10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2018

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: 0-24260

AMEDISYS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	11-3131700
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3854 American Way, Suite A, Baton Rouge, LA 70816

(Address of principal executive offices, including zip code)

(225) 292-2031 or (800) 467-2662

(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  ý   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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý   No  ¨

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

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

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, is as follows: Common stock, $0.001 par value, 31,836,002 shares outstanding as of July 27, 2018.

TABLE OF CONTENTS

SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS		1
;;;
PART I.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017	2
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX-MONTH PERIODS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)	3
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2018 AND 2017 (UNAUDITED)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
ITEM 4.	CONTROLS AND PROCEDURES	33
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	35
ITEM 1A.	RISK FACTORS	35
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	35
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	35
ITEM 4.	MINE SAFETY DISCLOSURES	35
ITEM 5.	OTHER INFORMATION	35
ITEM 6.	EXHIBITS	36
SIGNATURES		37

SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

When included in this Quarterly Report on Form 10-Q, or in other documents that we file with the Securities and Exchange Commission (“SEC”) or in statements made by or on behalf of the Company, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the healthcare industry, our ability to integrate our personal care segment into our business efficiently, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to attract and retain qualified personnel, changes in payments and covered services due to an economic downturn and deficit spending by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to comply with requirements stipulated in our corporate integrity agreement and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law. For a discussion of some of the factors discussed above as well as additional factors, see our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 28, 2018, particularly, Part I, Item 1A - Risk Factors therein, which are incorporated herein by reference and Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Additional risk factors may also be described in reports that we file from time to time with the SEC.

Available Information

Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website. In addition, we make available on the Investor Relations subpage of our website (under the link “SEC filings”) free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as practicable after we electronically file such reports with the SEC. Further, copies of our Certificate of Incorporation and Bylaws, our Code of Ethical Business Conduct, our Corporate Governance Guidelines and the charters for the Audit, Compensation, Quality of Care, Compliance and Ethics and Nominating and Corporate Governance Committees of our Board are also available on the Investor Relations subpage of our website (under the link “Governance”).

Additionally, the public may read and copy any of the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. Our electronically filed reports can also be obtained on the SEC’s internet site at http://www.sec.gov.

1

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

	June 30, 2018 (unaudited)			December 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	25,904		$	86,363
Patient accounts receivable	197,592			201,196
Prepaid expenses	10,493			7,329
Other current assets	24,784			16,268
Total current assets	258,773			311,156
Property and equipment, net of accumulated depreciation of $101,128 and $146,814	27,998			31,122
Goodwill	324,145			319,949
Intangible assets, net of accumulated amortization of $31,864 and $30,610	44,888			46,061
Deferred income taxes	46,919			56,064
Other assets, net	50,601			49,130
Total assets	$	753,324		$	813,482
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	29,810		$	25,384
Payroll and employee benefits	87,239			89,936
Accrued expenses	96,472			89,104
Current portion of long-term obligations	668			10,638
Total current liabilities	214,189			215,062
Long-term obligations, less current portion	123,937			78,203
Other long-term obligations	6,137			3,791
Total liabilities	344,263			297,056
Commitments and Contingencies—Note 5
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding	—			—
Common stock, $0.001 par value, 60,000,000 shares authorized; 36,044,177 and 35,747,134 shares issued; and 31,801,357 and 33,964,767 shares outstanding	36			35
Additional paid-in capital	585,137			568,780
Treasury stock, at cost 4,242,820 and 1,782,367 shares of common stock	(237,947		)	(53,713		)
Accumulated other comprehensive income	15			15
Retained earnings	60,712			204
Total Amedisys, Inc. stockholders’ equity	407,953			515,321
Noncontrolling interests	1,108			1,105
Total equity	409,061			516,426
Total liabilities and equity	$	753,324		$	813,482

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

	For the Three-Month  Periods Ended June 30						For the Six-Month Periods Ended June 30
	2018			2017			2018			2017
Net service revenue	$	411,603		$	374,946		$	810,865		$	739,607
Cost of service, excluding depreciation and amortization	242,564			220,541			480,873			436,870
General and administrative expenses:
Salaries and benefits	77,215			74,943			152,846			149,402
Non-cash compensation	3,767			4,356			7,811			8,230
Other	42,104			41,617			83,784			82,034
Depreciation and amortization	3,125			4,537			6,718			8,954
Securities Class Action Lawsuit settlement, net	—			28,712			—			28,712
Operating expenses	368,775			374,706			732,032			714,202
Operating income	42,828			240			78,833			25,405
Other income (expense):
Interest income	114			41			234			60
Interest expense	(2,140		)	(1,197		)	(3,843		)	(2,265		)
Equity in earnings from equity method investments	2,976			2,355			4,836			2,249
Miscellaneous, net	359			1,127			960			2,239
Total other income, net	1,309			2,326			2,187			2,283
Income before income taxes	44,137			2,566			81,020			27,688
Income tax (expense) benefit	(10,596		)	1,963			(20,159		)	(7,960		)
Net income	33,541			4,529			60,861			19,728
Net income attributable to noncontrolling interests	(192		)	(68		)	(353		)	(137		)
Net income attributable to Amedisys, Inc.	$	33,349		$	4,461		$	60,508		$	19,591
Basic earnings per common share:
Net income attributable to Amedisys, Inc. common stockholders	$	1.00		$	0.13		$	1.80		$	0.58
Weighted average shares outstanding	33,439			33,637			33,705			33,540
Diluted earnings per common share:
Net income attributable to Amedisys, Inc. common stockholders	$	0.98		$	0.13		$	1.76		$	0.57
Weighted average shares outstanding	34,179			34,329			34,391			34,203

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

AMEDISYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	For the Six-Month  Periods Ended June 30
	2018			2017
Cash Flows from Operating Activities:
Net income	$	60,861		$	19,728
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,718			8,954
Non-cash compensation	7,811			8,230
401(k) employer match	4,894			4,367
Loss on disposal of property and equipment	650			147
Deferred income taxes	9,145			7,582
Equity in earnings from equity method investments	(4,836		)	(2,249		)
Amortization of deferred debt issuance costs	355			370
Write off of deferred debt issuance costs	38			—
Return on equity investment	2,204			3,416
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	3,604			(6,833		)
Other current assets	(11,680		)	(6,892		)
Other assets	688			(1,148		)
Accounts payable	3,623			1,093
Securities Class Action Lawsuit settlement accrual, net	—			28,712
Accrued expenses	4,548			(2,743		)
Other long-term obligations	2,347			607
Net cash provided by operating activities	90,970			63,341
Cash Flows from Investing Activities:
Proceeds from sale of deferred compensation plan assets	471			565
Proceeds from the sale of property and equipment	11			—
Purchase of investment	—			(436		)
Purchases of property and equipment	(1,611		)	(7,449		)
Acquisitions of businesses, net of cash acquired	(4,074		)	(24,128		)
Net cash used in investing activities	(5,203		)	(31,448		)
Cash Flows from Financing Activities:
Proceeds from issuance of stock upon exercise of stock options and warrants	2,609			4,203
Proceeds from issuance of stock to employee stock purchase plan	1,157			1,187
Shares withheld upon stock vesting	(2,832		)	(5,726		)
Non-controlling interest distribution	(350		)	(90		)
Proceeds from borrowings under revolving line of credit	127,500			—
Principal payments of long-term obligations	(90,475		)	(2,500		)
Debt issuance costs	(2,433		)	—
Purchase of company stock	(181,402		)	—
Net cash used in financing activities	(146,226		)	(2,926		)
Net (decrease) increase in cash and cash equivalents	(60,459		)	28,967
Cash and cash equivalents at beginning of period	86,363			30,197
Cash and cash equivalents at end of period	$	25,904		$	59,164
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	2,080		$	1,172
Cash paid for income taxes, net of refunds received	$	6,149		$	284

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

Amedisys, Inc., a Delaware corporation, (together with its consolidated subsidiaries, referred to herein as “Amedisys,” “we,” “us,” or “our”) is a multi-state provider of home health, hospice and personal care services with approximately 74% of our revenue derived from Medicare for the three and six-month periods ended June 30, 2018 and approximately 76% of our revenue derived from Medicare for the three and six-month periods ended June 30, 2017. As of June 30, 2018, we owned and operated 322 Medicare-certified home health care centers, 83 Medicare-certified hospice care centers and 15 personal-care care centers in 34 states within the United States and the District of Columbia.

Basis of Presentation

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations, and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of results of our operations for the entire year and have not been audited by our independent auditors.

This report should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2018 (the “Form 10-K”), which includes information and disclosures not included herein. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented, as allowed by such SEC rules and regulations.

Recently Adopted Accounting Pronouncements

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (collectively, “ASC 606”), the new accounting standards issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition, using the full retrospective method. ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The standards supersede existing revenue recognition requirements and eliminate most industry-specific guidance from U.S. GAAP. The core principle of the revenue recognition standard is to require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. As a result of the Company's adoption of ASC 606, the revenue and related estimated uncollectible amounts owed to us by non-Medicare payors that were historically classified as a provision for doubtful accounts are now considered an implicit price concession in determining net service revenue. Accordingly, the Company reports uncollectible balances due from third-party payors and uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore, as a reduction in net service revenue (or as it relates to Hospice room and board, an increase in cost of service, excluding depreciation and amortization) when historically these amounts were classified as a provision for doubtful accounts within operating expenses within our condensed consolidated statements of operations. In addition, the adoption of ASC 606 resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides specific guidance on eight cash flow classification issues not specifically addressed by U.S. GAAP. The ASU is effective for annual and interim periods beginning after December 15, 2017. The standard should be applied using a retrospective transition method unless it is impractical to do so for some of the issues. In such case, the amendments for those issues would be applied prospectively as of the earliest date practicable. Our adoption of this standard on January 1, 2018, using a retrospective transition method for each period presented, did not have an effect on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance to assist entities with evaluating whether transactions should be accounted for as an acquisition (or disposal) of assets or a business. The ASU is effective for annual and interim periods beginning after December 15, 2017. We

5

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

adopted this ASU effective January 1, 2018, on a prospective basis. The impact on our consolidated financial statements and related disclosures will depend on the facts and circumstances of any specific future transactions as evaluated under the new framework.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350)—Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2 of the goodwill impairment test). Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. The ASU is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We adopted this ASU effective January 1, 2018, on a prospective basis and will apply this guidance to our future tests of goodwill impairment.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will require lessees to recognize a lease liability and right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The ASU is effective for annual and interim periods beginning on or after December 15, 2018. Early adoption is permitted. The standard requires a modified retrospective transition method which requires recognition and disclosure under the new guidance for all periods presented. While the Company expects adoption of this standard to lead to a material increase in the assets and liabilities recorded on our balance sheet, we are still evaluating the overall impact on our consolidated financial statements and related disclosures and the effect of the standard on our ongoing financial reporting.

Use of Estimates

Our accounting and reporting policies conform with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications and Comparability

Certain reclassifications have been made to prior periods’ financial statements in order to conform to the current period’s presentation. Effective January 1, 2018, we adopted ASC 606 on a full retrospective basis which required the reclassification of certain previously reported results. See Note 2 - Summary of Significant Accounting Policies for further details on the impact of the adoption of ASC 606.

Principles of Consolidation

These unaudited condensed consolidated financial statements include the accounts of Amedisys, Inc., and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in our accompanying unaudited condensed consolidated financial statements, and business combinations accounted for as purchases have been included in our unaudited condensed consolidated financial statements from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth below.

Equity Investments

We consolidate investments when the entity is a variable interest entity and we are the primary beneficiary or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third party equity interests in our consolidated joint ventures are reflected as noncontrolling interests in our condensed consolidated financial statements.

We account for investments in entities in which we have the ability to exercise significant influence under the equity method if we hold 50% or less of the voting stock and the entity is not a variable interest entity in which we are the primary beneficiary. The book value of investments that we accounted for under the equity method of accounting was $29.0 million and $26.4 million as of June 30, 2018 and December 31, 2017, respectively. We account for investments in entities in which we have less than a 20% ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee.

6

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Our adoption of ASC 606 on January 1, 2018, on a full retrospective basis, impacted the Company's previously reported results as follows (amounts in thousands, unaudited):

	As Previously Reported			Adjustment for the Adoption of ASC 606			As Adjusted
	As of December 31, 2017
Condensed Consolidated Balance Sheets
Patient accounts receivable	$	201,196		$	—		$	201,196
Allowance for doubtful accounts	$	20,866		$	20,866		$	—
	For the three-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	378,821		$	(3,875	)	$	374,946
Cost of service, excluding depreciation and amortization	$	219,765		$	776		$	220,541
Provision for doubtful accounts	$	4,651		$	(4,651	)	$	—
Net income attributable to Amedisys, Inc.	$	4,461		$	—		$	4,461
	For the six-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	749,279		$	(9,672	)	$	739,607
Cost of service, excluding depreciation and amortization	$	435,550		$	1,320		$	436,870
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Net income attributable to Amedisys, Inc.	$	19,591		$	—		$	19,591
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	$	(17,825	)	$	10,992		$	(6,833	)

We earn net service revenue through our home health, hospice and personal care segments through the delivery of a variety of services that best suit our patients' needs, whether that is home-based recovery and rehabilitation after an operation or injury, care that empowers patients to manage a chronic disease, hospice care at the end of life, or providing assistance with daily activities through our personal care segment. We account for revenue from contracts with customers in accordance with ASC 606, and as such, we recognize revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers, in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. The Company's cost of obtaining contracts is not material.

