10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 001-33989

LHC GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	71-0918189
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

420 West Pinhook Road, Suite A

Lafayette, LA 70503

(Address of principal executive offices including zip code)

(337) 233-1307

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Number of shares of common stock, par value $0.01, outstanding as of May 2, 2013: 17,590,679 shares.

LHC GROUP, INC.

INDEX

		Page
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Balance Sheets — March 31, 2013 and December 31,  2012			3
Condensed Consolidated Statements of Income — Three months ended March  31, 2013 and 2012			4
Condensed Consolidated Statement of Changes in Equity — Three months ended March  31, 2013			5
Condensed Consolidated Statements of Cash Flows — Three months ended March  31, 2013 and 2012			6
Notes to Condensed Consolidated Financial Statements			7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		27
Item 4.	Controls and Procedures		27
Part II. Other Information
Item 1.	Legal Proceedings		27
Item 1A.	Risk Factors		27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 6.	Exhibits		28
Signatures			29

2

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

(Unaudited)

	March 31, 2013			December 31, 2012
ASSETS
Current assets:
Cash	$	3,404		$	9,720
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts of $12,917 and $11,863, respectively		81,238			83,951
Other receivables		622			589
Amounts due from governmental entities		1,237			1,596
Total receivables, net		83,097			86,136
Deferred income taxes		9,283			7,671
Prepaid income taxes		3,733			7,436
Prepaid expenses		6,573			6,818
Other current assets		3,893			2,949
Total current assets		109,983			120,730
Property, building and equipment, net of accumulated depreciation of $35,947 and $34,331, respectively		29,037			29,531
Goodwill		189,153			169,150
Intangible assets, net of accumulated amortization of $3,113 and $2,985, respectively		61,328			62,042
Other assets		5,406			5,441
Total assets	$	394,907		$	386,894
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	17,647		$	14,897
Salaries, wages, and benefits payable		23,581			29,890
Self insurance reserve		6,170			5,444
Amounts due to governmental entities		4,301			4,979
Total current liabilities		51,699			55,210
Deferred income taxes		27,587			25,129
Income tax payable		3,415			3,415
Revolving credit facility		22,996			19,500
Note payable		201			—
Total liabilities		105,898			103,254
Noncontrolling interest — redeemable		11,791			11,426
Stockholders’ equity:
LHC Group, Inc. stockholders’ equity:
Common stock — $0.01 par value; 40,000,000 shares authorized; 21,727,657 and 21,578,772 shares issued in 2013 and 2012, respectively		217			216
Treasury stock — 4,681,930 and 4,653,039 shares at cost, respectively		(34,453	)		(33,846	)
Additional paid-in capital		101,346			100,619
Retained earnings		207,478			201,192
Total LHC Group, Inc. stockholders’ equity		274,588			268,181
Noncontrolling interest — non-redeemable		2,630			4,033
Total equity		277,218			272,214
Total liabilities and equity	$	394,907		$	386,894

See accompanying notes to condensed consolidated financial statements.

3

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share and per share data)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Net service revenue	$	161,953		$	158,761
Cost of service revenue		93,248			89,859
Gross margin		68,705			68,902
Provision for bad debts		3,917			2,761
General and administrative expenses		51,623			50,882
Operating income		13,165			15,259
Interest expense		(425	)		(359	)
Non-operating income		65			65
Income before income taxes and noncontrolling interest		12,805			14,965
Income tax expense		4,536			5,226
Net income		8,269			9,739
Less net income attributable to noncontrolling interests		1,983			1,998
Net income attributable to LHC Group, Inc.’s common stockholders	$	6,286		$	7,741
Earnings per share — basic and diluted:
Net income attributable to LHC Group, Inc.’s common stockholders	$	0.37		$	0.42
Weighted average shares outstanding:
Basic		16,966,525			18,333,838
Diluted		17,073,543			18,399,608

See accompanying notes to condensed consolidated financial statements.

4

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Amounts in thousands, except share data)

(Unaudited)

	Common Stock										Additional Paid-In Capital			Retained Earnings		Non-controlling Interest Non Redeemable			Total Equity
	Issued				Treasury
	Amount		Shares		Amount			Shares
Balances as of December 31, 2012	$	216		21,578,772	$	(33,846	)		(4,653,039	)	$	100,619		$	201,192	$	4,033		$	272,214
Net income		—		—		—			—			—			6,286		220			6,506	(1)
Transfer of noncontrolling interest		—		—		—			—			—			—		(1,342	)		(1,342	)
Purchase of additional controlling interest		—		—		—			—			(350	)		—		—			(350	)
Noncontrolling interest distributions		—		—		—			—			—			—		(281	)		(281	)
Nonvested stock compensation		—		—		—			—			888			—		—			888
Issuance of vested stock		—		140,040		—			—			—			—		—			—
Treasury shares surrendered to pay income tax		—		—		(607	)		(28,891	)		—			—		—			(607	)
Excess tax benefits — vesting nonvested stock		—		—		—			—			11			—		—			11
Issuance of common stock under Employee Stock Purchase Plan		1		8,845		—			—			178			—		—			179
Balances as of March 31, 2013	$	217		21,727,657	$	(34,453	)		(4,681,930	)	$	101,346		$	207,478	$	2,630		$	277,218

(1) Net income excludes net income attributable to noncontrolling interest-redeemable of $1.8 million during the three months ending March 31, 2013. Noncontrolling interest-redeemable is reflected outside of permanent equity on the condensed consolidated balance sheets. See Note 9 of the Notes to Condensed Consolidated Financial Statements.

See accompanying notes to condensed consolidated financial statements.

5

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Operating activities
Net income	$	8,269		$	9,739
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		1,830			1,919
Provision for bad debts		3,917			2,761
Stock-based compensation expense		888			1,408
Deferred income taxes		846			(353	)
(Gain) loss on sale of assets		14			—
Changes in operating assets and liabilities, net of acquisitions:
Receivables		(1,237	)		(3,774	)
Prepaid expenses and other assets		(664	)		1,200
Prepaid income taxes		3,703			18,349
Accounts payable and accrued expenses		(3,178	)		(5,484	)
Net amounts due to/from governmental entities		(319	)		(180	)
Net cash provided by operating activities		14,069			25,585
Investing activities
Purchases of property, building and equipment		(1,151	)		(1,160	)
Cash paid for acquisitions, primarily goodwill and intangible assets		(19,655	)		(1,700	)
Net cash (used in) investing activities		(20,806	)		(2,860	)
Financing activities
Proceeds from line of credit		41,500			26,879
Payments on line of credit		(38,004	)		(47,486	)
Proceeds from employee stock purchase plan		179			189
Proceeds from debt issuance		201			—
Noncontrolling interest distributions		(2,509	)		(2,302	)
Excess tax benefits from vesting of restricted stock		11			—
Redemption of treasury shares		(607	)		—
Purchase of additional controlling interest		(350	)		—
Sale of noncontrolling interest		—			80
Net cash provided by (used in) financing activities		421			(22,640	)
Change in cash		(6,316	)		85
Cash at beginning of period		9,720			256
Cash at end of period	$	3,404		$	341
Supplemental disclosures of cash flow information
Interest paid	$	425		$	359
Income taxes paid	$	10,337		$	243

Note: Supplemental cash flow information is provided in Note 13 of the Notes to Condensed Consolidated Financial Statements.

See accompanying notes to condensed consolidated financial statements.

6

LHC GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization

LHC Group, Inc. (the “Company”) is a health care provider specializing in the post-acute continuum of care primarily for Medicare beneficiaries. The Company provides home-based services, primarily through home nursing agencies and hospices, and facility-based services, primarily through long-term acute care hospitals (“LTACHs”). As of March 31, 2013, the Company, through its wholly- and majority-owned subsidiaries, equity joint ventures and controlled affiliates, operated in Alabama, Arkansas, California, Georgia, Florida, Idaho, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington and West Virginia.

Unaudited Interim Financial Information

The condensed consolidated balance sheets as of March 31, 2013 and December 31, 2012, and the related condensed consolidated statements of income for the three months ended March 31, 2013 and 2012, condensed consolidated statement of changes in equity for the three months ended March 31, 2013, condensed consolidated statements of cash flows for the three months ended March 31, 2013 and 2012 and related notes (collectively, these financial statements and the related notes are referred to herein as the “interim financial information”) have been prepared by the Company. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented. This report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2013, which includes information and disclosures not included herein.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates.

Critical Accounting Policies

The Company’s most critical accounting policies relate to the principles of consolidation, revenue recognition and accounts receivable and allowances for uncollectible accounts.

Principles of Consolidation

The condensed consolidated financial statements include all subsidiaries and entities controlled by the Company. Control is defined by the Company as ownership of a majority of the voting interest of an entity. The condensed consolidated financial statements include entities in which the Company receives a majority of the entities’ expected residual returns, absorbs a majority of the entities’ expected losses, or both, as a result of ownership, contractual or other financial interests in the entity. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s condensed consolidated financial statements.

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended March 31,
	2013			2012
Equity joint ventures		50.1	%		48.2	%
Wholly-owned subsidiaries		47.2	%		48.3	%
License leasing arrangements		1.8	%		2.6	%
Management services		0.9	%		0.9	%
		100.0	%		100.0	%

7

All significant intercompany accounts and transactions have been eliminated in the Company’s accompanying condensed consolidated financial statements. Business combinations accounted for under the acquisition method have been included in the condensed consolidated financial statements from the respective dates of acquisition.

The following describes the Company’s consolidation policy with respect to its various ventures excluding wholly-owned subsidiaries:

Equity Joint Ventures

The Company’s joint ventures are structured in which the Company typically owns a majority equity interest ranging from 51% to 91%. The members of the Company’s equity joint ventures participate in profits and losses in proportion to their equity interests. The Company consolidates these entities as the Company has voting control over the entities.

License Leasing Arrangements

The Company, through wholly-owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing agencies. As with its wholly-owned subsidiaries, the Company owns 100% of the equity of these entities and consolidates them based on such ownership.

Management Services

The Company has various management services agreements under which the Company manages certain operations of agencies and facilities. The Company does not consolidate these agencies or facilities because the Company does not have an ownership interest and does not have an obligation to absorb losses of the entities or the right to receive the benefits from the entities.

Revenue Recognition

The Company reports net service revenue at the estimated net realizable amount due from Medicare, Medicaid, commercial insurance, managed care payors, patients and others for services rendered. All payors contribute to both the home-based services and facility-based services.

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
Payor:
Medicare		79.3	%		78.5	%
Medicaid		1.5	%		2.1	%
Other		19.2	%		19.4	%
		100.0	%		100.0	%

The percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2013 and 2012 was as follows:

	Three Months Ended March 31,
	2013			2012
Home-based services		87.7	%		87.9	%
Facility-based services		12.3	%		12.1	%
		100.0	%		100.0	%

Medicare

Home-Based Services

Home Nursing Services. The Company’s home nursing Medicare patients are classified into one of 153 home health resource groups prior to receiving services. Based on this home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60-day period referred to as an episode. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period.

8

Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. In calculating net service revenue, management estimates the impact of these payment adjustments based on historical experience and records this estimate as the services are rendered using the expected level of services that will be provided and the schedule of those services or a historical average of prior adjustments.

Hospice Services. The Company is paid by Medicare under a per diem payment system. The Company receives one of four predetermined daily or hourly rates based upon the level of care the Company furnished. The Company records net service revenue from hospice services based on the daily or hourly rate and recognizes revenue as hospice services are provided.

Hospice payments are also subject to an inpatient cap and an overall payment cap. Inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall payment cap relates to individual programs receiving reimbursements in excess of a “cap amount,” calculated by multiplying the number of beneficiaries during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. The Company monitors its limits on a program-by-program basis and records an estimate of its liability for reimbursements received in excess of the cap amount. Annually, the Company receives notification whether any of its hospices have exceeded the cap. Adjustments resulting from these notifications have not been material.

Facility-Based Services

Long-Term Acute Care Services. The Company is reimbursed by Medicare for services provided under the LTACH prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient classified in that particular long-term care diagnosis-related group. For selected patients, the amount may be further adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for the Company’s LTACHs as services are provided.

Medicaid, managed care and other payors

The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as services are provided based on this fee schedule. The Company’s managed care and other payors reimburse the Company in a manner similar to either Medicare or Medicaid. Accordingly, the Company recognizes revenue from managed care and other payors in the same manner as the Company recognizes revenue from Medicare or Medicaid.

Management Services

The Company records management services revenue as services are provided in accordance with the various management services agreements to which the Company is a party. As described in the agreements, the Company provides billing, management and other consulting services suited to and designed for the efficient operation of the applicable home nursing agency. The Company is responsible for the costs associated with the locations and personnel required for the provision of services. The Company is compensated based on a percentage of cash collections, reimbursed for operating expenses, compensated based on a percentage of operating net income, or compensated based on an agreed upon management fee.

Accounts Receivable and Allowances for Uncollectible Accounts

The Company reports accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, other third-party payors, and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations of receivables is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 60% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The provision for bad debts is based upon the Company’s assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined the account will not be collected.

9

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is deducted from the final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% instead of 60% of the estimated reimbursement.

The Company’s Medicare population is paid at a prospectively set amount that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and contracts with other payors are structured similar to either the Medicare or Medicaid payment methodologies. Because of its payor mix, the Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated contractual allowance when reporting net service revenue for each reporting period.

Other Significant Accounting Policies

Earnings Per Share

Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of operations by the weighted-average number of shares outstanding plus potentially dilutive shares.

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended March 31,
	2013		2012
Weighted average number of shares outstanding for basic per share calculation		16,966,525		18,333,838
Effect of dilutive potential shares:
Options		3,830		1,691
Nonvested stock		103,188		64,079
Adjusted weighted average shares for diluted per share calculation		17,073,543		18,399,608
Anti-dilutive shares		187,344		434,015

3. Acquisitions and Disposals

Pursuant to the Company’s strategy for becoming the leading provider of post-acute health care services in the United States, the Company acquired the home-based service line of Addus HomeCare Corp., which consisted of 19 home health agencies and one hospice agency, during the three months ended March 31, 2013, and maintains an ownership interest in the entities as set forth below:

Acquired Entity	Ownership Percentage			State of Operations	Acquisition Date
LHCG XXXVII, LLC (d/b/a Addus HealthCare)		90	%	Illinois	03/01/2013
LHCG XXXVIII, LLC (d/b/a Addus HealthCare)		90	%	California	03/01/2013
LHCG XLII, LLC (d/b/a/ Arkansas HomeCare)		100	%	Arkansas	03/01/2013
LHCG XLI, LLC (d/b/a CarePro Home Health)		100	%	South Carolina	03/01/2013
LHCG XXXIX, LLC (d/b/a Addus HealthCare)		100	%	Nevada	03/01/2013

Each of the acquisitions was accounted for under the acquisition method of accounting, and accordingly, the accompanying condensed consolidated financial statements include the results of operations of each acquired entity from the date of acquisition.

The total aggregate purchase price for the Company’s acquisitions was $20.0 million, which $19.7 million was paid in cash and $300,000 in assumed liabilities. The purchase prices are determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows.

10

The Company has preliminarily recorded $20.0 million as goodwill in the home-based services segment pending final valuation of the assets acquired and liabilities assumed in the acquisition. The Company paid $267,000 in related acquisition costs, which was recorded in general and administrative expenses.

Purchase of Membership Interest in Company’s Subsidiary

During the three months ended March 31, 2013, the Company purchased additional membership interests in one of its joint ventures. The total purchase price for the additional ownership from this equity transaction was $350,000.

4. Goodwill and Intangibles

The changes in recorded goodwill by segment for the three months ended March 31, 2013 were as follows (amounts in thousands):

	Three Months Ended March 31, 2013
Home-based services segment:
Balance at beginning of period	$	157,559
Goodwill from acquisitions		20,003
Balance as of March 31, 2013	$	177,562
Facility-based services segment:
Balance at beginning of period	$	11,591
Balance as of March 31, 2013	$	11,591
Consolidated balance as of March 31, 2013	$	189,153

The following table summarizes the changes in intangible assets during the three months ended March 31, 2013 (amounts in thousands):

	Trade Names			Certificate of Need/ License			Other Intangibles			Total
Balance as of December 31, 2012	$	51,408		$	10,100		$	534		$	62,042
Additions (1)		—			(515	)		—			(515	)
Amortization		(71	)		—			(128	)		(199	)
Balance as of March 31, 2013	$	51,337		$	9,585		$	406		$	61,328

(1) Includes $515,000 to reduce intangible assets acquired in 2012 based on the final Accounting Standards Codification (“ASC”) 805 valuation report received during the three months ended March 31, 2013. All reductions are related to the home-based services segment.

Intangible assets of $60.2 million, net of accumulated amortization, were related to the home-based services segment and $1.1 million were related to the facility-based services segment as of March 31, 2013.

5. Credit Facility

As of March 31, 2013 and December 31, 2012, respectively, the Company had $23.0 million and $19.5 million drawn and letters of credit totaling $6.2 million and $6.0 million outstanding under the Credit Facility. The interest rate for borrowings under the Credit Facility is a function of the prime rate (base rate) or Eurodollar rate, as elected by the Company, plus the applicable margin based on the Leverage Ratio, as defined in the agreement. The interest rate at March 31, 2013 was 4.25%.

