BREAKING NEWS: UnitedHealth Group (NYSE: UNH) closes LHC Group Inc. (Nasdaq: LHCG) transaction. More information below.


After a rough 2022, publicly traded post-acute providers are hoping to turn to a better page in the new year.

Almost all post-acute providers face significant staffing headwinds. It’s a near-universal problem. Home health providers, specifically, are dealing with those headwinds along with a dramatic shift in the way they’re paid.

Because Medicare Advantage (MA) plans are a much larger part of the equation than they used to be, providers are having to adjust.

“Transitioning the business to adjust to a new payer mix is certainly an uphill battle,” says Stoneridge Partners Managing Partner Joe Lynch. “It will be interesting to see which companies are able to seamlessly make the transition.”

The Stoneridge Home Health Index (HHI) increased 4% over the last month, while the Post-Acute Index (PAI) decreased by 4.5%.

Home Health Index

Though the HHI was up 4% month over month, that number was artificially dragged down by news about a possible Federal Trade Commission (FTC) challenge to UnitedHealth Group’s (NYSE: UNH) deal for LHC Group Inc. (Nasdaq: LHCG).

The FTC, however, did not make that challenge to the $5.4 Billion deal, which has now closed. LHC Group is no longer a tradable stock and was delisted effective Feb. 22, 2023.

Meanwhile, Amedisys Inc. (Nasdaq: AMED) had a terrific January, climbing 15.7%. It also beat Street expectations for the fourth quarter after Paul Kusserow returned to the CEO role.

The company recently divested its personal care division to the Massachusetts-based HouseWorks, and also announced a risk-based, in-home palliative care deal with BlueCross BlueShield of Tennessee.

Amedisys is positioning itself as a value driver for managed care, and is taking a hard stance on how it will contract with those health plans. It’s making deals with the ones that recognize its value, and promising to not work with those that do not recognize that value in contracts.

“I think home health is going to have more leverage than it thinks it has right now,” Kusserow told Home Health Care News. “And I think that’s going to be to Amedisys’ advantage, as well as the industry’s advantage.”

Post-Acute Care Index

After a rough December that saw its stock price dive by nearly 10%, Addus (Nasdaq: ADUS) turned things around in January. The company’s stock rose 8% month over month.

The biggest gainer in the greater post-acute space in the month, however, was the Pennant Group (Nasdaq: PNTG), which rose more than 17%.

The company is theoretically more insulated from looming home health rate cuts than others due to its senior living portfolio, but it has said that it would like to expand its home health reach.

In essence, Pennant is still bullish on the home health market, and in its ability to grow, both organically and through acquisitions.

“On the final rule, the negative behavioral adjustments represent a headwind for providers in our industry,” Pennant COO John Gochnour said during the company’s third-quarter earnings call. “Pennant’s home health and hospice segment began in, and has thrived through, periods of uncertainty and reimbursement cuts — much like today — thanks to the scalability of our operating model built on local leadership, our commitment to maintaining a strong and flexible balance sheet and our opportunistic approach to acquisitive growth.”

The S&P 500 rose 8% and outperformed the post-acute and home health indices in January, but some companies — including Amedisys and the Pennant Group — outperformed the market.

Quote of the Month

“CMS is committed to protecting people with Medicare and being a responsible steward of taxpayer dollars. By establishing our approach to RADV audits through this regulation, we are protecting access to Medicare both now and for future generations. We have considered significant stakeholder feedback and developed a balanced approach to ensure appropriate oversight of the Medicare Advantage program that aligns with our oversight of Traditional Medicare.” – Chiquita Brooks-LaSure, CMS Administrator

Read the Full Article Here: CMS Issues Final Rule for MA Risk Adjustment Audits

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)

Here are the results of the stock prices for the past two years:

Company 1/31/23 1 mos change YTD change 1/31/22 1/31/21
Amedisys 96.66 +15.71% +15.71% 135.04 289.07
LHC Group 158.60 -1.91% -1.91% 124.81 199.11
HH Index* 127.63 +4.09% +4.09% 129.93 244.09
S&P 4076.60 +5.13% +5.13% 4522.67 3731.17
Addus 107.52 +8.07% +8.07% 79.74 112.67

Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.

Enterprise Value (EV)

EV (in M) 2023 2022 2021
Amedisys 3510 4490 10370
LHC Group 5740 4050 6760
HH Index Total 9250 8540 17130
Addus 1820 1280 1950

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 2023 2022 2021
Amedisys 189% 204% 158%
LHC Group 251% 187% 249%
HH Index Average* 220% 196% 204%
Addus 178% 153% 196%

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company for its reporting. (Home Health Index February 2023 | Stoneridge Partners)

Recent Transactions From Around The Country

  • The Brentwood, Tennessee-based health care system Lifepoint Health has acquired Cornerstone Behavioral Health El Dorado
  • The electronic medical record (EMR) company Careficient Inc., has acquired Net Health’s home health, hospice, home care and palliative business, as well as its revenue cycle monitoring (RCM) products
  • Quipt Home Medical Corp.’s acquired Great Elm Healthcare, expanding its footprint to 26 U.S. states
  • Open Systems Healthcare, which provides in-home care in the Lehigh Valley and Reading area, has sold some of its operations to a larger rival.

