Q2 2024 Enhabit Inc Earnings Call

Speaker Change: Good morning, everyone, and welcome to Enhabit Home Health and Hospices' second quarter 2024 earnings conference call.

Speaker Change: At this time, I'd like to inform all participants that their lines will be in a listen-only mode.

Speaker Change: After the speaker's remarks, there will be a question and answer period. You will be limited to one question and one follow-up question. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Crissy Carlisle, Enhabit's Chief Financial Officer.

Unknown Executive: Thank you, Operator, and good morning, everyone. Thank you for joining our call today. With me on the call is Barb Jacobsmeyer, President and Chief Executive Officer.

Crissy Carlisle: Thank you, Operator, and good morning everyone. Thank you for joining our call today. With me on the call is Barb Jacobsmeyer, President and Chief Executive Officer.

Unknown Executive: Before we begin, if you do not already have a copy, the second quarter earnings release, supplemental information, and related Form 8K filed with the SEC are available on our website at investors.ehab.com. On page 2 of the supplemental information, you will find the Safe Harbor Statement, which is also set forth on the last page of the earnings release. During the call, we will make forward-looking statements that are subject to risks and uncertainties, many of which are beyond our control.

Speaker Change: Before we begin, if you do not already have a copy, the second quarter earnings release, supplemental information, and related Form 8K filed with the SEC are available on our website at investors.ehab.com.

Speaker Change: On page 2 of the supplemental information, you will find the Safe Harbor Statements, which are also set forth on the last page of the earnings release.

Speaker Change: During the call, we will make forward-looking statements which are subject to risk and uncertainty.

Speaker Change: Many of which are beyond our control.

Speaker Change: Certain risks and uncertainties that could cause actual results to differ materially from our projections, estimates, and expectations are discussed in our SDC filing, including our annual report on Form 10-K , which are available on our website.

Unknown Executive: Certain risks and uncertainties that could cause actual results to differ materially from our projections, estimates, and expectations are discussed in our SEC filings, including our annual report on Form 10-K, which is available on our website. You are cautioned not to place undue reliance on the estimates, projections, guidance, and other forward-looking information presented, which is based on current estimates of future events and speaks only as of today. We do not undertake a duty to update these forward-looking statements.

Speaker Change: We encourage you to read them.

Speaker Change: You are cautioned not to place undue reliance on the estimates, projections, guidance, and other forward-looking information presented, which are based on current estimates of future events and speak only as of today. We do not undertake a duty to update these forward-looking statements.

Unknown Executive: Our supplemental information and discussion on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most directly comparable GAAP measure is available at the end of the supplementary information and the earnings release. With that, I'll turn the call over to Barbara. Good morning.

Speaker Change: Our supplemental information and discussion on this call will include certain non- GAAP financial measures. For such measures, reconciliation to the most directly comparable GAP measure is available at the end of the supplemental information and the earnings release.

Barbara Jacobsmeyer: Good morning, and thanks for joining us. Quarter 2 2024 marks our third sequential quarter demonstrating the success of our strategy. Our team deserves great praise for keeping a strong focus on operational performance amidst many potential distractions. And the results we share with you today are a testament to the tremendous job they've done. I'm extremely proud to lead such a dedicated group of professionals.

Speaker Change: With that, I'll turn the call over to Barb.

Barb Jacobsmeyer: Good morning and thanks for joining us. Quarter 2 2024 marks our third sequential quarter demonstrating the success of our strategies.

Barb Jacobsmeyer: Our team deserves great praise for keeping a strong focus on operational performance amidst many potential distractions, and the results we share with you today are a testament to the tremendous job they've done.

Barb Jacobsmeyer: I'm extremely proud to lead such a dedicated group of professionals.

Barbara Jacobsmeyer: I also want to announce the opportunity we've had over the past couple of months to discuss our strategies with many of our stockholders and the valuable feedback we have received during those discussions. Before we discuss quarter two results, I want to comment on the proposed 2025 home health payment rule. CMS is proposing a permanent adjustment of negative 4.06%, resulting in a net decrease of 1.9, or 1.7%.

Barb Jacobsmeyer: I also want to acknowledge the opportunity we've had over the past couple of months to discuss our strategies with many of our stockholders and the valuable feedback we have received during those discussions.

Barb Jacobsmeyer: Before we discuss Q2 results, I want to comment on the proposed 2025 Home Health Payment Rule.

Barb Jacobsmeyer: CMS is proposing a permanent adjustment of negative 4.06%, resulting in a net decrease of 1.7%.

Barbara Jacobsmeyer: Based on our current home health patient mix, our estimated impact is negative 1.05%. The home health community is united behind PDGM legislation, the Preserving Access to Home Health Act, which would prevent CMS from making any further permanent cuts or temporary cuts. NAC, the National Association for Home Care and Hospice, and PQHH, the Partnership for Quality Home Health Care, have continued to work with our congressional allies to streamline the focus of the bill and draft offsets that would provide pay-fors. We understand that important committee stakeholders are working to score the legislation and pay for it. We remain actively engaged with our trade associations and the industry in these advocacy efforts.

Barb Jacobsmeyer: Based on our current home health patient mix, our estimated impact is negative 1.05%.

Barb Jacobsmeyer: The home health community is united behind PDGM legislation, the Preserving Access to Home Health Act, which would prevent CMS from making any further permanent cuts or temporary cuts.

Speaker Change: NAC, the National Association for Home Care and Hospice, and PQHH, the Partnership for Quality Home Health Care, have continued to work with our congressional allies to streamline the focus of the bill and draft offsets that would provide pay-fors.

Speaker Change: We understand that important committee stakeholders are working to score the legislation and pay for it. We remain actively engaged with our trade associations and the industry on these advocacy efforts.

Barbara Jacobsmeyer: Let's move now to our progress on our key strategies and how they continue to produce positive results. In our home health segment, 6.4% total admission growth was driven by our payer innovation strategy and our focus on improved utilization of clinical resources. Our payer innovation strategy continues to succeed, with our field teams successfully shifting admissions out of historically lower-paying contracts to better-paying contracts that recognize our better way to care. In quarter one of 2023, only 6% of non-Medicare visits were in payer innovation contracts.

Speaker Change: Let's move now to our progress on our key strategies and how they continue to produce positive results.

Speaker Change: In our home health segment, 6.4% total admission growth was driven by our payer innovation strategy and our focus on improved utilization of clinical resources.

