LHC Group

Greetings and welcome to LHC Group's fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to your host, Eric Elliott, Senior Vice President, Finance and Investor Relations. Thank you, you may begin.

Thank you, Rob, and good morning, everyone. I'd like to welcome you to LHC Group's earnings conference call for the fourth quarter and year-ended December 31, 2021. Last night, we issued our earnings release and posted a copy of our prepared commentary and a supplemental deck on the quarterly results section of our investor relations page. In addition to the earnings release and supplemental information, a copy of the 10-K and ultimately a transcript of this call when available can be found on this page. Our supplemental deck includes our full year 2022 guidance assumptions and detail on 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. Consistent with the approach we began last quarter, the majority of our time on this morning's call will be devoted to Q&A. With me today is Keith Myers, Chairman and Chief Executive Officer, Josh Profitt, President and Chief Operating Officer, and Dale Mackle, Chief Financial Officer. 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, in our prepared commentary, and in our supplemental financial information. I'll now turn the call over to Keith.

Thank you, Eric, and good morning, everyone. Before we begin, I'd like to take just a moment to thank our LAC Group family of nurses and caregivers physician extenders, allied health professionals, and administrative and support staff. They work tirelessly on behalf of the growing number of patients, families, and communities we are privileged to serve. And I just can't thank them enough for their commitment to those entrusted to our care and for their commitment to continued improvement and excellence in all we do. So to everyone on the team, thank you and know that you are valued and appreciated. I hope everyone had a chance to review the commentary and supplemental information we posted last night. We received a positive response from this practice last quarter and trust it will allow more time for Q&A today. When I try to summarize our year, what's ahead of us, and the current state of the industry, there are a few things that come to mind that I'd like to share in just my brief opening comments. The first is a clear policy consensus that patients want to be treated in the safety and comfort of their home. This is evidenced in part due to unprecedented regulatory flexibility afforded home health in the wake of COVID, as well as important legislative initiatives from Congress. Innovative waivers from CMS regarding the homebound requirement, flexibilities for remote certification of home care, telehealth, and continued legislative relief from the 2% sequestration cut were actions of targeted relief and sustained policy for our sector during the current public health emergency and beyond. Notably, CMS is giving considerations to making many of these waivers permanent reforms. Likewise, we saw the House pass and send to the Senate the President's initiative to expand HCBS services by a proposed $150 billion. and we saw solid progress with our signature legislation, Choose Home. Forty-eight members of Congress from both chambers, from both parties, and from committee jurisdictions, including committee chairs, are now cosponsoring this groundbreaking legislation. Every month, and at times weekly, We see Choose Home and other home-based reforms the subject of op-eds, articles in newspapers across the country, in social media, and in discussion at national conferences. Congress likewise is considering additional opportunities to expand telehealth benefits. The Hospital at Home program is gaining traction, and CMS is poised to implement nationally value-based purchasing in 2023. Never before have we seen such a sustained and significant emphasis from Congress and from CMS in expanding in-home health care services. More importantly, we can see this consensus also reflected in polling data. Third-party polling data shows that 86% of adults and 94% of Medicare beneficiaries prefer to recover at home after a hospital stay, while 85% of all adults and 90% of those over age 65 say that expanding home health care options should be a government priority. You can also see it in the increasing demand for our services. With new position referrals at an all-time high for us, along with an increasing number of existing and potential partners reaching out to manage their post-acute programs, our challenge right now is certainly not demand. And that leads me to my second point, which is the difficult challenges we face in the recent past have been short-term in nature. We saw a large spike in the percentage of our clinicians on quarantine in late Q4 and early Q1 due to COVID variants, compounded by lower availability of labor overall as the industry struggled to fill open positions. We have a number of initiatives that Josh will talk to later on the way that we've outlined and we'll review in more detail during Q&A. And finally, my last point is that even the growth we experienced in 2021, we expect another strong year in 2022 as we remain a longstanding industry leader in quality patient satisfaction and employee retention and our proven ability to deliver on the multiple levers we have for organic growth in each segment, and continued M&A activity. So I'll stop there with opening comments. Thanks again for joining us this morning, and now I'd like to open the call up for questions for Josh, Dale, or myself.