11

6. Income Taxes

As of March 31, 2013, $3.4 million was recorded in income tax payable as an unrecognized tax benefit which, if recognized, would decrease the Company’s effective tax rate. All of the Company’s unrecognized tax benefit is due to the settlement with the United States of America, which was announced September 30, 2011.

7. Stockholder’s Equity

Equity Based Awards

At the 2010 Annual Meeting, the stockholders of the Company approved the Company’s 2010 Long Term Incentive Plan (the “2010 Incentive Plan”). The 2010 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors. A total of 1,500,000 shares of the Company’s common stock is reserved and available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee of the Board of Directors. The Compensation Committee determines the exercise price for non-statutory stock options. The exercise price for any option cannot be less than the fair market value of the Company’s common stock as of the date of grant.

Share Based Compensation

Nonvested Stock

During the three months ended March 31, 2013, the Company’s independent directors were granted 24,300 nonvested shares of common stock under the 2005 Director Compensation Plan. The shares were drawn from the 1,500,000 shares of common stock reserved and available for issuance under the 2010 Incentive Plan. The shares vest 100% on the one year anniversary date. During the three months ended March 31, 2013, employees were granted 155,898 nonvested shares of common stock pursuant to the 2010 Incentive Plan. The shares generally vest over a five year period, conditioned on continued employment for the full incentive period. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date. The weighted average grant date fair value of nonvested shares of common stock granted during the three months ended March 31, 2013 was $21.01.

The following table represents the nonvested stock activity for the three months ended March 31, 2013:

	Number of Shares			Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2012		486,061		$	22.33
Granted		180,198		$	21.01
Vested		(140,040	)	$	20.83
Nonvested shares outstanding as of March 31, 2013		526,219		$	22.28

As of March 31, 2013, there was $10.0 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.47 years. The total fair value of shares of common stock vested during each of the three months ended March 31, 2013 and 2012 was $2.9 million. The Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight line basis for shares of common stock that vest over time. The Company recorded $888,000 and $1.4 million of compensation expense related to nonvested stock grants in the three months ended March 31, 2013 and 2012, respectively.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan. The table below details the shares of common stock issued during 2013:

	Number of Shares		Per share price
Shares available as of December 31, 2012		61,247
Shares issued during three months ended March 31, 2013		8,845	$	20.24
Shares available as of March 31, 2013		52,402

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Stock Options

As of March 31, 2013, 15,000 options were issued and exercisable. During the three months ended March 31, 2013, no options were exercised or forfeited and no options were granted.

Treasury Stock

In conjunction with the vesting of the non-vested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the three months ended March 31, 2013, the Company redeemed 28,891 shares of common stock valued at $607,000, related to these tax obligations.

Stock Repurchase Program

In October 2010, the Company’s Board of Directors authorized a share repurchase program to repurchase shares of the Company’s common stock, par value $0.01 per share, from time to time, in an amount not to exceed $50.0 million (“the Stock Repurchase Program”). The Company anticipates that it will finance the Stock Repurchase Program with cash from general corporate funds or draws under the Credit Facility. The Company may repurchase shares of common stock in open market purchases or in privately negotiated transactions in accordance with applicable securities laws, rules and regulations. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations.

The Company uses the cost method to account for the repurchase of common stock and the average cost method to account for reissuance of treasury shares. During the three months ended March 31, 2013, no shares have been repurchased or reissued from treasury shares. The remaining dollar value of shares authorized to be purchased under the Stock Repurchase Program was $22.5 million as of March 31, 2013.

8. Commitments and Contingencies

Contingencies

The Company is involved in various legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, management believes the outcome of pending litigation will not have a material adverse effect, after considering the effect of the Company’s insurance coverage, on the Company’s condensed consolidated financial statements.

On October 17, 2011, the Company received a subpoena from the Department of Health and Human Services Office of Inspector General (the “OIG”). The subpoena requests documents related to the Company’s agencies in Oregon, Washington and Idaho. The Company will produce the requested documents and will cooperate with the OIG’s review in this matter. The Company cannot predict the outcome or effect of this review, if any, on the Company’s business.

On June 13, 2012, a putative shareholder securities class action was filed against the Company and its Chairman and Chief Executive Officer in the United States District Court for the Western District of Louisiana, styled City of Omaha Police & Fire Retirement System v. LHC Group, Inc., et al., Case No. 6:12-cv-01609-JTT-CMH. The action was filed on behalf of LHC shareholders who purchased shares between July 30, 2008 and October 26, 2011. Plaintiff generally alleges that the defendants caused false and misleading statements to be issued in violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder and that the Company’s Chairman and Chief Executive Officer is a control person under Section 20(a) of the Exchange Act. On November 2, 2012, Lead Plaintiff City of Omaha Police & Fire Retirement System filed an Amended Complaint for Violations of the Federal Securities Laws (“Amended Complaint”) on behalf of the same putative class of LHC shareholders as the original Complaint. In addition to claims under Sections 10(b) and 20(a) of the Exchange Act, the Amended Complaint added a claim against the Chairman and Chief Executive Officer for violation of Section 20A of the Exchange Act. The Company believes these claims are without merit and intends to defend this lawsuit vigorously. On December 17, 2012, the Company and the Chairman and Chief Executive Officer filed a motion to dismiss the Amended Complaint, which was denied by Order dated March 15, 2013. The Company cannot predict the outcome or effect of this lawsuit, if any, on the Company’s business.

Except as discussed above, the Company is not aware of any pending or threatened investigations involving allegations of potential wrongdoing.

Any negative findings in the investigations or lawsuits could result in substantial financial penalties or awards against the Company or exclusion from future participation in the Medicare and Medicaid programs. At this time, the Company cannot predict the ultimate outcome of these inquiries or the potential range of damages, if any.

Joint Venture Buy/Sell Provisions

Several of the Company’s joint ventures include a buy/sell option that grants to the Company and its joint venture partners the right to require the other joint venture party to either purchase all of the exercising member’s membership interests or sell to the

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exercising member all of the non-exercising member’s membership interest, at the non-exercising member’s option, within 30 days of the receipt of notice of the exercise of the buy/sell option. In some instances, the purchase price is based on a multiple of the historical or future earnings before income taxes and depreciation and amortization of the equity joint venture at the time the buy/sell option is exercised. In other instances, the buy/sell purchase price will be negotiated by the partners and subject to a fair market valuation process. The Company has not received notice from any joint venture partners of their intent to exercise the terms of the buy/sell agreement nor has the Company notified any joint venture partners of its intent to exercise the terms of the buy/sell agreement.

Compliance

The laws and regulations governing the Company’s operations, along with the terms of participation in various government programs, regulate how the Company does business, the services offered and its interactions with patients and the public. These laws and regulations and their interpretations, are subject to frequent change. Changes in existing laws or regulations, or their interpretations, or the enactment of new laws or regulations could materially and adversely affect the Company’s operations and financial condition.

The Company is subject to various routine and non-routine governmental reviews, audits and investigations. In recent years, federal and state civil and criminal enforcement agencies have heightened and coordinated their oversight efforts related to the health care industry, including referral practices, cost reporting, billing practices, joint ventures and other financial relationships among health care providers. Violation of the laws governing the Company’s operations, or changes in the interpretation of those laws, could result in the imposition of fines, civil or criminal penalties, and/or termination of the Company’s rights to participate in federal and state-sponsored programs and suspension or revocation of the Company’s licenses. The Company believes that it is in material compliance with all applicable laws and regulations.

9. Noncontrolling interest

Noncontrolling Interest-Redeemable

A majority of the Company’s joint venture agreements include a provision that requires the Company to purchase the noncontrolling partner’s interest upon the occurrence of certain triggering events, such as death or bankruptcy of the partner or the partner’s exclusion from the Medicare or Medicaid programs. These triggering events and the related repurchase provisions are specific to each individual joint venture; if the repurchase provision is triggered in any one joint venture, the remaining joint ventures would not be impacted. Upon the occurrence of a triggering event, the Company would be required to purchase the noncontrolling partner’s interest at either the fair value or the book value at the time of purchase as stated in the agreement. Historically, no triggering event has occurred, and the Company believes the likelihood of a triggering event occurring is remote. The Company has never been required to purchase the noncontrolling interest of any of its joint venture partners. According to authoritative guidance, redeemable noncontrolling interests must be reported outside of permanent equity on the consolidated balance sheet in instances where there is a repurchase provision with a triggering event that is outside the control of the Company.

The following table summarizes the activity of noncontrolling interest-redeemable for the three months ended March 31, 2013 (amounts in thousands):

Balance as of December 31, 2012	$	11,426
Net income attributable to noncontrolling interest-redeemable		1,763
Transfer of noncontrolling interest		1,342
Noncontrolling interest-redeemable distributions		(2,228	)
Acquired noncontrolling interest (1)		(512	)
Balance as of March 31, 2013	$	11,791

(1) The fair value of the acquired noncontrolling interest was preliminary pending the final valuation for a 2012 acquisition. The change in valuations was recorded during the three months ended March 31, 2013 upon receipt of the final valuation.

10. Allowance for Uncollectible Accounts

The following table summarizes the activity and ending balances in the allowance for uncollectible accounts (amounts in thousands):

Balance as of December 31, 2012	$	11,863
Additions and expenses		3,917
Deductions		(2,863	)
Balance as of March 31, 2013	$	12,917

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11. Fair Value of Financial Instruments

The carrying amounts of the Company’s cash, receivables, accounts payable and accrued liabilities approximate their fair values. For the three months ended March 31, 2013, the carrying value of the Company’s long-term debt approximates fair value as the interest rates approximate current rates.

12. Segment Information

The Company’s segments consist of home-based services and facility-based services. Home-based services include home nursing services and hospice services. Facility-based services include long-term acute care services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The following tables summarize the Company’s segment information for the three months ending March 31, 2013 and 2012 (amounts in thousands):

	Three Months Ended March 31, 2013
	Home- Based Services			Facility- Based Services			Total
Net service revenue	$	141,987		$	19,966		$	161,953
Cost of service revenue		81,590			11,658			93,248
Provision for bad debts		3,277			640			3,917
General and administrative expenses		46,172			5,451			51,623
Operating income		10,948			2,217			13,165
Interest expense		(387	)		(38	)		(425	)
Non-operating income		41			24			65
Income before income taxes and noncontrolling interest		10,602			2,203			12,805
Income tax expense		4,087			449			4,536
Net income		6,515			1,754			8,269
Less net income attributable to noncontrolling interests		1,599			384			1,983
Net income attributable to LHC Group, Inc.’s common stockholders	$	4,916		$	1,370		$	6,286
Total assets	$	358,140		$	36,767		$	394,907
	Three Months Ended March 31, 2012
	Home- Based Services			Facility- Based Services			Total
Net service revenue	$	139,595		$	19,166		$	158,761
Cost of service revenue		79,061			10,798			89,859
Provision for bad debts		2,623			138			2,761
General and administrative expenses		45,226			5,656			50,882
Operating income		12,685			2,574			15,259
Interest expense		(323	)		(36	)		(359	)
Non-operating income		53			12			65
Income before income taxes and noncontrolling interest		12,415			2,550			14,965
Income tax expense		4,731			495			5,226
Net income		7,684			2,055			9,739
Less net income attributable to noncontrolling interests		1,692			306			1,998
Net income attributable to LHC Group, Inc.’s common stockholders	$	5,992		$	1,749		$	7,741
Total assets	$	345,287		$	34,761		$	380,048

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13. Supplemental Cash Flow Information

In conjunction with the vesting of the non-vested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the three months ended March 31, 2013, the Company redeemed $607,000 of treasury shares for tax payments on stock vestings.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to future plans and strategies, anticipated events or trends, future financial performance and expectations and beliefs concerning matters that are not historical facts or that necessarily depend upon future events. The words “may,” “should,” “could,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” or other similar expressions are intended to identify forward-looking statements. Specifically, this report contains, among others, forward-looking statements about:

• our expectations regarding financial condition or results of operations for periods after March 31, 2013;

• our critical accounting policies;

• our participation in the Medicare and Medicaid programs;

• the impact of healthcare reform;

• the reimbursement levels of Medicare and other third-party payors;

• the prompt receipt of payments from Medicare and other third-party payors;

• the outcomes of various routine and non-routine governmental reviews, audits and investigations;

• the impact of legal proceedings;

• our compliance with health care laws and regulations;

• our compliance with Securities and Exchange Commission (“SEC”) laws and regulations and Sarbanes-Oxley requirements;

• the impact of federal and state government regulation on our business; and

• the impact of changes in our future interpretations of fraud, anti-kickback or other laws.

The forward-looking statements contained in this report reflect our current views about future events and are based on assumptions and are subject to known and unknown risks and uncertainties. Many important factors could cause actual results or achievements to differ materially from any future results or achievements expressed in or implied by our forward-looking statements. Many of the factors that will determine future events or achievements are beyond our ability to control or predict. Important factors that could cause actual results or achievements to differ materially from the results or achievements reflected in our forward-looking statements include, among other things, the factors discussed in the Part II, Item 1A. “Risk Factors,” included in this report and in other of our filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”), as updated by subsequent filings with the SEC. This report should be read in conjunction with that annual report on Form 10-K, and all of our other filings, including quarterly reports on Form 10-Q and current reports on Form 8-K made with the SEC through the date of this report.

You should read this report, the information incorporated by reference into this report and the documents filed as exhibits to this report completely and with the understanding that our actual future results or achievements may be materially different from what we expect or anticipate.

The forward-looking statements contained in this report reflect our views and assumptions only as of the date this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refer to LHC Group, Inc. and its consolidated subsidiaries.

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OVERVIEW

We provide post-acute health care services by providing quality cost-effective health care services to our patients. As of March 31, 2013, we had 306 service providers in 23 states: Alabama, Arkansas, California, Georgia, Florida, Idaho, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington and West Virginia. Our services are classified into two segments: (1) home-based services offered through our home nursing agencies and hospices; and (2) facility-based services offered through our long-term acute care hospitals (“LTACHs”).

Through our home-based services segment we offer a wide range of services, including skilled nursing, private duty nursing, medically-oriented social services, hospice care and physical, occupational and speech therapy. As of March 31, 2013, the home-based services segment was comprised of the following:

Type of Service	Locations
Home Health		251
Hospice		33
Private Duty		4
Specialty Services		3
Management Companies		4
		295

Of our 295 home-based services locations, 148 are wholly-owned by us, 136 are majority-owned by us through joint ventures, seven are license lease arrangements and we manage the operations of the remaining four locations. We intend to increase the number of home nursing agencies and hospice locations that we operate through continued acquisitions and development.

We provide facility-based services through our LTACHs. As of March 31, 2013, we owned and operated nine LTACH locations, of which all but one are located within host hospitals. We also owned and operated a health club and a pharmacy. Of these 11 facility-based services locations, six are wholly-owned by us and five are majority-owned through joint ventures.

The percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2013 and 2012 was as follows:

	Three Months Ended March 31,
	2013			2012
Home-based services		87.7	%		87.9	%
Facility-based services		12.3	%		12.1	%
		100.0	%		100.0	%

Recent Developments Home-based services

Home Nursing. In 2010, the Patient Protection and Affordable Care Act (“PPACA”) was enacted, which made a number of changes to Medicare payment rates, including the reinstatement of the 3% home health rural add-on, which began on April 1, 2010 (expiring January 1, 2016). Other changes from PPACA that began on or after January 1, 2011 are:

• a reduction in the market basket adjustment to be determined by Centers for Medicare and Medicaid Services (“CMS”) for the calendar years (“CY”) 2011, 2012 and 2013 by 1%;

• a full productivity adjustment beginning in 2015; and

• rebasing of the base payment rate for Medicare beginning in 2014 and phasing in over a four year period – the amount of the rebasing is uncertain at this time.

On November 2, 2012, CMS issued the final rule effective January 1, 2013 regarding payment rates for home health services in CY 2013. Under the CY 2013 rule, CMS is:

• Decreasing the base payment rate to $2,137.73 in 2013 as compared to $2,138.52 in 2012. The decrease is made up of a market basket increase of 2.3% less a reduction of 1% to the market basket as defined by PPACA and less a 1.32% case mix adjustment carried over from 2012.

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• Rebasing of the wage index and increasing the labor related portion of the base payment rate from 77.082% to 78.535% which decreases payments to the home health industry an aggregate of 0.37%.

• Face to Face—CMS will allow non-physician practitioners in an acute or post-acute setting to perform the encounter and inform the certifying physician.

• Therapy—CMS will also revise the regulation to state that in cases where multiple therapy disciplines are involved, if the required reassessment visit was missed for any one of the therapy disciplines for which therapy services were being provided, therapy coverage would cease only for that particular therapy discipline. Therefore, as long as the required therapy reassessments were completed timely for the remaining therapy disciplines, therapy services would continue to be covered for those therapy disciplines. With respect to the timing of therapy assessments, CMS revised the regulations to clarify that in cases where the patient is receiving more than one type of therapy, qualified therapists could complete their reassessment visits during the 11th, 12th, or 13th visit for the required 13th visit reassessment and the 17th, 18th, or 19th visit for the required 19th visit reassessment.

• Sanctions—CMS will have additional sanctions for enforcement of survey deficiencies that will include the following: (These are not mutually exclusive. CMS can impose any or all of the following, including termination.) Each of these sanctions requires a prior 15 day notice:

(a) Civil money penalties;

(b) Suspension of payment for all new admissions and new payment episodes;

(c) Temporary management of the home health agency;

(d) Directed plan of correction;

(e) Directed in-service training.

