Enhabit, Inc.

Good morning, everyone, and welcome to Inhabit Home Health and Hospice's first quarter 2024 earnings conference call. At this time, I'd like to inform all participants that their lines will be in a listen-only mode. After the speaker's remarks, there will be a question and answer period. You will be limited to one question and one follow-up question. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Chrissy Carlisle and Habit's Chief Financial Officer. Chrissy, you have the floor.

Thank you, Operator, and good morning, everyone. Thank you for joining our call today. With me on the call is Barb Jacobsmeyer, President and Chief Executive Officer. Before we begin, if you do not already have a copy, the first quarter earnings release, supplemental information, and related form 8K filed with the SEC are available on our website at investors.ehav.com. On page two of the supplemental information, you will find the safe harbor statement, which are also set forth on the last page of the earnings release. During the call, we will make forward-looking statements which are subject to risk and uncertainties, many of which are beyond our control. Certain risks and uncertainties that could cause actual results to differ materially from our projections, estimates, and expectations are discussed in our SEC filings, including our annual report on Form 10-K, which are available on our website. We encourage you to read them. You are cautioned not to place undue reliance on the estimates, projections, guidance, and other forward-looking information presented, which are based on current estimates of future events and speak only as of today. We do not undertake a duty to update these forward-looking statements. Our supplemental information and discussion on this call will include certain non-GAAP financial measures. For such measures, reconciliation to the most directly comparable GAAP measure is available at the end of the supplemental information and the earnings release. With that, I'll turn the call over to Barb.

Thanks, Chrissy. Good morning, and thanks for joining us. Our strong start to 2024 is a result of our team's continued focus on our operational strategies. Additional frontline clinicians, more and better home health payer contracts, and controlling G&A expenses were the key drivers of our performance in the first quarter and resulted in sustained consolidated adjusted EBITDA of $25.3 million in line with last year's first quarter results. As our employees stated on our recent employee survey, their engagement is driven by the knowledge that our work is meaningful. No matter the role, clinical or support staff, they recognize that what they do impacts our patients' lives. During this celebration of Nurses Week, I especially want to thank each and every one of our nurses for their dedication to our mission and to our patients and families. Inhabit's high-quality outcomes are a result of our employees' hard work, and I am proud of our entire team. In our home health segment, we are focused on achieving growth through stabilization of Medicare admissions, continued progress with our payer innovation strategy, and increased utilization of our clinical resources. With our traditional Medicare mix of home health revenue now in line with peers, we are experiencing stabilization of our fee-for-service Medicare mix. While year-over-year fee-for-service Medicare admissions declined 11.4%, we experienced a sequential increase of 3.4%. Our payer innovation team continues to do a great job building our portfolio of payer contracts. And our field teams are successfully shifting admissions out of historically lower paying contracts to these new contracts at improved rates. Contracts that acknowledge the high quality care we provide to the payer's members. Admissions in our historically lower paying contracts declined from 42% of our total admissions in quarter one 2023 to 29% in quarter one this year. As these results show, our payer innovation strategy is working. We continue to be disciplined in our approach with payers as we work to negotiate new agreements and remain focused on moving volumes away from the lower paying agreements. We are committed to the renegotiation of historic contracts to improve rates while holding firm to our conviction in the value we provide. And we'll make the decision to terminate agreements when necessary. Finally, in both our home health and hospice segments, our teams are focused on ensuring that the intensity of care aligns with patient acuity and complexity of care needs within the important context of what matters most to patients in their journey. Staffing challenges and the increased demand for our services have created a mandate for us to effectively manage clinician visits. However, our strategy is not to simply reduce visits across the board, but instead to effectively right-size each plan of care to ensure patients receive a just-right care plan. For some, this means fewer visits. For others, it may mean more, depending on their unique presentation. Overutilization and underutilization are equally harmful to our patients and our business. Additionally, some patients can benefit from virtual encounters, which is convenient and efficient for our agencies and our patients who are beginning to understand and enjoy the benefits of tech-enabled care. We continue to explore how implementing virtual care in a strategic manner can benefit both service lines as well as the patients and families we serve. We plan to expand the scope of virtual care at Inhabit in 2024 in an effort to improve efficiency, capacity, patient outcomes, and patient experience. MediLogix Pulse supports our visit optimization strategy for our home health teams, and MediLogix Muse supports the strategy for our hospice teams. Leveraging predictive analytics bolsters our ability to deliver a better way to care for patients and families in a more efficient manner without compromising patient outcomes. Our competitive position in terms of patient outcomes, including hospitalization rates and visits at the end of life is what sets us apart when negotiating with payers and establishing strategic referral relationships. In our hospice segment, our priority is growing census, which will allow us to gain operating leverage against the fixed cost structure associated with the case management staffing model. Our sales headcount is now above last year's count, and we are focused on utilizing data from our lost loyalty reports to strengthen relationships with referral sources. In addition, we are working with our talent acquisition team to continue to recruit additional business development team members to grow the business. To complement our organic growth strategy in both segments, we continue to strategically reinvest for growth through our de novo strategy. This allows us to enter a new market with low capital costs. We added two hospice de novo locations in the first quarter, and the work is underway to open 10 more de novos in 2024. A critical key to our organic and de novo growth is our people strategy. We were pleased with our recent employee engagement survey, which saw a net promoter score in the top quartile of healthcare companies. We are seeing continued success with our recruitment and retention efforts. During the first quarter, our full-time nursing candidate pool increased 30% year over year and resulted in the addition of 151 net new full-time nurses. I will now turn it over to Chrissy to discuss the quarter's results. Thanks, Barb.