View Stoneridge closed transactions on our website

Exclusively Listed For Sale By Stoneridge Partners.

Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us at Stoneridge Partners.

Non-medical home care franchisee.  $9.6+M in revenue.  50% Medicaid/30% Private Pay/ 14% VA/ 6% Misc.  Experienced management team to stay post-transition.

 Home Care /  Multi-State

Hospice.  45+ ADC.  Rio Grande Valley.  No CAP or regulatory issues.

 Hospice /  Texas

$2M revenue home care agency.  100% private pay.  Primarily non-medical.  Skilled designation, not Medicare-certified.  W-2 caregivers.  Region 8.  Accredited.

 Home Care /  Florida

Profitable private-duty home health agency in Northern Virginia.  $1.5M in revenue.  20+ years in the community.

 Home Health /  Virginia

Profitable home care franchise with consistent sales growth.  Revenue of $1.3M.  Great reputation within the community.

 Home Care /  Iowa

$40M+ home care agency with 20+% AEBITDA.  Primarily private-duty, non-medical (90%).  Medicaid waiver programs.  40% family caregivers.  Multiple locations.

 Home Care /  Pennsylvania

Colorado Springs and surrounding areas.  Opportunity to grow existing small hospice.  Motivated Seller

 Hospice /  Colorado

Medicare-certified home health agency.  Houston/Kingwood area.  Approximately $600k in revenue.  Accredited.

 Home Health /  Texas

I/DD provider offering SCL & FHP services.  $3M in revenue.  Recent rate increase.

 I/DD /  Kentucky

Hospice.  30+ADC.  No CAP or regulatory issues.

 Hospice /  Illinois

Behavioral Health/Suboxone Clinic.  $900k in revenue.  21 years in business with stellar reputation.  Single office, great opportunities for expansion.  All cash paying patient base.

 Behavioral Health /  Kentucky

I/DD residential services.  $11M in revenue.  Highly profitable agency with long-standing reputation.  Community Residential Services (CRS) 4-bed model & Integrated Community Supports (ICS) apartment settings.

 I/DD /  Minnesota

Well established home health agency.  $4M in revenue.  Fully staffed.  Profitable.  Good history of compliance.

 Home Health /  Missouri

Home Health CON in Montgomery County.  Profitable agency generating over $1.3M in revenue.  95%+ Medicare.  Built in marketing relationship and growth potential.

 Home Health /  Maryland

Skilled Home Health & Private Duty. $4.4 million in revenue. 22% census increase over last year. Established over 23 years.

 Home Health /  Florida

Medicare/Medicaid Home Health agency. $8 million in revenue. Long history in the community.

 Home Health /  Oklahoma

86 patient hospice located Northeast of Houston, TX. $4M+ in revenue with 20% + adjusted EBITDA. Full staff in place. Excellent record of compliance.

 Hospice /  Texas

Medicare-certified home health agency. District 7. Census of approximately 30 patients. Accredited.

 Home Health /  Florida

Hospice. 150 ADC. Strong growth. Expertly run with administrative team willing to stay involved. No CAP or regulatory issues.

 Hospice /  Southwest

Mental Health Treatment Center. $1.1M in revenue. Long-established, profitable practice. Full spectrum of medical treatment and therapy services.

 Behavioral Health /  Indiana

Medical Staffing Agency. $4.6M in revenue. Established over 25 years. Excellent rapport with regional hospital network.

 Other /  Kentucky

Medicare home health agency.  Health system relationship.  Rare KY CON opportunity, multiple counties

 Home Health /  Kentucky / Popular

Home health with $8M in revenue.  Medicare/Medicaid-certified.  90+% traditional Medicare/episodic.  Services central Texas and licensed for entire state.  Strong management team in place.

 Home Health /  Texas

Medicare-certified home health agency.  Houston-area.  Minimal census.

 Home Health /  Texas

Medicare-certified home health agency.  $1M+ in revenue.  Long-established agency with excellent community rapport.

 Home Health /  Texas

$19.5M large home care franchisee.  89% Medicaid.  Well-established company operating more than 20 years.  Phenomenal year-over-year revenue growth.

 Home Care /  Illinois / Popular

Home Health Index February 2023 | Stoneridge Partners

From Joe Lynch, Publisher of “Home Health Index.” Joe can be reached at [email protected] or (239) 561-0826, and toll-free at 800-218-3944. Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Amedisys | LHC Group