Amedisys: PDGM Means Growth Opportunities For Large Companies

BIRMINGHAM, Alabama (August 1, 2019)—Many small to mid-sized home health agencies will suffer if the Patient-Driven Groupings Model (PDGM) is enacted as planned, according to Amedisys President and CEO Paul Kusserow—presenting his and other large company opportunities to increase market share.

Kusserow, speaking on the company’s mid-year earnings call Aug. 1, said that the rule recently filed by the Centers for Medicare & Medicaid that would first cut and then eliminate requests for anticipated payments (RAPs) would result in industry consolidation. Potentially more than 30% of Amedisys’ competitors will have negative margins if PDGM is fully implemented as proposed, company officials predicted.

“When you look at the folks who don’t have the borrowing resources to sustain this, which is a lot of the industry, I think there’s going to be a tremendous amount of shakeout, particularly in some of the rural states,” Kusserow said.

And while efforts are growing to fight the new rule in Congress—Kusserow said 40 U.S. representatives and 20 senators have signed on to legislation opposing the shift as it now stands—he predicted that large companies like his will likely continue business as usual or even benefit if PDGM is enacted as proposed.

“It won’t affect us, or we anticipate our big competitors, but it is going to affect a lot of this industry,” he said. “This will give us an opportunity to consolidate and we’re preparing for that and it will give us an opportunity to grow share.”

In fact, Amedisys officials said they’d been cleaning up company balance sheets in preparation for 2020, in addition to testing out responses to the new therapy model in some of their units.

Baton Rouge, Louisiana-based Amedisys is one of the country’s largest home health companies and hospice companies, with more than 21,000 employees in 471 care centers in 38 states and Washington, D.C. It spent much of 2018 and early 2019 expanding through acquisitions, buying Christian Care at Home, Bring Care Home, East Tennessee Personal Care, Compassionate Care Hospice and RoseRock Healthcare.

It also opened four new operations in the first half of 2019 and plans to open four to six more in the coming months; the company announced recently it has received regulatory authority to expand into several counties in New York state.

The company also reported growth in its existing stores, with same-store admissions up 7% in home health and growth in its Medicare fee-for-service efforts.