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Top News Stories of the Month Nov 2024 - TCN Podcast Teleios Collaborative Network (TCN); podcast by Chris Comeaux with Mark Cohen; 12/4/24 What if the future of Hospice and Palliative Care depends on understanding the intricacies of industry integration and regulation?  Join us for an insightful journey through November's most compelling stories that have captured the attention of Hospice and Palliative Care Today's readership. Our conversation reveals the significant impact of national events, from elections to regulatory changes, on shaping news cycles and industry priorities.  Also, rising workforce demands and political changes, such as immigration restrictions, paint a concerning picture for the future labor pool in Hospice Care. We provide a comprehensive analysis of the month's key themes that may have been missed, like tackling issues from CMS payment cuts to the Justice Department's stance on UnitedHealthcare Group's acquisition of Amedisys. This episode is a must-listen for those seeking a deeper understanding of the critical yet often overlooked issues in Hospice and Palliative Care today, and Mark delivers another excellent masterclass on creating compelling headlines. 

Delaware Court of Chancery awards damages and other relief to Encompass Health and Enhabit for misconduct by April Anthony, other former officers, and private equity firms Vistria Group and Nautic Partners Associated Press (AP) - Business Wire, Birmingham, AL and Dallas, TX; 12/4/24 On Monday, Encompass Health and Enhabit won their lawsuit in the Delaware Court of Chancery related to breaches of fiduciary duty by April Anthony, Luke James, and Chris Walker while they served as the senior officers at Encompass Health’s former home health and hospice division, which is now Enhabit. The Court awarded judgment against private equity firms Vistria Group and Nautic Partners and the home health and hospice business now known as VitalCaring Group for aiding and abetting “the egregious breaches of the duty of loyalty” by Anthony, James, and Walker. The case was the subject of a 7-day trial in December 2023. After considering “the damning record presented at trial,” the Court found that, while employed by Encompass Health, Anthony, James, and Walker usurped acquisition opportunities falling within Encompass Health’s line of business, used Encompass Health’s confidential information, and swayed key Encompass Health employees to join them with the promise of equity in the home health and hospice competitor that Anthony now heads. 

Court Orders VitalCaring to place 43% of profits into trust for Encompass Health Hospice News; by Jim Parker; 12/3/24 A federal judge in Delaware has ordered home health and hospice provider VitalCaring Group and its private equity backers to share future profits with Encompass Health (NYSE: EHC). The case has a long circuitous history that dates back to 2022 when Encompass Health spinned off its home health and hospice business as a standalone company, now known as Enhabit Inc. (NYSE: EHAB) brand. At the time, VitalCaring CEO April Anthony was CEO of the Encompass home-based case segment. “Encompass is entitled to one recovery,” a court opinion indicated. “That recovery takes the form of an equitable payment stream of VitalCaring’s future profits to be administered via a constructive trust, certain mitigation damages, and attorneys’ fee.” The court ordered that 43% of VitalCaring’s future profits be placed in trust to benefit Encompass. The remaining 57% would go to VitalCaring’s private equity backers, the Vistria Group and Nautic Partners.

Addus taking a cautious approach to hospice deals Hospice News; by Jim Parker; 11/22/24 Valuations in the hospice space have led Addus Homecare (Nasdaq: ADUS) to take a more conservative approach to hospice transactions as it actively seeks home health and personal care deals. Hospice multiples reach record highs in 2020 and 2021, as much as 26x. Since then the price tags have reportedly come down, but they haven’t gone far enough, according to Addus President and COO Brad Bickham. The company also seeks to bulk up its home health business relative to the scale of its hospice operations. “First and foremost is the pricing aspect of it. But secondly, it’s probably sequencing to a certain extent,” Bickham said during the Stephens Annual Investment Conference. “Our hospice platform is certainly significantly larger than our home health platform. We have found that home health does a good job of feeding hospice in the markets where we do have that overlap. It’d be good to essentially catch up our home and health platform at the hospice side, and certainly it’s a cheaper valuation.”

VITAS Healthcare honors retired hospice veteran, announces new executive leadership Globe Newswire, Miami, FL; by VITAS Healthcare; 11/20/24 VITAS Healthcare, the nation’s leading provider of end-of-life care and a best-in-class healthcare employer, proudly announces four major executive leadership changes:

For-profit hospices increasing despite poor performance EurekAlert!, Weill Cornell Medicine; Peer-reviewed publication; 11/18/24 Hospices are increasingly owned by private equity firms and publicly traded companies, but recently Weill Cornell Medicine researchers found that they performed substantially worse than hospices owned by not-for-profit agencies. This is concerning as nearly 75% of hospice programs, which care for patients in their last stage of life, are for-profit. The study, published Nov. 18 in JAMA, highlights the need for policy interventions that focus on increasing transparency and accountability in hospice ownership. ... The researchers analyzed Consumer Assessment of Health Care Providers and Systems (CAHPS) data from January 2021 through December 2022. CAHPS, the national standard for assessing the quality of patient care, surveyed the caregivers of those who passed away in hospice by telephone and mail. The researchers compared measures for communication, timely care, treating family members with respect, emotional and religious support, help for symptoms, hospice care training, hospice rating and willingness to recommend. ... Of the 2,676 hospices included in the final analysis, approximately 25% were owned by private equity and publicly traded companies and 40% were other types of privately owned for-profit hospices. Though only 25% of the hospices surveyed were not-for-profit, they provided the highest-rated quality care including focus on managing pain, comfort, dignity and quality of life.