Speaker Change: Our payer innovation strategy continues to succeed with our field team successfully shifting admissions out of historically lower paying contracts to better paying contracts that recognize our better way to care.

Speaker Change: In Quarter 1 of 2023, only 6% of non-Medicare visits were in payer innovation contracts.

Barbara Jacobsmeyer: That rate grew to 43% in quarter two of 2024. This shift into payer innovation contracts is driving an increase in non-Medicare revenue per visit and, equally as important, demonstrates our commitment to relationships with payers who understand the value of our care. Looking back at 2022, that rate approximated $136 per visit.

Speaker Change: That rate grew to 43% in quarter 2, 2024.

Speaker Change: This shift into payer innovation contracts is driving an increase in non-Medicare revenue per visit, and equally as important, demonstrates our commitment to relationships with payers who understand the value of our care.

Speaker Change: Looking back at 2022, that rate approximated $136 per visit. In 2024, it has grown to $147 per visit.

Barbara Jacobsmeyer: In 2024, it is projected to grow to 147 per visit. As we look to the future, the quickest way to get the majority of our non-Medicare business to the payer innovation contract is to continue to focus on referrals within the payer innovation contract. Negotiate improved rates with non-payer innovation contracts and, when necessary, terminate the lower reimbursing contract. We will dedicate our clinical resources to fee-for-service Medicare patients and those that are members of the 68 favorable contracts.

Speaker Change: As we look to the future, the quickest way to get the majority of our non-Medicare business to the payer innovation contracts is to continue to focus on referrals within the payer innovation contracts.

Speaker Change: Negotiate improved rates with non-payer innovation contracts, and when necessary, terminate the lower reimbursing contracts.

Speaker Change: After over nine months of unsuccessful negotiations with UnitedHealthcare, we submitted our termination notice on August 1st. We will dedicate our clinical resources to fee-for-service Medicare patients and those that are members of the 68 favorable contracts.

Barbara Jacobsmeyer: We remain committed to providing our strong quality of care to UnitedHealthcare members if at some point they decide to contract with acceptable rates. In quarter one of 2023, 58% of admissions were in combined Medicare fee-for-service and payer innovation contracts. That left 42% of admissions in unfavorable contracts.

Speaker Change: We remain committed to providing our strong quality of care to UnitedHealthcare members if at some point they decide to contract with acceptable rates.

Speaker Change: In Quarter 1 of 2023, 58% of admissions were in combined Medicare fee-for-service and payer innovation contracts.

Speaker Change: That left 42% of admissions in unfavorable contracts.

Barbara Jacobsmeyer: In 2024, the percent of admissions in Medicare fee-for-service and payer innovation contracts will have grown to 71%. This will continue to accelerate with this recent decision to terminate this national agreement. In regards to Medicare fee-for-service, we still have work to do. However, our strategy is working, as one-third of our branches experienced year-over-year fee-for-service Medicare admission growth in Quarter 2. We did a deep dive into branch level data to identify the branches that are successfully implementing our strategies and those that are not.

Speaker Change: In 2024, the percent of admissions in Medicare fee-for-service and payer innovation contracts has grown to 71 percent.

Speaker Change: In regards to Medicare Fee-for-Service, we still have work to do. However, our strategy is working as one-third of our branches experienced year-over-year fee-for-service Medicare admission growth in Quarter 2.

Barbara Jacobsmeyer: We are using this analysis and the identified best practices to make meaningful changes across the company that we believe will result in the overall stabilization of the fee-for-service Medicare business. And we've established a project team to concentrate on retaining the fee-for-service business. Additionally, our scale and density within key markets, along with our reputation for strong clinical outcomes, continues to attract opportunities to collaborate with both legacy and new accountable care organization operators. ACOs offer an opportunity to serve Medicare fee-for-service members and often to be recognized for outstanding clinical performance via value-based quality incentives.

Barbara Jacobsmeyer: We are grateful for both our legacy and new ACO relationships. We are encouraged to see the growth and maturity of ACO REACH organizations, and we're equally excited about opportunities in the new guide and team models from CMS. Growth has also been fueled by increasing the utilization of existing clinical staff through our technology. For example, creating the Just Right Care Plan through our Metallogix Pulse Tool resulted in visits per episode of 14.0, 3.8% lower than last year.

Barbara Jacobsmeyer: Lowering visits per episode increases revenue per visit, and with the majority of our clinicians in a salaried position, increases clinical capacity for growth. Turning now to the hospice segment, we continue to make steady progress in growing our census, and we are pleased that the average daily census has increased sequentially each month since January 2024. In addition to the implementation of the case management model, which eliminated staffing constraints and contract labor, we also implemented a centralized admissions department to support each of our hospice subregions, which allows for more efficient processing of referrals.

Barbara Jacobsmeyer: As a result, our conversion rate of referrals to admissions increased from 73% last year to 76% this year. With our focus on growth, we continue to strategically invest in our de novo strategy. This strategy complements our organic growth strategy in both segments and allows us to enter a new market at a low capital cost. In April, we opened a new home health location in Melbourne, Florida.

Speaker Change: With our focus on growth, we continue to strategically invest in our de novo strategy. This strategy complements our organic growth strategy in both segments and allows us to enter a new market at a low capital cost.

Barbara Jacobsmeyer: Our growth depends on clinical staffing. Success in recruitment and retention helped us eliminate nursing contract labor in 2023 and has positioned us for long-term growth, as evidenced by our performance over the last three quarters. Today, we have 243 more full-time nurses on the front line taking care of patients than we did at the time of our spin in 2022.

Speaker Change: Today, we have 243 more full-time nurses on the front line taking care of patients than we did at the time of our spin in 2022.

Barbara Jacobsmeyer: We've enhanced our people capabilities to better understand what drives both engagement and retention of our employees. This allows us to better understand how we can best support our employees as they support patients and their families. We have listened to our staff. They want career opportunities. We've developed leadership tracks that enable employees to grow into such roles as branch directors, clinical team leaders, and clinical sales physicians. In fact, over the last 12 months, 85 of our full-time nurses have been promoted into these types of roles.

Speaker Change: We have listened to our staff. They want career opportunities. We've developed leadership tracks that enable employees to grow into such roles such as branch directors, clinical team leaders, and clinical sales physicians.

Speaker Change: In fact, over the last 12 months, 85 of our full-time nurses have been promoted into these types of roles.

