The Pennant Group Inc. (Nasdaq: PNTG) leaders highlighted the company’s significant home health growth Tuesday. They also teased continued expansion in the East Coast and elsewhere.

“We are thrilled to report record-breaking second quarter results as we continue to experience momentum across all our service lines and create meaningful growth opportunities for local leaders and teams,” Pennant CEO Brent Guerisoli said during the company’s second-quarter earnings call. “Our financial performance and growth trajectory reflect the consistent efforts we have applied to every aspect of our business through our five key focus areas: leadership development, clinical excellence, employee engagement, margin and growth.”

The Pennant Group is a holding company based in Eagle, Idaho, with independent operating subsidiaries that provide health care services through 117 home health and hospice agencies and 54 senior living communities across 13 states.

The company reported a total revenue of $168.7 million for the second quarter, a 27.6% increase from the second quarter of 2023. The home health and hospice segment revenue reached $125.3 million, representing a 31.9% increase.

Home health admissions reached 14,140, an increase of 3,699 clients from the second quarter of 2023. Total Medicare home health admissions were 5,738, an increase of 889 more patients than in the second quarter of 2023.

Pennant leaders said they are concentrating on the Home Health Value-Based Purchasing (HHVBP) Model, and expect to receive positive adjustments based on the company’s performance.

In late June, CMS issued a proposed 2025 home health payment rule that includes a 4.1% negative behavioral adjustment offset by a 2.5% market-based increase, resulting in a projected net negative impact of 1.7%.

“We are disappointed in CMS’ proposal, which uses flawed methodology and does not reflect the significant ongoing increases in the cost of providing valuable home health services,” Pennant President and COO John Gochnour said on the call. “Along with our industry partners, we will advocate aggressively for CMS to acknowledge the important role that home health services play in reducing the nation’s aggregate Medicare spend.”

Acquisitions and partnerships

Gochnour also commented on the company’s accelerated pace of new acquisitions and partnerships, attributing it to a significant investment in recruiting and developing leaders, and building strong clusters and markets.

One example is the management agreement with Hartford Healthcare, which is based in Hartford, Connecticut. Under this agreement, Pennant will manage and support the Hartford Healthcare at Home business, which has over 1,000 employees. Gochnour said that Pennant will receive a management fee for its services. These services will include sharing the company’s operating model, training and developing leaders, implementing Pennant technology systems and best operational practices, as well as providing support for information technology, human resources and related back-office functions.

“The scale of this collaboration is significant,” Gochnour said. “It allows us to meaningfully invest in creating an East Coast service sector. As we work with Hartford Healthcare to strengthen and grow its home health and hospice business, we also have the opportunity to share in the value we create and build a strong presence with the potential to expand to other communities in the Eastern United States.”

Gochnour and Guerisoli also discussed the recent acquisition of the Washington and Idaho assets of Signature Healthcare at Home and an additional purchase agreement of Signature’s Oregon business scheduled to close on January 1, 2025.

“We’re so excited about this opportunity to partner with Signature in Washington, Oregon and Idaho,” Gochnour said. “We’re focused on integrating from a system standpoint and ensuring we have the right leaders in each seat. The first bedrock that we’re looking at is ensuring that those first teams are constructed in a Pennant model and that those leaders have the right training to thrive.”

Guerisoli reflected on the year’s growth and highlighted how it translates to the number of patients served.

“We’re significantly ahead of where we expected to grow,” Gochnour said. “Our hospice census has increased by 30%, home health census by nearly 30%; and senior living business revenue is up by 16%. It has been an outstanding start to the year. Our trends remain strong, and our focus is on continued execution.”