Enhabit, Inc.

Good morning, everyone, and welcome to Inhabit Home Health and Hospice's first quarter 2025 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 call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Joby Williams and have Senior Vice President and Treasurer. Mr. Williams, please go ahead.

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, and Ryan Solomon, Chief Financial Officer. Before we begin, we do not already have a copy of the first quarter earnings release Supplemental information and related form 8K filed with the SEC are available on our website at investors.ehab.com. On page two of the supplemental information, you will find the safe harbor statements, which are also set forth on the last page of the earnings release. During the call, we will make four looking statements, which are subject to risk and uncertainty, many of which are beyond our control. Certain risks and uncertainties that could cause actual results to differ material from our projections, estimates, and expectations are discussed in our SEC filing, 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, Jody. Good morning, and thanks for joining us. In our year-end earnings call, I outlined how executing on 2024 strategies laid a promising foundation for 2025 success. Our team has done a tremendous job in the first quarter building on that foundation. Our first quarter home health performance is the result of executing on our payer contract initiative. We started 2025 in a stronger position with our payer contract and were able to fully focus on growth. Our admissions from quarter four to quarter one increased by 8.1%, with fee-for-service also growing 4% sequentially. Our year-over-year admission growth was up 0.7%. When normalized for leap year and the impact of our closed branches, growth is 2.5%. Our total home health census was down 2.4% year-over-year due to a low entry point in January. Sequentially, total census was up 3.7%. Census growth occurred each month in quarter one, exiting March at a average daily census 9.8% higher than January. Our non-Medicare admissions were up 7.4% year over year, mainly driven by our payer innovation contracts. We increased the percentage of home health visits in payer innovation contracts. In the first quarter of 2024, 38% of non-Medicare visits were in payer innovation contracts. That rate grew to 44% in the first quarter of 2025. Payer mixed progress to payer innovation contracts resulted in a 7.6% improvement year-over-year in non-Medicare revenue per visit. A just right care plan for our patients continues to be an area of focus. With over two thirds of our payer innovation contracts and episodic arrangements, managing our visits per episode while maintaining high quality outcomes is an important part of our strategy. Total visits per episode declined 6.7% from 14.9 in quarter one of 2024 to 13.9 in quarter one 2025. Continued progress with managing BPE creates additional clinical capacity as evidenced by our decrease in cost per day year-over-year and sequentially. Moving now to our hospice segment, the sequential monthly census growth that started in January 2024 has continued throughout the first quarter of 2025. Total admissions grew 8% year-over-year, with same-store up 5.2%. Census grew 12.3%, with 10.6% same-store growth. Our admission departments continue to focus on timely responses to our referral sources, driving a 310 basis point improvement year-over-year in referrals to admission conversions. Census growth continues to create leverage on the fixed cost we added in 2023, resulting in a cost-per-day decrease of 0.8% year-over-year and a 2.7% decline sequentially. To complement our organic growth strategy, our de novo strategy is positively impacting total growth. In quarter one, we opened one hospice location and have 13 projects underway. Turning now to our cost structure strategy update. As anticipated, we completed the transition of all branches to the outsourced coding resource in the first quarter, which we estimate will deliver 1.5 million in cost savings for the remainder of 2025. Additionally, seven branches were closed or consolidated in the first quarter, and four remain on track to be closed by the end of quarter two, 2025. We continue to focus on new technologies targeted at improving efficiency, productivity, and cost reduction. We are currently piloting two internally developed apps. One of these is designed to improve clinician and patient communication related to scheduled visits. The other is designed to improve communication between our business development and operation team members regarding patient referral to admission, process, and status. On the human capital front, we just completed our annual employee engagement survey with results above the healthcare benchmark. There were two drivers to our engagement success, our employees finding their work meaningful and collaborating with colleagues to deliver quality outcomes for our patients. Survey results are critical feedback to help focus management on priorities identified by our staff as important to their success and continued engagement. We are proud of our inhabit culture and the impact it has on our team and on our patients and their families. And now I will turn it over to Ryan who will cover the financial results of quarter one.