The estimated 0.1% reduction to home health payments for 2013 does not include the deficit reduction sequester approved earlier by Congress. The sequestration cut to Medicare began on April 1, 2013 and reduced Medicare payments for patients whose service dates end on or after April 1, 2013 by 2%.

Hospice. On July 24, 2012, CMS issued its final rule for hospice for fiscal year (“FY”) 2013, which increases Medicare reimbursement payments by 0.9% over FY 2012 rates. The 0.9% increase consists of a 2.6% inflationary market basket update offset by a 0.6% reduction for the fourth year of CMS’ seven-year phase-out of its wage index budget neutrality adjustment factor, a 0.7% reduction for the productivity adjustment, a 0.3% reduction to the market basket as defined by PPACA, and a 0.1% reduction related to the wage index changes. The 0.9% does not include the deficit reduction sequester approved earlier by Congress. The sequestration cut to Medicare began on April 1, 2013 and reduced Medicare payments for patients whose service dates ended on or after April 1, 2013 by 2%.

The final rule also provides:

• Clarification regarding diagnosis reporting on hospice claims:

CMS is concerned that hospices reporting a single diagnosis on claims are not providing an accurate description of the patients’ conditions, and believes that providers should code and report coexisting or additional diagnoses in order to more fully describe the Medicare patients they are treating.

• Hospice payment reform update:

CMS indicates that it is moving forward with hospice payment reform efforts and will continue to investigate Medicare Payment Advisory Commission, Office of the Inspector General, and Government Accountability Office recommendations, as well as other payment options, as part of this comprehensive effort. CMS does not, however, provide an anticipated timeline for public release of information about proposals to alter the current hospice payment system.

The following table shows the hospice Medicare payment rates for FY 2013, which began on October 1, 2012 and will end September 30, 2013 (the payment rates do not reflect the 2% sequestration cut):

Description	Rate per patient day
Routine Home Care	$	153.45
Continuous Home Care	$	895.56
Full Rate = 24 hours of care
$37.32 = hourly rate
Inpatient Respite Care	$	158.72
General Inpatient Care	$	682.59

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On April 29, 2013, CMS issued a proposed rule to update the Medicare hospice wage index and Medicare hospice payment rates for FY 2014. This proposed rule also provides clarification on diagnosis reporting on hospice claims, proposes changes in the requirements for the hospice quality reporting program, and provides updates on hospice payment reform. Hospices serving Medicare beneficiaries will see an estimated 1.1% increase in their payments for FY 2014. The hospice payment increase is the net result of an estimated 1.8% increase in the “hospital market basket” update, which is offset by a 0.7% decrease in payments to hospices due to updated wage index data and the fifth year of CMS’ 7-year phase-out of its wage index budget neutrality adjustment factor (BNAF). Hospice Medicare payment rates for FY 2014 begin on October 1, 2013 and end on September 30, 2014.

Facility-Based Services

LTACHs. On August 1, 2012 CMS released its final rule for LTACH Medicare reimbursement for FY 2013 which spans from October 1, 2012 through September 30, 2013. In aggregate, payments for FY 2013 will increase by 1.8% over FY 2012 rates. The 1.8% increase consists of a 2.6% inflationary market basket update offset by a 0.7% reduction for the productivity adjustment, a 0.1% reduction to the market basket as defined by PPACA. LTACH payment rates will also be reduced by approximately 1.3% to 0.5% for the “one-time” budget neutrality adjustment for discharges on or after December 29, 2012. The 0.5% does not include the deficit reduction sequester approved earlier by Congress. The sequestration cut to Medicare began on April 1, 2013 and reduced Medicare payments for patients whose service dates end on or after April 1, 2013.

The FY 2013 rule also includes:

• A one-year extension of the existing moratorium on the “25 Percent threshold” policy, pending results of an on-going research initiative to re-define the role of LTACHs in the Medicare program.

• A reduction to Medicare payments for very short stay cases in LTACHs to the Inpatient Prospective Payment System (“IPPS”) comparable per diem amount payment option for discharges occurring on or after December 29, 2012 and an increase to the high cost outlier payment.

On April 26, 2013, CMS issued a proposed rule that would update FY 2014 Medicare payment policies and rates under the Long-Term Care Hospital Prospective Payment System (“LTCH PPS”). CMS projects that LTCH PPS payments would increase by 1.1% in FY 2014. This estimated increase is attributable to several factors, including the proposed update of 1.8% for LTACHs that submitted quality data (based on a market basket update of 2.5% reduced by a multi-factor productivity adjustment of 0.4% points and an additional 0.3% points reduction in accordance with PPACA); the “one-time” budget neutrality adjustment to standard federal rate of approximately -1.3% under the second year of a three-year phase-in; and projected increases in estimated high cost outlier payments as compared to FY 2013. LTACH Medicare payment rates for FY 2014 begin on October 1, 2013 and end on September 30, 2014.

The LTACH FY 2014 proposed rule also addresses the 25 Percent rule. Under the 25 Percent patient threshold policy, if an LTACH admits more than 25% of its patients from a single acute care hospital, Medicare will pay it at a rate comparable to IPPS hospitals for those patients above the 25 Percent threshold. A statutory moratorium on application of the 25 Percent rule was in place from December 2007 through December 2012. CMS extended the moratorium for FY 2013 but would allow the policy to go into effect in FY 2014. The imposition of 25 Percent rule will apply to all LTACHs beginning with their first cost reporting period beginning on or after October 1, 2013.

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RESULTS OF OPERATIONS

Three months ended March 31, 2013

Consolidated financial statements

The following table summarizes our consolidated results of operations for the three months ended March 31, 2013 and 2012 (amounts in thousands, except percentages which are percentages of consolidated net service revenue, unless indicated otherwise):

	2013					2012					Increase (Decrease)			Percentage Change
Net service revenue	$	161,953				$	158,761				$	3,192			2.0	%
Cost of service revenue		93,248		57.6	%		89,859		56.6	%		3,389			3.8	%
Provision for bad debts		3,917		2.4	%		2,761		1.7	%		1,156			41.9	%
General and administrative expenses		51,623		31.9	%		50,882		32.0	%		741			1.5	%
Income tax expense		4,536		41.9	%(1)		5,226		40.3	%(1)		(690	)		(13.2	%)
Noncontrolling interest		1,983					1,998					(15	)		—
Total non-operating income (loss)		(360	)				(294	)				(66	)		—
Net income attributable to LHC Group, Inc.’s common stockholders	$	6,286				$	7,741				$	(1,455	)

(1) Percentage of income from continuing operations attributable to LHC Group, Inc.’s common stockholders

Home-based services segment operating results

The following table summarizes our home-based results of operations for the three months ended March 31, 2013 and 2012 (amounts in thousands, except percentages which are percentages of home-based net service revenue):

	2013				2012				Increase (Decrease)		Percentage Change
Net service revenue	$	141,987			$	139,595			$	2,392		1.7	%
Cost of service revenue		81,590	57.5	%		79,061	56.6	%		2,529		3.2	%
Provision for bad debts		3,277	2.3	%		2,623	1.9	%		654		24.9	%
General and administrative expenses		46,172	32.5	%		45,226	32.4	%		946		2.09	%
Operating income	$	10,948			$	12,685

Net service revenue

The following table sets forth home-based services revenue growth, admissions, census and episodes for the three months ended March 31, 2013 and the related change from the same period in 2012 (amounts in thousands, except census and episode data):

	Same Store(1)		De Novo(2)		Organic(3)		Organic Growth (Loss) %			Acquired(4)		Total		Total Growth (Loss) %
Revenue	$	137,761	$	—	$	137,761		(1.3	)%	$	4,226	$	141,987		1.7	%
Revenue Medicare	$	109,725	$	—	$	109,725		0.1	%	$	3,142	$	112,867		3.0	%
New Admissions		30,091		—		30,091		4.5	%		1,503		31,594		9.7	%
New Medicare Admissions		20,852		—		20,852		4.1	%		883		21,735		8.5	%
Average Census		34,263		—		34,263		2.1	%		2,366		36,629		9.2	%
Average Medicare Census		26,066		—		26,066		2.1	%		1,875		27,941		9.5	%
Home Health Episodes		41,541		—		41,541		0.6	%		1,267		42,808		3.7	%

(1) Same store — location that has been in service with the Company for greater than 12 months.

(2) De Novo — internally developed location that has been in service with the Company for 12 months or less.

(3) Organic — combination of same store and de novo.

(4) Acquired — purchased location that has been in service with the Company for 12 months or less.

Total organic home-based revenue for the three months ended March 31, 2013 decreased 1.3% compared to the three months ended March 31, 2012, while organic Medicare revenue increased 0.1%. The primary cause for the decrease in organic revenue in the home-based segment was reduced reimbursement caused by Medicare sequestration and wage index adjustments, which became effective in 2013, partially offset by Medicare census growth.

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Average home-based patient census for the three months ended March 31, 2013 was 9.2% higher than the same period in 2012.

Total home-based admissions increased 9.7% to 31,594 during the first quarter of 2013.

Organic growth is generated by population growth in areas covered by mature agencies, agencies five years old or older, and by increased market share in acquired and developing agencies. Historically, acquired agencies have the highest growth in admissions and average census in the first 24 months after acquisition, and have the highest contribution to organic growth, measured as a percentage, in the second full year of operation after the acquisition.

Cost of service revenue

The following table summarizes home-based services cost of service revenue (amounts in thousands, except percentages):

	Three Months Ended March 31,
	2013				2012
Salaries, wages and benefits	$	70,921	49.9	%(1)	$	68,660	49.2	%(1)
Transportation		5,808	4.1	%		5,909	4.2	%
Supplies and services		4,861	3.5	%		4,492	3.2	%
	$	81,590	57.5	%	$	79,061	56.6	%

(1) Percentage of home-based net service revenue

Salaries, wages and benefits increased during the three months ended March 31, 2013 compared to the same period in 2012. The increase was primarily due to an increase in acquisition activity and offset by productivity improvements and efficiencies gained through our Point Of Care (“POC”) initiatives that we have implemented during the past year.

Provision for bad debts

Provision for bad debts increased during the three months ended March 31, 2013 compared to the same period in 2012. The increase was associated with collectability risks identified on a group of claims from certain commercial insurance payor contracts.

General and administrative expenses

General and administrative expenses increased during the three months ended March 31, 2013 compared to the same period in 2012 due to increased acquisition costs and POC device costs, which were partially offset by reductions of staff resulting from the benefits derived from POC initiatives implemented during the past year.

Facility-based services segment operating results

The following table summarizes our facility-based results of operations for the three months ended March 31, 2013 and 2012 (amounts in thousands, except percentages which are percentages of facility-based net service revenue):

	2013				2012				Increase (Decrease)			Percentage Change
Net service revenue	$	19,966			$	19,166			$	800			4.2	%
Cost of service revenue		11,658	58.4	%		10,798	56.3	%		860			8.0	%
Provision for bad debts		640	3.2	%		138	0.7	%		502			>100	%
General and administrative expenses		5,451	27.3	%		5,656	29.5	%		(205	)		(3.6	)%
Operating income	$	2,217			$	2,574

Facility-based services net service revenue increased during the three months ended March 31, 2013 compared to the same period in 2012 due to an increase in patient acuity and occupancy.

Provision for bad debts increased during the three months ended March 31, 2013 compared to the same period in 2012 due to reserves calculated on third-party pharmacy contract and prior year cost report settlement denials.

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Cost of service revenue

The following table summarizes facility-based services cost of service revenue (amounts in thousands, except percentages):

	Three Months Ended March 31,
	2013				2012
Salaries, wages and benefits	$	7,280	36.5	%(1)	$	6,879	35.9	%(1)
Transportation		71	0.3	%		55	0.3	%
Supplies and services		4,307	21.6	%		3,864	20.1	%
	$	11,658	58.4	%	$	10,798	56.3	%

(1) Percentage of facility-based net service revenue

Salaries, wages and benefits increased during the three months ended March 31, 2013 compared to the same period in 2012 due to the increases in both staff and contract labor hours as driven by the increases in the acuity of our patients we serve and the increases in occupancy.

Supplies and services increased during the three months ended March 31, 2013 compared to the same period in 2012 due to increases in the use of certain pharmaceutical supplies in correlation to the increases in the acuity of our patients we serve and the increases in occupancy.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our principal source of liquidity for operating activities is the collection of patient accounts receivable, most of which are collected from governmental and third party commercial payors. We also have the ability to obtain additional liquidity, if necessary, through our Credit Facility, which provides for aggregate borrowings up to $100 million.

Our reported cash flows from operating activities are affected by various external and internal factors, including the following:

• Operating Results — Our net income has a significant effect on our operating cash flows. Any significant increase or decrease in our net income could have a material effect on our operating cash flows.

• Timing of Acquisitions — We use our operating cash flows for acquisitions. When the acquisitions occur at or near the end of a period, our cash outflows significantly increase.

• Timing of Payroll — Our employees are paid bi-weekly on Fridays; therefore, operating cash flows decline in reporting periods that end on a Friday.

• Medical Insurance Plan Funding — We are self-funded for medical insurance purposes. Any significant changes in the amount of insurance claims submitted could have a direct effect on our operating cash flows.

• Medical Supplies — A significant expense associated with our business is the cost of medical supplies. Any increase in the cost of medical supplies, or in the use of medical supplies by our patients, could have a material effect on our operating cash flows.

The following table summarizes changes in cash (amounts in thousands):

	Three Months Ended March 31,
	2013			2012
Cash provided by operating activities	$	14,069		$	25,585
Cash (used in) investing activities		(20,806	)		(2,860	)
Cash provided by (used in) financing activities		421			(22,640	)
Change in cash		(6,316	)		85
Cash and cash equivalents at beginning of period		9,720			256
Cash and cash equivalents at end of period	$	3,404		$	341

Cash provided by operating activities for the three months ended March 31, 2013 decreased due to the reduction of working capital. The working capital reduction in 2013 principally resulted from the increased use of previously established prepaid taxes associated with tax loss carrybacks generated from our 2011 settlement with the United States of America.

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Cash used in investing activities for the three months ended March 31, 2013 increased due to the acquisition of the home-based service line of Addus HomeCare Corp.

Cash provided by financing activities for the three months ended March 31, 2013 increased due to the acquisition and initial working capital funding for the home-based service line of Addus HomeCare Corp.

Accounts Receivable and Allowance for Uncollectible Accounts

As of March 31, 2013, our allowance for uncollectible accounts, as a percentage of patient accounts receivable, was approximately 13.7%, or $12.9 million, compared to 12.4% or $11.9 million at December 31, 2012. Days sales outstanding as of March 31, 2013 and December 31, 2012 was 45 days and 48 days, respectively. Our calculation of days sales outstanding is derived by dividing our ending net patient accounts receivable (i.e., net of estimated revenue adjustments and allowance for doubtful accounts) at March 31, 2013 and December 31, 2012 by our average daily net patient revenues for the three month periods ended March 31, 2013 and December 31, 2012, respectively.

The following table sets forth as of March 31, 2013, the aging of accounts receivable (based on the end of episode date) and the total allowance for uncollectible accounts expressed as a percentage of the related aged accounts receivable (amounts in thousands, except percentages):

Payor	0-90		91-180		181-365		Over 365		Total
Medicare	$	48,073	$	6,437	$	3,766	$	597	$	58,873
Medicaid		2,293		346		470		250		3,359
Other		19,289		5,762		5,163		1,709		31,923
Total	$	69,655	$	12,545	$	9,399	$	2,556	$	94,155

For home-based services, we calculate the allowance for uncollectible accounts as a percentage of total patient receivables. The percentage changes depending on the payor and increases as the patient receivables age. For facility-based services, we calculate the allowance for uncollectible accounts based on a claim by claim review. As a result, the allowance percentages presented in the table above vary between the aging categories because of the mix of claims in each category.

The following table sets forth as of December 31, 2012, the aging of accounts receivable (based on the end of episode date) and the total allowance for uncollectible accounts expressed as a percentage of the related aged accounts receivable (amounts in thousands, except percentages):

Payor	0-90		91-180		181-365		Over 365		Total
Medicare	$	48,219	$	7,955	$	4,114	$	672	$	60,960
Medicaid		2,067		531		696		300		3,594
Other		18,688		4,695		5,536		2,341		31,260
Total	$	68,974	$	13,181	$	10,346	$	3,313	$	95,814

Indebtedness

As of March 31, 2013 we had $23.0 million drawn and letters of credit totaling $6.2 million outstanding and $70.8 million available under our line of credit. At December 31, 2012, $19.5 million was drawn and letters of credit totaling $6.0 million was outstanding on the line of credit.