Barbara Jacobsmeyer: We are proud of the culture of growth we have created, and we look forward to the continued success it fuels for Enhabit. We're very pleased with the execution of our strategies and the continued progress our teams have made. A great benefit of the size of our company is the ability to experience the various levels of success from our strategies on things such as recruitment, retention, payer strategy, and quality outcomes and understand how and who is executing them in ways that drive positive outcomes, so we can share those across the organization.

Speaker Change: We are proud of the culture of growth we have created, and we look forward to the continued success it fuels for Enhabit.

Speaker Change: We're very pleased with the execution of our strategies and the continued progress our teams have made.

Speaker Change: A great benefit of the size of our company is the ability to experience the various levels of success from our strategies on things such as recruitment, retention, payer strategy, and quality outcomes.

Speaker Change: and understand how and who is executing them in ways that drive positive outcomes so we can share those across the organization.

Barbara Jacobsmeyer: We remain confident in the need for our services and in the long-term growth potential for Enhabit. Before turning the call over to Crissy to discuss our results in more detail, I wanted to acknowledge the announcement we made yesterday that Craig will be stepping down as Enhabit's Chief Financial Officer. We are grateful for Crissy's important contributions to Enhabit since our spin-off from Encompass. I have enjoyed working side-by-side with her and witnessed firsthand her passion for Enhabit's mission and her deep commitment to all our stakeholders.

Speaker Change: We remain confident in the need for our services and in the long-range growth potential for Enhabit.

Barbara Jacobsmeyer: She has played a large role in helping the company achieve stability across the business and position our organization for growth. Most importantly, Crissy has been an incredible partner and true friend, and I look forward to her continued leadership as we search for her successor.

Crissy Carlisle: Before turning the call over to Crissy to discuss our results in more detail, I wanted to acknowledge the announcement we made yesterday that Crissy will be stepping down as Enhabit's Chief Financial Officer.

Speaker Change: She has played a large role in helping the company achieve stability across the business and position our organization for growth.

Crissy Carlisle: Consolidated net revenue was $260.6 million for the second quarter, down $1.7 million, or 0.6% year-over-year. Consolidated Adjusted EBITDA was $25.2 million, up $1.3 million, or 5.4% year-over-year. In our home health segment, revenue declined $3.6 million, or 1.7%, primarily due to lower Medicare recertification.

Crissy Carlisle: Thanks, Barb. Consolidated net revenue was $260.6 million for the second quarter, down $1.7 million, or 0.6% year-over-year.

Crissy Carlisle: Consolidated adjusted EBITDA was $25.2 million, up $1.3 million or 5.4% year-over-year.

Crissy Carlisle: Our payer innovation strategy continues to foster non-Medicare growth. Non-Medicare admissions grew 25.2%, driving total admissions growth of 6.4% year-over-year and 6.2% growth on a same-store basis. 43% of non-Medicare visits are now in payer innovation contracts at improved rates. This shift in the payer innovation contract lessens the impact of the mixed shift to Medicare Advantage.

Crissy Carlisle: Our payer innovation strategy continues to foster non-Medicare growth. Non-Medicare admissions grew 25.2%, driving total admissions growth of 6.4% year-over-year and 6.2% growth on a same-store basis.

Crissy Carlisle: 43% of non-Medicare visits are now in payer innovation contracts at improved rates.

Crissy Carlisle: This shift into payer innovation contracts lessens the impact of mixed-shift to Medicare Advantage.

Crissy Carlisle: On a net basis, the impact of improved pricing and the mixed-shift to non-Medicare visits increased revenue and adjusted EBITDA by $1 million in the quarter. Home Health and Justice EBITDA increased $1.4 million, or 3.3% year-over-year, as a reduction in cost per visit offset the revenue decline. Cost per visit decreased 2.2% year-over-year, primarily due to a reduction in contract labor and favorable experience in workers' compensation and group medical claims.

Crissy Carlisle: Home Health Adjusted EBITDA increased $1.4 million or 3.3% year-over-year as a reduction in cost per visit offset the revenue decline.

Crissy Carlisle: Cost per visit decreased 2.2% year-over-year, primarily due to a reduction in contract labor and favorable experience in workers' compensation and group medical claims.

Crissy Carlisle: In our hospice segment, revenue increased $1.9 million, or 3.9% year-over-year, due to increased Medicare reimbursement rates and an increase in patient days. We made steady progress in growing our average daily census, with our census growing 2.7% year-over-year and increasing sequentially every month since January 2024. This trend continued in July.

Crissy Carlisle: In our hospice segment, revenue increased $1.9 million, or 3.9% year-over-year, due to increased Medicare reimbursement rates and an increase in patient days.

Speaker Change: We made steady progress in growing our Average Damage Census, with our census growing 2.7% year-over-year and increasing sequentially every month since January 2024. This trend continued in July .

Crissy Carlisle: As we continue to ramp up our business development team and balance our referral portfolio, we expect Average Savings Census to grow throughout the remainder of the year. Adjusted EBITDA increased $0.8 million or 9.6% year-over-year, primarily due to increased revenue. Cost per day increased 1.3% year-over-year, primarily due to increased costs associated with patient supplies, including durable medical equipment and pharmaceuticals. However, we continue to expect patient volumes to increase without the need to hire a significant number of additional staff, resulting in operating leverage against the fixed costs associated with our case management staffing model.

Speaker Change: As we continue to ramp up our business development team and balance our referral portfolio, we expect Average Savings Census to grow throughout the remainder of the year.

Speaker Change: Adjusted EBITDA increased $0.8 million or 9.6% year-over-year, primarily due to increased revenue.

Speaker Change: Cost per day increased 1.3% year-over-year primarily due to increased cost associated with patient supply, including durable medical equipment and pharmacy.

Speaker Change: We continue to expect patient volumes to increase without the need to hire a significant number of additional staff, resulting in operating leverage against the fixed costs associated with our case management staffing model.

Crissy Carlisle: Our Home Office General and Administrative Expenses increased $0.9 million year-over-year to 10.8% of consolidated revenue as merit market and anticipated bonus compensation increases in 2024 offset cost structure changes implemented in the back half of 2023. Now, let's transition now to the balance.

Speaker Change: Our Home Office General and Administrative Expenses increased $0.9 million year-over-year to 10.8% of consolidated revenue as merit market and anticipated bonus compensation increases in 2024 offset cost structure changes implemented in the back half of 2023.

Crissy Carlisle: Our leverage decreased for the second quarter in a row. We ended the second quarter with a leverage ratio of 5.1 times, well within our covenant maximum of 6.5 times, and less than our year-end 2023 leverage of 5.4 times. In June, in addition to the $5 million required amortization on our term loans, we made a voluntary $10 million payment to reduce the outstanding balance of our revolving credit facility.