Revenues are recognized as performance obligations are satisfied, which varies based on the nature of the services provided. Our performance obligation is the delivery of patient care services in accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.

The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the optional exemption provided by ASC 606 and is not required to disclose the aggregate amount of the transaction

7

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.

We determine the transaction price based on gross charges for services provided, reduced by contractual adjustments provided to third-party payors and estimates of implicit price concessions provided to self-pay or uninsured patients or other payors. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare contributes to approximately 74% of the Company's consolidated net service revenue. We determine our estimates of contractual adjustments and implicit price concessions by major payor class based on contractual agreements with individual third-party payors, our historical collection experience, aged accounts receivable by payor and current economic conditions. The implicit price concession included in estimating the transaction price represents the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. Subsequent changes to the estimate of the transaction price are recorded as adjustments to net service revenue in the period of change. Subsequent changes that are determined to be the result of an adverse change in the patient's ability to pay (i.e. change in credit risk) are recorded as a provision for doubtful accounts.

We record our service revenue net of estimated revenue adjustments related to third-party payor payment reviews to reflect amounts we estimate to be realizable for services provided. Amounts due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), include variable consideration for retroactive revenue adjustments due to settlements of audits and reviews. We make estimates for these revenue adjustments based on our historical experience and success rates in the claim appeals and adjudication process.

Home Health Revenue Recognition

Medicare Revenue

Net service revenue is recorded under the Medicare prospective payment system (“PPS”) based on an established Federal Medicare home health episode payment rate, that is subject to adjustment based on certain variables, including, but not limited to (a) an outlier payment if our patient’s care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits was fewer than five; (c) a partial payment if our patient transferred to another provider or we received a patient from another provider before completing the episode; (d) a payment adjustment based upon the level of therapy services required (with various incremental adjustments made for additional visits, with larger payment increases associated with the sixth, fourteenth and twentieth visit thresholds); (e) adjustments to payments if we are unable to perform periodic therapy assessments; (f) the number of episodes of care provided to a patient, regardless of whether the same home health provider provided care for the entire series of episodes; (g) changes in the base episode payments established by the Medicare Program; (h) adjustments to the base episode payments for case mix and geographic wages; and (i) recoveries of overpayments. Medicare rates are based on the severity of the patient's condition, service needs and goals, and other factors relating to the cost of providing services and supplies, bundled into an episode of care, not to exceed 60 days. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier, with multiple continuous episodes allowed.

The Medicare home health benefit requires that beneficiaries be homebound (meaning that the beneficiary is unable to leave their home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services, and receive treatment under a plan of care established and periodically reviewed by a physician. All Medicare contracts are required to have a signed plan of care which represents a single performance obligation, comprising of the delivery of a series of distinct services that are substantially similar and have a similar pattern of transfer to the customer. Accordingly, the Company accounts for the series of services ("episode") as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. Expected Medicare revenue per episode is recognized based on a pro-rated service output method, utilizing our historical average length of episode prior to discharge.

The base episode payment can be adjusted based on each patient's health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. Medicare can also make various adjustments to payments received if we are unable to produce appropriate billing documentation or acceptable authorizations. In addition, we make adjustments to Medicare revenue if we find we are unable to obtain appropriate billing documentation, authorizations or face-to-face documentation. We estimate the impact of such adjustments based on our historical experience,

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered as an estimated price concession and a corresponding reduction to patient accounts receivable.

A portion of reimbursement from each Medicare episode is billed near the start of each episode, and cash is typically received before all services are rendered. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the company's average percentage of days complete on episodes as of the end of the year. As of June 30, 2018 and 2017, the difference between the cash received from Medicare for a request for anticipated payment (“RAP”) on episodes in progress and the associated estimated revenue was immaterial and, therefore, the resulting credits were recorded as a reduction to our outstanding patient accounts receivable in our condensed consolidated balance sheets for such periods.

Non-Medicare Revenue

Episodic-based Revenue. We recognize revenue in a similar manner as we recognize Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs; however, these rates can vary based upon the negotiated terms which generally range from 90% to 100% of Medicare rates.

Non-episodic based Revenue. Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established or estimated per-visit rates. Contractual adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third parties and others for services provided and are deducted from gross revenue to determine net service revenue. We also make adjustments to non-episodic revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price. We receive a minimal amount of our net service revenue from patients who are either self-insured or are obligated for an insurance co-payment.

Hospice Revenue Recognition

Hospice Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounts for 99% of our total net Medicare hospice service revenue for each of the three and six-month periods ended June 30, 2018, and 99% and 98% of our total net Medicare hospice service revenue for each of the three and six-month periods ended June 30, 2017, respectively. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse (“RN”) or medical social worker (“MSW”) for patients in a routine level of care.

The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.

We make adjustments to Medicare revenue for an inability to obtain appropriate billing documentation or acceptable authorizations and other reasons unrelated to credit risk. We estimate the impact of these adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record it during the period services are rendered as an estimated price concession and as a reduction to our outstanding patient accounts receivable.

Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in other accrued liabilities. Beginning for the cap year ending October 31, 2017, providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of June 30, 2018, we have settled our Medicare hospice reimbursements for all fiscal years through October 31, 2012. As of June 30, 2018, we have recorded $1.1 million for estimated amounts due back to Medicare in other accrued liabilities for the Federal cap years ended October 31, 2013 through September 30, 2018. As of December 31, 2017, we had recorded $0.9 million for estimated amounts due back to Medicare in other accrued liabilities for the Federal cap years ended October 31, 2013 through September 30, 2018.

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(Unaudited)

Hospice Non-Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established rates or estimated per day rates, as applicable. Contractual adjustments are recorded for the difference between our established rates and the amounts estimated to be realizable from patients, third parties and others for services provided and are deducted from gross revenue to determine our net service revenue. We also make adjustments to non-Medicare revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price.

Personal Care Revenue Recognition

Personal Care Revenue

We generate net service revenues by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that is either contractual or fixed by legislation, which are recognized as net service revenue at the time services are rendered. We receive payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors include the following elder service agencies: Aging Services Access Points (ASAPs), Senior Care Options (SCOs), Program of All-Inclusive Care for the Elderly (PACE) and the Veterans Administration (VA).

Patient Accounts Receivable

We report accounts receivable from services rendered at their estimated transaction price, which includes price concessions based on the amounts expected to be due from payors. Our patient accounts receivable are uncollateralized and consist of amounts due from Medicare, Medicaid, other third-party payors and patients. As of June 30, 2018, there is only one single payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables (approximately 11.8%). Thus, we believe there are no other significant concentrations of receivables that would subject us to any significant credit risk in the collection of our patient accounts receivable. We write off accounts on a monthly basis once we have exhausted our collection efforts and deem an account to be uncollectible.

We believe the collectibility risk associated with our Medicare accounts, which represent 56% and 59% of our patient accounts receivable at June 30, 2018 and December 31, 2017, respectively, is limited due to our historical collection rate of over 99% from Medicare and the fact that Medicare is a U.S. government payor. Accordingly, we do not record an allowance for doubtful accounts for our Medicare patient accounts receivable, which are recorded at their net realizable value after recording estimated price concessions as discussed above. During the three and six-month periods ended June 30, 2018, we recorded $2.5 million and $4.2 million, respectively, in estimated revenue adjustments to Medicare revenue as compared to $5.0 million and $8.4 million during the three and six-month periods ended June 30, 2017, respectively.

We do not believe there are any significant concentrations of revenues from any payor that would subject us to any significant credit risk in the collection of our accounts receivable.

Medicare Home Health

For our home health patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We submit a RAP for 60% of our estimated payment for the initial episode at the start of care or 50% of the estimated payment for any subsequent episodes of care contiguous with the first episode for a particular patient. The full amount of the episode is billed after the episode has been completed (“final billed”). The RAP received for that particular episode is then deducted from our 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 RAPs received for that episode will be recouped by Medicare from any other claims in process for that particular provider number. The RAP and final claim must then be resubmitted.

Medicare Hospice

For our hospice patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare on a monthly basis for the services provided to the patient.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Non-Medicare Home Health, Hospice and Personal Care

For our non-Medicare patients, our pre-billing process primarily begins with verifying a patient’s eligibility for services with the applicable payor. Once the patient has been confirmed for eligibility, we will provide services to the patient and bill the applicable payor. Our review and evaluation of non-Medicare accounts receivable includes a detailed review of outstanding balances and special consideration to concentrations of receivables from particular payors or groups of payors with similar characteristics that would subject us to any significant credit risk.

Property and Equipment

Property and equipment is stated at cost and we depreciate it on a straight-line basis over the estimated useful lives of the assets. Additionally, we have internally developed computer software for our own use. Additions and improvements (including interest

costs for construction of qualifying long-lived assets) are capitalized. Maintenance and repair expenses are charged to expense as incurred. The cost of property and equipment sold or disposed of and the related accumulated depreciation are eliminated from the property and related accumulated depreciation accounts, and any gain or loss is credited or charged to other general and administrative expenses.

During the six-month period ended June 30, 2018, we reviewed the balances of our property and equipment and as a result, eliminated those asset balances for which the asset was no longer in service. The following table summarizes the balances related to our property and equipment for the periods indicated (amounts in millions):

	As of June 30, 2018			As of December 31, 2017
Building and leasehold improvements	$	8.8		$	7.8
Equipment and furniture	56.9			72.9
Computer software	63.4			97.2
	129.1			177.9
Less: accumulated depreciation	(101.1		)	(146.8		)
	$	28.0		$	31.1

Fair Value of Financial Instruments

The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels of inputs are as follows:

• Level 1 – Quoted prices in active markets for identical assets and liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Our deferred compensation plan assets are recorded at fair value and are considered a level 2 measurement. For our other financial instruments, including our cash and cash equivalents, patient accounts receivable, accounts payable, payroll and employee benefits and accrued expenses, we estimate the carrying amounts approximate fair value. As of June 30, 2018, the carrying amount of our long-term debt is subject to a variable rate of interest based on current market rates, and as such, the carrying values approximate fair value.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Weighted-Average Shares Outstanding

Net income per share attributable to Amedisys, Inc. common stockholders, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The following table sets forth, for the periods indicated, shares used in our computation of the weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):

	For the Three- Month Periods Ended June 30,		For the Six- Month Periods Ended June 30,
	2018	2017	2018	2017
Weighted average number of shares outstanding - basic	33,439	33,637	33,705	33,540
Effect of dilutive securities:
Stock options	425	329	381	285
Non-vested stock and stock units	315	363	305	378
Weighted average number of shares outstanding - diluted	34,179	34,329	34,391	34,203
Anti-dilutive securities	57	169	88	248

3. ACQUISITIONS

We complete acquisitions from time to time in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health, hospice and personal care services. The purchase price paid for acquisitions is negotiated through arm’s length transactions, with consideration based on our analysis of, among other things, comparable acquisitions and expected cash flows. Acquisitions are accounted for as purchases and are included in our consolidated financial statements from their respective acquisition dates. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets because of the expected contributions of the acquisitions to our overall corporate strategy. We typically engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets. The preliminary purchase price allocation is adjusted, as necessary, up to one year after the acquisition closing date if management obtains more information regarding asset valuations and liabilities assumed.

On March 1, 2018, we acquired the assets of Christian Care at Home which provides home health services to the state of Kentucky for a total purchase price of $2.3 million. The purchase price was paid with cash on hand on the date of the transaction. Based on our preliminary purchase price allocation, we recorded goodwill of $2.3 million in connection with the acquisition during the three-month period ended March 31, 2018.

On May 1, 2018, we acquired the assets of East Tennessee Personal Care Services which owns and operates one personal-care care center servicing the state of Tennessee for a total purchase price of $2.0 million (subject to certain adjustments, of which $0.2 million was placed in a promissory note to be paid over 24 months, subject to any offsets or withholds for indemnification purposes). The purchase price was paid with cash on hand on the date of the transaction. During the three-month period ended June 30, 2018, we recorded goodwill of $1.9 million and other intangibles - non-compete agreements of $0.1 million in connection with the acquisition. The non-compete agreement will be amortized over a weighted-average period of 2.8 years.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. LONG-TERM OBLIGATIONS

Long-term debt consisted of the following for the periods indicated (amounts in millions):

	June 30, 2018			December 31, 2017
$100.0 million Term Loan; principal payments plus accrued interest payable quarterly; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate; due August 28, 2020	$	—		$	90.0
$200.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate; due August 28, 2020	—			—
$550.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate (3.7% at June 30, 2018); due June 29, 2023	127.5			—
Promissory notes	0.9			0.7
Capital leases	0.1			—
Principal amount of long-term obligations	128.5			90.7
Deferred debt issuance costs	(3.9		)	(1.9		)
	124.6			88.8
Current portion of long-term obligations	(0.7		)	(10.6		)
Total	$	123.9		$	78.2

Credit Agreement

On June 29, 2018, we entered into our Amended and Restated Credit Agreement ("Credit Agreement") that provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $550.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility provides for and includes within its $550.0 million limit a $25.0 million swingline facility and commitments for up to $60.0 million in letters of credit. Upon lender approval, we may increase the aggregate loan amount under the Revolving Credit Facility by either i) $125.0 million or ii) an unlimited amount subject to a leverage limit of 0.5x under the maximum allowable consolidated leverage ratio per the Credit Agreement.

