LHC Group

Good morning and welcome to the LAC Group Second Quarter 2021 Earnings Conference Call. All participants will be in 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, you may press star then one on your telephone keypad. 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, Danielle, and good morning, everyone. I'd like to welcome you to LHC Group's earnings conference call for the second quarter into June 30th, 2021. We issued our earnings release last night, and I would also like to highlight that we have posted some supplemental information on the quarterly results section of our investor relations page, the supplemental deck, as well as a copy of the earnings release, the 10Q and ultimately a transcript of this call when available can be found on this page. Our supplemental deck includes our full year 2021 guidance assumptions, the impact of COVID-19, and detail on the breakdown among sector performance. 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 Mackel, 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 to statements made in this call, in our press release, and in our supplemental financial information. Now I'll turn the call over to Keith.

Thank you, Eric, and good morning, everyone. I'd like to begin, as customary, by voicing my deep appreciation and respect for our growing LAC Group family of nurses, physician extenders, allied health professionals, and administrative support staff for their unwavering commitment to excellence in providing quality care and customer service to the growing number of patients, families, and communities we are privileged to serve. LAC Group continues to be an industry leader in quality and patient satisfaction. Data published in June of 2021 by Strategic Health Programs, or SHP, shows our overall home health quality star rating improved to 4.39 from 4.23 in October of 2020. This is possible only because of this unwavering commitment of the many boots on the ground, frontline caregivers that treat our patients every day. Thank you again. Now turning to policy and legislative tailwinds, with last week's introduction of the Choose Home Act of 2021 in the Senate, We have bipartisan legislation that for the first time would provide clinically appropriate Medicare beneficiaries the option to safely recover in the privacy of their own homes following an acute inpatient stay as an alternative to more costly and restrictive inpatient post-acute care settings such as SNFs. In addition to four senators from each party co-sponsoring the Choose Home bill, We have lead sponsors from both the Senate Finance Committee and the Senate Aging Committee, including the Chair of the Senate Finance Health Subcommittee and the Chair of the Senate Aging Committee. In the near term, we expect Choose Home to be filed in the House with strong bipartisan support, including lead sponsors from committees of jurisdiction responsible for legislating health care policy. This common sense legislation will allow qualifying seniors the choice of receiving SNF-level care in the comfort of their own homes at a guaranteed Medicare savings of at least 20% of the cost of an inpatient SNF episode of care. The introduction of Choose Home was aided by strong endorsements from key organizations such as AARP, the National Council for Medicare and Medicaid Reform, Allies for Independence, LeadingAge, and other organizations representing veterans and those with disabilities. These endorsements and strong congressional support positions Choose Home for consideration in the budget reconciliation process or other year-end legislative packages. I'd like to mention that Choose Home conceptually is not new. Various states have already demonstrated cost savings and better outcomes by combining skilled and personal care services, such as the Ohio Passport Program, which has been in place since the early 90s and has consistently demonstrated both cost savings and better patient outcomes. Similarly, since 2019, CMS has provided Medicare Advantage plans the option to include non-skill home care services, transportation, home modification, and assistance with activities of daily living as part of their plans. Choose Home combines these services with the traditional Medicare home health benefit and for the first time provides traditional Medicare beneficiaries the option to recover safely in their own homes as an alternative to more costly and restrictive inpatient post-acute settings. Cost savings are hardwired because Choose Home limits payment to not exceed 80% of the monthly cost of a stay in a skilled nursing facility and limits the benefit to 30-day episodes of care. Medicare savings under Choose Home were projected by the healthcare economics firm of Dobson and DiVonzo to be in the range of $1.6 billion to $2.8 billion over 10 years. A copy of the Dobson-DeVonzo Choose Home Saving Analysis is included in our supplemental deck. Last month, LAC Group commissioned a national survey led by Dr. Frederick Barber of the Decision Company in Nashville. The finding was that Americans overwhelmingly prefer in-home care following a serious illness or hospitalization as opposed to inpatient post-acute settings. Notably, survey respondents strongly supported Medicare coverage for the various services provided under Choose Home, such as transportation, medical supplies, and in-home modifications. A copy of the survey results fielded by the decision company is included in our supplemental debt. We expect these survey findings favoring more in-home care to resonate in Congress and aid our advocacy for Choose Home. Now turning to regulatory updates, CMS has published favorable final rules for fiscal 2022 related to both hospice and LTACs. We also saw a favorable proposed rule for home health that projects no cuts for 2022 and an aggregate increase in payment rates of 1.7%. The rule also included a proposal to expand nationally the home health value-based payment demonstration from nine states to all 50 states beginning January 1, 2022. The national expansion of HHVPP is supportive of our recently announced Advanced Care at Home Service Line expansion, which further leverages our existing post-acute capabilities to provide an efficient, low-overhead alternative to more restrictive and costly inpatient care settings. The opportunity we have to bring our advanced care at home model to scale is substantial, as we have significant direct experience in this area from the proven and highly successful SNF diversion programs we have developed in partnership with a number of hospitals throughout the country, beginning with Ochsner Health in 2014. And now last, but certainly not least, I'll close my prepared remarks with an overview of M&A. Excluding only 2018 when we announced our merger with Almost Family, 2021 to date has been our best year in terms of acquired revenue in the 27-year history of LAC Group. Based on our success thus far, our strong M&A pipeline and the exclusive nature of the majority of opportunities in our current pipeline we have more than doubled our previous acquired revenue target for 2021 to a range of $350 million to $500 million in acquired revenues. The incremental adjusted EBITDA contributions from these acquisitions alone would add a 12% to 17% increase in 2022 compared to our 2021 range for adjusted EBITDA. And I'll turn it over to Josh to provide more color on our growth and operations Then Dale will provide more detail on our financial results and guidance prior to Q&A. Josh?