Amedisys CEO: We Won’t Be Working With Plans That View Us As ‘Cheap, Per Visit Provider’

Ahead of the Amedisys Inc. (Nasdaq: AMED) earnings call, the company made waves by announcing that it signed a definitive agreement to divest its personal care segment to HouseWorks on Wednesday.

The divestiture will reportedly net the company $50 million.

During Thursday’s earnings call, Amedisys Chairman and CEO Paul Kusserow offered more details about the agreement with HouseWorks.


“We announced, yesterday, that we will be divesting the operational portion of our personal care business to HouseWorks — a Massachusetts-based operator of personal care assets — and in turn, adding HouseWorks to our personal care network,” Kusserow said. “We continue to believe in the need for, and the importance of personal care services, as a key piece of whole person care. As such, we are committed to continuing to push to grow the utilization of our personal care network.”

Having access to personal care services across Amedisys’ nationwide footprint will be a “key value driver,” as the company continues to work on contract innovation with managed care, according to Kusserow.

“Our commitment is to contract and build networks with personal care at this point — not to own it,” he said.


As a company, Amedisys’ footprint includes 347 care centers in 34 states and D.C. under its home health segment, 164 care centers in 31 states under its hospice segment and 13 care centers in 3 states under its personal care segment.

Plus, Amedisys has its subsidiary, Contessa Health, a Nashville, Tennessee-based company that specializes in shifting higher-acuity care into the home.

Kusserow explained that its personal care network will also factor into Amedisys’ plans for Contessa.

“There’s a lot of need for personal care, particularly with a higher acuity patient,” he said. “We’re going to be employing that network pretty heavily through Contessa. Also, as we move into the palliative care business, we do need personal care.”

On Wednesday, Amedisys also unveiled its risk-based partnership with BlueCross BlueShield of Tennessee to deliver home-based palliative care to the organization’s members.

“This new innovative partnership really showcases the power of a combined Amedisys and Contessa clinical asset, and we are thankful to for our partners at BlueCross BlueShield of Tennessee and their desire to disrupt how health care is provided to their high-acuity Medicare Advantage members,” Kusserow said. “In our palliative care at-home model, BlueCross BlueShield of Tennessee’s members can receive palliative care in person or via telehealth from Amedisys clinicians … at no additional costs.”

Kusserow said to expect more innovative partnerships — in the same vein as its agreement with BlueCross BlueShield of Tennessee — in the future.

He also noted that Amedisys continues to make progress in the company’s pursuit of direct relationships with health systems that are looking for a comprehensive care at-home partner, as well as with health plans interested in value-based arrangements.

This lines up with the company’s larger plan of taking a different approach to growth, one that doesn’t rely so heavily on fee-for-service Medicare.

“Historically, fee-for-service has been our main driver of revenue growth,” Kusserow said. “However, as Medicare Advantage penetration continues to significantly outpace fee-for-service growth, we must think differently about how and where we grow. Amedisys has been at the forefront of working with Medicare Advantage plans for the past number of years. We have executed innovative case-rate contracts with our partners at CVS and Aetna, and figured out ways to work strategically with our convener partners.”

Still, Kusserow was quick to point out that not all plans are created equal, and that walking away from these arrangements is always an option.

“For those plans that continue to view us as simply as a cheap per-visit provider and won’t recognize that labor inflation is real, and try to simply cram lower rates and lower utilization on us — we will no longer be working with them,” he said. “We just can’t afford to, we have a finite amount of clinical capacity.”

Overall, Amedisys saw its net service revenue increase slightly to $562 million in the fourth quarter, compared to $559.3 million over the same time period the previous year.

The company’s home health segment brought in $343 million in Q4, a 2% increase compared to the previous year.

Full year revenue for 2022 was 2.2 billion which is comparable to the previous year.

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