Speaker Change: Let's transition now to the balance sheet.

Speaker Change: Our leverage decreased for the second quarter in a row.

Speaker Change: We ended the second quarter with a leverage ratio of 5.1 times, well within our covenant maximum of 6.5 times, and less than our year-end 2023 leverage of 5.4 times.

Crissy Carlisle: Since our spinoff in July 2022, we have reduced outstanding debt under our credit agreement by $40 million. We have available liquidity of approximately $72 million, including approximately $29 million of cash on hand. We believe this is adequate to support our operation, including our de novo strategy. Our free cash flow remains strong. For the year to date through June, we generated approximately $29 million of free cash flow, which equates to a conversion rate of approximately 57%. Now, let's turn now to guidance.

Speaker Change: Since our spinoff in July 2022, we have reduced outstanding debt under our credit agreement by $40 million.

Speaker Change: We have available liquidity of approximately $72 million, including approximately $29 million of cash on hand. We believe this is adequate to support our operation, including our de novo strategy.

Speaker Change: Our free cash flow remains strong. For the year-to-date through June , we generated approximately $29 million of free cash flow, which equates to a conversion rate of approximately 57%.

Crissy Carlisle: Based on our year-to-date performance through June, we are narrowing our guidance ranges for full year 2024. Using our current payer mix trend, we are updating our outlook for net service revenue to a range of $1,050,000,000 to $1,063,000,000. With costs coming in better than our initial guidance considerations, we are narrowing our adjusted EBITDA range to $100 million to $106 million. We expect to generate 39 to 58 million of free cash flow in 2024.

Speaker Change: Let's turn now to guidance.

Speaker Change: Based on our year-to-date performance through June , we are narrowing our guidance ranges for full year 2024. Using our current payer mix trends, we are updating our outlook for net service revenue to a range of $1,050,000,000 to $1,063,000,000.

Speaker Change: With costs coming in better than our initial guidance considerations, we are narrowing our adjusted EBITDA range to $100 million to $106 million.

Speaker Change: We expect to generate $39 million to $58 million of free cash flow in 2024.

Crissy Carlisle: The primary difference between the low and high ends of the range is Medicare fee-for-service volume. As we think about the cadence of the remainder of the year, I remind you that Q3 tends to be a lower volume quarter compared to Q2, while Q4 tends to be a higher volume quarter. Similar to 2023, we may experience a slight decline in adjusted EBITDA sequentially from Q2 to Q3, with adjusted EBITDA increasing in Q4, given the expected increase in volume and the benefit of the hospice rate increase effective October 1st.

Speaker Change: As we think about the cadence of the remainder of the year, I remind you that Q3 tends to be a lower volume quarter to Q2, while Q4 tends to be a higher volume quarter.

Speaker Change: Similar to 2023, we may experience a slight decline in adjusted EBITDA sequentially from Q2 to Q3, with adjusted EBITDA increasing in Q4 given the expected increase in volume and the benefit of the hospice rate increase effective October 1st.

Crissy Carlisle: In addition to 2024 guidance, in June, as part of our participation in the Goldman Sachs Healthcare Conference, we issued longer-term volume growth targets for both home health and hospital care. Those slides are included on pages 25 through 27 of the supplemental slides that accompanied our earnings release yesterday.

Speaker Change: In addition to 2024 guidance, in June , as part of our participation in the Goldman Sachs Healthcare Conference, we issued longer-term volume growth targets for both home health and hospice.

Speaker Change: Those slides are included on pages 25 through 27 of the supplemental slides that accompanied our earnings release yesterday. We remain confident in the long-term outlook for Enhabit. The demographics haven't changed, and care at home remains the lowest cost setting for health care.

Crissy Carlisle: We remain confident in the long-term outlook for Enhabit because demographics haven't changed, and care at home remains the lowest cost setting for health. As payers continue to manage their costs, home care is a great place to turn. When we consider these factors, along with our payer innovation strategy, Clinical Capacity and Current Trends. We expect to continue to grow home health admissions at a mid to high single-digit growth factor over the next three years.

Speaker Change: As payers continue to manage their costs, home care is a great place to turn.

Speaker Change: When we consider these factors along with our payer innovation strategy, clinical capacity, and current trends, we expect to continue to grow home health admissions at a mid- to high-single-digit growth factor over the next three years.

Speaker Change: We expect hospice volumes to grow at mid to high single digits over the next three years after investing in the case management model and the build-out of our development team.

Crissy Carlisle: We expect hospice volumes to grow at mid to high single digits over the next three years after investing in the case management model and the build out of our development. With that, we will open the line for questions.

Operator: We will now begin the question-and-answer session. If you would like to ask a question, press star, then the number one on your telephone keypad. I would like to remind everyone that we will adhere to the one-question-and-one-follow-up-question rule to allow everyone to submit a question. If you have additional questions, please feel free to put yourself back in the queue. Our first question will come from the line of Brian Tanquilut with Jeffries. Please go ahead.

Speaker Change: We will now begin the question and answer session. If you would like to ask a question, press star, then the number one on your telephone keypad.

Speaker Change: I would like to remind everyone that we will adhere to the one question and one follow-up question rule to allow everyone to submit a question. If you have additional questions, please feel free to put yourself back in the queue. Our first question will come from the line of Brian Tanquilut with Jeffries. Please go ahead.

Noor: Morning, Brian. Hi, this is Noor speaking on behalf of Brian. Thank you for taking my question. As we think about the turnaround process for the company, how are you strategizing to turn Medicare fee-for-service admissions around? And is that a Salesforce thing, or are there other moves that can be made to shore up that?

Brian Tenkiet: Morning, Brian.

Noor: Hi, this is Noor for Brian . Thank you for taking my question. As we think about the turnaround process for the company, how are you strategizing to turn Medicare fee-for-service admissions around? And is that a Salesforce thing or are there other moves that can be made to shore up admins?

Barbara Jacobsmeyer: Sure, so the initial strategy focused on building out payer innovation and payer contracts because what we heard loud and clear from both our sales team members and our referral sources is that they want full-service providers that could come in and take the majority of their types of patients. And so as that success has occurred, we've been working with the teams to continue to develop that and pitch that to our referral sources.