The net proceeds of the Revolving Credit Facility were used to pay off our existing indebtedness under our prior credit agreement, dated as of August 28, 2015 (the "Prior Credit Agreement"), with a principal balance of $127.5 million. The final maturity of the Revolving Credit Facility is June 29, 2023 and there is no mandatory amortization on the outstanding principal balances which are payable in full upon maturity. The Revolving Credit Facility may be used to provide ongoing working capital and for general corporate purposes of the Company and our subsidiaries, including permitted acquisitions, as defined in the Credit Agreement.

The interest rate on borrowings under the Revolving Credit Facility shall be selected by us from the following: (i) the Base Rate plus the Applicable Rate or (ii) the Eurodollar Rate plus the Applicable Rate. The “Base Rate” means a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 0.50% per annum, (b) the prime rate of interest established by the Administrative Agent, and (c) the Eurodollar Rate plus 1% per annum. The “Eurodollar Rate” means the quoted rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable successor rate approved by the Administrative Agent for an interest period of one, two, three or six months (as selected by us). The “Applicable Rate” is based on the consolidated leverage ratio and is presented in the table below. As of June 30, 2018, the Applicable Rate is 0.50% per annum for Base Rate Loans and 1.50% per annum for Eurodollar Rate Loans. We are also subject to a commitment fee and letter of credit fee under the terms of the Credit Agreement, as presented in the table below.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Pricing Tier	Consolidated Leverage Ratio	Commitment Fee	Letter of Credit Fee	Eurodollar Rate Loans	Base Rate Loans
I	> 3.00 to 1.0	0.35%	2.00%	2.25%	1.25%
II	≤ 3.00 to 1.0 but > 2.00 to 1.0	0.30%	1.75%	2.00%	1.00%
III	≤ 2.00 to 1.0 but > 1.00 to 1.0	0.25%	1.50%	1.75%	0.75%
IV	≤ 1.00 to 1.0	0.20%	1.25%	1.50%	0.50%

The Credit Agreement requires maintenance of two financial covenants: (i) a consolidated leverage ratio of funded indebtedness to EBITDA, as defined in the Credit Agreement, and (ii) a consolidated interest coverage ratio of EBITDA to cash interest charges, all as defined in the Credit Agreement. Each of these covenants is calculated over rolling four-quarter periods and also is subject to certain exceptions and baskets. The Credit Agreement also contains customary covenants, including, but not limited to, restrictions on: incurrence of liens; incurrence of additional debt; sales of assets and other fundamental corporate changes; investments; and declarations of dividends. These covenants contain customary exclusions and baskets as detailed in the Credit Agreement.

The Credit Facility is guaranteed by substantially all of our wholly-owned direct and indirect subsidiaries. The Credit Agreement requires at all times that we (i) provide guarantees from wholly-owned subsidiaries that in the aggregate represent not less than 95% of our consolidated net revenues and adjusted EBITDA from all wholly-owned subsidiaries and (ii) provide guarantees from subsidiaries that in the aggregate represent not less than 70% of consolidated adjusted EBITDA, subject to certain exceptions.

In connection with entering into the Credit Agreement, we entered into (i) a Security Agreement with the Administrative Agent dated June 29, 2018 and (ii) a Pledge Agreement with the Administrative Agent dated as of June 29, 2018 for the purpose of securing the payment of our obligations under the Credit Agreement. Pursuant to the Security Agreement and the Pledge Agreement, as of the effective date of the Credit Agreement, our obligations under the Credit Agreement are secured by (i) the grant of a first lien security interest in the non-real estate assets of substantially all of our direct and indirect, wholly-owned subsidiaries (subject to exceptions) and (ii) the pledge of the equity interests in (a) substantially all of our direct and indirect, wholly-owned corporate, limited liability company and limited partnership subsidiaries and (b) those joint ventures which constitute subsidiaries under the Credit Agreement (subject, in the case of the Pledge Agreement, to exceptions). In connection with our entry into the Credit Agreement, we recorded $2.4 million in deferred debt issuance costs as long-term obligations, less current portion within our condensed consolidated balance sheet.

Our weighted average interest rate for our $100.0 million Term Loan, under our Prior Credit Agreement, was 3.9% and 3.8% for the three and six-month periods ended June 30, 2018, respectively, and 3.0% and 2.9% for the three and six-month periods ended June 30, 2017, respectively. Our weighted average interest rate for our $550.0 million Revolving Credit Facility was 3.7% at June 30, 2018.

As of June 30, 2018, our consolidated leverage ratio was 0.8, our consolidated interest coverage ratio was 51.0 and we are in compliance with our covenants under the Credit Agreement. In the event we are not in compliance with our debt covenants in the future, we would pursue various alternatives in an attempt to successfully resolve the non-compliance, which might include, among other things, seeking debt covenant waivers or amendments.

As of June 30, 2018, our availability under our $550.0 million Revolving Credit Facility was $388.1 million as we have $127.5 million outstanding in borrowings and $34.4 million outstanding in letters of credit.

5. COMMITMENTS AND CONTINGENCIES

Legal Proceedings - Ongoing

We are involved in the following legal actions:

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AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Subpoena Duces Tecum Issued by the U.S. Department of Justice

On May 21, 2015, we received a Subpoena Duces Tecum (“Subpoena”) issued by the U.S. Department of Justice. The Subpoena requests the delivery of information regarding 53 identified hospice patients to the United States Attorney’s Office for the District of Massachusetts. It also requests the delivery of documents relating to our hospice clinical and business operations and related compliance activities. The Subpoena generally covers the period from January 1, 2011 through May 21, 2015. We are fully cooperating with the U.S. Department of Justice with respect to this investigation. Based on the information currently available to us, we cannot predict the timing or outcome of this investigation or reasonably estimate the amount or range of potential losses, if any, which may arise from this matter.

Civil Investigative Demands Issued by the U.S. Department of Justice

On November 3, 2015, we received a civil investigative demand (“CID”) issued by the U.S. Department of Justice pursuant to the federal False Claims Act relating to claims submitted to Medicare and/or Medicaid for hospice services provided through designated facilities in the Morgantown, West Virginia area. The CID requests the delivery of information to the United States Attorney’s Office for the Northern District of West Virginia regarding 66 identified hospice patients, as well as documents relating to our hospice clinical and business operations in the Morgantown area. The CID generally covers the period from January 1, 2009 through August 31, 2015. We are fully cooperating with the U.S. Department of Justice with respect to this investigation. Based on the information currently available to us, we cannot predict the timing or outcome of this investigation or reasonably estimate the amount or range of potential losses, if any, which may arise from this matter.

On June 27, 2016, we received a CID issued by the U.S. Department of Justice pursuant to the federal False Claims Act relating to claims submitted to Medicare and/or Medicaid for hospice services provided through designated facilities in the Parkersburg, West Virginia area. The CID requests the delivery of information to the United States Attorney’s Office for the Southern District of West Virginia regarding 68 identified hospice patients, as well as documents relating to our hospice clinical and business operations in the Parkersburg area. The CID generally covers the period from January 1, 2011 through June 20, 2016. We are fully cooperating with the U.S. Department of Justice with respect to this investigation. Based on the information currently available to us, we cannot predict the timing or outcome of this investigation or reasonably estimate the amount or range of potential losses, if any, which may arise from this matter.

In addition to the matters referenced in this note, we are involved in legal actions in the normal course of business, some of which seek monetary damages, including claims for punitive damages. We do not believe that these normal course actions, when finally concluded and determined, will have a material impact on our consolidated financial condition, results of operations or cash flows.

Legal Proceedings - Settled

Securities Class Action Lawsuits

As previously disclosed, between June 10 and July 28, 2010, several putative securities class action complaints were filed in the United States District Court for the Middle District of Louisiana (the “District Court”) against the Company and certain of our former senior executives. The cases were consolidated into the first-filed action Bach, et al. v. Amedisys, Inc., et al. Case No. 3:10-cv-00395, and the District Court appointed as co-lead plaintiffs the Public Employees’ Retirement System of Mississippi and the Puerto Rico Teachers’ Retirement System (the “Co-Lead Plaintiffs”).

The Plaintiffs were granted leave to file a First Amended Consolidated Complaint (the “First Amended Securities Complaint”) on behalf of all purchasers or acquirers of Amedisys’ securities between August 2, 2005 and September 30, 2011. The First Amended Securities Complaint alleges that the Company and seven individual defendants violated Section 10(b), Section 20(a), and Rule 10b-5 of the Securities Exchange Act of 1934 by materially misrepresenting the Company’s financial results and concealing a scheme to obtain higher Medicare reimbursements and additional patient referrals by (1) providing medically unnecessary care to patients, including certifying and re-certifying patients for medically unnecessary 60-day treatment episodes; (2) implementing clinical tracks such as “Balanced for Life” and wound care programs that provided a pre-set number of therapy visits irrespective of medical need; (3) “upcoding” patients’ Medicare forms to attribute a “primary diagnosis” to a medical condition associated with higher billing rates; and (4) providing improper and illegal remuneration to physicians to obtain patient certifications or re-certifications. The First Amended Securities Complaint seeks certification of the case as a class action and an unspecified amount of damages, as well as interest and an award of attorneys’ fees.

On June 12, 2017, the Company reached an agreement-in-principle to settle this matter. All parties to the action executed a binding term sheet that, subject to final documentation and court approval, provided in part for a settlement payment of approximately

15

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

$43.7 million, which we accrued as of June 30, 2017, and the dismissal with prejudice of the litigation. Approximately $15.0 million of the settlement amount paid by the Company’s insurance carriers during the three-month period ended September 30, 2017, was previously recorded within other current assets in our condensed consolidated balance sheet as of June 30, 2017. The net of these two amounts, $28.7 million, was recorded as a charge in our condensed consolidated statements of operations during the three-month period ended June 30, 2017 and paid with cash on hand during the three-month period ended September 30, 2017. On December 19, 2017, the Court entered the final order and judgment on the case.

Other Investigative Matters - Ongoing

Corporate Integrity Agreement

On April 23, 2014, with no admissions of liability on our part, we entered into a settlement agreement with the U.S. Department of Justice relating to certain of our clinical and business operations. Concurrently with our entry into this agreement, we entered into a corporate integrity agreement (“CIA”) with the Office of Inspector General-HHS (“OIG”). The CIA formalizes various aspects of our already existing ethics and compliance programs and contains other requirements designed to help ensure our ongoing compliance with federal health care program requirements. Among other things, the CIA requires us to maintain our existing compliance program, executive compliance committee and compliance committee of the Board of Directors; provide certain compliance training; continue screening new and current employees to ensure they are eligible to participate in federal health care programs; engage an independent review organization to perform certain auditing and reviews and prepare certain reports regarding our compliance with federal health care programs, our billing submissions to federal health care programs and our compliance and risk mitigation programs; and provide certain reports and management certifications to the OIG. Additionally, the CIA specifically requires that we report substantial overpayments that we discover we have received from federal health care programs, as well as probable violations of federal health care laws. Upon breach of the CIA, we could become liable for payment of certain stipulated penalties, or could be excluded from participation in federal health care programs. The corporate integrity agreement has a term of five years.

Third Party Audits - Ongoing

From time to time, in the ordinary course of business, we are subject to audits under various governmental programs in which third party firms engaged by the Centers for Medicare and Medicaid Services (“CMS”) conduct extensive review of claims data to identify potential improper payments under the Medicare program.

In July 2010, our subsidiary that provides hospice services in Florence, South Carolina received from a Zone Program Integrity Contractor (“ZPIC”) a request for records regarding a sample of 30 beneficiaries who received services from the subsidiary during the period of January 1, 2008 through March 31, 2010 (the “Review Period”) to determine whether the underlying services met pertinent Medicare payment requirements. We acquired the hospice operations subject to this review on August 1, 2009; the Review Period covers time periods both before and after our ownership of these hospice operations. Based on the ZPIC’s findings for 16 beneficiaries, which were extrapolated to all claims for hospice services provided by the Florence subsidiary billed during the Review Period, on June 6, 2011, the Medicare Administrative Contractor (“MAC”) for the subsidiary issued a notice of overpayment seeking recovery from our subsidiary of an alleged overpayment. We dispute these findings, and our Florence subsidiary has filed appeals through the Original Medicare Standard Appeals Process, in which we are seeking to have those findings overturned. An administrative law judge ("ALJ") hearing was held in early January 2015. On January 18, 2016, we received a letter dated January 6, 2016 referencing the ALJ hearing decision for the overpayment issued on June 6, 2011. The decision was partially favorable with a new overpayment amount of $3.7 million with a balance owed of $5.6 million, including interest, based on 9 disputed claims (originally 16). We filed an appeal to the Medicare Appeals Council on the remaining 9 disputed claims and also argued that the statistical method used to select the sample was not valid. No assurances can be given as to the timing or outcome of the Medicare Appeals Council decision. As of June 30, 2018, Medicare has withheld payments of $5.7 million (including additional interest) as part of their standard procedures once this level of the appeal process has been reached. In the event we are not able to recoup this alleged overpayment, we are entitled to be indemnified by the prior owners of the hospice operations for amounts relating to the period prior to August 1, 2009. As of June 30, 2018, we have an indemnity receivable of approximately $4.9 million for the amount withheld related to the period prior to August 1, 2009.