Our Credit Facility with Capital One, National Association provides for a maximum aggregate principal borrowing of $100 million. The Credit Facility, which is scheduled to expire on August 31, 2015, is unsecured and has a letter of credit sub-limit of $15 million. A fee of 0.5% is charged for any unused amounts. A letter of credit fee equal to the applicable London Interbank Offered Rate (“LIBOR”) margin times the face amount of the letter of credit is charged upon the issuance and on each anniversary date while the letter of credit is outstanding. The agent’s standard up-front fee and other customary administrative charges will also be due upon issuance of the letter of credit along with a renewal fee on each anniversary date of such issuance while the letter of credit is outstanding. The interest rate for the borrowings under the Credit Facility, at our election, shall be either at the Base Rate (as defined in the Credit Facility) as a function of the prime rate or the LIBOR Rate (as defined in the Credit Agreement). Borrowings accruing interest under the Credit Facility at either the Base Rate or the LIBOR Rate are subject to the applicable margins set forth below:

Leverage Ratio	LIBOR Margin			Base Rate Margin
<1.00:1.00		2.25	%		1.00	%
>1.00:1.00<1.50:1.00		2.50	%		1.25	%
>1.50:1.00£2.00:1.00		2.75	%		1.50	%

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Our Credit Facility contains customary affirmative, negative and financial covenants. For example, we are restricted in incurring additional debt, disposing of assets, making investments, allowing fundamental changes to our business or organization, and making certain payments in respect of stock or other ownership interests, such as dividends and stock repurchases, up to $50 million. Under our Credit Facility, we are also required to meet certain financial covenants with respect to minimum fixed charge coverage, consolidated net worth and leverage ratios.

Our Credit Facility also contains customary events of default. These include bankruptcy and other insolvency events, cross-defaults to other debt agreements, a change in control involving us or any subsidiary guarantor, and the failure to comply with certain covenants.

At March 31, 2013, we believe we were in compliance with all covenants.

Contingencies

For a discussion of contingencies, see Note 8 of the Notes to Condensed Consolidated Financial Statements.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Critical Accounting Policies

For a discussion of critical accounting policies, see Note 2 of the Notes to Condensed Consolidated Financial Statements.

Revenue Recognition

We report net service revenue at the estimated net realizable amount due from Medicare, Medicaid, commercial insurance, managed care payors, patients and other payors for services rendered.

Medicare

Home-Based Services

Home Nursing Services. We are reimbursed by Medicare for delivering care over a 60-day period referred to as an episode. We recognize revenue based on the number of days elapsed during an episode of care within the appropriate reporting period.

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). We submit a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. We estimate all potential adjustments to an episode based on the best information available as the services are provided and prior to recognizing revenue or presenting the final bill. Therefore, historically, we have recorded little or no adjustments at the time payment is received. Although our estimates are based on historical experience using the best information available at the time we provide service, final payments could differ from our estimates.

Hospice Services. We are paid by Medicare under a per diem payment system. We receive one of four predetermined daily or hourly rates based upon the level of care we furnished. We record net service revenue from hospice services based on the daily or hourly rate and recognize revenue as these hospice services are provided.

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Hospice payments are also subject to an inpatient cap and an overall payment cap. The inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services. The overall payment cap relates to individual programs receiving reimbursements in excess of a “cap amount,” which is calculated by multiplying the number of beneficiaries receiving services during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. We monitor our limits on a provider-by-provider basis. Our revenue could be affected if we exceed the cap limits in the future.

Facility-Based Services

Long-Term Acute Care Services. We are reimbursed by Medicare for services provided at our LTACHs based on a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient. The actual amount reimbursed can be adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted. Similar to the home health Medicare reimbursement, we estimate the adjustment based on a historical average and record revenue considering such adjustment. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for our LTACHs as services are provided. Although our estimates are based on historical experience using the best information available at the time we provide service, final payments could differ from our estimates.

Medicaid, managed care and other payors

Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as the services are provided based on this fee schedule. Managed care and other payors reimburse us in a manner similar to either Medicare or Medicaid. Accordingly, we recognize revenue from managed care and other payors in the same manner as we recognize revenue from Medicare or Medicaid.

Accounts Receivable and Allowances for Uncollectible Accounts

We report accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, other third-party payors, and patients. To provide for accounts receivable that could become uncollectible in the future, we establish an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value.

The collection of outstanding receivables is our primary source of cash collections and is critical to our operating performance. Because Medicare is our primary payor, the credit risk associated with receivables from other payors is limited. We believe the credit risk associated with our Medicare accounts, which represent 62.5% and 63.6% of our patient accounts receivable as of March 31, 2013 and December 31, 2012, respectively, is limited due to (i) the historical collections from Medicare and (ii) the fact that Medicare is a U.S. government payor. We do not believe that there are any other significant concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The amount of the provision for bad debts is based upon our assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Quarterly, we perform a detailed review of historical writeoffs and recoveries as well as recent collection trends. Uncollectible accounts are written off when we have exhausted collection efforts and concluded the account will not be collected.

Although our estimated reserves for uncollectible accounts are based on historical experience and the most current collection trends, this process requires significant judgment and interpretation of the observed trends and the actual collections could differ from our estimates.

Insurance

We retain significant exposure for our employee health insurance, workers compensation, employment practices and professional liability insurance programs. Our insurance programs require us to estimate potential payments on filed claims and/or claims incurred but not reported. Our estimates are based on information provided by the third-party plan administrators, historical claim experience, expected costs of claims incurred but not paid and expected costs associated with settling claims. Each month we review the insurance-related recoveries and liabilities to determine if any adjustments are required.

Our employee health insurance program is self funded, with stop-loss coverage on claims that exceed $150,000 for any individual covered employee or employee family member. We are responsible for workers’ compensation claims up to $350,000 per individual incident.

Malpractice, employment practices and general liability claims for incidents which may give rise to litigation have been asserted against us by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. We are aware of incidents that have occurred through March 31, 2013 that may result in the assertion of additional claims. We currently carry professional, general liability and employment practices insurance coverage (on a claims made basis) for this exposure. We also carry D&O coverage (also on a claims made basis) for potential claims against our directors and officers, including securities actions, with a deductible of $500,000 per claim.

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We estimate our liabilities related to these programs using the most current information available. As claims develop, we may need to change the recorded liabilities and change our estimates. These changes and adjustments could be material to our financial statements, results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of March 31, 2013, we had cash of $3.4 million. In 2013, the FDIC will insure each depositor up to $250,000 in coverage at each separately chartered insured depository institution. At times, cash in banks is in excess of the FDIC insurance limit. The Company has not experienced any loss as a result of those deposits in excess of the FDIC insurance limit and does not expect any in the future.

Our exposure to market risk relates to changes in interest rates for borrowings under our Credit Facility. Our Credit Facility is a revolving credit facility and, as such, we borrow, repay and re-borrow amounts as needed, changing the average daily balance outstanding under our Credit Facility. A hypothetical 100 basis point increase in interest rates on the average daily amounts outstanding under our Credit Facility would have increased interest expense by $10,000 for the three months ended March 31, 2013.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Such disclosure controls and procedures are designed also to ensure that such information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that we maintained effective disclosure controls and procedures at the reasonable assurance level as of March 31, 2013.

Changes in Internal Controls Over Financial Reporting

There have not been any changes in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, during the quarterly period ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

For a discussion of legal proceedings, see Note 8 of the Notes to Condensed Consolidated Financial Statements.

ITEM 1A. RISK FACTORS.

There have been no material changes from the information included in Part I, Item 1A. “Risk Factors” of the Company’s 2012 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In October 2010, the Company’s Board of Directors authorized a share repurchase program to repurchase shares of the Company’s common stock, par value $0.01 per share, from time to time, in an amount not to exceed $50.0 million (“Stock Repurchase Program”). The Company anticipates that it will finance the Stock Repurchase Program with cash from general corporate funds, or draws under the Credit Facility. The Company may repurchase shares of common stock in open market purchases or in privately negotiated transactions in accordance with applicable securities laws, rules and regulations. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations. During the three months ended March 31, 2013, no shares were repurchased. The remaining dollar value of shares authorized to be purchased under the share repurchase program was $22.5 million as of March 31, 2013.

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ITEM 6. EXHIBITS.

3.1	Certificate of Incorporation of LHC Group, Inc. (previously filed as an Exhibit 3.1 to the Form S-1/A (File No. 333-120792) on February 14, 2005).
3.2	Bylaws of LHC Group, Inc. as amended on December 31, 2007 (previously filed as Exhibit 3.2 to the Form 10-Q on May 9, 2008).
4.1	Specimen Stock Certificate of LHC Group’s Common Stock, par value $0.01 per share (previously filed as Exhibit 4.1 to the Form S-1/ A (File No. 333-120792) on February 14, 2005).
10.1	Third Amended and Restated Credit Agreement, by and among LHC Group, Inc., Capital One, National Association, as a lender, administrative agent, sole book runner and sole lead arranger, JPMorgan Chase Bank, N.A., as a lender and syndication agent, Compass Bank, as a lender and documentation agent, and Whitney Bank and Regions Bank, as lenders, dated August 31, 2012 (previously filed as Exhibit 10.1 to the Form 8-K filed on September 4, 2012).
10.2	Consulting Agreement, by and between LHC Group, Inc. and John L. Indest, dated September 1, 2011.
31.1	Certification of Keith G. Myers, Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Peter J. Roman, Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer of LHC Group, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

Attached as Exhibit 101 to this report are documents formatted in XBRL (Extensible Business Reporting Language). Users of this data are advised pursuant to Rule 406T of Regulation S-T that the interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of section 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise not subject to liability under these sections. The financial information contained in the XBRL-related documents is “unaudited” and “unreviewed.”

* This exhibit is furnished to the SEC as an accompanying document and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, and the document will not be deemed incorporated by reference into any filing under the Securities Act of 1933.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LHC GROUP, INC.
Date: May 9, 2013	/s/ Peter J. Roman
	Peter J. Roman
	Executive Vice President and Chief Financial Officer (Principal financial officer)

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EX-10.2

Exhibit 10.2

Execution Copy

CONSULTING AGREEMENT

This CONSULTING AGREEMENT (this “Agreement”) is entered into and effective as of the 1^st day of September, 2011 (the “Effective Date”) by and between LHC Group, Inc. (“LHC”) and John L. Indest (“Consultant”), a resident of the State of Louisiana.

W I T N E S S E T H

WHEREAS, LHC is engaged in the business of providing post-acute health care services to patients through its home nursing agencies, hospices and long-term acute care hospitals;

WHEREAS, Consultant has substantial experience in operating facilities and programs that provide acute and post-acute healthcare services and currently has an employment agreement with LHC, effective as of September 14, 2009 (the “Employment Agreement”); and

WHEREAS, Consultant has agreed to voluntarily terminate the Employment Agreement and instead to perform certain consulting services for LHC on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the promises and covenants contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

1. Termination of Employment Agreement. The parties mutually agree to terminate the Employment Agreement without triggering any of the obligations set forth in Section 8 thereof and have the terms and conditions of any services provided by Consultant to LHC governed by this Agreement. All prior agreements between Consultant and LHC regarding or pertaining to Consultant’s employment, including but not limited to the Employment Agreement, are terminated upon the Effective Date of this Agreement and neither party shall have any further obligations under any such terminated employment agreements; provided, however, those restricted stock agreements set forth on Exhibit A hereto shall remain in full force and effect and all unvested shares shall continue to vest in accordance with the terms of the RSA Agreements or immediately upon any third party acquiring a controlling interest in LHC, whichever occurs first (the “RSA Benefits”). Consultant shall be entitled to the RSA Benefits regardless of whether LHC or an authorized representative thereof requests that he provide any actual consulting services.

2. Nature of Relationship; Services. LHC hereby engages Consultant as an independent contractor to provide certain mutually-agreed upon consulting services from time-to-time upon request by LHC or an authorized representative thereof. Consultant expressly agrees that he is an independent contractor, not an employee or agent of LHC. For purposes of assisting Consultant in the completion of the consulting services, during the term of the Agreement LHC agrees to provide Consultant with a laptop computer and cellular phone, at LHC’s expense.

3. Term; Termination. The term of this Agreement shall extend from the Effective Date through the date that Consultant’s spouse becomes Medicare eligible. In the event that Consultant’s spouse predeceases him, the term of this Agreement shall extend from the Effective Date through the date that Consultant becomes Medicare eligible. It is expressly understood by the parties hereto that if the criteria for Medicare eligibility are changed after execution of this Agreement, the term of this Agreement shall automatically extend through the new date that Consultant’s spouse becomes Medicare eligible or, in the event that Consultant’s spouse predeceases him, the new date that Consultant becomes Medicare eligible.

4. Compensation. LHC shall pay Consultant for the services to be performed under this Agreement in accordance with those amounts set forth on Exhibit B attached hereto (“Consulting Fees”). Consultant and his spouse shall be entitled to the Medical Insurance Benefits set forth on Exhibit B regardless of whether LHC or an authorized representative thereof requests that he provide any actual consulting services. In addition to the Consulting Fees, during such period of time in which Consultant serves on LHC’s board of directors, Consultant shall be entitled to receive both fees for such services and grants of LHC stock in such amounts as those to which LHC’s independent directors are entitled (collectively, “Board Compensation”). The Board Compensation received by Consultant for Consultant’s 2011 board service shall be prorated for the year from the Effective Date.

5. Tax Reporting. LHC shall file an Internal Revenue Service Form 1099-MISC (or equivalent form for independent contractor payments) with respect to Consultant that shall report the amount of compensation paid by LHC to Consultant for services rendered hereunder. Consultant shall be responsible for filing any and all other required state or federal income and self-employed independent contractor, LHC will make no deduction from payments to Consultant for federal or state tax withholdings, social security, unemployment, workers’ compensation or disability insurance and will make no payments for such items on his behalf.

6. Right to Materials and Return of Materials. All records, files, software, memoranda, reports, customer lists, drawings, plans, sketches, documents, technical information and the like (together with all copies of such documents and things) relating to the business of LHC, which Consultant shall use or prepare or come in contact with in the course of or as a result of his engagement under this Agreement, shall remain the sole property of LHC and shall be returned to LHC upon the expiration of this Agreement.

7. Restrictions on Conduct of Consultant. Consultant and LHC understand and agree that the purpose of the provisions of this Section 7 is to protect legitimate business interests of LHC, as more fully described below, and is not intended to impair or infringe upon Consultant’s right to work, earn a living, or acquire and possess property from the fruits of his labor. Consultant hereby acknowledges that Consultant has received good and valuable consideration for the restrictions set forth in this Section in the form of the RSA Benefits, Consulting Fees and Board Compensation provided for herein and that the restrictions set forth in this Section are reasonable.

(a) Definitions. The following capitalized terms used in this Section shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:

“Competitive Services” means the business of providing home-based services through home nursing and hospice agencies and facility-based services through long-term acute care hospitals.

“Confidential Information” means all information regarding LHC, its activities, business or clients that is the subject of reasonable efforts by LHC to maintain its confidentiality and that is not generally disclosed by practice or authority to persons not employed by LHC, but that does not rise to the level of a Trade Secret. “Confidential Information” shall include, but is not limited to, financial plans and data concerning LHC; management planning information; business plans; operational methods; market studies; marketing plans or strategies; product development techniques or plans; customer lists; customer files, data and financial information, details of customer contracts; current and anticipated

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customer requirements; identifying and other information pertaining to business referral sources; past, current and planned research and development; business acquisition plans; and new personnel acquisition plans. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of LHC. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law.

“Determination Date” means the date of termination of this Agreement Company for any reason whatsoever or any earlier date (during the term of the Agreement) of an alleged breach of the Restrictive Covenants by Consultant.

“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association or other entity or enterprise.

“Principal or Representative” means a principal, owner, partner, stockholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative or consultant.

“Protected Customers” means any Person to whom LHC has sold its products or services or solicited to sell its products or services, other than through general advertising targeted at consumers, during the twelve (12) months prior to the Determination Date.

“Protected Consultants” means employees of LHC who were employed by LHC or its affiliates at any time within six (6) months prior to the Determination Date, other than those who were discharged by LHC or such affiliated employer without cause.

“Restricted Period” means the term of this Agreement.

“Restricted Territory” means the geographical territories described on Exhibit C hereto. LHC and Consultant agree that Exhibit C shall be periodically reviewed and updated as necessary to maintain a current and complete description of the geographic territories in which LHC does business.

“Restrictive Covenants” means the restrictive covenants contained in Section 7(c) hereof.

“Third Party Information” means confidential or proprietary information subject to a duty on LHC’s and its affiliates’ part to maintain the confidentiality of such information and to use it only for certain limited purposes.

“Trade Secret” means all information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potential customers, advertisers or suppliers which is not commonly known by or available to the public and which information: (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential information that constitutes a “trade secret(s)” under the common law or statutory law of the State of Louisiana.

-3-

“Work Product” means all inventions, innovations, improvements, developments, methods, processes, programs, designs, analyses, drawings, reports, and all similar or related information (whether or not patentable) that relate to LHC’s or its affiliates’ actual or anticipated business, research and development, or existing or future products or services and that are conceived, developed, contributed to, made, or reduced to practice by Consultant (either solely or jointly with others) while employed by LHC or its affiliates.

(c) Restrictive Covenants.