Speaker Change: Sure, so the initial strategy focused on building out payer innovation and payer contracts because what we heard loud and clear from both our sales team members and our referral sources is they want full service providers that could come in and take the majority of their types of patients.

Speaker Change: And so, as that success has occurred, we've been working with the teams to continue to develop that and script that to our referral sources.

Barbara Jacobsmeyer: As I mentioned this morning, a third of our branches actually had nice growth in fee-for-service in the second quarter this year versus last year, so we are seeing that that strategy is working. And now it's really about making sure that we are taking those best practices across the entire company. So some of that is really about not only scripting but really doing a deep dive on their referral sources, what has happened to that referral sources' payer mix over the last year or so, deciding is that where we can still have focus from our business development teams, or do we need to build out their book of business to get more referral sources that have a stronger mix from a payer standpoint?

Speaker Change: As I mentioned this morning, a third of our branches actually had nice growth in fee-for-service over second quarter this year versus last year, so we are seeing that that strategy is working. And now it's really about making sure that we are taking those best practices across all of the company.

Speaker Change: So some of that is really about not only the scripting, but really doing a deep dive on their referral sources, what has happened to that referral sources payer mix over the last year or so, deciding is that where we can still have focus from our business development teams or do we need to build out their book of business to get more referral sources that have a stronger mix from a payer standpoint.

Noor: Got it. Thank you for that.

Speaker Change: Got it. Thank you for that.

Speaker Change: To follow up, there was pretty good success in bringing down costs per visit. Just curious to know how much room you see in driving that figure down. And as we think about visits per episode, is there room to drive improvement there? And I understand you're already using Metalogix.

Barbara Jacobsmeyer: And then to follow up, there was pretty good success in bringing down cost per visit. Just curious to know how much room you see in driving that figure down. And as we think about visits per episode, is there room to drive improvement there? And I understand you're already using MetaLogix, right?

Barbara Jacobsmeyer: Right on the cost per visit, what I would say is that, you know, we're certainly experiencing the benefit of eliminating all contract labor last year. So in home health, that was eliminated by the end of 2023. So we will have the full value of that by, you know, January of 2025.

Speaker Change: Right, on the on the cost per visit, what I would say is that, you know, we're certainly experiencing the benefit of eliminating all of the contract labor last year. So in home health, that was eliminated by the end of 2023. So we will have the full value of that by, you know, January of 2025. We do though continue to work on our productivity and optimization, which has always been a big focus of ours to manage that cost per visit.

Barbara Jacobsmeyer: We do, though, continue to work on our productivity and optimization, which has always been a big focus of ours to manage that cost per visit. And then, as you mentioned, our visits per episode have seen a decline, and that focus will remain on making sure we are using that freed up capacity to serve more patients. Because if you don't use it to serve more patients, then you can actually see an increase in your cost per visit as your visits decline. So kind of keeping a focus on all of those together.

Speaker Change: And then as you mentioned, our visits per episode has seen a decline, and that focus will remain on making sure we are using those freed up capacity to serve more patients, because if you don't use it to serve more patients, then you can actually see an increase in your cost per visit as your visits decline. So, kind of keeping a focus on all of those together.

Operator: All right. Thank you. Our next question will come from the line of Jason Cassorla with Citi. Please go ahead. Hi, good morning, everyone.

Speaker Change: All right. Thank you.

Speaker Change: Our next question will come from the line of Jason Cassorla with Citi. Please go ahead.

Ben Rossi: Hi, good morning, everyone. Thanks for the question. You have Ben Rossi on the line for Jason.

Speaker Change: Good morning, everyone. Thanks for the question. You have Ben Rossi on the line for Jason.

Barbara Jacobsmeyer: So thinking about home health demand, your overall admissions growth is kind of a solid first half, and you also provided those details regarding your long-term outlook for admission growth in the mid to high single digits over the next three years. What makes you feel comfortable in balancing this growth with a now lower outlook on cost per visit? And how should we be thinking about the contribution split here between Medicare and non-Medicare admissions?

Ben Rossi: So thinking about home health demand, your overall admissions growth is kind of solid first half, and you also provided those details regarding your long-term outlook for admission growth in the mid to high single digits over the next three years.

Ben Rossi: What makes you feel comfortable in balancing this growth with the now lower outlook on cost per visit, and how should we be thinking about the contribution split here between Medicare and non-Medicare admissions?

Ben Rossi: If you're talking about the There was a lot in that question. We're trying to kind of digest that. So in regards to the mix, I think that's ultimately what you're asking, because that's the most sensitive factor in any outlook, guidance, anything that we give, and the Medicare mix specifically within that. We don't provide or talk specific and give outlooks in regards to volume information because it remains difficult to predict.

Speaker Change: If you're talking about the

Speaker Change: There was a lot in that question. We're trying to kind of digest that.

Speaker Change: So in regards to the mix, I think is ultimately what you're asking because that's the most sensitive factor in any outlook, guidance, anything that we give, and the Medicare mix specifically within that.

Ben Rossi: As Barb noted, we have plans in place to strategically spread the best practices that we've learned from our strategy and from what we're learning from the third of the branches who are growing fee-for-service businesses and how we educate and use that for our branches that are struggling a little bit with the Medicare fee-for-service. And then, in addition, As Barb mentioned, we have, you know, given notice to United, and our ability now to go to those referral sources and say, you know, we can't take those patients, we're not contracted, should, is expected to speed up the process of having existing volumes moved into higher-paying contracts as part of that overall payer innovation strategy. We know we have two national agreements that do recognize the value of the services we provide. And so we're going to focus our clinical capacity on those.

Bread: Bread, the best practices that we've learned from our strategy and from what we're learning from the third of the branches who are growing fee-for-service business and how we educate and use that for our branches that are struggling a little bit with the Medicare fee-for-service.

Bread: And then in addition,

Speaker Change: As Barb mentioned, we have, you know, given notice to, you know, United and our ability now to go to those referral sources and say, you know, we can't take those patients, we're not contracted.

Speaker Change: It's expected to speed up the process of having existing volumes moved into higher paying contracts.

Speaker Change: As part of that overall peer innovation strategy, we have two national agreements that do recognize the value of the services we provide, and so we're going to focus our clinical capacity on those.

Barbara Jacobsmeyer: Got it. Thanks. And I guess just as a quick follow-up on the contract termination with United. How are you thinking about the impact here on pipeline contribution in your, I guess, that long-term admission growth algo, and could you provide some details on the overall impact of this termination? Sure. So certainly, you know, a year or so ago.

