Industry Notes:
HHA Chains Report Positive Earnings
Published on Fri Jul 11, 2008
Acquisitions continue at a rapid pace. The prospective payment system refinements this year haven't hurt publicly traded home care chains too much. Gentiva Health Services Inc. reported net income of $12.0 million on revenues of $346.2 million for the quarter ended July 1. That's up from a $9.0 million profit on $307.3 million in revenues for the same period in 2007. The Melville, NY-based national chain also announced a hospice acquisition in South Carolina, a Certificate of Need state. Gentiva bought Hospice of Charleston and plans to serve the three counties covered by its CON, "rounding out its home health coverage in the state," the company says in a release. Meanwhile, regional chain LHC Group Inc. reported net income of $6.3 million on revenues of $90.1 million for the quarter ended June 30. That's compared to a $5.0 million profit on $70.6 million in revenues for the same time in 2007. This earnings report showed "the first quarter in which the company experienced the full impact of the Medicare reimbursement changes," CEO Keith Myers notes in a release. "We ... see these results as confirmation of the ability of our management team to successfully adapt to changes in the reimbursement environment." The Lafayette, LA-based company also whittled its days sales outstanding (DSO) from 75 to 60 days in that time period, it touts. And LHC has acquired the assets of Mor-ristown-Hamblen Home Health and Hospice located in Morristown, TN, from Morristown-Hamblen Healthcare System. The company will combine the acquisition with its joint venture with the University of Tennessee Medical Center home care program and operate them under the Morristown-Hamblen name, LHC says in a release. The agencies' combined net annual revenue is $2.8 million, LHC adds. • Gas prices may have ticked down a bit, but home care workers and companies are still groaning under the weight of the fuel burden. The national average price of gasoline is down about 18 cents per gallon from two weeks ago, to $3.88, says the federal Energy Information Administration. But that's still about $1.04 more per gallon than one year ago, the EIA says. Grayson Home Health in Sherman, TX is offering company vehicles and gas cards on top of mileage reimbursement, reports TV station KXII. The company is also reducing in-person visits by using telehealth, it told the station. The CBS Evening News highlighted the problem in a July 30 segment. North Country Home Services in upstate New York says aides are refusing cases in rural areas and asking for paychecks early, CBS reported. • In addition to payment rates for 2009, the Centers for Medicare & Medicaid Services also issued the hospice cap amount for the year ending Oct. 31, 2008. [...]
