Home Healthcare — CMS Target #1

I’ve begged my friends who own home healthcare assets to get out. Sell. And all but one (way to go George) told me that they had too much upside in the business to consider selling now. Lesson #1 when running a healthcare company. Sell before major regulatory change. Sell when margins are too high to be sustainable — no one is good enough to make up for it in volume without MANY years of additional work. Sell when someone wants to buy your business — for when the day comes that CMS targets the industry, then NO ONE will be a buyer. Amedisys is the poster child for the most recent CMS and Congressional action. They have been accused of creating care plans with one eye on the reimbursement rules. Get to a certain threshold of visits, and reimbursement rises substantially. One visit less than the threshold and no bonus. Guess what? CMS thinks the industry is making sure the patient gets the one last, and arguably unnecessary, visit so the home health agency gets the higher payment. OF COURSE THEY DO. Wouldn’t you? One more treatment will help, not hurt the patient. Yet when the payment system is set …