VITAS seeking large acquisitions in hospice CON states Hospice News; by Jim Parker; 11/13/24 As it considers potential acquisitions, VITAS Healthcare is focused on large assets in certificate of need (CON) states. VITAS is a subsidiary of Chemed Corp. (NYSE: CHE). The company this year made its return to the M&A market after a hiatus of several years. In April, VITAS acquired Covenant Health and Community Services’ hospice operations as well as one assisted living facility in an $85 million deal. With that transaction under its belt, more are likely on the way, according to Mike Witzeman, vice president and CFO for Chemed. “We are fairly optimistic on a pipeline of potential Covenant-size deals, but there are a few hurdles from an internal perspective that we would certainly want to keep in mind. First is we like CON states or states where there are restrictions on barriers of entry,” Witzeman said during a presentation at the UBS Healthcare Conference. “The second would then be locations that, generally speaking, have some size to them. That’s important, obviously, from a patient flow perspective, but also from a staffing perspective.” The third major consideration is the price tag. The Covenant deal was sealed at a multiple of 6x to 8x EBITDA. ...

Kaiser keeps cutting costs to stem operating losses Modern Healthcare; by Caroline Hudson; 11/8/24 Kaiser Permanente has continued implementing cost-cutting measures in an attempt to quell losses stemming in part from high medical expenses. ... Oakland, California-based Kaiser reported a $608 million operating loss in the third quarter, compared with a $156 million gain in the year-ago period. Net income was $845 million in the third quarter, compared with $239 million a year ago. CEO Greg Adams said in a news release he remains confident in Kaiser's integrated model and thinks it helps the health system navigate changes in the operating environment. Kaiser reported a $13 million gain in the quarter related to the Geisinger Health acquisition earlier this year. Kaiser Foundation Hospitals acquired Geisinger in April and folded it into Risant Health, a new nonprofit formed to create a national value-based care network. Washington, D.C.-based Risant is tasked with acquiring a handful of other systems to add to the network. In June, Risant announced plans to buy Cone Health in Greensboro, North Carolina, as part of a deal expected to close next year.

‘Everything is lining up’: Home-based care M&A expected to soar in near-term future Home Health News; by Audrie Martin; 11/11/24 Home health, home care and hospice M&A was historically high in 2021, with high valuations serving sellers and solid return on investment serving buyers. Transactions plummeted after that, but recent signs suggest M&A is beginning to pick back up across sectors. ... Sellers should expect questions about employee retention, the company’s track record of growth after M&A and whether their leadership has done due diligence before entering the race. ... Experts predict that large, founder-led home health and hospice businesses will be in high demand in the coming year. Larger home care companies, especially those that are Medicaid-funded, will also be in demand. 

New Day Healthcare acquires Intrepid USA’s Missouri, Texas hospice assets Hospice News; by Holly Vossel; 11/11/24 Texas-based New Day Healthcare LLC on Monday announced its acquisition of Intrepid USA’s hospice operations in Missouri and in its home state. The transaction expands the home-based service provider’s existing presence in those markets. The deal includes Intrepid’s hospice assets in Joplin and Springfield, Missouri, as well as its locations in Beaumont, Texas. New Day Healthcare has additional strategic growth plans in store once the acquisition completes, with more deals on the near horizon in coming months according to CEO and Founder G. Scott Herman.

Quality hospice researchers seek to untangle possible relationships between tax status and outcomes Hospice News; by Holly Vossel; 11/8/24 ... More private equity (PE) investors have stepped into the hospice and home health space in recent years. This trend extends across the broader health care continuum, as certain types of owners — notably private equity entities — have come under scrutiny from lawmakers. Providers’ tax status may be among the potential risk factors of fraudulent hospice spending. For-profit business and operational infrastructures can differ from nonprofit hospices, which have historically represented much of the providers in the industry. But research has found that the tide is shifting. Private equity transactions represented half of all home health and hospice deals in 2018 and 2019, resulting in a 300% increase in patients enrolled under PE-backed providers, according to research published in the Journal of Palliative Medicine. ... Live discharges occur in less than 10% of patients at nonprofit hospices, study author Lauren Hunt indicated. This compared to an overall 20% of live discharge rates among patients of for-profit hospices. 

Enhabit to shutter handful of home health locations, ‘close’ to new deal with UnitedHealthcare Home Health Care News; by Andrew Donlan; 11/7/24 Enhabit Inc. (NYSE: EHAB) has a new CFO and a somewhat new strategy. It still faces a lot of the same problems. On Thursday, CEO Barb Jacobsmeyer said the company would be closing or consolidating certain locations that are underperforming, specifically when it comes to traditional Medicare business in home health care. While its payer innovation strategy is still intact, that’s largely a departure from its goal of moving more toward Medicare Advantage (MA) revenue over the last couple of years. Specifically, the company has been trying to diversify its revenue mix to become a better partner to referral sources and adjust to a more MA-dominated future. But now, after a strategic review and a battle with the activist investor AREX Capital, it seems to be re-focusing on fee-for-service revenue from traditional Medicare. ...