(i) Restriction on Disclosure and Use of Confidential Information and Trade Secrets. Consultant understands and agrees that the Confidential Information and Trade Secrets constitute valuable assets of LHC and its affiliated entities, and may not be converted to Consultant’s own use. Accordingly, Consultant hereby agrees that Consultant shall not, directly or indirectly, at any time during the Restricted Period reveal, divulge, or disclose to any Person not expressly authorized by LHC any Confidential Information, and Consultant shall not, directly or indirectly, at any time during the Restricted Period use or make use of any Confidential Information in connection with any business activity other than that of LHC. Throughout the term of this Agreement and at all times after the date that this Agreement terminates for any reason, Consultant shall not directly or indirectly transmit or disclose any Trade Secret of LHC to any Person, and shall not make use of any such Trade Secret, directly or indirectly, for himself or for others, without the prior written consent of LHC. The parties acknowledge and agree that this Agreement is not intended to, and does not, alter either LHC’s rights or Consultant’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Consultant shall not be restricted from disclosing or using Confidential Information or any Trade Secret that is required to be disclosed by law, court order or other legal process; provided, however, that in the event disclosure is required by law, Consultant shall provide LHC with reasonable notice of such requirement so that LHC may seek an appropriate protective order prior to any such required disclosure by Consultant. Consultant acknowledges that any and all Confidential Information is the exclusive property of LHC and agrees to deliver to LHC on the Date of Termination, or at any other time LHC may request in writing, any and all Confidential Information which he may then possess or have under his control in whatever form same may exist, including, but not by way of limitation, hard copy files, soft copy files, computer disks, and all copies thereof.

(ii) Nonsolicitation of Protected Consultants. Consultant understands and agrees that the relationship between LHC and each of its Protected Consultants constitutes a valuable asset of LHC and may not be converted to Consultant’s own use. Accordingly, Consultant hereby agrees that during the Restricted Period, Consultant shall not directly or indirectly on Consultant’s own behalf or as a Principal or Representative of any Person or otherwise solicit or induce any Protected Consultant to terminate his employment relationship with LHC or to enter into employment with any other Person.

(iii) Restriction on Relationships with Protected Customers. Consultant understands and agrees that the relationship between LHC and each of its Protected Customers constitutes a valuable asset of LHC and may not be converted to Consultant’s own use. Accordingly, Consultant hereby agrees that, during the Restricted Period and in the Restricted Territory, Consultant shall not, without the prior written consent of LHC, directly or indirectly, on Consultant’s own behalf or as a Principal or Representative of any Person, solicit, divert, take away or attempt to solicit, divert or take away a Protected Customer for the purpose of providing or selling Competitive Services; provided, however, that the prohibition of this

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covenant shall apply only to Protected Customers with whom Consultant had Material Contact on LHC’s behalf during the twelve (12) months immediately preceding this Agreements termination (the “Termination Date”); and, provided further, that the prohibition of this covenant shall not apply to the conduct of general advertising activities. For purposes of this Agreement, Consultant had “Material Contact” with a Protected Customer if (a) he had business dealings with the Protected Customer on LHC’s behalf; (b) he was responsible for supervising or coordinating the dealings between LHC and the Protected Customer; or (c) he obtained Trade Secrets or Confidential Information about the customer as a result of his association with LHC.

(iv) Noncompetition with LHC. In consideration of the RSA Benefits, Consulting Fees and Board Compensation being paid and to be paid by LHC to Consultant hereunder, Consultant understands and agrees that, during the Restricted Period and within the Restricted Territory, he shall not, directly or indirectly, carry on or engage in Competitive Services on his own or on behalf of any Person, or any Principal or Representative of any Person; provided, however, that the provisions of this Agreement shall not be deemed to prohibit the ownership by Consultant of any securities of LHC or its affiliated entities or not more than five percent (5%) of any class of securities of any corporation having a class of securities registered pursuant to the Securities Exchange Act of 1934. Consultant acknowledges that the Restricted Territory is reasonable because LHC carries on and engages in Competitive Services throughout the Restricted Territory and that in the performance of his duties for LHC he is charged with operating on LHC’s behalf throughout the Restricted Territory.

(v) Ownership of Work Product. Consultant acknowledges that the Work Product belongs to LHC or its affiliates and Consultant hereby assigns, and agrees to assign, all of the Work Product to LHC or its affiliates. Any copyrightable work prepared in whole or in part by Consultant in the course of his work for any of the foregoing entities shall be deemed a “work made for hire” under the copyright laws, and LHC or such affiliate shall own all rights therein. To the extent that any such copyrightable work is not a “work made for hire,” Consultant hereby assigns and agrees to assign to LHC or such affiliate all right, title, and interest, including without limitation, copyright in and to such copyrightable work. Consultant shall promptly disclose such Work Product and copyrightable work to LHC and perform all actions reasonably requested by LHC (whether during or after the term of this Agreement) to establish and confirm LHC’s or such affiliate’s ownership (including, without limitation, assignments, consents, powers of attorney, and other instruments).

(vi) Third Party Information. Consultant understands that LHC and its affiliates will receive Third Party Information. During the term of this Agreement and thereafter, and without in any way limiting the provisions of Section 7(c)(i) above, Consultant will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than personnel of LHC or its affiliates who need to know such information in connection with their work for LHC or its affiliates) or use, except in connection with his work for LHC or its affiliates, Third Party Information unless expressly authorized by an authorized representative of LHC in writing.

(d) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. In the event Consultant breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, LHC shall have the right and remedy to enjoin, preliminarily and permanently, Consultant from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court or tribunal of competent jurisdiction, it being agreed

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that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to LHC and that money damages would not provide an adequate remedy to LHC. Such right and remedy shall be independent of any others and severally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to LHC at law or in equity.

(ii) Severabilitv of Covenants. Consultant acknowledges and agrees that the Restrictive Covenants are reasonable and valid in time and scope and in all other respects. The covenants set forth in this Agreement shall be considered and construed as separate and independent covenants. Should any part or provision of any covenant be held invalid, void or unenforceable, such invalidity, voidness or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement.

(iii) Reformation. The parties hereunder agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent possible under applicable law. The parties further agree that, in the event any tribunal of competent jurisdiction shall find that any provision hereof is not enforceable in accordance with its terms, the tribunal shall reform the Restrictive Covenants such that they shall be enforceable to the maximum extent permissible at law.

8. Modification. No waiver or modification of this Agreement or of any covenant, condition or limitation contained herein shall be valid unless in writing signed by both parties. However, specifications of services to be rendered by Consultant that are consistent with the general scope of the services to be performed as provided herein shall not constitute a modification of the Agreement.

9. Construction of the Agreement and Binding Effect. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all terms and conditions of this Agreement shall be construed under and governed by the laws of the State of Louisiana.

10. Entire Agreement; Assignment. This Agreement contains the complete understanding concerning the consulting arrangement between the parties. The obligations and rights set forth in this Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, executors, heirs, administrators, successors and assigns; provided, however, that Consultant shall have no right to delegate Consultant’s obligations under this Agreement. In the event of Consultant’s death, LHC and its successors and assigns shall remain obligated to provide the Medical Insurance Benefits and RSA Benefits to Consultant’s spouse regardless of whether Consultant has performed any consulting services for LHC.

[Signatures on Following Page]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

LHC GROUP, INC.
By:	/s/ Keith G. Myers
	Keith G. Myers, Chairman & CEO
CONSULTANT
	/s/ John L. Indest
	John L. Indest

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EXHIBIT A

RSA BENEFITS

RSA Agreement, dated 03/01/2007, for 15,000 shares

RSA Agreement, dated 03/01/2008, for 20,450 shares

RSA Agreement, dated 03/01/2009, for 31,611 shares

RSA Agreement, dated 03/01/2010, for 10,885 shares

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EXHIBIT B

CONSULTING FEES

(a) Hourly Compensation. In exchange for Consultant’s performance of services hereunder, LHC shall pay to Consultant a rate equal to $125.00/hour.

(b) Expense Reimbursement. LHC will reimburse Consultant for reasonable business expenses directly related to Consultant’s performance of services under this Agreement, provided that (i) LHC approves such expenses in advance; and (ii) Consultant submits accurate reports and receipts documenting such expenses.

(c) Medical Insurance Benefits. During the term of this Agreement, Consultant and his spouse shall be permitted to continue participating in LHC’s medical insurance plan.

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EXHIBIT C

RESTRICTED TERRITORY

The Restricted Territory shall include the following counties and parishes in the states LHC and its subsidiaries and affiliates conduct business:

ALABAMA

Autauga, Baldwin, Barbour, Bibb, Blount, Bullock, Butler, Calhoun, Choctaw, Clarke, Clay, Cleburne, Chambers, Colbert, Coffee, Conecuh, Coosa, Covington, Crenshaw, Cullman, Dale, Dallas, DeKalb, Elmore, Escambia, Etowah, Fayette, Franklin, Geneva, Greene, Hale, Henry, Houston, Jackson, Jefferson, Lamar, Lauderdale, Lawrence, Lee, Limestone, Lowndes, Macon, Madison, Marengo, Marion, Marshall, Mobile, Monroe, Morgan, Montgomery, Perry, Pickens, Pike, Randolph, Russell, Shelby, Sumter, St. Clair, Talledega, Tallapoosa, Tuscaloosa, Walker, Washington, Wilcox, Winston,

ARKANSAS

Carroll, Benton, Madison, Boone, Washington, Johnson, Newton, St. Francis, Lee, Woodruff, Monroe, Cross, Crittenden, Mississippi, Poinsett, White, Prairie, Arkansas, Phillips, Polk, Scott, Logan, Sebastian, Hot Spring, Clark, Pike, Howard, Sevier, Garland, Saline, Montgomery, Perry, Hempstead, Nevada, Grant, Pulaski, Faulkner, Conway, Yell, Dallas, Cleveland, Calhoun, Bradley, Ouachita, Union, Ashley, Drew, Lincoln, Jefferson, Fulton, Izard, Baxter, Sharp, Marion, Searcy, Stone, Cleburne, Independence, Lawrence, Randolph, Jackson, Lafayette, Little River, Miller, Van Buren

FLORIDA

Alachua, Bradford, Citrus, Columbia, Dixie, Escambia, Gilchrist, Hamilton, Hardee, Hernando, Highlands, Hillsborough, Lafayette, Lake, Levy, Manatee, Marion, Monroe, Okaloosa, Polk, Putnam, Santa Rosa, Sumter, Suwannee, Union, Walton

GEORGIA

Bartow, Catoosa, Chattooga, Dade, Floyd, Gordon, Haralson, Harris, Murray, Muscogee, Paulding, Pickens, Polk, Troup, Walker, Whitfield

IDAHO

Ada, Bannock, Bear Lake, Bingham, Blaine, Bonner, Bonneville, Butte, Camas, Canyon, Caribou, Cassia, Clark, Custer, Elmore, Franklin, Freemont, Gooding, Jefferson, Jerome, Kootenai, Lemhi, Lincoln, Madison, Minidoka, Oneida, Owyhee, Power, Shoshone, Teton, Twin Falls

KENTUCKY

Allen, Anderson, Butler, Caldwell, Casey, Christian, Clinton, Crittenden, Cumberland, Daviess, Edmonson, Fayette, Fulton, Grayson, Green, Hardin, Hart, Henderson, Hickman, Jessamine, Lincoln, Livingston, Logan, Lyon, Marshall, McCreary, Mercer, Pulaski, Rockcastle, Russell, Simpson, Taylor, Todd, Trigg, Union, Warren, Wayne, Webster, Woodford

LOUISIANA

Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson Davis, Jefferson, LaSalle, Lafayette, Lafourche, Lincoln, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, Red River, Richland,

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Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana, Winn

MARYLAND

Anne Arundel, Baltimore, Calvert, Caroline, Carroll, Charles, Dorchester, Frederick, Harford, Howard, Montgomery, Prince George’s, Queen Anne’s, St. Mary’s, Talbot, Washington, Wicomico and Worcester. Also the jurisdiction of Baltimore City.

MISSISSIPPI

Attala, Calhoun, Carroll, Chickasaw, Choctaw, Claiborne, Clarke, Clay, Copiah, Covington, Forrest, George, Greene, Grenada, Hancock, Harrison, Hinds, Issaquena, Jasper, Jefferson, Jones, Kemper, Lamar, Leake, Lowndes, Madison, Marion, Montgomery, Neshoba, Noxubee, Oktibbeha, Pearl River, Perry, Rankin, Scott, Sharkey, Simpson, Smith, Stone, Walthall, Warren, Wayne, Webster, Winston, Yazoo

MISSOURI

Audrain, Barry, Barton, Camden, Cedar, Christian, Dade, Dallas, Douglas, Franklin, Gasconade, Greene, Hickory, Howell, Jasper, Lawrence, Laclede, Lincoln, Marion, McDonald, Montgomery, Newton, Ozark, Pike, Pulaski, Polk, Ralls, St. Charles, St. Louis, Stone, Taney, Texas, Warren, Webster, Wright

NORTH CAROLINA

Bladen, Cumberland, Harnett, Hoke, Lee, Moore, Robeson, Sampson

OHIO

Adams, Athens, Belmont, Coshocton, Fairfield, Gallia, Guernsey, Harrison, Highland, Hocking, Jackson, Jefferson, Lawrence, Licking, Meigs, Monroe, Morgan, Muskingum, Noble, Perry, Pickaway, Pike, Ross, Scioto, Tuscarawas, Vinton, Washington

OKLAHOMA

Craig, Mayes, Ottawa, Rogers

OREGON

Douglas, Benton, Clackamas, Jackson, Josephine, Linn, Marion, Polk, Yamhill

TENNESSEE

Anderson, Bedford, Benton, Bledsoe, Blount, Bradley, Campbell, Cannon, Carroll, Carter, Cheatham, Chester, Claiborne, Clay, Cocke, Coffee, Crockett, Cumberland, Davidson, Decatur, Dekalb, Dickson, Dyer, Fayette, Fentress, Franklin, Gibson, Giles, Grainger, Greene, Grundy, Hamblen, Hamilton, Hancock, Hardeman, Hardin, Hawkins, Haywood, Henderson, Henry, Hickman, Houston, Humphreys, Jackson, Jefferson, Johnson, Knox, Lake, Lauderdale, Lawrence, Lewis, Lincoln, Loudon, Macon, Madison, Marion, Marshall, Maury, McMinn, McNairy, Meigs, Monroe, Montgomery, Moore, Morgan, Obion, Overton, Perry, Pickett, Polk, Putnam, Rhea, Roane, Robertson, Rutherford, Scott, Sequatchie, Sevier, Shelby, Smith, Stewart, Sullivan, Sumner, Tipton, Trousdale, Unicoi, Union, Van Buren, Warren, Washington, Wayne, Weakley, White, Williamson, Wilson

TEXAS

Andrews, Angelina, Armstrong, Atascosa, Bandera, Bastrop, Bexar, Blanco, Borden, Bowie, Briscoe, Burnett, Caldwell, Camp, Carson, Cass, Castro, Cherokee, Collin, Comal, Crane,

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Crosby, Dawson, Deaf Smith, Delta, Dimmit, Donley, Ector, Edwards, Fannin, Floyd, Franklin, Frio, Garza, Gillespie, Glasscock, Gonzales, Gray, Grayson, Gregg, Guadalupe, Hale, Hall, Hardin, Harrison, Hartley, Hays, Hockley, Hopkins, Howard, Hunt, Hutchinson, Jefferson, Kendall, Kerr, Kinney, Lamar, Lamb, LaSalle, Llano, Liberty, Loving, Lubbock, Lynn, Marion, Martin, Maverick, Medina, Midland, Moore, Morris, Nacogdoches, Oldham, Orange, Panola, Pecos, Polk, Potter, Rains, Randall, Reagan, Real, Red River, Reeves, Rusk, San Jacinto, Shelby, Smith, Swisher, Terry, Titus, Travis, Tyler, Upshur, Upton, Uvalde, Val Verde, Ward, Williamson, Wilson, Winkler, Wood, Zavala

VIRGINIA

Bedford, Bedford City, Bland, Botetourt, Carroll, Craig, Floyd, Franklin, Giles, Montgomery, Pulaski, Roanoke, Roanoke City

WASHINGTON

Adams, Clallum, Cowlitz, Ferry, Grant, Grays Harbor, Jefferson, Lewis, Lincoln, Mason, Pacific, Pend Orielle, Spokane, Stevens, Thurston, Wahkiakum

WEST VIRGINIA

Barbour, Boone, Cabell, Calhoun, Doddridge, Fayette, Gilmer, Grant, Greenbrier, Hardy, Harrison, Hampshire, Jackson, Kanawha, Lincoln, Logan, Marion, Marshall, Mason, McDowell, Mercer, Mingo, Monongalia, Monroe, Nicholas, Ohio, Pendleton, Pleasants, Preston, Pocahontas, Putnam, Raleigh, Ritchie, Roane, Summers, Taylor, Tucker, Tyler, Wayne, Wetzel, Wirt, Wood, Wyoming

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Keith G. Myers, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of LHC Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2013

/s/ Keith G. Myers

Keith G. Myers

Chief Executive Officer (Principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter J. Roman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of LHC Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2013

/s/ Peter J. Roman

Peter J. Roman

Executive Vice President and Chief Financial Officer

(Principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of LHC Group, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Keith G. Myers, Chief Executive Officer of the Company, and Peter J. Roman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2013

/s/ Keith G. Myers

Keith G. Myers

Chief Executive Officer

(Principal executive officer)

/s/ Peter J. Roman

Peter J. Roman

Executive Vice President and Chief Financial Officer

(Principal financial officer)

XML

Credit Facility (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Credit Facility (Textual) [Abstract]
Letter of credit facility drawn	$ 23.0	$ 19.5
Letter of credit outstanding	$ 6.2	$ 6.0
Line of Credit [Member]
Short-term Debt [Line Items]
Line of credit facility Interest rate	4.25%

XML

Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Supplemental Cash Flow Information (Textual) [Abstract]
Company redeemed treasury shares for tax payments	$ 607,000