In July 2016, the Company received a request for medical records from SafeGuard Services, L.L.C (“SafeGuard”), a ZPIC related to services provided by some of the care centers that the Company acquired from Infinity Home Care, L.L.C. The review period covers time periods both before and after our ownership of the care centers, which were acquired on December 31, 2015. In August 2017, the Company received Requests for Repayment from Palmetto GBA, LLC ("Palmetto") regarding Infinity Home Care of

16

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Lakeland, LLC ("Lakeland Care Centers") and Infinity Home Care of Pinellas, LLC ("Clearwater Care Center"). The Palmetto letters are based on statistical extrapolation performed by SafeGuard which alleged an overpayment of $34.0 million for the Lakeland Care Centers on a universe of 72 Medicare claims totaling $0.2 million in actual claims payments using a 100% error rate and an overpayment of $4.8 million for the Clearwater Care Center on a universe of 70 Medicare claims totaling $0.2 million in actual claims payments using a 100% error rate.

The Lakeland Request for Repayment covers claims between January 2, 2014 and September 13, 2016. The Clearwater Request for Repayment covers claims between January 2, 2015 and December 9, 2016. As a result of Level I Administrative Appeals, also known as Redetermination, the alleged overpayment for the Lakeland Care Centers has been reduced to $27.0 million and the alleged overpayment for the Clearwater Care Center has been reduced to $3.3 million. The Company filed Level II Administrative Appeals, also known as Reconsideration, and has received the decision of the Qualified Independent Contractor ("QIC"), which was partially favorable and partially unfavorable. With regard to the extrapolation, the QIC found that although SafeGuard made certain mistakes in performing the extrapolation, it did not invalidate the extrapolation. The QIC directed Palmetto to ensure that the Company received credit for all payments made as a result of an extensive self-audit. We have requested that Palmetto recalculate the amount allegedly due consistent with the findings of the QIC. The Company will continue to vigorously pursue its appeal rights, which include contesting the methodology used by the ZPIC contractor to perform statistical extrapolation. The Company is contractually entitled to indemnification by the prior owners for all claims prior to December 31, 2015, for up to $12.6 million.

At this stage of the review, based on the information currently available to the Company, the Company cannot predict the timing or outcome of this review. The Company estimates a low-end potential range of loss related to this review of $6.5 million (assuming the Company is successful in seeking indemnity from the prior owners and unsuccessful in demonstrating that the extrapolation method used by SafeGuard was erroneous). The Company has reduced its high-end potential range of loss from $38.8 million (the maximum amount Palmetto claims has been overpaid for both the Lakeland Care Centers and the Clearwater Care Center of which amount $12.6 million is subject to indemnification by the prior owners) to $30.3 million based on the partial success achieved by the Company in prosecuting its Level I Administrative Appeals.

As of June 30, 2018, we have an accrued liability of approximately $17.4 million related to this matter. We expect to be indemnified by the prior owners for approximately $10.9 million of the total $12.6 million available indemnification related to this matter and have recorded this amount within other assets, net in our condensed consolidated balance sheet as of June 30, 2018. The net of these two amounts, $6.5 million, was recorded as a reduction in revenue in our condensed consolidated statements of operations during the three-month period ended September 30, 2017. As of June 30, 2018, $2.7 million of receivables have been impacted by this payment suspension.

Insurance

We are obligated for certain costs associated with our insurance programs, including employee health, workers’ compensation and professional liability. While we maintain various insurance programs to cover these risks, we are self-insured for a substantial portion of our potential claims. We recognize our obligations associated with these costs, up to specified deductible limits in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported. These costs have generally been estimated based on historical data of our claims experience. Such estimates, and the resulting reserves, are reviewed and updated by us on a quarterly basis.

Our health insurance has an exposure limit of $1.0 million for any individual covered life. Our workers’ compensation insurance has a retention limit of $0.5 million per incident and our professional liability insurance has a retention limit of $0.3 million per incident.

6. SEGMENT INFORMATION

Our operations involve servicing patients through our three reportable business segments: home health, hospice and personal care. Our home health segment delivers a wide range of services in the homes of individuals who may be recovering from surgery, have a chronic disability or terminal illness or need assistance with completing important personal tasks. Our hospice segment provides palliative care and comfort to terminally ill patients and their families. Our personal care segment provides patients with assistance with the essential activities of daily living. The “other” column in the following tables consists of costs relating to executive management and administrative support functions, primarily information services, accounting, finance, billing and collections, legal, compliance, risk management, procurement, marketing, clinical administration, training, human resources and administration.

17

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Management evaluates performance and allocates resources based on the operating income of the reportable segments, which includes an allocation of corporate expenses directly attributable to the specific segment and includes revenues and all other costs directly attributable to the specific segment. Segment assets are not reviewed by the company’s chief operating decision maker and therefore are not disclosed below (amounts in millions).

	For the Three-Month Period Ended June 30, 2018
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	291.5	$	101.4	$	18.7	$	—		$	411.6
Cost of service, excluding depreciation and amortization	176.5		51.7		14.4		—			242.6
General and administrative expenses	68.4		20.3		3.3		31.1			123.1
Depreciation and amortization	0.8		0.3		—		2.0			3.1
Operating expenses	245.7		72.3		17.7		33.1			368.8
Operating income (loss)	$	45.8	$	29.1	$	1.0	$	(33.1	)	$	42.8
	For the Three-Month Period Ended June 30, 2017
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	270.3	$	90.3	$	14.3	$	—		$	374.9
Cost of service, excluding depreciation and amortization	164.8		45.4		10.3		—			220.5
General and administrative expenses	68.9		19.1		3.0		30.0			121.0
Depreciation and amortization	1.0		0.2		—		3.3			4.5
Securities Class Action Lawsuit settlement, net	—		—		—		28.7			28.7
Operating expenses	234.7		64.7		13.3		62.0			374.7
Operating income (loss)	$	35.6	$	25.6	$	1.0	$	(62.0	)	$	0.2
	For the Six-Month Period Ended June 30, 2018
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	575.6	$	198.7	$	36.6	$	—		$	810.9
Cost of service, excluding depreciation and amortization	350.9		101.8		28.2		—			480.9
General and administrative expenses	136.4		40.3		6.5		61.3			244.5
Depreciation and amortization	1.6		0.5		0.1		4.5			6.7
Operating expenses	488.9		142.6		34.8		65.8			732.1
Operating income (loss)	$	86.7	$	56.1	$	1.8	$	(65.8	)	$	78.8
	For the Six-Month Period Ended June 30, 2017
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	537.9	$	173.9	$	27.8	$	—		$	739.6
Cost of service, excluding depreciation and amortization	327.8		88.4		20.7		—			436.9
General and administrative expenses	136.9		37.0		6.2		59.5			239.6
Depreciation and amortization	1.9		0.5		0.1		6.5			9.0
Securities Class Action Lawsuit settlement, net	—		—		—		28.7			28.7
Operating expenses	466.6		125.9		27.0		94.7			714.2
Operating income (loss)	$	71.3	$	48.0	$	0.8	$	(94.7	)	$	25.4

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AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7. SHARE REPURCHASE

On June 4, 2018, we purchased 2,418,304 of our common shares from affiliates of KKR Credit Advisors (US) LLC ("KKR"), representing one-half of KKR's holdings in the Company and 7.1% of the aggregate outstanding shares of the Company's common stock for a total purchase price of $181.4 million including related direct costs. The Company repurchased the shares at $73.96 which represents 96% of the closing stock price of the Company's common stock on June 4, 2018.

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

The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our results of operations and financial condition for the three and six-month periods ended June 30, 2018. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included herein, and the consolidated financial statements and notes and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2018 (the “Form 10-K”), which are incorporated herein by this reference.

Unless otherwise provided, “Amedisys,” “we,” “our,” and the “Company” refer to Amedisys, Inc. and our consolidated subsidiaries.

Overview

We are a provider of high-quality in-home healthcare and related services to the chronic, co-morbid, aging American population, with approximately 74% of our revenue derived from Medicare for the three and six-month periods ended June 30, 2018 and approximately 76% of our revenue derived from Medicare for the three and six-month periods ended June 30, 2017.

Our operations involve servicing patients through our three reportable business segments: home health, hospice and personal care. Our home health segment delivers a wide range of services in the homes of individuals who may be recovering from an illness, injury or surgery. Our hospice segment provides care that is designed to provide comfort and support for those who are facing a terminal illness. Our personal care segment provides patients with assistance with the essential activities of daily living. As of June 30, 2018, we owned and operated 322 Medicare-certified home health care centers, 83 Medicare-certified hospice care centers and 15 personal-care care centers in 34 states within the United States and the District of Columbia.

Owned and Operated Care Centers

	Home Health		Hospice	Personal Care
As of December 31, 2017	320		81	15
Acquisitions/Startups	—		—	1
Closed/Consolidated	(1	)	—	(1	)
As of June 30, 2018	319		81	15
Unconsolidated Joint Ventures	3		2	—
Total Including Unconsolidated Joint Ventures as of June 30, 2018	322		83	15

Recent Developments

Governmental Inquiries and Investigations and Other Litigation

See Note 5 – Commitments and Contingencies to our condensed consolidated financial statements for additional information regarding our corporate integrity agreement and for a discussion of and updates regarding other legal proceedings and investigations we are involved in. No assurances can be given as to the timing or outcome of these items.

Payment

In April 2018, the Centers for Medicare and Medicaid Services ("CMS") issued a proposed rule to update hospice payment rates and the wage index for fiscal year 2019. CMS estimates hospices serving Medicare beneficiaries would see an estimated 1.8% increase in payments. This increase is the result of a 2.9% market basket adjustment less a 0.8% productivity adjustment, less 0.3% as required under the Patient Protection and Affordable Health Care Act and the Health Care and Education Reconciliation Act (collectively, "PPACA"). We expect our impact of the 2019 proposed rule to be in line with that of the hospice industry.

In July 2018, CMS issued proposed payment changes for Medicare home health providers for 2019 and 2020. For 2019, CMS estimates that the net impact of the payment provisions of the proposed changes will result in an increase of 2.1% in reimbursement to home health providers. This increase is the result of a 2.8% market basket increase less a 0.7% productivity adjustment. Additionally, the proposed rule includes changes to the home health prospective payment system ("HHPPS") case-mix adjustment methodology through the use of a new Patient-Driven Grouping Model ("PDGM") for home health payments. This change is proposed to be implemented January 1, 2020 and also includes a change in the unit of payment from 60-day episodes of care to 30-day periods of care and eliminates the use of therapy visits in the determination of payments. While the proposed rule is to be

20

implemented in a budget neutral manner to the industry, the ultimate impact will vary by provider based on factors including patient mix and admission source. Additionally, in arriving at the calculation of a rate that is budget neutral, CMS has made assumptions about behavioral changes. We are currently evaluating the proposed rule’s impact on our home health operations.

Results of Operations

Three-Month Period Ended June 30, 2018 Compared to the Three-Month Period Ended June 30, 2017

Consolidated

The following table summarizes our consolidated results of operations (amounts in millions):

	For the Three- Month Periods Ended June 30,
	2018			2017
Net service revenue	$	411.6		$	374.9
Gross margin, excluding depreciation and amortization	169.0			154.4
% of revenue	41.1		%	41.2		%
Other operating expenses	126.2			125.5
% of revenue	30.7		%	33.5		%
Securities Class Action Lawsuit settlement, net	—			28.7
Operating income	42.8			0.2
Total other income (expense), net	1.3			2.3
Income tax expense	(10.6		)	2.0
Effective income tax rate	24.0		%	(76.5		%)
Net income	33.5			4.5
Net income attributable to noncontrolling interests	(0.2		)	(0.1		)
Net income attributable to Amedisys, Inc.	$	33.3		$	4.5

Overall, our operating income increased $43 million on a revenue increase of $37 million. Excluding the Securities Class Action Lawsuit settlement accrual in 2017 (see Note 5 - Commitments and Contingencies to our condensed consolidated financial statements), operating income increased $14 million, driven by growth within our home health and hospice segments. Our gross margin as a percentage of revenue was flat despite a net reduction of $1 million in net service revenue and gross margin due to the impact of the 2018 changes in reimbursement and planned wage increases that became effective during the three-month period ended September 30, 2017. Our home health segment continues to see improvement in clinician productivity which resulted in a decrease in cost per visit. We continue to remain focused on costs as our other operating expenses as a percentage of revenue declined significantly from prior year.