Speaker Change: Got it. Thanks. And I guess just as a quick follow up on the contract termination with United, how are you thinking about the impact here to top line contribution in your, I guess, that long term admission growth algo, and you provide some details on, you know, the overall impact of this termination.

Barbara Jacobsmeyer: Sure. So certainly, you know, a year or so ago, we would not have been in this position to terminate that contract. But now with 68 agreements, including two national agreements, we feel confident that we're going to be able to replace that census. However, our current non Medicare conversion rate is only 48%. So we do have, we do have some non-Medicare patients that we don't convert. And so it's really now going to be about replacing that census over this notice period.

Speaker Change: Sure. So certainly, you know, a year or so ago, we would not have been in this position to terminate that contract. But now with 68 agreements, including two national agreements, we feel confident that we're going to be able to replace that census.

Speaker Change: Our current non-Medicare conversion rate is only at 48%, so we do have some non-Medicare that we don't convert, and so it's really now going to be about replacing that census over this notice period.

Operator: Our next question comes from the line of A.J. Rice with UBS. Please go ahead.

Speaker Change: Thanks for the call, Ian.

Speaker Change: Our next question comes from the line of AJ Rice with UBS. Please go ahead.

Albert Rice: Hi, everybody. Best wishes, Crissy, on future endeavors. Maybe on this one: I think your target for this year on permanent labor cost growth was zero to one percent per visit. Is that where you're trending? Any updated thoughts on what you're seeing on the permanent labor side, wage rates, et cetera, turnover?

AJ Rice: Hi, everybody. Best wishes, Crissy, on future endeavors.

AJ Rice: Maybe on, I think your target for this year on permanent labor cost growth was zero to one percent per visit. Is that where you're trending? Any updated thoughts on what you're seeing on the permanent labor side, wage rates, et cetera?

Crissy Carlisle: Yeah, so we know we are expecting that, you know, no change in the wage rate. We can still say about 3% is where we're landing from a merit and market standpoint, on average. There are markets where we continue to have to examine market increases just based on the competition there locally.

Speaker Change: Turn it over.

Speaker Change: Yeah, so, you know, we are expecting that, you know, no change in the wage rate, we would still say about 3% is where we're landing from a merit and market standpoint on average.

Speaker Change: There are markets where we continue to have to examine market increases just based off the competition there locally. A lot of this benefit is coming from the elimination of that contract labor and replacing it with full-time labor that doesn't have the premium associated with those 13-week contracts.

Speaker Change: And then, as we also noted, we've had some favorable claims experience on, you know, insurance-type receivables related to workers' compensation and our group medical costs.

Speaker Change: And so that is helping, you know, as Barb also mentioned.

Crissy Carlisle: A lot of this benefit is coming from the elimination of that contract labor and replacing it with full-time labor that doesn't have the premium associated with those 13 week contracts. And then, as we also noted, we've had some favorable claims experience on, you know, insurance type receivables related to workers compensation and our group medical costs. And so that is helping, you know, as Barb also mentioned. As we continue to work with MetaLogix and our team on developing that right care plan and lowering our visits per episode, it's really important that we monitor that and keep our staff productive, and that is another way that we're creating clinical capacity without the need to hire additional staff in order to grow the business.

MetaLogix: As we continue to work with MetaLogix and our team on

Barb Jacobsmeyer: Developing that right care plan and lowering our visits per episode. It's really important that we monitor that, keep our staff productive, and that is another way that we're creating clinical capacity without the need to hire additional staff in order to grow the business.

Albert Rice: Okay. And you did call out workers' comp and a couple of other, what was it, group medical or something. Is that just a one-time reserve adjustment that you took in the second quarter as you looked at your claims experience, or is this something that flows through to the back half as a potential savings going forward?

Speaker Change: Okay. And you did call out the workers' comp and the...

Speaker Change: And a couple of other, what was it, group medical or something. Is that just a one-time reserve adjustment that you took in the second quarter as you looked at your claims experience, or is this something that flows through to the back half as a potential savings going forward?

Crissy Carlisle: Well,

Crissy Carlisle: Well, it's something, AJ, that we're monitoring very closely. I can't say it's a one-time thing; I can't say that it's going to recur.

Speaker Change: Well, it's something, AJ, that we're monitoring very closely. You know, I can't say it's a one-time. I can't say that it's going to recur. It's just something that we're monitoring very closely. We are currently experiencing favorable claims experience.

Speaker Change: But as you well know, you know, one big claim can change that in a second, right, so it's difficult to predict those. But right now, as of today, we have favorable claims experience.

Crissy Carlisle: It's just something that we're monitoring very closely. We are currently experiencing favorable claims experience, but as you well know, one big claim can change that in a second, right? So it's difficult to predict those, but right now, as of today, we have favorable claims experience.

Speaker Change: So you're not, you're not changing the rate of accrual on those items in the back half the year, you're continuing to monitor and there may be more opportunities to do a catch-up reserve adjustment, but it's not something that's a net tailwind in the back half. That's right, we can't count on it.

Crissy Carlisle: That's right; we can't count on it.

Albert Rice: So you're not changing the rate of accrual on those items in the back half of the year; you're, you're continuing to monitor, and there may be more opportunities to do a catch-up reserve adjustment, but it's not something that's that much of a tailwind in the back half. That's right. We can't.

Albert Rice: Okay, thanks a lot.

Speaker Change: Okay.

Operator: Our next question comes from the line of Joanna Gajuk with Bank of America. Please go ahead.

Speaker Change: Okay, thanks a lot.

Speaker Change: Our next question comes from the line of Joanna Gajuk with Bank of America. Please go ahead.

Joanna Gajuk: Hi, good morning. Thanks so much for taking the question. So I guess first of all, a follow-up on the partially United contract and revenue. So can you talk about the drivers for the $30 million, also, I guess, reduction in revenue guidance? Is that the United contract termination or is there something else?

Joanna Gajuk: Hi, good morning. Thanks so much for taking the question. So I guess first of all, a follow-up on the partially united contract and the revenue. So can you talk about the drivers for the 30 million or so, I guess, reduction in the revenue guidance? Is that the united contract termination or is there something else?

Crissy Carlisle: No, Joanna, the United contract has not really been a significant part of our guidance going forward because we have been in negotiations with them, and as you can see, they've not been successful to date. The change in revenue guidance, as we've noted previously, the most sensitive factor in our guidance is Medicare fee-for-service, and as Barb mentioned, we're still working on that. We have a lot more work to do in regards to Medicare fee-for-service, so that's the main point.

