LHC Group

Good day and welcome to the LHC Group fourth quarter and year end 2020 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, press star then one on a touch tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Eric Elliott, Senior Vice President of Finance. Please go ahead.

Thank you, Tom, and good morning, everyone. I'd like to welcome you to LAC Group's earnings conference call for the fourth quarter, ended December 31, 2020. We issued our earnings release last night, and I would also like to highlight that we have posted some supplemental information on the quarter the quarterly results section of our investor relations page the supplemental deck as well as a copy of the earnings release the 10k and ultimately a transcript of this call when available can be found on this page our supplemental deck includes our full year and first quarter 2021 guidance assumptions the impact of covid19 detail on the breakdown among sector performance and a significant amount of detail on the monthly trends we have also included schedules reconciling the trailing five quarters the same store revenue statistics to All of our non-GAAP reconciliations and breakdown of adjustments are included as well. We will reference this information in our remarks today. We expect today's prepared comments from Keith Myers, Chairman and Chief Executive Officer, Josh Profitt, President, and Dale Macko, Chief Financial Officer, to run for approximately 20 minutes to allow time for Q&A. Before we start, I would like to point everyone to our forward-looking statements on page two of our supplemental presentation and encourage you to read them carefully. They apply the statements made in this call in our press release and our supplemental financial information. Now I'll turn the call over to Keith Myers.

Thank you, Eric, and good morning, everyone. On behalf of all of us at LAC Group, I want to acknowledge the hard work and dedication of our frontline employees, as well as those who diligently serve in supporting roles. It is a privilege for me to work with all of you. Thank you for your commitment to those entrusted to our care and to the excellence in all that we do at every level of our organization. This morning I want to provide an update on legislative and regulatory activity impacting our sector and touch on the increasingly important role of LAC Group in our nation's healthcare delivery system, how it reinforces our value proposition and provide some specific examples of how our differentiated strategy is generating high quality growth. Josh will provide an overview of our growth and operation strategies for 2021, and Dale will provide key metrics that tie into our growth and operational strategies. We view 2021 as a year of great opportunity, in part due to the unprecedented flexibility afforded home health in the wake of COVID. In particular, 2020 saw a series of significant COVID-related waivers granted home health by CMS, as well as groundbreaking legislation benefiting our sector. Innovative waivers from CMS regarding the homebound requirement, flexibilities for remote certification of home care, and legislative relief from the 2% sequestration cut first quarter, plus enactment of nurse practitioner's legislation allowing nurse practitioners to certify home care for the first time. were among the significant policy improvements last year, recognizing the advantages of home care over more costly and potentially higher risk settings. CMS is giving active consideration to making a number of these waivers permanent reforms. We are equally pleased to see Congress include a significant number of positive references to home care in its report on budget appropriations for 2021. This language encouraging CMS to avoid payment systems that risk patient access to rural home health providers, and calling for a study in this regard, encouraging the rapid expansion of in-home services as alternatives to institutional care, and urging CMS to place traditional Medicare on a level playing field with Medicare Advantage in terms of access and coverage. We attached a more detailed summary of this language as a policy supplement to our earnings slide deck. Even further, we are encouraged by the emphasis the Biden administration has announced promoting more care in the home. These proposals include over $450 billion to expand in-home healthcare services for seniors, including funds for innovative care models. We look forward to working with the administration and our contacts on the Hill to advance and properly structure these initiatives. 2021 will also be a year in which we expect to advance Choose Home legislation, which we have begun to socialize with Congress. This initiative is broadly supported by the industry, including the Partnership for Quality Home Health Care and National Association for Home Care and Hospice. For the first time, this important legislation will provide a time-limited, cost-effective benefit, which would include Medicare-certified skilled home health services and personal care services. We are pleased to be receiving positive feedback from Congress on this initiative and look forward to seeing it filed for consideration in 2021. In sum, 2021 is already shaping up to be a year in which lawmakers and CMS give unprecedented emphasis to healthcare services provided in the home over higher risk post-acute settings. We believe they are recognizing the many advantages it affords patients and families while simultaneously proving out reductions to total cost of care with the delivery of high-quality outcomes. The support and energy we're seeing on the Hill lines up with how our patients, partners, referral sources, and payers are valuing at-home care. That it's a patient preferred, clinically appropriate, and cost-effective benefit. The data backs up this statement. The new physician referral sources we've been highlighting the last few quarters maintain their double digit pace to end the year with a 22% increase for the full year. We continue to take on COVID-19 confirmed and suspected patients with that number more than doubling in the fourth quarter in home health and up 70% in hospice. Since the pandemic began, we've treated 26,600 of these patients. Our institutional admissions have also increased sequentially during the same timeframe and are approaching pre-COVID levels, which is closer to the norm for us. Another data point I'd like to highlight is from the recent data on healthcare spending published by the U.S. Bureau of Economic Analysis. For the second straight year, it has shown a greater share of annual healthcare spending is going to home health. With the exception of prescription drug spending, home health care was the only category that was up in 2020. Home health was up by 2% with hospital care, physician and clinical services and nursing home care all down low to mid-single digits. What this demonstrates is that the pandemic has resulted in a shift in referral patterns with more patients, families, physicians and discharge planners choosing home health over more costly and potentially higher risk congregate care settings. One of the other ways we've been able to differentiate LHC Group is through the real-time demonstration of our value proposition, our range of capabilities, and our potential. You've heard us talk about this before, so I won't cover much of that ground again, but I do want to quickly leave you with a specific example. We began talking to Orlando Health System last April about a joint venture and completed the transaction on August 1st. Orlando's strategy centered on our ability to grow as the system expands. Capacity, length of stay reduction, and improvement in patient care through the continuum were immediate areas of focus. We have already initiated the skilled at home program and are increasing the acuity level of traditional home health placement to assist with their capacity constraints related to COVID. we have strategies and action items identified and underway to address length of stay and patient care improvement. As a result, we've seen 157% increase in census since August 1st, despite the challenges of COVID. This is another good example of how we tailor our approach to meet the needs of specific hospital partners in each community we serve. And with that, I'll turn it over to Josh to provide some high-level comments on growth and operations.