XML

Allowance for Uncollectible Accounts (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Allowance for uncollectible accounts activity and ending balances
Beginning balance	$ 11,863
Additions and expenses	3,917	2,761
Deductions	(2,863)
Ending balance	$ 12,917

XML

Significant Accounting Policies (Details Textual)	3 Months Ended
	Mar. 31, 2013 Group Person
Schedule of Equity Method Investments [Line Items]
Medicare credit risk for accounts receivable	60.00%
Significant Accounting Policies (Textual) [Abstract]
License Leasing Arrangements	100.00%
Number of Medicare home health resource groups	153
Low utilization adjustment visits	5
Minimum percentage of Medicare reimbursement from inpatient care services that subjects individual programs to inpatient cap	20.00%
Determination period for hospice Medicare inpatient reimbursement cap	12 months
Number of days from start of episode to submit final Medicare bill	120 days
Number of days from date RAP paid to submit final Medicare bill	60 days
Reimbursement for subsequent episodes of care	50.00%
Reimbursement for initial episode of care	60.00%
Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Joint Ventures, Ownership	91.00%
Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Joint Ventures, Ownership	51.00%

XML

Stockholder's Equity (Tables)

3 Months Ended

Mar. 31, 2013

Stockholder's Equity [Abstract]

Nonvested stock activity

	Number of Shares			Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2012		486,061		$	22.33
Granted		180,198		$	21.01
Vested		(140,040	)	$	20.83
Nonvested shares outstanding as of March 31, 2013		526,219		$	22.28

Shares of common stock issued during 2013 under employee stock purchase plan

	Number of Shares		Per share price
Shares available as of December 31, 2012		61,247
Shares issued during three months ended March 31, 2013		8,845	$	20.24
Shares available as of March 31, 2013		52,402

XML

Stockholder's Equity (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2013
Employee Stock Purchase Plan, shares issued
Shares issued during period, Per share price	$ 20.24
Employee Stock Purchase Plan [Member]
Employee Stock Purchase Plan, shares issued
Shares available, Beginning balance	61,247
Shares issued during period	8,845
Shares available, Ending Balance	52,402

XML

Goodwill and Intangibles (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Intangible Assets, Net
Balance at December 31, 2012	$ 62,042
Additions (1)	(515)
Amortization	(199)
Balance at March 31, 2013	61,328
Trade Names [Member]
Intangible Assets, Net
Balance at December 31, 2012	51,408
Amortization	(71)
Balance at March 31, 2013	51,337
Certificate of Need/ License [Member]
Intangible Assets, Net
Balance at December 31, 2012	10,100
Additions (1)	(515)
Balance at March 31, 2013	9,585
Other Intangibles [Member]
Intangible Assets, Net
Balance at December 31, 2012	534
Amortization	(128)
Balance at March 31, 2013	$ 406

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Segment information
Net service revenue	$ 161,953	$ 158,761
Cost of service revenue	93,248	89,859
Provision for bad debts	3,917	2,761
General and administrative expenses	51,623	50,882
Operating income	13,165	15,259
Interest expense	(425)	(359)
Non-operating income	65	65
Income before income taxes and noncontrolling interest	12,805	14,965
Income tax expense	4,536	5,226
Net income	8,269	9,739
Less net income attributable to noncontrolling interests	1,983	1,998
Net income attributable to LHC Group, Inc.'s common stockholders	6,286	7,741
Total assets	394,907	380,048	386,894
Home-Based Services [Member]
Segment information
Net service revenue	141,987	139,595
Cost of service revenue	81,590	79,061
Provision for bad debts	3,277	2,623
General and administrative expenses	46,172	45,226
Operating income	10,948	12,685
Interest expense	(387)	(323)
Non-operating income	41	53
Income before income taxes and noncontrolling interest	10,602	12,415
Income tax expense	4,087	4,731
Net income	6,515	7,684
Less net income attributable to noncontrolling interests	1,599	1,692
Net income attributable to LHC Group, Inc.'s common stockholders	4,916	5,992
Total assets	358,140	345,287
Facility-Based Services [Member]
Segment information
Net service revenue	19,966	19,166
Cost of service revenue	11,658	10,798
Provision for bad debts	640	138
General and administrative expenses	5,451	5,656
Operating income	2,217	2,574
Interest expense	(38)	(36)
Non-operating income	24	12
Income before income taxes and noncontrolling interest	2,203	2,550
Income tax expense	449	495
Net income	1,754	2,055
Less net income attributable to noncontrolling interests	384	306
Net income attributable to LHC Group, Inc.'s common stockholders	1,370	1,749
Total assets	$ 36,767	$ 34,761

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Significant Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates.

Critical Accounting Policies

The Company’s most critical accounting policies relate to the principles of consolidation, revenue recognition and accounts receivable and allowances for uncollectible accounts.

Principles of Consolidation

The condensed consolidated financial statements include all subsidiaries and entities controlled by the Company. Control is defined by the Company as ownership of a majority of the voting interest of an entity. The condensed consolidated financial statements include entities in which the Company receives a majority of the entities’ expected residual returns, absorbs a majority of the entities’ expected losses, or both, as a result of ownership, contractual or other financial interests in the entity. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s condensed consolidated financial statements.

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended March 31,
	2013			2012
Equity joint ventures		50.1	%		48.2	%
Wholly-owned subsidiaries		47.2	%		48.3	%
License leasing arrangements		1.8	%		2.6	%
Management services		0.9	%		0.9	%
		100.0	%		100.0	%

All significant intercompany accounts and transactions have been eliminated in the Company’s accompanying condensed consolidated financial statements. Business combinations accounted for under the acquisition method have been included in the condensed consolidated financial statements from the respective dates of acquisition.

The following describes the Company’s consolidation policy with respect to its various ventures excluding wholly-owned subsidiaries:

Equity Joint Ventures

The Company’s joint ventures are structured in which the Company typically owns a majority equity interest ranging from 51% to 91%. The members of the Company’s equity joint ventures participate in profits and losses in proportion to their equity interests. The Company consolidates these entities as the Company has voting control over the entities.

License Leasing Arrangements

The Company, through wholly-owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing agencies. As with its wholly-owned subsidiaries, the Company owns 100% of the equity of these entities and consolidates them based on such ownership.

Management Services

The Company has various management services agreements under which the Company manages certain operations of agencies and facilities. The Company does not consolidate these agencies or facilities because the Company does not have an ownership interest and does not have an obligation to absorb losses of the entities or the right to receive the benefits from the entities.

Revenue Recognition

The Company reports net service revenue at the estimated net realizable amount due from Medicare, Medicaid, commercial insurance, managed care payors, patients and others for services rendered. All payors contribute to both the home-based services and facility-based services.

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
Payor:
Medicare		79.3	%		78.5	%
Medicaid		1.5	%		2.1	%
Other		19.2	%		19.4	%
		100.0	%		100.0	%

The percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2013 and 2012 was as follows:

	Three Months Ended March 31,
	2013			2012
Home-based services		87.7	%		87.9	%
Facility-based services		12.3	%		12.1	%
		100.0	%		100.0	%

Medicare

Home-Based Services

Home Nursing Services. The Company’s home nursing Medicare patients are classified into one of 153 home health resource groups prior to receiving services. Based on this home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60-day period referred to as an episode. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period.

Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. In calculating net service revenue, management estimates the impact of these payment adjustments based on historical experience and records this estimate as the services are rendered using the expected level of services that will be provided and the schedule of those services or a historical average of prior adjustments.

Hospice Services. The Company is paid by Medicare under a per diem payment system. The Company receives one of four predetermined daily or hourly rates based upon the level of care the Company furnished. The Company records net service revenue from hospice services based on the daily or hourly rate and recognizes revenue as hospice services are provided.

Hospice payments are also subject to an inpatient cap and an overall payment cap. Inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall payment cap relates to individual programs receiving reimbursements in excess of a “cap amount,” calculated by multiplying the number of beneficiaries during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. The Company monitors its limits on a program-by-program basis and records an estimate of its liability for reimbursements received in excess of the cap amount. Annually, the Company receives notification whether any of its hospices have exceeded the cap. Adjustments resulting from these notifications have not been material.

Facility-Based Services

Long-Term Acute Care Services. The Company is reimbursed by Medicare for services provided under the LTACH prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient classified in that particular long-term care diagnosis-related group. For selected patients, the amount may be further adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for the Company’s LTACHs as services are provided.

Medicaid, managed care and other payors

The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as services are provided based on this fee schedule. The Company’s managed care and other payors reimburse the Company in a manner similar to either Medicare or Medicaid. Accordingly, the Company recognizes revenue from managed care and other payors in the same manner as the Company recognizes revenue from Medicare or Medicaid.

Management Services

The Company records management services revenue as services are provided in accordance with the various management services agreements to which the Company is a party. As described in the agreements, the Company provides billing, management and other consulting services suited to and designed for the efficient operation of the applicable home nursing agency. The Company is responsible for the costs associated with the locations and personnel required for the provision of services. The Company is compensated based on a percentage of cash collections, reimbursed for operating expenses, compensated based on a percentage of operating net income, or compensated based on an agreed upon management fee.

Accounts Receivable and Allowances for Uncollectible Accounts

The Company reports accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, other third-party payors, and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations of receivables is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 60% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The provision for bad debts is based upon the Company’s assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined the account will not be collected.

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is deducted from the final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% instead of 60% of the estimated reimbursement.

The Company’s Medicare population is paid at a prospectively set amount that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and contracts with other payors are structured similar to either the Medicare or Medicaid payment methodologies. Because of its payor mix, the Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated contractual allowance when reporting net service revenue for each reporting period.

Other Significant Accounting Policies

Earnings Per Share

Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of operations by the weighted-average number of shares outstanding plus potentially dilutive shares.

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended March 31,
	2013		2012
Weighted average number of shares outstanding for basic per share calculation		16,966,525		18,333,838
Effect of dilutive potential shares:
Options		3,830		1,691
Nonvested stock		103,188		64,079
Adjusted weighted average shares for diluted per share calculation		17,073,543		18,399,608
Anti-dilutive shares		187,344		434,015

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Stockholder's Equity (Details Textual) (USD $)	1 Months Ended	3 Months Ended
	Oct. 31, 2010	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Stockholder's Equity (Textual) [Abstract]
Common stock reserved and available for issuance		1,500,000
Percentage of directors' stock grant vested on one year anniversary date		100.00%
Period of Vested Shares		5 years
Granted, Weighted average grant date fair value		$ 21.01
Total unrecognized compensation cost related to nonvested shares of common stock granted		$ 10,000,000
Weighted average period of Cost Recognized		3 years 5 months 19 days
Total fair Value of Shares of common stock vested		2,900,000	2,900,000
Compensation expense related to nonvested stock grants		888,000	1,400,000
Price of shares issued under Employee Stock Purchase Plan as a percentage of FMV		95.00%
Number of shares reserved for the Employee Stock Purchase Plan		250,000
Stock options issued and exercisable		15,000
Options exercised		0
Options forfeited		0
Options granted		0
Shares redeemed to satisfy personal tax obligations		28,891
Values of shares redeemed to satisfy personal tax obligations		607,000
Par value of common stock repurchased	$ 0.01	$ 0.01		$ 0.01
Total amount authorized for repurchase under Company's Stock Repurchase Program	50,000,000
Number of shares of common stock repurchased during period		0
Number of shares of common stock reissued from treasury shares		0
Remaining amount authorized for repurchase under Company's Stock Repurchase Program		$ 22,500,000
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested stock grants to independent directors		24,300
Director Period of Vested Shares		1 year
Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested stock grants to employees		155,898

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Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Percentage of net service revenue
Percentage of net service revenue	100.00%	100.00%
Equity joint ventures [Member]
Percentage of net service revenue
Percentage of net service revenue	50.10%	48.20%
Wholly-owned subsidiaries [Member]
Percentage of net service revenue
Percentage of net service revenue	47.20%	48.30%
License leasing arrangements [Member]
Percentage of net service revenue
Percentage of net service revenue	1.80%	2.60%
Management services [Member]
Percentage of net service revenue
Percentage of net service revenue	0.90%	0.90%

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Segment Information

	Three Months Ended March 31, 2013
	Home- Based Services			Facility- Based Services			Total
Net service revenue	$	141,987		$	19,966		$	161,953
Cost of service revenue		81,590			11,658			93,248
Provision for bad debts		3,277			640			3,917
General and administrative expenses		46,172			5,451			51,623
Operating income		10,948			2,217			13,165
Interest expense		(387	)		(38	)		(425	)
Non-operating income		41			24			65
Income before income taxes and noncontrolling interest		10,602			2,203			12,805
Income tax expense		4,087			449			4,536
Net income		6,515			1,754			8,269
Less net income attributable to noncontrolling interests		1,599			384			1,983
Net income attributable to LHC Group, Inc.’s common stockholders	$	4,916		$	1,370		$	6,286
Total assets	$	358,140		$	36,767		$	394,907
	Three Months Ended March 31, 2012
	Home- Based Services			Facility- Based Services			Total
Net service revenue	$	139,595		$	19,166		$	158,761
Cost of service revenue		79,061			10,798			89,859
Provision for bad debts		2,623			138			2,761
General and administrative expenses		45,226			5,656			50,882
Operating income		12,685			2,574			15,259
Interest expense		(323	)		(36	)		(359	)
Non-operating income		53			12			65
Income before income taxes and noncontrolling interest		12,415			2,550			14,965
Income tax expense		4,731			495			5,226
Net income		7,684			2,055			9,739
Less net income attributable to noncontrolling interests		1,692			306			1,998
Net income attributable to LHC Group, Inc.’s common stockholders	$	5,992		$	1,749		$	7,741
Total assets	$	345,287		$	34,761		$	380,048

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Commitments and Contingencies (Details)	3 Months Ended
	Mar. 31, 2013
Commitments and Contingencies (Textual) [Abstract]
Period of joint venture buy/sell option	30 days

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Significant Accounting Policies (Details 1)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Percentage of net service revenue
Percentage of net service revenue	100.00%	100.00%
Medicare [Member]
Percentage of net service revenue
Percentage of net service revenue	79.30%	78.50%
Medicaid [Member]
Percentage of net service revenue
Percentage of net service revenue	1.50%	2.10%
Other [Member]
Percentage of net service revenue
Percentage of net service revenue	19.20%	19.40%

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Significant Accounting Policies (Details 2)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Percentage of net service revenue
Percentage of net service revenue	100.00%	100.00%
Home-based services [Member]
Percentage of net service revenue
Percentage of net service revenue	87.70%	87.90%
Facility-based services [Member]
Percentage of net service revenue
Percentage of net service revenue	12.30%	12.10%

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Organization

3 Months Ended

Mar. 31, 2013

Organization [Abstract]

Organization

1. Organization

LHC Group, Inc. (the “Company”) is a health care provider specializing in the post-acute continuum of care primarily for Medicare beneficiaries. The Company provides home-based services, primarily through home nursing agencies and hospices, and facility-based services, primarily through long-term acute care hospitals (“LTACHs”). As of March 31, 2013, the Company, through its wholly- and majority-owned subsidiaries, equity joint ventures and controlled affiliates, operated in Alabama, Arkansas, California, Georgia, Florida, Idaho, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, Washington and West Virginia.

Unaudited Interim Financial Information

The condensed consolidated balance sheets as of March 31, 2013 and December 31, 2012, and the related condensed consolidated statements of income for the three months ended March 31, 2013 and 2012, condensed consolidated statement of changes in equity for the three months ended March 31, 2013, condensed consolidated statements of cash flows for the three months ended March 31, 2013 and 2012 and related notes (collectively, these financial statements and the related notes are referred to herein as the “interim financial information”) have been prepared by the Company. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented. This report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2013, which includes information and disclosures not included herein.