Joanna Gajuk: Okay, I see it. Thank you.

Speaker Change: No, Joanna, the United contract has not really been a significant part of our guidance going forward because we have been in negotiations with them, and as you can see, they have not been successful to date.

Speaker Change: The change in the revenue guidance, as we've noted previously, the most sensitive factor in our guidance is Medicare fee-for-service.

Speaker Change: And, you know, as Barb mentioned, we're still working on that, we have some more work to do in regards to Medicare fee-for-service, so that's the main driver.

Joanna: Okay, I see. Thank you. And on that note.

Barbara Jacobsmeyer: And on that note, the home health revenues were fine, but I guess, yeah, to your point, Medicare admissions were still down 11% year-over-year, and it sounds like there's a third location that did better than this. So, I understand, yeah, you're trying to kind of change some things and learn from this third location, but is there a specific action plan to grow the Medicare business? I mean, what can you do? It sounds like you keep losing market share there. So, I wonder what actually needs to happen for you to grow, you know, across the platform, in terms of Medicare volume.

Speaker Change: The home health revenues were fine, but I guess the three-point Medicare admissions were still down 11% year-over-year, and it sounds like there's third locations that did better than this.

Speaker Change: Jacobsmeyer, Crissy Carlisle, Unknown Executive, Jordan Loyd

Speaker Change: I understand, yeah, you're trying to kind of, you know.

Speaker Change: change some things and learn from this third. But is there, you know, specific action plan to grow the Medicare business? I mean, what can you do? Because sounds like you keep losing market share there. So I wonder, you know, what actually needs to happen for you to grow, you know, across the platform, the Medicare volumes?

Barbara Jacobsmeyer: Sure. So I mentioned a few of the things that have come out of those that had a very successful second quarter as it related to year-over-year fee-for-service growth, and that has been those that have, you know, really done a deep dive into each book of business, looking at, we use Trella for our Medicare claims information, and I'll just give an example, you know, we've historically had a big program of what we called community care, so that was, you know, we would go and provide care inside, you know, senior apartment settings, assisted living facilities, and that is a very efficient place to provide care because the clinician can go and instead of having windshield time, they can actually provide that care to multiple, you know, residents in an efficient amount of time.

Speaker Change: Sure, so I can mention a few of the things that have come out of those that had a very successful second quarter as it related to year-over-year fee-for-service growth.

Speaker Change: And that has been those that have, you know, really done a deep dive into each book of business looking at we use Trella for our Medicare claims information. And when and I'll just give an example of, you know, we've

Speaker Change: Historically had a big program of what we called community care. So that was, you know, we would go and provide care inside, you know, senior apartment settings, assisted living facilities.

Barbara Jacobsmeyer: We can see in cases where really, you know, overnight, they can have a dramatic change in the payer mix in those buildings, you know, they can have one MA provider come in and do a lunch, and the next thing you know, a good number of residents have signed up, and so it's really been about looking and saying, we need to understand what is that payer mix shift that is happening, so for example, if the payer mix shift is happening, but it is still a strong fee-for-service, and if it's complemented by, you know, an MA plan that we have, you know, good rates with, well, then it may make sense for us to continue to stay in that setting, both from a business development and operation standpoint because of the efficiency that's created, but if overnight, that has changed, and now it is almost significantly MA, and particularly if it's an MA that doesn't recognize our great value, then it may mean that it is time for us to redeploy that business development team to other referral sources, so that's an example of some things that have happened in some of the markets that have had success, as well as just the ability to go in and really work with the referral sources to understand that we now are able and willing to take more of their types of patients, but it does need to continue to be payer mix so that we can remain committed to that referral source.

Speaker Change: And that is a very efficient place to provide care, because a clinician can go and instead of having windshield time, they can actually provide that care to multiple residents in an efficient amount of time.

Speaker Change: We can see in cases where really, you know, overnight they can have a dramatic change in the payer mix in those buildings.

Speaker Change: They can have one MA provider come in and do a lunch, and the next thing you know, a good number of residents have signed up. And so it's really been about looking and saying, we need to understand what is that payor mix shift that is happening. So for example, if the payor mix shift is happening, but it is still a strong fee for service,

Speaker Change: And if it's complemented by, you know, an MA plan that we have, you know, good rates with, well, then it may make sense for us to continue to stay in that setting, both from a business development and operation standpoint, because of the efficiency that's created. But if overnight that has changed, and now it is almost significantly MA, and particularly if it's an MA that doesn't recognize our great value, then it may mean that it is time for us to redeploy that business development team to other referral sources. So that's an example of some things that have happened in some of the markets that have had success.

Speaker Change: As well as just the ability to go in and really work with the referral sources to understand that we now are able and willing to take more of their types of patients, but it does need to continue to be a healthy payer mix so that we can remain committed to that referral source.

Barbara Jacobsmeyer: Thank you. If I may, just one number question. On hospice, the same-store admissions improved, I guess, were kind of flattish. But what was the same-store census growth in the quarter? Because I wasn't sure whether there were some of the numbers and acquisitions that kind of explain the delta in admissions. So that question is, yeah, what was the same-store census in the quarter for hospice? Thank you. Sure. Same-store

Speaker Change: Thank you. If I may, just one number question. On hospice, the same-store admissions improved, I guess we're kind of flattish, but what was the same-store census growth?

Speaker Change: In the quarter, because I wasn't sure whether there's some of the novice and acquisitions that are kind of excellent at Delta in admission. So that question is, yeah, what was the same store census in the quarter for hospice? Thank you. Sure. Same store ADC growth was 1.2% positive.

Barbara Jacobsmeyer: Sure, same store, ADC growth was 1.2% positive.

Operator: Again, to ask a question, press star one, and our next question comes from the line of Ryan Langston with TD Cowen. Please go ahead.

Speaker Change: Great, thank you.

Speaker Change: Again, to ask a question, press star one and our next question comes from the line of Ryan Langston with TD Cowen. Please go ahead.

Ryan Langston: Hi, good morning. Just looking for an update on the DME issue you called out in the fourth quarter. How's that new contract progressing? And is there any further pressure on DME? Or is that just more of an isolated issue?

Speaker Change: Hi, good morning. Just looking for an update on the DME issue you called out in the fourth quarter. How's that new contract progressing and is there any further pressure on DME or is that just more of an isolated issue?

