Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home
care services, commented on the final rule announced on April 22,
2024, by the Department of Health and Human Services (HHS) known as
“Ensuring Access to Medicaid Services.” The rule incorporates new
requirements governing Medicaid Services, including Home and
Community-Based Services (HCBS). The proposed requirements are
intended to improve access to care, increase transparency and
accountability, and promote health equity for Medicaid
beneficiaries, including those who receive home health
services.
One provision of the rule, which was originally proposed in
April 2023, mandates that state Medicaid agencies be required to
ensure that a minimum of 80% of Medicaid payments for personal care
and similar services be spent on compensation for the direct care
workforce. The final rule has kept this requirement, however, it
extends the period for states to comply to six years from four
years after the effective date of the final rule.
Dirk Allison, Chairman and Chief Executive Officer of Addus
HomeCare, stated, “As a provider of home care services, we support
the stated goal of HHS to expand access to more services like ours
for Medicaid beneficiaries while providing for a stable ongoing
workforce. The new reporting requirements, additional monitoring
and quality measures will strengthen necessary safeguards that
promote more consistent care for the patients we serve. However, we
are disappointed that HHS elected to keep the 80% payment threshold
in place, despite over 2,000 comment letters to HHS from our
industry and trade groups over the past year, which pointed out the
significant challenges implementing such a provision would create.
We believe a nationwide “one size fits all” minimum threshold is
contradictory to the goal of ensuring access to Medicaid services,
given the wide variance in state waiver programs, which directly
affects the administrative burden in individual states. We were
very pleased to see the extension to six years for implementation,
giving states and providers a substantial amount of time to address
the complexities of the rule.
“We will continue to evaluate the potential impact of all
aspects of this rule on our business, as we will have at least six
years to prepare for final implementation. We see many benefits for
Addus, and we are fortunate to have the size, scale and market
coverage to support our ability to manage through the new
requirements. We will also continue to advocate for increased
reimbursement for HCBS, which translates directly into improved
wages and benefits for the direct caregivers who provide essential
home-based services for our population of Medicaid
beneficiaries.
“We would expect to see the most significant negative impact
from implementation of the rule on smaller providers and the
beneficiaries they serve. These providers lack the scale and
technological capabilities to operate under these requirements and
implementation could lead to further industry consolidation. In
light of the final rule, Addus is actively pursuing opportunities
to address this new industry dynamic with greater scale and with an
emphasis on states where we have the best opportunity to engage in
meaningful, long-term value creation and partnership.
“We also anticipate legal challenges from multiple stakeholders,
including states, to prevent implementation of this provision,
although the potential outcome of such litigation is unknown.
However, regardless of any future developments, we will continue to
focus on managing our business and providing safe, quality
home-based care for the consumers we serve,” added Allison.
Forward-Looking Statements
Certain matters discussed in this press release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements may be identified by words such as “preliminary,”
“continue,” “expect,” and similar expressions. These
forward-looking statements are based on our current expectations
and beliefs concerning future developments and their potential
effect on us. Forward-looking statements involve a number of risks
and uncertainties that may cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, including discretionary determinations by government
officials, the consummation and integration of acquisitions,
transition to managed care providers, our ability to successfully
execute our growth strategy, unexpected increases in SG&A and
other expenses, expected benefits and unexpected costs of
acquisitions and dispositions, management plans related to
dispositions, the possibility that expected benefits may not
materialize as expected, the failure of the business to perform as
expected, changes in reimbursement, changes in government
regulations, changes in Addus HomeCare’s relationships with
referral sources, increased competition for Addus HomeCare’s
services, changes in the interpretation of government regulations,
the uncertainty regarding the outcome of discussions with managed
care organizations, changes in tax rates, the impact of adverse
weather, higher than anticipated costs, lower than anticipated cost
savings, estimation inaccuracies in future revenues, margins,
earnings and growth, whether any anticipated receipt of payments
will materialize, any security breaches, cyber-attacks, loss of
data or cybersecurity threats or incidents, and other risks set
forth in the Risk Factors section in Addus HomeCare’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
February 27, 2024, which is available at www.sec.gov. The financial information described herein and
the periods to which they relate are preliminary estimates that are
subject to change and finalization. There is no assurance that the
final amounts and adjustments will not differ materially from the
amounts described above, or that additional adjustments will not be
identified, the impact of which may be material. Addus HomeCare
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In addition, these forward-looking statements
necessarily depend upon assumptions, estimates and dates that may
be incorrect or imprecise and involve known and unknown risks,
uncertainties, and other factors. Accordingly, any forward-looking
statements included in this press release do not purport to be
predictions of future events or circumstances and may not be
realized.
About Addus HomeCare
Addus HomeCare is a provider of home care services that
primarily include personal care services that assist with
activities of daily living, as well as hospice and home health
services. Addus HomeCare’s consumers are primarily persons who,
without these services, are at risk of hospitalization or
institutionalization, such as the elderly, chronically ill and
disabled. Addus HomeCare’s payor clients include federal, state,
and local governmental agencies, managed care organizations,
commercial insurers, and private individuals. Addus HomeCare
currently provides home care services to over 49,000 consumers
through 217 locations across 22 states. For more information,
please visit www.addus.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240423125905/en/
Brian W. Poff Executive Vice President, Chief Financial Officer
Addus HomeCare Corporation (469) 535-8200
investorrelations@addus.com
Dru Anderson FINN Partners (615) 324-7346
dru.anderson@finnpartners.com
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