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Significant Accounting Policies (Details 3)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Shares used in computation of basic and diluted per share information
Weighted average number of shares outstanding for basic per share calculation	16,966,525	18,333,838
Effect of dilutive potential shares:
Options	3,830	1,691
Nonvested stock	103,188	64,079
Adjusted weighted average shares for diluted per share calculation	17,073,543	18,399,608
Anti-dilutive shares	187,344	434,015

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Income Taxes (Textual) [Abstract]
Tax payable as an unrecognized tax benefit	$ 3.4

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash	$ 3,404	$ 9,720
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts of $12,917 and $11,863, respectively	81,238	83,951
Other receivables	622	589
Amounts due from governmental entities	1,237	1,596
Total receivables, net	83,097	86,136
Deferred income taxes	9,283	7,671
Prepaid income taxes	3,733	7,436
Prepaid expenses	6,573	6,818
Other current assets	3,893	2,949
Total current assets	109,983	120,730
Property, building and equipment, net of accumulated depreciation of $35,947 and $34,331, respectively	29,037	29,531
Goodwill	189,153	169,150
Intangible assets, net of accumulated amortization of $3,113 and $2,985, respectively	61,328	62,042
Other assets	5,406	5,441
Total assets	394,907	386,894
Current liabilities:
Accounts payable and other accrued liabilities	17,647	14,897
Salaries, wages, and benefits payable	23,581	29,890
Self insurance reserve	6,170	5,444
Amounts due to governmental entities	4,301	4,979
Total current liabilities	51,699	55,210
Deferred income taxes	27,587	25,129
Income tax payable	3,415	3,415
Revolving credit facility	22,996	19,500
Note payable	201
Total liabilities	105,898	103,254
Noncontrolling interest - redeemable	11,791	11,426
LHC Group, Inc. stockholders' equity:
Common stock - $0.01 par value; 40,000,000 shares authorized; 21,727,657 and 21,578,772 shares issued in 2013 and 2012 respectively	217	216
Treasury stock - 4,681,930 and 4,653,039 shares at cost, respectively	(34,453)	(33,846)
Additional paid-in capital	101,346	100,619
Retained earnings	207,478	201,192
Total LHC Group, Inc. stockholders' equity	274,588	268,181
Noncontrolling interest - non-redeemable	2,630	4,033
Total equity	277,218	272,214
Total liabilities and equity	$ 394,907	$ 386,894

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Noncontrolling interest (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Summary of activity of noncontrolling interest-redeemable
Noncontrolling interest-redeemable, Beginning balance	$ 11,426
Net income attributable to noncontrolling interest-redeemable	1,763
Transfer of noncontrolling interest	1,342
Noncontrolling interest-redeemable distributions	(2,228)
Acquired noncontrolling interest	(512)
Noncontrolling interest-redeemable, Ending balance	$ 11,791

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Condensed Consolidated Statement of Changes in Equity (Unaudited) (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Condensed Consolidated Statements of Changes in Equity [Abstract]
Net income attributable to noncontrolling interest-redeemable	$ 1.8

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Acquisitions and Disposals (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2013
Acquisitions and Disposals (Textual) [Abstract]
Total purchase price for acquisitions	$ 20,000,000
Acquisition price paid in cash	19,700,000
Acquisition paid in assumed liabilities	300,000
Acquisition-related costs (included in general and administrative expenses)	267,000
Purchase price to acquire additional ownership interests in joint ventures	350,000
Home-based services segment [Member]
Business Acquisition [Line Items]
Goodwill Recognized	$ 20,000,000
Home Health Entities [Member]
Business Acquisition [Line Items]
Number of entities acquired	19
Hospice Entity [Member]
Business Acquisition [Line Items]
Number of entities acquired	1

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2013

Significant Accounting Policies [Abstract]

Percentage of net service revenue earned by type of ownership or relationship with operating entity

	Three Months Ended March 31,
	2013			2012
Equity joint ventures		50.1	%		48.2	%
Wholly-owned subsidiaries		47.2	%		48.3	%
License leasing arrangements		1.8	%		2.6	%
Management services		0.9	%		0.9	%
		100.0	%		100.0	%

Percentage of net service revenue earned by category of payor

	Three Months Ended March 31,
	2013			2012
Payor:
Medicare		79.3	%		78.5	%
Medicaid		1.5	%		2.1	%
Other		19.2	%		19.4	%
		100.0	%		100.0	%

Percentage of net service revenue contributed from each reporting segment

	Three Months Ended March 31,
	2013			2012
Home-based services		87.7	%		87.9	%
Facility-based services		12.3	%		12.1	%
		100.0	%		100.0	%

Shares used in computation of basic and diluted per share information

	Three Months Ended March 31,
	2013		2012
Weighted average number of shares outstanding for basic per share calculation		16,966,525		18,333,838
Effect of dilutive potential shares:
Options		3,830		1,691
Nonvested stock		103,188		64,079
Adjusted weighted average shares for diluted per share calculation		17,073,543		18,399,608
Anti-dilutive shares		187,344		434,015

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Goodwill and Intangibles (Details) (USD $) In Thousands, unless otherwise specified			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Home-based services segment [Member]	Mar. 31, 2013 Facility-based services segment [Member]	Dec. 31, 2012 Facility-based services segment [Member]
Changes in goodwill
Balance at beginning of period	$ 189,153	$ 169,150	$ 157,559	$ 11,591	$ 11,591
Goodwill from acquisitions			20,003
Balance at ending period	$ 189,153	$ 169,150	$ 177,562	$ 11,591	$ 11,591

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Goodwill and Intangibles (Tables)

3 Months Ended

Mar. 31, 2013

Goodwill and Intangibles [Abstract]

Schedule of changes in goodwill by segment

	Three Months Ended March 31, 2013
Home-based services segment:
Balance at beginning of period	$	157,559
Goodwill from acquisitions		20,003
Balance as of March 31, 2013	$	177,562
Facility-based services segment:
Balance at beginning of period	$	11,591
Balance as of March 31, 2013	$	11,591
Consolidated balance as of March 31, 2013	$	189,153

Schedule of changes in intangible assets

	Trade Names			Certificate of Need/ License			Other Intangibles			Total
Balance as of December 31, 2012	$	51,408		$	10,100		$	534		$	62,042
Additions (1)		—			(515	)		—			(515	)
Amortization		(71	)		—			(128	)		(199	)
Balance as of March 31, 2013	$	51,337		$	9,585		$	406		$	61,328

(1) Includes $515,000 to reduce intangible assets acquired in 2012 based on the final Accounting Standards Codification (“ASC”) 805 valuation report received during the three months ended March 31, 2013. All reductions are related to the home-based services segment.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating activities
Net income	$ 8,269	$ 9,739
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	1,830	1,919
Provision for bad debts	3,917	2,761
Stock-based compensation expense	888	1,408
Deferred income taxes	846	(353)
(Gain) loss on sale of assets	14
Changes in operating assets and liabilities, net of acquisitions:
Receivables	(1,237)	(3,774)
Prepaid expenses and other assets	(664)	1,200
Prepaid income taxes	3,703	18,349
Accounts payable and accrued expenses	(3,178)	(5,484)
Net amounts due to/from governmental entities	(319)	(180)
Net cash provided by operating activities	14,069	25,585
Investing activities
Purchases of property, building and equipment	(1,151)	(1,160)
Cash paid for acquisitions, primarily goodwill and intangible assets	(19,655)	(1,700)
Net cash (used in) investing activities	(20,806)	(2,860)
Financing activities
Proceeds from line of credit	41,500	26,879
Payments on line of credit	(38,004)	(47,486)
Proceeds from employee stock purchase plan	179	189
Proceeds from debt issuance	201
Noncontrolling interest distributions	(2,509)	(2,302)
Excess tax benefits from vesting of restricted stock	11
Redemption of treasury shares	(607)
Purchase of additional controlling interest	(350)
Sale of noncontrolling interest		80
Net cash provided by (used in) financing activities	421	(22,640)
Change in cash	(6,316)	85
Cash at beginning of period	9,720	256
Cash at end of period	3,404	341
Supplemental disclosures of cash flow information
Interest paid	425	359
Income taxes paid	$ 10,337	$ 243

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]
Patient accounts receivable, allowance for uncollectible accounts	$ 12,917	$ 11,863
Property, building and equipment, accumulated depreciation	35,947	34,331
Intangible assets, accumulated amortization	$ 3,113	$ 2,985
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	21,727,657	21,578,772
Treasury stock at cost, shares	4,681,930	4,653,039

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Allowance for Uncollectible Accounts

3 Months Ended

Mar. 31, 2013

Allowance for Uncollectible Accounts [Abstract]

Allowance for Uncollectible Accounts

10. Allowance for Uncollectible Accounts

The following table summarizes the activity and ending balances in the allowance for uncollectible accounts (amounts in thousands):

Balance as of December 31, 2012	$	11,863
Additions and expenses		3,917
Deductions		(2,863	)
Balance as of March 31, 2013	$	12,917

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 02, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	LHC Group, Inc
Entity Central Index Key	0001303313
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,590,679

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

11. Fair Value of Financial Instruments

The carrying amounts of the Company’s cash, receivables, accounts payable and accrued liabilities approximate their fair values. For the three months ended March 31, 2013, the carrying value of the Company’s long-term debt approximates fair value as the interest rates approximate current rates.

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Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statements of Income [Abstract]
Net service revenue	$ 161,953	$ 158,761
Cost of service revenue	93,248	89,859
Gross margin	68,705	68,902
Provision for bad debts	3,917	2,761
General and administrative expenses	51,623	50,882
Operating income	13,165	15,259
Interest expense	(425)	(359)
Non-operating income	65	65
Income before income taxes and noncontrolling interest	12,805	14,965
Income tax expense	4,536	5,226
Net income	8,269	9,739
Less net income attributable to noncontrolling interests	1,983	1,998
Net income attributable to LHC Group, Inc.'s common stockholders	$ 6,286	$ 7,741
Earnings per share - basic and diluted:
Net income attributable to LHC Group, Inc.'s common stockholders	$ 0.37	$ 0.42
Weighted average shares outstanding:
Basic	16,966,525	18,333,838
Diluted	17,073,543	18,399,608

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Credit Facility

3 Months Ended

Mar. 31, 2013

Credit Facility [Abstract]

Credit Facility

5. Credit Facility

As of March 31, 2013 and December 31, 2012, respectively, the Company had $23.0 million and $19.5 million drawn and letters of credit totaling $6.2 million and $6.0 million outstanding under the Credit Facility. The interest rate for borrowings under the Credit Facility is a function of the prime rate (base rate) or Eurodollar rate, as elected by the Company, plus the applicable margin based on the Leverage Ratio, as defined in the agreement. The interest rate at March 31, 2013 was 4.25%.

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Goodwill and Intangibles

3 Months Ended

Mar. 31, 2013

Goodwill and Intangibles [Abstract]

Goodwill and Intangibles

4. Goodwill and Intangibles

The changes in recorded goodwill by segment for the three months ended March 31, 2013 were as follows (amounts in thousands):

	Three Months Ended March 31, 2013
Home-based services segment:
Balance at beginning of period	$	157,559
Goodwill from acquisitions		20,003
Balance as of March 31, 2013	$	177,562
Facility-based services segment:
Balance at beginning of period	$	11,591
Balance as of March 31, 2013	$	11,591
Consolidated balance as of March 31, 2013	$	189,153

The following table summarizes the changes in intangible assets during the three months ended March 31, 2013 (amounts in thousands):

	Trade Names			Certificate of Need/ License			Other Intangibles			Total
Balance as of December 31, 2012	$	51,408		$	10,100		$	534		$	62,042
Additions (1)		—			(515	)		—			(515	)
Amortization		(71	)		—			(128	)		(199	)
Balance as of March 31, 2013	$	51,337		$	9,585		$	406		$	61,328

(1) Includes $515,000 to reduce intangible assets acquired in 2012 based on the final Accounting Standards Codification (“ASC”) 805 valuation report received during the three months ended March 31, 2013. All reductions are related to the home-based services segment.

Intangible assets of $60.2 million, net of accumulated amortization, were related to the home-based services segment and $1.1 million were related to the facility-based services segment as of March 31, 2013.

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Acquisitions and Disposals (Tables)

3 Months Ended

Mar. 31, 2013

Acquisitions and Disposals [Abstract]

Schedule of acquired entities

Acquired Entity	Ownership Percentage			State of Operations	Acquisition Date
LHCG XXXVII, LLC (d/b/a Addus HealthCare)		90	%	Illinois	03/01/2013
LHCG XXXVIII, LLC (d/b/a Addus HealthCare)		90	%	California	03/01/2013
LHCG XLII, LLC (d/b/a/ Arkansas HomeCare)		100	%	Arkansas	03/01/2013
LHCG XLI, LLC (d/b/a CarePro Home Health)		100	%	South Carolina	03/01/2013
LHCG XXXIX, LLC (d/b/a Addus HealthCare)		100	%	Nevada	03/01/2013

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Segment Information

3 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Segment Information

12. Segment Information

The Company’s segments consist of home-based services and facility-based services. Home-based services include home nursing services and hospice services. Facility-based services include long-term acute care services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The following tables summarize the Company’s segment information for the three months ending March 31, 2013 and 2012 (amounts in thousands):

	Three Months Ended March 31, 2013
	Home- Based Services			Facility- Based Services			Total
Net service revenue	$	141,987		$	19,966		$	161,953
Cost of service revenue		81,590			11,658			93,248
Provision for bad debts		3,277			640			3,917
General and administrative expenses		46,172			5,451			51,623
Operating income		10,948			2,217			13,165
Interest expense		(387	)		(38	)		(425	)
Non-operating income		41			24			65
Income before income taxes and noncontrolling interest		10,602			2,203			12,805
Income tax expense		4,087			449			4,536
Net income		6,515			1,754			8,269
Less net income attributable to noncontrolling interests		1,599			384			1,983
Net income attributable to LHC Group, Inc.’s common stockholders	$	4,916		$	1,370		$	6,286
Total assets	$	358,140		$	36,767		$	394,907
	Three Months Ended March 31, 2012
	Home- Based Services			Facility- Based Services			Total
Net service revenue	$	139,595		$	19,166		$	158,761
Cost of service revenue		79,061			10,798			89,859
Provision for bad debts		2,623			138			2,761
General and administrative expenses		45,226			5,656			50,882
Operating income		12,685			2,574			15,259
Interest expense		(323	)		(36	)		(359	)
Non-operating income		53			12			65
Income before income taxes and noncontrolling interest		12,415			2,550			14,965
Income tax expense		4,731			495			5,226
Net income		7,684			2,055			9,739
Less net income attributable to noncontrolling interests		1,692			306			1,998
Net income attributable to LHC Group, Inc.’s common stockholders	$	5,992		$	1,749		$	7,741
Total assets	$	345,287		$	34,761		$	380,048

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Contingencies

The Company is involved in various legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, management believes the outcome of pending litigation will not have a material adverse effect, after considering the effect of the Company’s insurance coverage, on the Company’s condensed consolidated financial statements.

On October 17, 2011, the Company received a subpoena from the Department of Health and Human Services Office of Inspector General (the “OIG”). The subpoena requests documents related to the Company’s agencies in Oregon, Washington and Idaho. The Company will produce the requested documents and will cooperate with the OIG’s review in this matter. The Company cannot predict the outcome or effect of this review, if any, on the Company’s business.

On June 13, 2012, a putative shareholder securities class action was filed against the Company and its Chairman and Chief Executive Officer in the United States District Court for the Western District of Louisiana, styled City of Omaha Police & Fire Retirement System v. LHC Group, Inc., et al., Case No. 6:12-cv-01609-JTT-CMH. The action was filed on behalf of LHC shareholders who purchased shares between July 30, 2008 and October 26, 2011. Plaintiff generally alleges that the defendants caused false and misleading statements to be issued in violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder and that the Company’s Chairman and Chief Executive Officer is a control person under Section 20(a) of the Exchange Act. On November 2, 2012, Lead Plaintiff City of Omaha Police & Fire Retirement System filed an Amended Complaint for Violations of the Federal Securities Laws (“Amended Complaint”) on behalf of the same putative class of LHC shareholders as the original Complaint. In addition to claims under Sections 10(b) and 20(a) of the Exchange Act, the Amended Complaint added a claim against the Chairman and Chief Executive Officer for violation of Section 20A of the Exchange Act. The Company believes these claims are without merit and intends to defend this lawsuit vigorously. On December 17, 2012, the Company and the Chairman and Chief Executive Officer filed a motion to dismiss the Amended Complaint, which was denied by Order dated March 15, 2013. The Company cannot predict the outcome or effect of this lawsuit, if any, on the Company’s business.

Except as discussed above, the Company is not aware of any pending or threatened investigations involving allegations of potential wrongdoing.

Any negative findings in the investigations or lawsuits could result in substantial financial penalties or awards against the Company or exclusion from future participation in the Medicare and Medicaid programs. At this time, the Company cannot predict the ultimate outcome of these inquiries or the potential range of damages, if any.

Joint Venture Buy/Sell Provisions

Several of the Company’s joint ventures include a buy/sell option that grants to the Company and its joint venture partners the right to require the other joint venture party to either purchase all of the exercising member’s membership interests or sell to the exercising member all of the non-exercising member’s membership interest, at the non-exercising member’s option, within 30 days of the receipt of notice of the exercise of the buy/sell option. In some instances, the purchase price is based on a multiple of the historical or future earnings before income taxes and depreciation and amortization of the equity joint venture at the time the buy/sell option is exercised. In other instances, the buy/sell purchase price will be negotiated by the partners and subject to a fair market valuation process. The Company has not received notice from any joint venture partners of their intent to exercise the terms of the buy/sell agreement nor has the Company notified any joint venture partners of its intent to exercise the terms of the buy/sell agreement.

Compliance

The laws and regulations governing the Company’s operations, along with the terms of participation in various government programs, regulate how the Company does business, the services offered and its interactions with patients and the public. These laws and regulations and their interpretations, are subject to frequent change. Changes in existing laws or regulations, or their interpretations, or the enactment of new laws or regulations could materially and adversely affect the Company’s operations and financial condition.

The Company is subject to various routine and non-routine governmental reviews, audits and investigations. In recent years, federal and state civil and criminal enforcement agencies have heightened and coordinated their oversight efforts related to the health care industry, including referral practices, cost reporting, billing practices, joint ventures and other financial relationships among health care providers. Violation of the laws governing the Company’s operations, or changes in the interpretation of those laws, could result in the imposition of fines, civil or criminal penalties, and/or termination of the Company’s rights to participate in federal and state-sponsored programs and suspension or revocation of the Company’s licenses. The Company believes that it is in material compliance with all applicable laws and regulations.

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Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes [Abstract]

Income Taxes

6. Income Taxes

As of March 31, 2013, $3.4 million was recorded in income tax payable as an unrecognized tax benefit which, if recognized, would decrease the Company’s effective tax rate. All of the Company’s unrecognized tax benefit is due to the settlement with the United States of America, which was announced September 30, 2011.

