Ticker
$EHAB
Industry
Healthcare
Type
Spin-off
Rating
Covered
Category
General
Spin-off of Home Health care business (think Ensign Group, Chemed, Amedisys, etc.). Spin completed in June 2022. Stock has sold off significantly from $25 to $15 as of September 1, 2022.
Notes
‣
‣
‣
‣
Now let's discuss the home health proposed rule. On June 17, CMS published its proposed rule for 2023, which includes a 7.69% permanent negative behavioral assumption adjustment. The cut would be partially offset by a 3.3% market basket update, reduced by a 0.4% productivity adjustment that would result in an approximate 4.2% negative payment impact for 2023.
The proposed rule also includes language around a clawback of an additional $2 billion from the industry for assumed overpayments from 2020 and 2021. We are opposed to these cuts and strongly disagree with CMS' approach, interpretation and resulting recommendations.
Enhabit, along with its trade associations and industry partners, are pushing back hard on this rule. We are currently working with our legislative supporters on Capitol Hill to mitigate these cuts.
Resources
‣
CVS buying Signify health and others buying in the space too
This spring, UnitedHealth agreed to buy LHC Group Inc., one of the country’s largest home-health firms, for about $5.4 billion. Last year, Humana Inc. agreed to take full control of home-health provider Kindred at Home. Both LHC and Kindred provide continuous home-healthcare services.
‣
Revenue down 6.3% and EBITDA down 30%. Not a great start as the first quarterly earnings release for the newly spun EHAB.
Guidance was also cut
‣
‣