-home services,” Myers said. “For decades now, proven, time-tested and innovative state Medicaid programs — such as the PASSPORT program in Ohio and the Oregon Health Plan — have given seniors the choice to age in place in the comfort and privacy of their own homes as an alternative to more costly, long-term institutional care.”

Choose Home wants to build on those state plans.

Ohio’s “Pre-Admission Screening System Providing Options and Resources Today” (PASSPORT) program allows seniors who require facility-level care remain at home. Oregon’s plan coordinates a long list of benefits for seniors through Medicaid, including home health care, hospice and nursing home care.

LHC Group also applauded the Centers for Medicare & Medicaid Services (CMS) for recommending expansion of the Home Health Value-Based Purchasing (HHVBP) Model from nine states to a potentially nationwide program.

“We strongly believe that given our proven capabilities as a national in-home health care services provider … expansion of the HHVBP model would provide additional opportunities for us to leverage our proven efficient and effective in-home health care services delivery model to drive organic growth,” Myers said.

Although the Biden administration has touted its American Jobs Plan and its ability to improve long-term care with a $400 billion investment, there’s a lot of “unknowns” about how it will affect providers.

That uncertainty has left LHC Group and others cautiously optimistic.

“With the $400 billion that’s proposed, it’s difficult, because there’s a number that’s out there, but there’s not a lot of detail around how it’s going to be structured,” Myers said. “It could mean a lot of things. We don’t know how much union activity is going to be involved in that. So we’re taking a conservative approach to everything and staying very close to it from a policy perspective and waiting for more color around it.”

Personal care goals

Personal care services currently represent a smaller portion of LHC Group’s overall business, accounting for about 9% of its net service revenue.

Myers said that the company is not opposed to growing that service line in the future. If LHC Group does go down that road, it will still take that same conservative approach that it does elsewhere, he noted.

“I’m not ruling out more expansion into personal care services,” Myers said. “We think that’s a vital service, but it’s been the most difficult one for us to manage because of how it’s delivered. There’s a different program in every state … and there’s challenges like stable staffing [and others]. We’re not risk takers. We’re keeping a close eye on it, though, and if there’s an opportunity there and the risk profiles good enough for us, we’ll move in that direction.”

On the home health side, the company remains confident in its organic growth strategies, pointing to its numbers through the COVID-19 crisis as the reason.

LHC Group’s admissions per day were higher in Q1 than they were last year, increasing from an average daily census of 76,978 to 83,938.

“To be back on that pace — after having that hurdle rate for this quarter and all the headwinds — is a true testament to the growth momentum we currently have in our home health segment,” LHC Group President Joshua Proffitt said on the call.

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