Crissy Carlisle: So, as you can see from our comments, both in the earnings slides and the relief DME and the supplies did have an impact year over year on our cost per day. So we had said it was about a $2 million impact annually based on the new contract, and I think we're kind of in line with that right now. But again, as we continue to grow the volume, we expect to gain leverage against that fixed cost.

Speaker Change: So, as you can see from our comments, both in the earnings slides and the relief, CME and the supplies did have an impact year over year within our cost per day. So, we said it was about a $2 million impact annually based on the new contract, and I think we're kind of in line with that right now.

Ryan Langston: And then maybe kind of a higher level question. Obviously, since the Chevron SCOTUS case came down, there's maybe some thought that maybe some rulemaking, especially in home health, there could be some opportunity to reduce some of that potential pressure, either from the temporary or the permanent cuts. Just wondering if you guys have any thoughts on that.

Barbara Jacobsmeyer: Thanks.

Speaker Change: Obviously, since the Chevron

Ryan Langston: Well, we continue to watch that from a regulatory perspective, but I would say that the majority of the focus from us as we're involved is more on that legislative fix. And that's where our advocacy efforts, obviously, Matt continues to have their litigation out there. But I would say that the focus that we have is our participation with the trade associations on the legislative fix.

Operator: Our next question will come from the line of Jason Cassorla with Citi. Please go ahead.

Speaker Change: Our next question will come from the line of Jason Cassorla with Citi. Please go ahead.

Jason Cassorla: Hey, thanks for squeezing me in for another one. Just wanted to touch on some of the payermix trends. So in your deck, you mentioned that 1 million positive benefits from payermix changes as a result of the newly negotiated contracts. Do you think the headwind impact here from the mixed shift changes is reaching an inflection point? I do think when we look at it.

Jason Casorla: Do you think the headwind impact here from the mixed shift changes has reached an inflection point?

Barbara Jacobsmeyer: I do think when we look at it, both from the business and from the financial perspective, we see, you know, the positive in the third of our branches that we're able to grow fee-for-service. So it is good to see that the strategies that we felt would work are working. And then again, when you look at how we've been successful moving into payer innovation contracts, and frankly, it's going to be easier to make that shift faster.

Speaker Change: I do think when we look at it both from again, we see, you know, the positive in the third of our branches that were able to grow fee for service. So it is good to see that the strategies that we felt would work are working.

Speaker Change: And then again, when you look at how we've been successful moving into the payer innovation contracts.

Speaker Change: And frankly, it's going to be easier to make that shift faster when we can say that we're not contracted with, you know, with a large national provider that has not recognized the benefit of the value we bring. So I think we are kind of at an inflection point, both from what we've seen in some of our branches on fee-for-service, as well as the payer innovation.

Barbara Jacobsmeyer: When we can say that we're not contracted with, you know, a large national provider that has not recognized the benefit of our value and the value we bring. So I think we are kind of at an inflection point both from what we've seen in some of our branches on fee-for-service as well as payer innovation.

Operator: And our next question comes from the line of Joanna Gajuk with Bank of America. Please go ahead.

Speaker Change: Great, thanks.

Speaker Change: And our next question comes from the line of Joanna Gajuk with Bank of America. Please go ahead.

Joanna Gajuk: Oh, hi, thanks. Thanks for following up or letting me ask a follow-up question here.

Joanna Gajic: Oh, hi, thanks. Thanks for following up or letting me ask a follow-up question here. So, on your sort of three-year growth targets on volumes, right? So, home health, mid-single digits, admissions, and hospice volumes. So, I just want to clarify that census or admissions,

Joanna Gajuk: So on your sort of three-year growth targets for volumes, right? So home health, mid-single digits, admissions, and hospice volumes. So I just want to clarify that census or admissions and the other clarification is, you know, in those kind of, you know, three-year growth targets, how much do you assume from the NOVAs in those targets and acquisitions, if at all? Thank you.

Barbara Jacobsmeyer: Right, so the Denovo's would be included. We continue to think about 10 per year. Now that is going to be based on us being at the mercy of the licensing and regulatory agencies. We will be ready to open within 10. It's a matter of getting people out to do surveys and actually getting the license and the final touches, if you will, for those to open. I'm, In regards to acquisitions, you know, we continue to diligence opportunities.

Speaker Change: Right, so the Denovo's would be included. We continue to think about 10 per year. Now that is going to be based off, you know, us being at the mercy of the licensing and regulatory agencies. We will be ready to open 10.

Speaker Change: In regards to acquisitions, you know, we continue to diligence opportunities. Right now, our credit agreement limits our ability to do that as well as our leverage.

Barbara Jacobsmeyer: Right now, our credit agreement limits our ability to do that, as well as our leverage. But, you know, we're not going to let that drive the long-term outlook. But right now, the actual mid to single, and mid to high single digits are based on organic growth, as well as de novo loans.

Speaker Change: But, you know, we're not going to let that drive the long-term outlook, but right now the actual mid to single, mid to high single digits is based off of organic growth as well as the de novo alone.

Joanna Gajuk: And would you be willing to quantify the denouement, how much they add to that, you know, make the high school digits are like kind of basis points of that or 200?

Speaker Change: And would you be willing to quantify the numbers, how much they add in that, you know, like the high single digits, is it like 100 basis points of that or 200? Yeah, it's mostly in hospice. Remember, we have a professional training process where we have home health. We're not going to quantify that separately.

Barbara Jacobsmeyer: Yeah, it's mostly in hospice. Remember, we have a professional care hospice where we have home health. We're not going to quantify that.

Joanna Gajuk: And then so you have to target, right? That's admissions or that's the census or both, I guess, maybe.

Speaker Change: And then so you'll have to target, right, that's admissions or that's census or both, I guess, maybe.

Barbara Jacobsmeyer: It's kind of both, really. It's the admissions, which is ultimately what matters.

Speaker Change: It's kind of both, really. It's the admissions, which is what's off limits.

Joanna Gajuk: Great. Thank you so much.

Crissy Carlisle: And that will conclude our question and answer session. I'll turn the call back over to Crissy Carlisle for any closing remarks.

Speaker Change: Great. Thank you so much.

Speaker Change: And that will conclude our question and answer session. I'll turn the call back over to Crissy Carlisle for any closing remarks.

Crissy Carlisle: If you have additional questions, please email InvestorRelations at ehab.com. Thank you again for joining today's call.

Crissy Carlisle: If you have additional questions, please email InvestorRelations at ehab.com. Thank you again for joining today's call.

Operator: This concludes today's conference. You may now disconnect.