Our income tax expense as a percentage of our income before income taxes decreased due to the enactment of H.R. 1 (Tax Cuts and Jobs Act) on December 22, 2017.

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Home Health Segment

The following table summarizes our home health segment results of operations:

	For the Three- Month Periods Ended June 30,
	2018			2017
Financial Information(in millions):
Medicare	$	206.3		$	198.3
Non-Medicare	85.2			72.0
Net service revenue	291.5			270.3
Cost of service	176.5			164.8
Gross margin	115.0			105.5
Other operating expenses	69.2			69.9
Operating income	$	45.8		$	35.6
Same Store Growth (1):
Medicare revenue	6		%	(5		%)
Non-Medicare revenue	18		%	14		%
Total admissions	6		%	—		%
Total volume (2)	8		%	2		%
Total Episodic admissions (3)	5		%	(1		%)
Total Episodic volume (4)	6		%	2		%
Key Statistical Data - Total (5):
Medicare:
Admissions	47,058			47,260
Recertifications	28,431			26,839
Total volume	75,489			74,099
Completed episodes	74,776			73,872
Visits	1,318,074			1,271,747
Average revenue per completed episode (6)	$	2,874		$	2,829
Visits per completed episode (7)	17.8			17.5
Non-Medicare:
Admissions	29,271			26,225
Recertifications	13,891			11,462
Total volume	43,162			37,687
Visits	690,548			579,328
Total (5):
Visiting Clinician Cost per Visit	$	80.07		$	80.61
Clinical Manager Cost per Visit	$	7.76		$	8.44
Total Cost per Visit	$	87.83		$	89.05
Visits	2,008,622			1,851,075

(1) Same store information represents the percent increase (decrease) in our Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume for the period as a percent of the Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume of the prior period.

(2) Total volume includes all admissions and recertifications.

(3) Total Episodic admissions includes admissions for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.

(4) Total Episodic volume includes admissions and recertifications for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.

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(5) Total includes acquisitions.

(6) Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care.

(7) Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

Operating Results

Overall, our operating income increased $10 million on a $21 million increase in net service revenue. Our growth in volumes and increases in clinician productivity positively impacted our gross margin as a percentage of revenue which increased despite the 2018 change in reimbursement and planned wage increases that became effective during the three-month period ended September 30, 2017. The impact of the 2018 change in reimbursement was a reduction in net service revenue and gross margin of approximately $2 million.

Net Service Revenue

Our revenue increased $21 million on an 8% increase in total volumes which is inclusive of a 6% increase in episodic volumes. The volume growth was driven by a 6% increase in admissions and a 170 basis point increase in our recertification rate. In addition to the increase in volumes, our revenue per episode is up approximately $45 per episode as a result of an increase in the acuity level of our patients which offset the 70 basis point reimbursement reduction effective January 1, 2018. Our non-Medicare revenue is a mix of both per visit and episodic payors. Our revenue was also impacted by revenue adjustments related to internal compliance reviews offset by a reduction in our Medicare revenue adjustments. Our provision for estimated non-Medicare revenue adjustments, which was reclassified from other operating expenses to a reduction in net service revenue as a result of the implementation of Accounting Standard Updates 2014-09 and 2015-14 (collectively "ASC 606") on January 1, 2018, increased approximately $1 million offsetting the increase in our gross revenues.

Cost of Service, Excluding Depreciation and Amortization

Our cost per visit consists of costs associated with direct clinician care in the homes of our patients as well as the cost of clinical managers who monitor the overall delivery of care. Our cost of service increased 7% on a 9% increase in total visits. Our increase in total visits was driven by growth in volumes as well as an increase in visits per completed episode which is the result of an increase in the acuity level of our patients. Our cost per visit decreased 1% as an increase in clinician productivity offset planned wage increases.

Other Operating Expenses

Other operating expenses decreased approximately $1 million due to decreases in salaries and benefits expense and telecommunications expense which were offset by increases in information technology expense and rent expense.

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Hospice Segment

The following table summarizes our hospice segment results of operations:

	For the Three- Month Periods Ended June 30,
	2018			2017
Financial Information(in millions):
Medicare	$	96.9		$	85.8
Non-Medicare	4.5			4.5
Net service revenue	101.4			90.3
Cost of service	51.7			45.4
Gross margin	49.7			44.9
Other operating expenses	20.6			19.3
Operating income	$	29.1		$	25.6
Same Store Growth (1):
Medicare revenue	13		%	19		%
Non-Medicare revenue	(1		%)	8		%
Hospice admissions	7		%	11		%
Average daily census	12		%	16		%
Key Statistical Data - Total (2):
Hospice admissions	6,746			6,248
Average daily census	7,554			6,717
Revenue per day, net	$	147.58		$	147.74
Cost of service per day	$	75.20		$	74.34
Average discharge length of stay	97			89

(1) Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.

(2) Total includes acquisitions.

Operating Results

Overall, our operating income increased $4 million on an $11 million increase in net service revenue. We experienced a slight decrease in gross margin as a percentage of revenue primarily due to planned wage increases that became effective during the three-month period ended September 30, 2017 and increases in revenue adjustments.

Net Service Revenue

Our hospice revenue increased $11 million on a 12% increase in our average daily census and a 1% increase in reimbursement effective for services provided from October 1, 2017. The increase in revenue was offset by an increase in Medicare revenue adjustments. Our provision for estimated non-Medicare revenue adjustments, which was reclassified from other operating expenses to a reduction in net service revenue as a result of the implementation of ASC 606 on January 1, 2018, remained relatively flat for the three-month period ended June 30, 2018 compared to three-month period ended June 30, 2017.

Cost of Service, Excluding Depreciation and Amortization

Our hospice cost of service increased $6 million as the result of a 12% increase in average daily census. Our cost of service per day increased 1% primarily due to an increase in salary cost per day as a result of planned wage increases that became effective during the three-month period ended September 30, 2017.

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Other Operating Expenses

Other operating expenses increased $1 million due to increases in other care center related expenses, primarily salaries and benefits expense and advertising expense.

Personal Care Segment

The following table summarizes our personal care segment results of operations:

	For the Three- Month Periods Ended June 30,
	2018		2017
Financial Information(in millions):
Medicare	$	—	$	—
Non-Medicare	18.7		14.3
Net service revenue	18.7		14.3
Cost of service	14.4		10.3
Gross margin	4.3		4.0
Other operating expenses	3.3		3.0
Operating income	$	1.0	$	1.0
Key Statistical Data:
Billable hours	797,228		618,401
Clients served	12,683		8,270
Shifts	356,874		283,130
Revenue per hour	$	23.48	$	23.12
Revenue per shift	$	52.45	$	50.50
Hours per shift	2.2		2.2

On October 1, 2017, we acquired the assets of Intercity Home Care, which owned and operated four personal-care care centers, three of which were subsequently consolidated with our existing personal-care care centers. On May 1, 2018, we acquired the assets of East Tennessee Personal Care Services, which owned and operated one personal-care care center. Acquisitions are included in our consolidated financial statements from their respective acquisition dates. As a result, our personal care operating results for 2018 and 2017 are not fully comparable.

Operating income related to our personal care segment remained flat on a $4 million increase in net service revenue. The increase in net service revenue includes revenues associated with our acquisitions. Gross margin also remained flat as the segment incurred additional costs associated with our acquisitions and the newly enacted Employer Medical Assistance Contribution ("EMAC") program that became effective in the state of Massachusetts on January 1, 2018. Other operating expenses increased less than $1 million on a 31% increase in net service revenue.

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Corporate

The following table summarizes our corporate results of operations:

	For the Three- Month Periods Ended June 30,
	2018		2017
Financial Information(in millions):
Other operating expenses	$	31.1	$	30.0
Depreciation and amortization	2.0		3.3
Total operating expenses before Securities Class Action Lawsuit settlement, net	33.1		33.3
Securities Class Action Lawsuit settlement, net	—		28.7
Total operating expenses	$	33.1	$	62.0

Corporate expenses consist of costs relating to our executive management and corporate and administrative support functions, primarily information services, accounting, finance, billing and collections, legal, compliance, risk management, procurement, marketing, clinical administration, training, human resources and administration. Excluding the Securities Class Action Lawsuit settlement accrual during the three-month period ended June 30, 2017, corporate operating expenses remained flat due to increases in salaries and benefits expense and travel and training expense which were offset by decreases in information technology expense, depreciation and amortization and professional fees.

Six-Month Period Ended June 30, 2018 Compared to the Six-Month Period Ended June 30, 2017

Consolidated

The following table summarizes our consolidated results of operations (amounts in millions):

	For the Six- Month Periods Ended June 30,
	2018			2017
Net service revenue	$	810.9		$	739.6
Gross margin, excluding depreciation and amortization	330.0			302.7
% of revenue	40.7		%	40.9		%
Other operating expenses	251.2			248.6
% of revenue	31.0		%	33.6		%
Securities Class Action Lawsuit settlement, net	—			28.7
Operating income	78.8			25.4
Total other income (expense), net	2.2			2.3
Income tax expense	(20.1		)	(8.0		)
Effective income tax rate	24.9		%	28.7		%
Net income	60.9			19.7
Net income attributable to noncontrolling interests	(0.4		)	(0.1		)
Net income attributable to Amedisys, Inc.	$	60.5		$	19.6

Overall, our operating income increased $53 million on a revenue increase of $71 million. Excluding the Securities Class Action Lawsuit settlement accrual in 2017 (see Note 5 - Commitments and Contingencies to our condensed consolidated financial statements), operating income increased $25 million, driven by the improved performance of all three of our segments. Our gross margin as a percentage of revenue was relatively flat despite a net reduction of $2 million in net service revenue and gross margin due to the impact of the 2018 changes in reimbursement, planned wage increases during the three-month period ended September 30, 2017, and a net increase in revenue adjustments and additional reserves primarily related to our Florida self-audit. Our improvement in gross margin was driven by continued growth in our hospice segment and increases in clinical productivity in our

26

home health segment. We continue to maintain cost discipline as our other operating expenses increased only 1% on a 10% increase in net service revenue.

Our income tax expense as a percentage of our income before income taxes decreased due to the enactment of H.R. 1 (Tax Cuts and Jobs Act) on December 22, 2017.

Home Health Segment

The following table summarizes our home health segment results of operations:

	For the Six- Month Periods Ended June 30,
	2018			2017
Financial Information(in millions):
Medicare	$	411.3		$	397.0
Non-Medicare	164.3			140.9
Net service revenue	575.6			537.9
Cost of service	350.9			327.8
Gross margin	224.7			210.1
Other operating expenses	138.0			138.8
Operating income	$	86.7		$	71.3
Same Store Growth (1):
Medicare revenue	5		%	(4		%)
Non-Medicare revenue	16		%	12		%
Total admissions	5		%	1		%
Total volume (2)	7		%	2		%
Total Episodic admissions (3)	4		%	1		%
Total Episodic volume (4)	6		%	2		%
Key Statistical Data - Total (5):
Medicare:
Admissions	96,513			96,888
Recertifications	55,667			51,882
Total volume	152,180			148,770
Completed episodes	147,612			145,736
Visits	2,632,200			2,534,845
Average revenue per completed episode (6)	$	2,833		$	2,806
Visits per completed episode (7)	17.5			17.2
Non-Medicare:
Admissions	59,160			53,558
Recertifications	26,323			21,686
Total volume	85,483			75,244
Visits	1,351,481			1,134,876
Total (5):
Visiting Clinician Cost per Visit	$	80.20		$	80.84
Clinical Manager Cost per Visit	$	7.88		$	8.49
Total Cost per Visit	$	88.08		$	89.33
Visits	3,983,681			3,669,721

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(1) Same store information represents the percent increase (decrease) in our Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume for the period as a percent of the Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume of the prior period.

(2) Total volume includes all admissions and recertifications.

(3) Total Episodic admissions includes admissions for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.

(4) Total Episodic volume includes admissions and recertifications for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.

(5) Total includes acquisitions.

(6) Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care.

(7) Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

Operating Results

Overall, our operating income increased $15 million on a $38 million increase in net service revenue. Our growth in volumes and increases in clinician productivity positively impacted our gross margin as a percentage of revenue, which remained flat despite the 2018 changes in reimbursement, a net increase in revenue adjustments and additional reserves primarily related to our Florida ZPIC audit and planned wage increases that became effective during the three-month period ended September 30, 2017. The impact of the 2018 changes in reimbursement was a reduction in net service revenue and gross margin of approximately $4 million.

Net Service Revenue

Our revenue increased $38 million on a 7% increase in total volumes which is inclusive of a 6% increase in episodic volumes. The volume growth was driven by a 5% increase in admissions and a 210 basis point increase in our recertification rate. In addition to the increase in volumes, our revenue per episode is up $27 per episode as a result of an increase in the acuity level of our patients which offset the 70 basis point reimbursement reduction effective January 1, 2018 as well as the reduction related to the increase in revenue adjustments and additional reserves primarily related to our Florida self-audit. Our provision for estimated non-Medicare revenue adjustments, which was reclassified from other operating expenses to a reduction in net service revenue as a result of the implementation of ASC 606 on January 1, 2018, increased approximately $4 million offsetting the increase in our gross revenues.

