The extended moratorium on Medicare pay cuts to healthcare providers could throw a monkey wrench into Amedisys’ acquisition plans, CEO Paul Kusserow admitted Thursday.
“I do think the delay of sequestration will delay roll-up opportunities with mom-and-pop industries,” Kusserow said on a call with analysts.
Still, Kusserow said Amedisys is still on the hunt for home health, hospice and personal care firms to expand the Baton Rouge, LA-based company’s reach. Earlier this year, the company said it hoped to spend up to $350 million on acquisitions in 2021. Amedisys is one of the nation’s largest home health and hospice providers. It operates in 39 states and the District of Columbia.
“We are going to continue being highly proactive, going after high quality assets at reasonable prices. Have we seen prices move up? A little, but not crazy,” Kusserow said.
At an investment banking conference in March, Kusserow said Amedisys was going to aggressively target smaller companies struggling to repay Medicare for loans extended last year at the start of the COVID-19 public health emergency. Earlier this month, the Centers for Medicare and Medicaid Services began collecting on those loans. But around the same time, the Biden administration delayed the 2% Medicare cuts to providers, providing a temporary financial cushion.
But despite that possible roadblock, Amedisys is undeterred in its expansion plans. On Tuesday, the company announced a pilot program with Tacoma, WA-based Sound Physicians to provide home care support to patients recently discharged from acute care hospitals. Two weeks ago, Amedisys acquired regulatory assets in Randolph County, NC, which will give it access to 31,000 Medicare and Medicare advantage enrollees.
Kusserow also suggested Amedisys could benefit from Humana’s announcement earlier this week that it was acquiring the remainder of Kindred At Home. He said in markets where Amedisys and Kindred overlap, Amedisys could provide care if Kindred lacks the capacity.
Strong Q1 earnings
On Wednesday, Amedisys reported first quarter earnings of $1.50 a diluted share on $537.1 million in revenues. That compares to $0.96 per diluted share on $491.7 million in revenues in the comparative quarter year earlier. On Thursday, the company raised its earnings guidance to $6.85 to $7.07 per share. The company said additional revenue generated from the extension of sequestration is helping increase revenues for the remainder of the year.