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Stockholder's Equity

3 Months Ended

Mar. 31, 2013

Stockholder's Equity [Abstract]

Stockholder's Equity

7. Stockholder’s Equity

Equity Based Awards

At the 2010 Annual Meeting, the stockholders of the Company approved the Company’s 2010 Long Term Incentive Plan (the “2010 Incentive Plan”). The 2010 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors. A total of 1,500,000 shares of the Company’s common stock is reserved and available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee of the Board of Directors. The Compensation Committee determines the exercise price for non-statutory stock options. The exercise price for any option cannot be less than the fair market value of the Company’s common stock as of the date of grant.

Share Based Compensation

Nonvested Stock

During the three months ended March 31, 2013, the Company’s independent directors were granted 24,300 nonvested shares of common stock under the 2005 Director Compensation Plan. The shares were drawn from the 1,500,000 shares of common stock reserved and available for issuance under the 2010 Incentive Plan. The shares vest 100% on the one year anniversary date. During the three months ended March 31, 2013, employees were granted 155,898 nonvested shares of common stock pursuant to the 2010 Incentive Plan. The shares generally vest over a five year period, conditioned on continued employment for the full incentive period. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date. The weighted average grant date fair value of nonvested shares of common stock granted during the three months ended March 31, 2013 was $21.01.

The following table represents the nonvested stock activity for the three months ended March 31, 2013:

	Number of Shares			Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2012		486,061		$	22.33
Granted		180,198		$	21.01
Vested		(140,040	)	$	20.83
Nonvested shares outstanding as of March 31, 2013		526,219		$	22.28

As of March 31, 2013, there was $10.0 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.47 years. The total fair value of shares of common stock vested during each of the three months ended March 31, 2013 and 2012 was $2.9 million. The Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight line basis for shares of common stock that vest over time. The Company recorded $888,000 and $1.4 million of compensation expense related to nonvested stock grants in the three months ended March 31, 2013 and 2012, respectively.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan. The table below details the shares of common stock issued during 2013:

	Number of Shares		Per share price
Shares available as of December 31, 2012		61,247
Shares issued during three months ended March 31, 2013		8,845	$	20.24
Shares available as of March 31, 2013		52,402

Stock Options

As of March 31, 2013, 15,000 options were issued and exercisable. During the three months ended March 31, 2013, no options were exercised or forfeited and no options were granted.

Treasury Stock

In conjunction with the vesting of the non-vested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the three months ended March 31, 2013, the Company redeemed 28,891 shares of common stock valued at $607,000, related to these tax obligations.

Stock Repurchase Program

In October 2010, the Company’s Board of Directors authorized a share repurchase program to repurchase shares of the Company’s common stock, par value $0.01 per share, from time to time, in an amount not to exceed $50.0 million (“the Stock Repurchase Program”). The Company anticipates that it will finance the Stock Repurchase Program with cash from general corporate funds or draws under the Credit Facility. The Company may repurchase shares of common stock in open market purchases or in privately negotiated transactions in accordance with applicable securities laws, rules and regulations. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations.

The Company uses the cost method to account for the repurchase of common stock and the average cost method to account for reissuance of treasury shares. During the three months ended March 31, 2013, no shares have been repurchased or reissued from treasury shares. The remaining dollar value of shares authorized to be purchased under the Stock Repurchase Program was $22.5 million as of March 31, 2013.

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Noncontrolling interest

3 Months Ended

Mar. 31, 2013

Noncontrolling interest [Abstract]

Noncontrolling interest

9. Noncontrolling interest

Noncontrolling Interest-Redeemable

A majority of the Company’s joint venture agreements include a provision that requires the Company to purchase the noncontrolling partner’s interest upon the occurrence of certain triggering events, such as death or bankruptcy of the partner or the partner’s exclusion from the Medicare or Medicaid programs. These triggering events and the related repurchase provisions are specific to each individual joint venture; if the repurchase provision is triggered in any one joint venture, the remaining joint ventures would not be impacted. Upon the occurrence of a triggering event, the Company would be required to purchase the noncontrolling partner’s interest at either the fair value or the book value at the time of purchase as stated in the agreement. Historically, no triggering event has occurred, and the Company believes the likelihood of a triggering event occurring is remote. The Company has never been required to purchase the noncontrolling interest of any of its joint venture partners. According to authoritative guidance, redeemable noncontrolling interests must be reported outside of permanent equity on the consolidated balance sheet in instances where there is a repurchase provision with a triggering event that is outside the control of the Company.

The following table summarizes the activity of noncontrolling interest-redeemable for the three months ended March 31, 2013 (amounts in thousands):

Balance as of December 31, 2012	$	11,426
Net income attributable to noncontrolling interest-redeemable		1,763
Transfer of noncontrolling interest		1,342
Noncontrolling interest-redeemable distributions		(2,228	)
Acquired noncontrolling interest (1)		(512	)
Balance as of March 31, 2013	$	11,791

(1) The fair value of the acquired noncontrolling interest was preliminary pending the final valuation for a 2012 acquisition. The change in valuations was recorded during the three months ended March 31, 2013 upon receipt of the final valuation.

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Acquisitions and Disposals (Details)	3 Months Ended
	Mar. 31, 2013
LHCG XXXVII, LLC (d/b/a Addus HealthCare) [Member]
Summary of the acquisitions
Ownership Percentage	90.00%
State of operations	Illinois
Acquisition Date	Mar. 01, 2013
LHCG XXXVIII, LLC (d/b/a Addus HealthCare) [Member]
Summary of the acquisitions
Ownership Percentage	90.00%
State of operations	California
Acquisition Date	Mar. 01, 2013
LHCG XLII, LLC (d/b/a/ Arkansas HomeCare) [Member]
Summary of the acquisitions
Ownership Percentage	100.00%
State of operations	Arkansas
Acquisition Date	Mar. 01, 2013
LHCG XLI, LLC (d/b/a CarePro Home Health) [Member]
Summary of the acquisitions
Ownership Percentage	100.00%
State of operations	South Carolina
Acquisition Date	Mar. 01, 2013
LHCG XXXIX, LLC (d/b/a Addus HealthCare) [Member]
Summary of the acquisitions
Ownership Percentage	100.00%
State of operations	Nevada
Acquisition Date	Mar. 01, 2013

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Significant Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates.

Critical Accounting Policies

Critical Accounting Policies

The Company’s most critical accounting policies relate to the principles of consolidation, revenue recognition and accounts receivable and allowances for uncollectible accounts.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include all subsidiaries and entities controlled by the Company. Control is defined by the Company as ownership of a majority of the voting interest of an entity. The condensed consolidated financial statements include entities in which the Company receives a majority of the entities’ expected residual returns, absorbs a majority of the entities’ expected losses, or both, as a result of ownership, contractual or other financial interests in the entity. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s condensed consolidated financial statements.

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended March 31,
	2013			2012
Equity joint ventures		50.1	%		48.2	%
Wholly-owned subsidiaries		47.2	%		48.3	%
License leasing arrangements		1.8	%		2.6	%
Management services		0.9	%		0.9	%
		100.0	%		100.0	%

All significant intercompany accounts and transactions have been eliminated in the Company’s accompanying condensed consolidated financial statements. Business combinations accounted for under the acquisition method have been included in the condensed consolidated financial statements from the respective dates of acquisition.

The following describes the Company’s consolidation policy with respect to its various ventures excluding wholly-owned subsidiaries:

Equity Joint Ventures

The Company’s joint ventures are structured in which the Company typically owns a majority equity interest ranging from 51% to 91%. The members of the Company’s equity joint ventures participate in profits and losses in proportion to their equity interests. The Company consolidates these entities as the Company has voting control over the entities.

License Leasing Arrangements

The Company, through wholly-owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing agencies. As with its wholly-owned subsidiaries, the Company owns 100% of the equity of these entities and consolidates them based on such ownership.

Management Services

The Company has various management services agreements under which the Company manages certain operations of agencies and facilities. The Company does not consolidate these agencies or facilities because the Company does not have an ownership interest and does not have an obligation to absorb losses of the entities or the right to receive the benefits from the entities.

Revenue Recognition

Revenue Recognition

The Company reports net service revenue at the estimated net realizable amount due from Medicare, Medicaid, commercial insurance, managed care payors, patients and others for services rendered. All payors contribute to both the home-based services and facility-based services.

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
Payor:
Medicare		79.3	%		78.5	%
Medicaid		1.5	%		2.1	%
Other		19.2	%		19.4	%
		100.0	%		100.0	%

The percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2013 and 2012 was as follows:

	Three Months Ended March 31,
	2013			2012
Home-based services		87.7	%		87.9	%
Facility-based services		12.3	%		12.1	%
		100.0	%		100.0	%

Medicare

Home-Based Services

Home Nursing Services. The Company’s home nursing Medicare patients are classified into one of 153 home health resource groups prior to receiving services. Based on this home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60-day period referred to as an episode. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period.

Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. In calculating net service revenue, management estimates the impact of these payment adjustments based on historical experience and records this estimate as the services are rendered using the expected level of services that will be provided and the schedule of those services or a historical average of prior adjustments.

Hospice Services. The Company is paid by Medicare under a per diem payment system. The Company receives one of four predetermined daily or hourly rates based upon the level of care the Company furnished. The Company records net service revenue from hospice services based on the daily or hourly rate and recognizes revenue as hospice services are provided.

Hospice payments are also subject to an inpatient cap and an overall payment cap. Inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall payment cap relates to individual programs receiving reimbursements in excess of a “cap amount,” calculated by multiplying the number of beneficiaries during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. The Company monitors its limits on a program-by-program basis and records an estimate of its liability for reimbursements received in excess of the cap amount. Annually, the Company receives notification whether any of its hospices have exceeded the cap. Adjustments resulting from these notifications have not been material.

Facility-Based Services

Long-Term Acute Care Services. The Company is reimbursed by Medicare for services provided under the LTACH prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient classified in that particular long-term care diagnosis-related group. For selected patients, the amount may be further adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for the Company’s LTACHs as services are provided.

Medicaid, managed care and other payors

The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as services are provided based on this fee schedule. The Company’s managed care and other payors reimburse the Company in a manner similar to either Medicare or Medicaid. Accordingly, the Company recognizes revenue from managed care and other payors in the same manner as the Company recognizes revenue from Medicare or Medicaid.

Management Services

The Company records management services revenue as services are provided in accordance with the various management services agreements to which the Company is a party. As described in the agreements, the Company provides billing, management and other consulting services suited to and designed for the efficient operation of the applicable home nursing agency. The Company is responsible for the costs associated with the locations and personnel required for the provision of services. The Company is compensated based on a percentage of cash collections, reimbursed for operating expenses, compensated based on a percentage of operating net income, or compensated based on an agreed upon management fee.

Accounts Receivable and Allowances for Uncollectible Accounts

Accounts Receivable and Allowances for Uncollectible Accounts

The Company reports accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, other third-party payors, and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations of receivables is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 60% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The provision for bad debts is based upon the Company’s assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined the account will not be collected.

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is deducted from the final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% instead of 60% of the estimated reimbursement.

The Company’s Medicare population is paid at a prospectively set amount that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and contracts with other payors are structured similar to either the Medicare or Medicaid payment methodologies. Because of its payor mix, the Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated contractual allowance when reporting net service revenue for each reporting period.

Earnings Per Share

Earnings Per Share

Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of operations by the weighted-average number of shares outstanding plus potentially dilutive shares.

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended March 31,
	2013		2012
Weighted average number of shares outstanding for basic per share calculation		16,966,525		18,333,838
Effect of dilutive potential shares:
Options		3,830		1,691
Nonvested stock		103,188		64,079
Adjusted weighted average shares for diluted per share calculation		17,073,543		18,399,608
Anti-dilutive shares		187,344		434,015

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Noncontrolling interest (Tables)

3 Months Ended

Mar. 31, 2013

Noncontrolling interest [Abstract]

Summary of the activity of noncontrolling interest-redeemable

Balance as of December 31, 2012	$	11,426
Net income attributable to noncontrolling interest-redeemable		1,763
Transfer of noncontrolling interest		1,342
Noncontrolling interest-redeemable distributions		(2,228	)
Acquired noncontrolling interest (1)		(512	)
Balance as of March 31, 2013	$	11,791

(1) The fair value of the acquired noncontrolling interest was preliminary pending the final valuation for a 2012 acquisition. The change in valuations was recorded during the three months ended March 31, 2013 upon receipt of the final valuation.

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Stockholder's Equity (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Nonvested stock activity
Nonvested shares outstanding, Number of Shares, Beginning Balance	486,061
Granted, Number of Shares	180,198
Vested, Number of Shares	(140,040)
Nonvested shares outstanding, Number of Shares, Ending Balance	526,219
Nonvested shares outstanding, Weighted average grant date fair value, Beginning Balance	$ 22.33
Granted, Weighted average grant date fair value	$ 21.01
Vested, Weighted average grant date fair value	$ 20.83
Nonvested shares outstanding, Weighted average grant date fair value, Ending Balance	$ 22.28

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Condensed Consolidated Statement of Changes in Equity (Unaudited) (USD $) In Thousands, except Share data	Total		Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Non-controlling Interest Non-Redeemable
Beginning balances at Dec. 31, 2012	$ 272,214		$ 216	$ (33,846)	$ 100,619	$ 201,192	$ 4,033
Beginning balances, shares at Dec. 31, 2012			21,578,772	(4,653,039)
Net income	6,506	[1]				6,286	220
Transfer of noncontrolling interest	(1,342)						(1,342)
Purchase of additional controlling interest	(350)				(350)
Noncontrolling interest distributions	(281)						(281)
Nonvested stock compensation	888				888
Issuance of vested stock, shares			140,040
Treasury shares surrendered to pay income tax	(607)			(607)
Treasury shares surrendered to pay income tax, shares				(28,891)
Excess tax benefits - vesting nonvested stock	11				11
Issuance of common stock under Employee Stock Purchase Plan	179		1		178
Issuance of common stock under Employee Stock Purchase Plan, shares			8,845
Ending balances at Mar. 31, 2013	$ 277,218		$ 217	$ (34,453)	$ 101,346	$ 207,478	$ 2,630
Ending balances, shares at Mar. 31, 2013			21,727,657	(4,681,930)

[1] Net income excludes net income attributable to noncontrolling interest-redeemable of $1.8 million during the three months ending March 31, 2013. Noncontrolling interest-redeemable is reflected outside of permanent equity on the condensed consolidated balance sheets. See Note 9 of the Notes to Condensed Consolidated Financial Statements.

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Acquisitions and Disposals

3 Months Ended

Mar. 31, 2013

Acquisitions and Disposals [Abstract]

Acquisitions and Disposals

3. Acquisitions and Disposals

Pursuant to the Company’s strategy for becoming the leading provider of post-acute health care services in the United States, the Company acquired the home-based service line of Addus HomeCare Corp., which consisted of 19 home health agencies and one hospice agency, during the three months ended March 31, 2013, and maintains an ownership interest in the entities as set forth below:

Acquired Entity	Ownership Percentage			State of Operations	Acquisition Date
LHCG XXXVII, LLC (d/b/a Addus HealthCare)		90	%	Illinois	03/01/2013
LHCG XXXVIII, LLC (d/b/a Addus HealthCare)		90	%	California	03/01/2013
LHCG XLII, LLC (d/b/a/ Arkansas HomeCare)		100	%	Arkansas	03/01/2013
LHCG XLI, LLC (d/b/a CarePro Home Health)		100	%	South Carolina	03/01/2013
LHCG XXXIX, LLC (d/b/a Addus HealthCare)		100	%	Nevada	03/01/2013

Each of the acquisitions was accounted for under the acquisition method of accounting, and accordingly, the accompanying condensed consolidated financial statements include the results of operations of each acquired entity from the date of acquisition.

The total aggregate purchase price for the Company’s acquisitions was $20.0 million, which $19.7 million was paid in cash and $300,000 in assumed liabilities. The purchase prices are determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows.

The Company has preliminarily recorded $20.0 million as goodwill in the home-based services segment pending final valuation of the assets acquired and liabilities assumed in the acquisition. The Company paid $267,000 in related acquisition costs, which was recorded in general and administrative expenses.

Purchase of Membership Interest in Company’s Subsidiary

During the three months ended March 31, 2013, the Company purchased additional membership interests in one of its joint ventures. The total purchase price for the additional ownership from this equity transaction was $350,000.

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Allowance for Uncollectible Accounts (Tables)

3 Months Ended

Mar. 31, 2013

Allowance for Uncollectible Accounts [Abstract]

Allowance for uncollectible accounts activity and ending balances

Balance as of December 31, 2012	$	11,863
Additions and expenses		3,917
Deductions		(2,863	)
Balance as of March 31, 2013	$	12,917

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Goodwill and Intangibles (Details Textual) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Indefinite-lived Intangible Assets [Line Items]
Intangible assets net of accumulated amortization	$ 61,328,000	$ 62,042,000
Goodwill and Intangibles (Textual) [Abstract]
Reduction in intangible assets due to final valuation report	515,000
Home-based services [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets net of accumulated amortization	60,200,000
Facility-based services [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible assets net of accumulated amortization	$ 1,100,000

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Supplemental Cash Flow Information

3 Months Ended

Mar. 31, 2013

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

13. Supplemental Cash Flow Information

In conjunction with the vesting of the non-vested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the three months ended March 31, 2013, the Company redeemed $607,000 of treasury shares for tax payments on stock vestings.