Cost of Service, Excluding Depreciation and Amortization

Our cost of service increased 7% on a 9% increase in total visits. Our increase in total visits was driven by growth in volumes as well as an increase in visits per completed episode which is the result of an increase in the acuity level of our patients. Our cost per visit decreased 1% as an increase in clinician productivity offset planned wage increases.

Other Operating Expenses

Other operating expenses decreased approximately $1 million on a 7% increase in net service revenue. Decreases in salaries and benefits expense and telecommunications expense were offset by an increase in information technology expense.

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Hospice Segment

The following table summarizes our hospice segment results of operations:

	For the Six- Month Periods Ended June 30,
	2018			2017
Financial Information(in millions):
Medicare	$	188.7		$	166.5
Non-Medicare	10.0			7.4
Net service revenue	198.7			173.9
Cost of service	101.8			88.4
Gross margin	96.9			85.5
Other operating expenses	40.8			37.5
Operating income	$	56.1		$	48.0
Same Store Growth (1):
Medicare revenue	12		%	18		%
Non-Medicare revenue	33		%	(7		%)
Hospice admissions	6		%	15		%
Average daily census	12		%	16		%
Key Statistical Data - Total (2):
Hospice admissions	13,679			12,753
Average daily census	7,385			6,542
Revenue per day, net	$	148.66		$	146.89
Cost of service per day	$	76.15		$	74.68
Average discharge length of stay	97			90

(1) Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.

(2) Total includes acquisitions.

Operating Results

Overall, our operating income increased $8 million on a $25 million increase in net service revenue. The 14% increase in net service revenue was moderated by a lower gross margin as a percentage of revenue primarily related to planned wage increases that became effective during the three-month period ended September 30, 2017 and a 9% increase in other operating expenses.

Net Service Revenue

Our hospice revenue increased $25 million on a 12% increase in our average daily census and a 1% increase in reimbursement effective for services provided from October 1, 2017. Our provision for estimated non-Medicare revenue adjustments which was reclassified from other operating expenses to a reduction in net service revenue as a result of the implementation of ASC 606 on January 1, 2018, decreased approximately $2 million and thus increased net service revenue.

Cost of Service, Excluding Depreciation and Amortization

Our hospice cost of service increased $13 million as the result of a 12% increase in average daily census. Our cost of service per day increased 2% primarily due to an increase in salary cost per day as a result of planned wage increases that became effective during the three-month period ended September 30, 2017.

Other Operating Expenses

Other operating expenses increased $3 million on a 14% increase in net service revenue. The increase was related to other care center related expenses, primarily salaries and benefits expense, advertising expense and travel and training expense.

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Personal Care Segment

The following table summarizes our personal care segment results of operations:

	For the Six- Month Periods Ended June 30,
	2018		2017
Financial Information(in millions):
Medicare	$	—	$	—
Non-Medicare	36.6		27.8
Net service revenue	36.6		27.8
Cost of service	28.2		20.7
Gross margin	8.4		7.1
Other operating expenses	6.6		6.3
Operating income	$	1.8	$	0.8
Key Statistical Data:
Billable hours	1,547,181		1,206,618
Clients served	14,350		9,845
Shifts	705,040		548,247
Revenue per hour	$	23.66	$	23.04
Revenue per shift	$	51.91	$	50.72
Hours per shift	2.2		2.2

Operating income related to our personal care segment increased approximately $1 million on a $9 million increase in net service revenue. The increase in net service revenue includes revenues associated with the acquisitions of Intercity Home Care and East Tennessee Personal Care Services, both of which occurred after June 30, 2017. The segment experienced a decrease in gross margin as a percentage of revenue related to additional costs associated with these acquisitions and the EMAC program that became effective in the state of Massachusetts on January1, 2018. Other operating expenses remained flat on a 32% increase in net service revenue.

Corporate

The following table summarizes our corporate results of operations:

	For the Six- Month Periods Ended June 30,
	2018		2017
Financial Information(in millions):
Other operating expenses	$	61.3	$	59.5
Depreciation and amortization	4.5		6.5
Total operating expenses before Securities Class Action Lawsuit settlement, net	65.8		66.0
Securities Class Action Lawsuit settlement, net	—		28.7
Total operating expenses	$	65.8	$	94.7

Excluding the Securities Class Action Lawsuit settlement accrual during the six-month period ended June 30, 2017, corporate operating expenses remained flat on a 10% increase in net service revenue. Increase in salaries and benefits expense, travel and training expense and a loss on disposal of assets were offset by decreases in personnel costs, telecommunications expense, information technology expense and professional fees.

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Liquidity and Capital Resources

Cash Flows

The following table summarizes our cash flows for the periods indicated (amounts in millions):

	For the Six- Month Periods Ended June 30,
	2018			2017
Cash provided by operating activities	$	90.9		$	63.3
Cash used in investing activities	(5.2		)	(31.4		)
Cash used in financing activities	(146.2		)	(2.9		)
Net (decrease) increase in cash and cash equivalents	(60.5		)	29.0
Cash and cash equivalents at beginning of period	86.4			30.2
Cash and cash equivalents at end of period	$	25.9		$	59.2

Cash provided by operating activities increased $27.6 million during the six-month period ended June 30, 2018 compared to the six-month period ended June 30, 2017 primarily due to an increase in our cash collections as compared to 2017. For additional information regarding our operating performance and our days revenue outstanding, see “Results of Operations” and “Outstanding Patient Accounts Receivable,” respectively.

Cash used in investing activities decreased $26.2 million during the six-month period ended June 30, 2018 compared to the six-month period ended June 30, 2017 primarily due to a decrease in our acquisition activity ($20.1 million) and a decrease in capital expenditures ($5.8 million).

Cash used in financing activities increased $143.3 million during the six-month period ended June 30, 2018 compared to the six-month period ended June 30, 2017 primarily due to our repurchase of company stock and the repayment of borrowings under our Term Loan offset by borrowings under our new Credit Agreement.

Liquidity

Typically, our principal source of liquidity is the collection of our patient accounts receivable, primarily through the Medicare program. In addition to our collection of patient accounts receivable, from time to time, we can and do obtain additional sources of liquidity by the incurrence of additional indebtedness.

During the six-month period ended June 30, 2018, we spent $1.6 million in capital expenditures as compared to $7.4 million during the six-month period ended June 30, 2017. Our capital expenditures for 2018 are expected to be approximately $7.0 million to $9.0 million.

As of June 30, 2018, we had $25.9 million in cash and cash equivalents and $388.1 million in availability under our $550.0 million Revolving Credit Facility.

Based on our operating forecasts and our debt service requirements, we believe we will have sufficient liquidity to fund our operations, capital requirements and debt service requirements.

Outstanding Patient Accounts Receivable

Our patient accounts receivable decreased $3.6 million from December 31, 2017 to June 30, 2018. Our cash collection as a percentage of revenue was 102% and 101% for the six-month periods ended June 30, 2018 and 2017, respectively. Our days revenue outstanding at June 30, 2018 was 41.1 days which is a decrease of 2.9 days from December 31, 2017.

Our patient accounts receivable includes unbilled receivables and are aged based upon our initial service date. We monitor unbilled receivables on a care center by care center basis to ensure that all efforts are made to bill claims within timely filing deadlines. Our unbilled patient accounts receivable can be impacted by acquisition activity, probe edits or regulatory changes which result in additional information or procedures needed prior to billing. The timely filing deadline for Medicare is one year from the date the episode was completed, varies by state for Medicaid-reimbursable services and among insurance companies and other private payors.

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Our estimated price concessions (which are deducted from our service revenue to determine net service revenue) were as follows for the periods indicated (amounts in millions). Our policy is to record a reduction in revenue for amounts due from Medicare and other patient accounts receivable that are aged over 365 days and deemed probable of uncollection; however, we have elected to not apply this policy to those accounts impacted by the Florida ZPIC audit.

	For the Three- Month Periods  Ended June 30,						For the Six- Month Periods Ended June 30,
	2018			2017			2018			2017
Provision for estimated Medicare revenue adjustments	$	2.5		$	5.0		$	4.2		$	8.4
Provision for estimated Non-Medicare revenue adjustments	5.9			4.7			13.4			11.0
Total	$	8.4		$	9.7		$	17.6		$	19.4
As a percent of revenue	2.0		%	2.6		%	2.2		%	2.6		%

The following schedules detail our patient accounts receivable, by payor class, aged based upon initial date of service (amounts in millions, except days revenue outstanding):

	0-90		91-180		181-365		Over 365			Total
At June 30, 2018:
Medicare patient accounts receivable	$	93.9	$	10.3	$	4.1	$	1.6		$	109.9
Other patient accounts receivable:
Medicaid	12.6		2.4		1.3		(1.4		)	14.9
Private	57.6		9.8		3.1		2.3			72.8
Total	$	70.2	$	12.2	$	4.4	$	0.9		$	87.7
Total patient accounts receivable										$	197.6
Days revenue outstanding (1)										41.1
	0-90		91-180		181-365		Over 365			Total
At December 31, 2017:
Medicare patient accounts receivable	$	95.9	$	16.1	$	6.6	$	0.6		$	119.2
Other patient accounts receivable:
Medicaid	13.8		3.2		1.3		(1.1		)	17.2
Private	51.0		7.5		4.1		2.2			64.8
Total	$	64.8	$	10.7	$	5.4	$	1.1		$	82.0
Total patient accounts receivable										$	201.2
Days revenue outstanding (1)										44.0

(1) Our calculation of days revenue outstanding is derived by dividing our ending patient accounts receivable at June 30, 2018 and December 31, 2017 by our average daily patient revenue for the three-month periods ended June 30, 2018 and December 31, 2017, respectively.

Indebtedness

Credit Agreement

On June 29, 2018, we entered into our Amended and Restated Credit Agreement ("Credit Agreement") that provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $550.0 million (the “Revolving Credit Facility”). The net proceeds of the Revolving Credit Facility were used to pay off our existing indebtedness under our prior credit agreement, dated as of August 28, 2015 (the "Prior Credit Agreement"), with a principal balance of $127.5 million.

32

The final maturity of the Revolving Credit Facility is June 29, 2023 and there is no mandatory amortization on the outstanding principal balances which are payable in full upon maturity. The Revolving Credit Facility may be used to provide ongoing working capital and for general corporate purposes of the Company and our subsidiaries, including permitted acquisitions, as defined in the Credit Agreement.

Our weighted average interest rate for our $100.0 million Term Loan, under our Prior Credit Agreement, was 3.9% and 3.8% for the three and six-month periods ended June 30, 2018, respectively, and 3.0% and 2.9% for the three and six-month periods ended June 30, 2017, respectively. Our weighted average interest rate for our $550.0 million Revolving Credit Facility was 3.7% at June 30, 2018.

As of June 30, 2018, our consolidated leverage ratio was 0.8, our consolidated interest coverage ratio was 51.0 and we are in compliance with our covenants under the Credit Agreement.

As of June 30, 2018, our availability under our $550.0 million Revolving Credit Facility was $388.1 million as we have $127.5 million outstanding in borrowings and $34.4 million outstanding in letters of credit.

See Note 4 - Long Term Obligations to our condensed consolidated financial statements and Note 6 - Long Term Obligations of the financial statements included in our Form 10-K for additional details on our outstanding long-term obligations.

Share Repurchase

On June 4, 2018, we purchased 2,418,304 of our common shares from affiliates of KKR Credit Advisors (US) LLC ("KKR"), representing one-half of KKR's holdings in the Company and 7.1% of the aggregate outstanding shares of the Company's common stock for a total purchase price of $181.4 million including related direct costs. The Company repurchased the shares at $73.96 which represents 96% of the closing stock price of the Company's common stock on June 4, 2018.

Inflation

We do not believe inflation has significantly impacted our results of operations.

Critical Accounting Estimates

See Part II, Item 7 – Critical Accounting Estimates and our consolidated financial statements and related notes in Part II, Item 8 of our 2017 Annual Report on Form 10-K, for accounting policies and related estimates we believe are the most critical to understanding our condensed consolidated financial statements, financial condition and results of operations and which require complex management judgment and assumptions, or involve uncertainties. These critical accounting estimates include revenue recognition; patient accounts receivable; insurance; goodwill and other intangible assets; and income taxes. There have not been any changes to our significant accounting policies or their application since we filed our 2017 Annual Report on Form 10-K except for the changes related to the implementation of Accounting Standards Updates 2014-19 and 2015-14 as disclosed in Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from fluctuations in interest rates. Our Revolving Credit Facility carries a floating interest rate which is tied to the Eurodollar rate (i.e. LIBOR) and the Prime Rate and therefore, our condensed consolidated statements of operations and our condensed consolidated statements of cash flows are exposed to changes in interest rates. As of June 30, 2018, the total amount of outstanding debt subject to interest rate fluctuations was $127.5 million. A 1.0% interest rate change would cause interest expense to change by approximately $1.3 million annually.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures which are designed to provide reasonable assurance of achieving their objectives and to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 as amended (the “Exchange Act”) is recorded, processed, summarized, disclosed and reported within the time periods specified in the SEC’s rules and forms. This information is also accumulated and communicated to our management and Board of Directors to allow timely decisions regarding required disclosure.

