After terminating its contract with UnitedHealth Group’s (NYSE: UNH) UnitedHealthcare back in August, Enhabit Inc. (NYSE: EHAB) has recently reached a new home health agreement with the insurer.

On Tuesday, Enhabit CEO Barb Jacobsmeyer shed some light on the new agreement during a fireside chat at the BofA Securities 2024 Home Care Conference.

“We’ve been kind of in the works with United for quite a while, and we were pleased to be able to get into an agreement,” she said. “I will say that while the contract is not going to be considered a payer innovation contract — the contract did allow us to have a creative benefit, considering the size of UnitedHealthcare.”

Dallas-based Enhabit has 256 home health locations and 112 hospice locations across 34 states.

One of the main reasons Enhabit decided to execute on this agreement was that it enables the company to be a “full-service provider” to its referral sources, according to Jacobsmeyer.

Additionally, it allows Enhabit to turn its full attention to census growth versus replacement.

Enhabit currently has some regional contracts that are not considered payer innovative under its belt. The UnitedHealthcare move allows the company more room to maneuver in this respect.

“It does now allow us to be more on the offense with those,” Jacobsmeyer said. “So again, [we’re] pleased to be able to initiate this new agreement, effective January 1.”

Though Jacobsmeyer chose not to go into detail about the terms of the contract, she did describe it as “agreeable.” She also noted that the contract was still at a per visit rate.

She also offered an update on the company’s efforts around other Medicare Advantage (MA) contracts.

“Our payer innovation kind of ranges between that zero to 25% discount, so the focus really is to continue to move as much of the non-Medicare into the payer innovation contracts,” Jacobsmeyer said. “That’s going to happen within the contracts that we have, we continue to have a pipeline of contracts that we’re working on. As I mentioned earlier, we’ve [also] been working to renegotiate some of those smaller, regional contracts — a lot of those that came over the years with acquisitions. Now that we have gotten across the finish line with United, it was really about either getting them to a payer innovation rate, these smaller agreements, or terminating them.”

Overall, Enhabit’s focus is getting more patients into payer innovation contracts. Jacobsmeyer believes that this is the key to seeing rate improvement.

She also believes that payers have begun to shift their perspective, at least a little.

“I would say that the majority of them have started to understand that home health is the lowest cost setting, and if they really want to focus on those high cost dollars of emergency room visits, hospitalizations and re-hospitalizations, they need timely access to high-quality home health providers,” she said. “If they are willing to look at their data more wholesomely, then I think it gives our payer innovation team quite the opportunity to talk about the value that Enhabit brings to them.”