33

In connection with the preparation of this Quarterly Report on Form 10-Q, as of June 30, 2018, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act.

Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2018, the end of the period covered by this Quarterly Report.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) that have occurred during the quarter ended June 30, 2018, that have materially impacted, or are reasonably likely to materially impact, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls’ effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and, based on an evaluation of our controls and procedures, our principal executive officer and our principal financial officer concluded our disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2018, the end of the period covered by this Quarterly Report.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 5 - Commitments and Contingencies to the condensed consolidated financial statements for information concerning our legal proceedings.

ITEM 1A. RISK FACTORS

In addition to other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors included in Part I, Item 1A. – Risk Factors of our Annual Report on Form 10-K. These risk factors could materially impact our business, financial condition and/or operating results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely impact our business, financial condition and/or operating results.

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

The following table provides the information with respect to purchases made by us of shares of our common stock during each of the months during the three-month period ended June 30, 2018:

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs
April 1, 2018 to April 30, 2018	3,812		$	60.34	—	$	—
May 1, 2018 to May 31, 2018	—		—		—	—
June 1, 2018 to June 30, 2018	2,434,166		75.06		—	—
	2,437,978	(1) (2)	$	75.03	—	$	—

(1) Includes 2,418,304 shares of common stock we repurchased from KKR on June 4, 2018 in a private transaction at a price per share equal to $73.96, which represents a 4% discount to the closing price of our common stock on June 4, 2018.

(2) Includes shares of common stock surrendered to us by certain employees to satisfy tax withholding obligations in connection with the vesting of non-vested stock previously awarded to such employees under our 2008 Omnibus Incentive Compensation Plan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

35

ITEM 6. EXHIBITS

The exhibits marked with the cross symbol (†) are filed and the exhibits marked with a double cross (††) are furnished with this Form 10-Q. Any exhibits marked with the asterisk symbol (*) are management contracts or compensatory plans or arrangements filed pursuant to Item 601(b)(10)(iii) of Regulation S-K.

Exhibit Number	Document Description	Report or Registration Statement	SEC File or Registration Number	Exhibit or Other Reference
3.1	Composite of Certificate of Incorporation of the Company inclusive of all amendments through June 14, 2007	The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007	0-24260	3.1
3.2	Composite of By-Laws of the Company inclusive of all amendments through April 20, 2016	The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016	0-24260	3.2
†10.1	First Amendment to Equity Purchase Agreement, dated May 18, 2018, by and among the Company, Amedisys Personal Care, LLC, Associated Home Care, LLC, Elder Home Options, LLC and Michael Trigilio
10.2	Share Repurchase Agreement, dated as of June 4, 2018, by and among the Company and the selling stockholders set forth on Schedule I thereto	The Company's current Report on Form 8-K filed on June 4, 2018	0-24260	2.1
10.3	Amended and Restated Credit Agreement, dated as of June 29, 2018, among the Company and Amedisys Holding, L.L.C, as borrowers, certain subsidiaries of the Company party thereto as guarantors, Bank of America, N.A., as Administrative Agent, Swingline Lender and L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent, Capital One Bank, National Association, Citizens Bank, N.A., Compass Bank, Fifth Third Bank, Hancock Whitney Bank, Regions Bank, and Wells Fargo Bank, National Association, as Co-Documentation Agents, the lenders party thereto, Merrill, Lynch, Pierce Fenner & Smith Incorporated, Citizens Bank N.A., Fifth Third Bank, and JPMorgan Chase Bank, N.A., as Joint Lead Arrangers, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and JPMorgan Chase Bank, N.A., as Joint Bookrunners	The Company's current Report on Form 8-K filed on July 2, 2018	0-24260	10.1
10.4	Amended and Restated Security Agreement, dated as of June 29, 2018, among the Company and Amedisys Holding, L.L.C., as borrowers, certain other parties identified as “grantors” on the signature pages thereto and Bank of America, N.A., in its capacity as Administrative Agent	The Company's current Report on Form 8-K filed on July 2, 2018	0-24260	10.2
10.5	Amended and Restated Pledge Agreement, dated as of June 29, 2018, among the Company and Amedisys Holding, L.L.C., as borrowers, certain other parties identified as “pledgors” on the signature pages thereto, and Bank of America, N.A., in its capacity as Administrative Agent	The Company's current Report on Form 8-K filed on July 2, 2018	0-24260	10.3
*10.6	Amedisys, Inc. 2018 Omnibus Incentive Compensation Plan	The Company's Definitive Proxy Statement filed on April 25, 2018	0-24260	Appendix A
†31.1	Certification of Paul B. Kusserow, President and Chief Executive Officer (principal executive officer), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
†31.2	Certification of Scott G. Ginn, Chief Financial Officer (principal financial officer), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
††32.1	Certification of Paul B. Kusserow, President and Chief Executive Officer (principal executive officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
††32.2	Certification of Scott G. Ginn, Chief Financial Officer (principal financial officer), 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
†101.SCH	XBRL Taxonomy Extension Schema Document
†101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
†101.DEF	XBRL Taxonomy Extension Definition Linkbase
†101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
†101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

36

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMEDISYS, INC. (Registrant)
By:	/s/ SCOTT G. GINN
	Scott G. Ginn,
	Principal Financial Officer and
	Duly Authorized Officer

Date: August 1, 2018

37

EX-10.1

FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT

This First Amendment (this “First Amendment”) to that certain Equity Purchase Agreement by and among Amedisys Personal Care, LLC, a Delaware limited liability company (“Buyer”), Associated Home Care, LLC, a Massachusetts limited liability company formerly named Associated Home Care, Inc. (the “Company”), Elder Home Options, LLC, a Massachusetts limited liability company (“EHO” and together with the Company, the “Acquired Companies”), Michael Trigilio (“Seller”), and Amedisys, Inc., a Delaware corporation (“Amedisys”), dated as of February 5, 2016 (the “Purchase Agreement”), is made and entered into and effective on the 18^th day of May, 2018, by and among Buyer, the Company, EHO, Seller and Amedisys. Buyer, the Company, EHO, Seller and Amedisys are sometimes collectively referred to herein as the “Parties” and each, a “Party.” Capitalized terms used herein that are not otherwise defined herein shall have the meanings given to such terms in the Purchase Agreement.

RECITALS

WHEREAS, the Closing occurred on March 1, 2016, and, pursuant thereto, Buyer acquired (i) one hundred percent (100%) of the membership interest of the Company, and (ii) one hundred percent (100%) of the membership interest of EHO (collectively, the “Equity Interests”);

WHEREAS, Section 1.03 of the Purchase Agreement provides that, as additional consideration for Seller’s sale of the Equity Interests to Buyer, Seller shall be eligible to receive certain Contingent Payments, up to an aggregate amount of approximately $10.1 million (prior to any withholdings required by law and to be reported as compensation by Seller), based on the achievement by the Acquired Companies of certain identified minimum EBITDA thresholds for five measurement periods ending on each of the first through fifth anniversaries of the Closing Date (each, a “Measurement Period”), and provided Seller satisfies certain employment conditions specified in the Purchase Agreement;

WHEREAS, both the First Measurement Period and the Second Measurement Period have ended and no Contingent Payments have been earned by Seller pursuant to Section 1.03 of the Purchase Agreement;

WHEREAS, in view of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by the Parties, (x) the Parties desire to amend the Purchase Agreement to, inter alia, delete Section 1.03 therefrom, and (y) Seller desires to fully, completely and irrevocably release and discharge Amedisys, Buyer, the Company and their respective Affiliates from any obligations pursuant to Section 1.03 of the Purchase Agreement, including, without limitation, any obligation to make any Contingent Payments as well as any related reporting and accounting obligations thereunder.

NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual promises set forth herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by the Seller and the other Parties, the Parties hereby agree as follows:

1.Amendment of Section 1.03. Section 1.03 of the Purchase Agreement is hereby amended and restated in its entirety as follows: “Reserved.”

2.Amendment of Section 9.02(d). In view of the amendment to Section 1.03 of the Purchase Agreement, Section 9.02(d) of the Purchase Agreement is hereby amended and restated in its entirety as follows: “Reserved.”

3.Seller Acknowledgment and Release. Seller hereby acknowledges that no Contingent Payments were earned or are due and payable to him pursuant to Section 1.03 of the Purchase Agreement for either the First Measurement Period or the Second Measurement Period. Further, Seller hereby fully, completely and irrevocably releases and discharges Amedisys, Buyer, the Company and their respective Affiliates from any prior, existing or future obligations pursuant to Section 1.03 of the Purchase Agreement, whether relating to the First Measurement Period, the Second Measurement Period, or any remaining Measurement Period, including, without limitation, any obligation to make any Contingent Payments as well as any related reporting, accounting or other obligations thereunder.

4.Seller Indemnity. Seller hereby covenants and agrees that he will defend and indemnify the Buyer Indemnitees against and hold them harmless from any Losses suffered or incurred by any Buyer Indemnitee to the extent such Loss results from any third party alleging that its rights have been adversely affected by this First Amendment.

5. General Provisions.

(a)Counterpart Execution. This First Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one and the same instrument. For purposes hereof, facsimile and electronically scanned copies hereof and facsimile and electronically scanned signatures hereof shall be authorized and deemed effective.

(b)Recitals. The Recitals set forth hereinabove are incorporated into this First Amendment and made a part hereof.

(c)Governing Law. This First Amendment shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of laws principles.

(d)Binding Effect. This First Amendment shall be binding upon and inure to the benefit of the parties and their permitted successors and assigns.

(e)Amendment. This First Amendment may be amended, modified, extended, superseded or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by all of the Parties.

(f)Continued Effectiveness. Except as amended by this First Amendment, all terms and provisions of the Purchase Agreement shall continue in full force and effect and remain unchanged.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Parties have executed this First Amendment as of the date first set forth above.

BUYER:

AMEDISYS PERSONAL CARE, LLC

By: /s/ Paul Kusserow

Name: Paul Kusserow

Its: President and Chief Executive Officer

AMEDISYS:

AMEDISYS, INC.

By: /s/ Paul Kusserow

Name: Paul Kusserow

Its: President and Chief Executive Officer

COMPANY:

ASSOCIATED HOME CARE, INC.

By: /s/ Michael Trigilio

Name: Michael Trigilio

Its: President Personal Care

EHO:

ELDER HOME OPTIONS, LLC

By: /s/ Michael Trigilio

Name: Michael Trigilio

Its: President Personal Care

SELLER:

MICHAEL TRIGILIO

/s/ Michael Trigilio

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Paul B. Kusserow, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, of Amedisys, 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 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 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: August 1, 2018

/S/ Paul B. Kusserow

Paul B. Kusserow

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Scott G. Ginn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, of Amedisys, 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 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 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: August 1, 2018

/S/ Scott G. Ginn

Scott G. Ginn

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER 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 Amedisys, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2018 (the “Report”), I, Paul B. Kusserow, President and Chief Executive Officer of the Company, hereby certify to my knowledge, 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: August 1, 2018

/S/ Paul B. Kusserow

Paul B. Kusserow

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER 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 Amedisys, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2018 (the “Report”), I, Scott G. Ginn, Chief Financial Officer of the Company, hereby certify to my knowledge, 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: August 1, 2018

/S/ Scott G. Ginn

Scott G. Ginn

Chief Financial Officer

(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 27, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	AMED
Entity Registrant Name	AMEDISYS INC
Entity Central Index Key	0000896262
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		31,836,002

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 25,904	$ 86,363
Patient accounts receivable	197,592	201,196
Prepaid expenses	10,493	7,329
Other current assets	24,784	16,268
Total current assets	258,773	311,156
Property and equipment, net of accumulated depreciation of $101,128 and $146,814	27,998	31,122
Goodwill	324,145	319,949
Intangible assets, net of accumulated amortization of $31,864 and $30,610	44,888	46,061
Deferred income taxes	46,919	56,064
Other assets, net	50,601	49,130
Total assets	753,324	813,482
Current liabilities:
Accounts payable	29,810	25,384
Payroll and employee benefits	87,239	89,936
Accrued expenses	96,472	89,104
Current portion of long-term obligations	668	10,638
Total current liabilities	214,189	215,062
Long-term obligations, less current portion	123,937	78,203
Other long-term obligations	6,137	3,791
Total liabilities	344,263	297,056
Commitments and Contingencies—Note 5
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.001 par value, 60,000,000 shares authorized; 36,044,177 and 35,747,134 shares issued; and 31,801,357 and 33,964,767 shares outstanding	36	35
Additional paid-in capital	585,137	568,780
Treasury stock, at cost 4,242,820 and 1,782,367 shares of common stock	(237,947)	(53,713)
Accumulated other comprehensive income	15	15
Retained earnings	60,712	204
Total Amedisys, Inc. stockholders’ equity	407,953	515,321
Noncontrolling interests	1,108	1,105
Total equity	409,061	516,426
Total liabilities and equity	$ 753,324	$ 813,482

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 101,128	$ 146,814
Intangible assets, accumulated amortization	$ 31,864	$ 30,610
Preferred stock, par value (usd per share)	$ 0.001	$ 0.001
Preferred stock, authorized (shares)	5,000,000	5,000,000
Preferred stock, issued (shares)	0	0
Preferred stock, outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.001	$ 0.001
Common stock, authorized (shares)	60,000,000	60,000,000
Common stock, issued (shares)	36,044,177	35,747,134
Common stock, outstanding (shares)	31,801,357	33,964,767
Treasury stock at cost (shares)	4,242,820	1,782,367

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Net service revenue	$ 411,603	$ 374,946	$ 810,865	$ 739,607
Cost of service, excluding depreciation and amortization	242,564	220,541	480,873	436,870
General and administrative expenses:
Salaries and benefits	77,215	74,943	152,846	149,402
Non-cash compensation	3,767	4,356	7,811	8,230
Other	42,104	41,617	83,784	82,034
Depreciation and amortization	3,125	4,537	6,718	8,954
Securities Class Action Lawsuit settlement, net	0	28,712	0	28,712
Operating expenses	368,775	374,706	732,032	714,202
Operating income	42,828	240	78,833	25,405
Other income (expense):
Interest income	114	41	234	60
Interest expense	(2,140)	(1,197)	(3,843)	(2,265)
Equity in earnings from equity method investments	2,976	2,355	4,836	2,249
Miscellaneous, net	359	1,127	960	2,239
Total other income, net	1,309	2,326	2,187	2,283
Income before income taxes	44,137	2,566	81,020	27,688
Income tax (expense) benefit	(10,596)	1,963	(20,159)	(7,960)
Net income	33,541	4,529	60,861	19,728
Net income attributable to noncontrolling interests	(192)	(68)	(353)	(137)
Net income attributable to Amedisys, Inc.	$ 33,349	$ 4,461	$ 60,508	$ 19,591
Basic earnings per common share:
Net income attributable to Amedisys, Inc. common stockholders, basic (usd per share)	$ 1.00	$ 0.13	$ 1.80	$ 0.58
Weighted average shares outstanding, basic (shares)	33,439	33,637	33,705	33,540
Diluted earnings per common share:
Net income attributable to Amedisys, Inc. common stockholders, diluted (usd per share)	$ 0.98	$ 0.13	$ 1.76	$ 0.57
Weighted average shares outstanding, diluted (shares)	34,179	34,329	34,391	34,203

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities:
Net income	$ 60,861	$ 19,728
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,718	8,954
Non-cash compensation	7,811	8,230
401(k) employer match	4,894	4,367
Loss on disposal of property and equipment	650	147
Deferred income taxes	9,145	7,582
Equity in earnings from equity method investments	(4,836)	(2,249)
Amortization of deferred debt issuance costs	355	370
Write off of deferred debt issuance costs	38	0
Return on equity investment	2,204	3,416
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	3,604	(6,833)
Other current assets	(11,680)	(6,892)
Other assets	688	(1,148)
Accounts payable	3,623	1,093
Securities Class Action Lawsuit settlement accrual, net	0	28,712
Accrued expenses	4,548	(2,743)
Other long-term obligations	2,347	607
Net cash provided by operating activities	90,970	63,341
Cash Flows from Investing Activities:
Proceeds from sale of deferred compensation plan assets	471	565
Proceeds from the sale of property and equipment	11	0
Purchase of investment	0	(436)
Purchases of property and equipment	(1,611)	(7,449)
Acquisitions of businesses, net of cash acquired	(4,074)	(24,128)
Net cash used in investing activities	(5,203)	(31,448)
Cash Flows from Financing Activities:
Proceeds from issuance of stock upon exercise of stock options and warrants	2,609	4,203
Proceeds from issuance of stock to employee stock purchase plan	1,157	1,187
Shares withheld upon stock vesting	(2,832)	(5,726)
Non-controlling interest distribution	(350)	(90)
Proceeds from borrowings under revolving line of credit	127,500	0
Principal payments of long-term obligations	(90,475)	(2,500)
Debt issuance costs	(2,433)	0
Purchase of company stock	(181,402)	0
Net cash used in financing activities	(146,226)	(2,926)
Net (decrease) increase in cash and cash equivalents	(60,459)	28,967
Cash and cash equivalents at beginning of period	86,363	30,197
Cash and cash equivalents at end of period	25,904	59,164
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	2,080	1,172
Cash paid for income taxes, net of refunds received	$ 6,149	$ 284

XML

NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

Amedisys, Inc., a Delaware corporation, (together with its consolidated subsidiaries, referred to herein as “Amedisys,” “we,” “us,” or “our”) is a multi-state provider of home health, hospice and personal care services with approximately 74% of our revenue derived from Medicare for the three and six-month periods ended June 30, 2018 and approximately 76% of our revenue derived from Medicare for the three and six-month periods ended June 30, 2017. As of June 30, 2018, we owned and operated 322 Medicare-certified home health care centers, 83 Medicare-certified hospice care centers and 15 personal-care care centers in 34 states within the United States and the District of Columbia.

Basis of Presentation

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations, and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of results of our operations for the entire year and have not been audited by our independent auditors.

This report should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2018 (the “Form 10-K”), which includes information and disclosures not included herein. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented, as allowed by such SEC rules and regulations.

Recently Adopted Accounting Pronouncements

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (collectively, “ASC 606”), the new accounting standards issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition, using the full retrospective method. ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The standards supersede existing revenue recognition requirements and eliminate most industry-specific guidance from U.S. GAAP. The core principle of the revenue recognition standard is to require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. As a result of the Company's adoption of ASC 606, the revenue and related estimated uncollectible amounts owed to us by non-Medicare payors that were historically classified as a provision for doubtful accounts are now considered an implicit price concession in determining net service revenue. Accordingly, the Company reports uncollectible balances due from third-party payors and uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore, as a reduction in net service revenue (or as it relates to Hospice room and board, an increase in cost of service, excluding depreciation and amortization) when historically these amounts were classified as a provision for doubtful accounts within operating expenses within our condensed consolidated statements of operations. In addition, the adoption of ASC 606 resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides specific guidance on eight cash flow classification issues not specifically addressed by U.S. GAAP. The ASU is effective for annual and interim periods beginning after December 15, 2017. The standard should be applied using a retrospective transition method unless it is impractical to do so for some of the issues. In such case, the amendments for those issues would be applied prospectively as of the earliest date practicable. Our adoption of this standard on January 1, 2018, using a retrospective transition method for each period presented, did not have an effect on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance to assist entities with evaluating whether transactions should be accounted for as an acquisition (or disposal) of assets or a business. The ASU is effective for annual and interim periods beginning after December 15, 2017. We adopted this ASU effective January 1, 2018, on a prospective basis. The impact on our consolidated financial statements and related disclosures will depend on the facts and circumstances of any specific future transactions as evaluated under the new framework.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350)—Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2 of the goodwill impairment test). Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. The ASU is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We adopted this ASU effective January 1, 2018, on a prospective basis and will apply this guidance to our future tests of goodwill impairment.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will require lessees to recognize a lease liability and right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The ASU is effective for annual and interim periods beginning on or after December 15, 2018. Early adoption is permitted. The standard requires a modified retrospective transition method which requires recognition and disclosure under the new guidance for all periods presented. While the Company expects adoption of this standard to lead to a material increase in the assets and liabilities recorded on our balance sheet, we are still evaluating the overall impact on our consolidated financial statements and related disclosures and the effect of the standard on our ongoing financial reporting.

Use of Estimates

Our accounting and reporting policies conform with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications and Comparability

Certain reclassifications have been made to prior periods’ financial statements in order to conform to the current period’s presentation. Effective January 1, 2018, we adopted ASC 606 on a full retrospective basis which required the reclassification of certain previously reported results. See Note 2 - Summary of Significant Accounting Policies for further details on the impact of the adoption of ASC 606.

Principles of Consolidation

These unaudited condensed consolidated financial statements include the accounts of Amedisys, Inc., and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in our accompanying unaudited condensed consolidated financial statements, and business combinations accounted for as purchases have been included in our unaudited condensed consolidated financial statements from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth below.

Equity Investments

We consolidate investments when the entity is a variable interest entity and we are the primary beneficiary or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third party equity interests in our consolidated joint ventures are reflected as noncontrolling interests in our condensed consolidated financial statements.

We account for investments in entities in which we have the ability to exercise significant influence under the equity method if we hold 50% or less of the voting stock and the entity is not a variable interest entity in which we are the primary beneficiary. The book value of investments that we accounted for under the equity method of accounting was $29.0 million and $26.4 million as of June 30, 2018 and December 31, 2017, respectively. We account for investments in entities in which we have less than a 20% ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Our adoption of ASC 606 on January 1, 2018, on a full retrospective basis, impacted the Company's previously reported results as follows (amounts in thousands, unaudited):

	As Previously Reported			Adjustment for the Adoption of ASC 606			As Adjusted
	As of December 31, 2017
Condensed Consolidated Balance Sheets
Patient accounts receivable	$	201,196		$	—		$	201,196
Allowance for doubtful accounts	$	20,866		$	20,866		$	—
	For the three-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	378,821		$	(3,875	)	$	374,946
Cost of service, excluding depreciation and amortization	$	219,765		$	776		$	220,541
Provision for doubtful accounts	$	4,651		$	(4,651	)	$	—
Net income attributable to Amedisys, Inc.	$	4,461		$	—		$	4,461
	For the six-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	749,279		$	(9,672	)	$	739,607
Cost of service, excluding depreciation and amortization	$	435,550		$	1,320		$	436,870
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Net income attributable to Amedisys, Inc.	$	19,591		$	—		$	19,591
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	$	(17,825	)	$	10,992		$	(6,833	)

We earn net service revenue through our home health, hospice and personal care segments through the delivery of a variety of services that best suit our patients' needs, whether that is home-based recovery and rehabilitation after an operation or injury, care that empowers patients to manage a chronic disease, hospice care at the end of life, or providing assistance with daily activities through our personal care segment. We account for revenue from contracts with customers in accordance with ASC 606, and as such, we recognize revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers, in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. The Company's cost of obtaining contracts is not material.

Revenues are recognized as performance obligations are satisfied, which varies based on the nature of the services provided. Our performance obligation is the delivery of patient care services in accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.

The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the optional exemption provided by ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.

We determine the transaction price based on gross charges for services provided, reduced by contractual adjustments provided to third-party payors and estimates of implicit price concessions provided to self-pay or uninsured patients or other payors. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare contributes to approximately 74% of the Company's consolidated net service revenue. We determine our estimates of contractual adjustments and implicit price concessions by major payor class based on contractual agreements with individual third-party payors, our historical collection experience, aged accounts receivable by payor and current economic conditions. The implicit price concession included in estimating the transaction price represents the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. Subsequent changes to the estimate of the transaction price are recorded as adjustments to net service revenue in the period of change. Subsequent changes that are determined to be the result of an adverse change in the patient's ability to pay (i.e. change in credit risk) are recorded as a provision for doubtful accounts.

We record our service revenue net of estimated revenue adjustments related to third-party payor payment reviews to reflect amounts we estimate to be realizable for services provided. Amounts due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), include variable consideration for retroactive revenue adjustments due to settlements of audits and reviews. We make estimates for these revenue adjustments based on our historical experience and success rates in the claim appeals and adjudication process.

Home Health Revenue Recognition

Medicare Revenue

Net service revenue is recorded under the Medicare prospective payment system (“PPS”) based on an established Federal Medicare home health episode payment rate, that is subject to adjustment based on certain variables, including, but not limited to (a) an outlier payment if our patient’s care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits was fewer than five; (c) a partial payment if our patient transferred to another provider or we received a patient from another provider before completing the episode; (d) a payment adjustment based upon the level of therapy services required (with various incremental adjustments made for additional visits, with larger payment increases associated with the sixth, fourteenth and twentieth visit thresholds); (e) adjustments to payments if we are unable to perform periodic therapy assessments; (f) the number of episodes of care provided to a patient, regardless of whether the same home health provider provided care for the entire series of episodes; (g) changes in the base episode payments established by the Medicare Program; (h) adjustments to the base episode payments for case mix and geographic wages; and (i) recoveries of overpayments. Medicare rates are based on the severity of the patient's condition, service needs and goals, and other factors relating to the cost of providing services and supplies, bundled into an episode of care, not to exceed 60 days. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier, with multiple continuous episodes allowed.

The Medicare home health benefit requires that beneficiaries be homebound (meaning that the beneficiary is unable to leave their home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services, and receive treatment under a plan of care established and periodically reviewed by a physician. All Medicare contracts are required to have a signed plan of care which represents a single performance obligation, comprising of the delivery of a series of distinct services that are substantially similar and have a similar pattern of transfer to the customer. Accordingly, the Company accounts for the series of services ("episode") as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. Expected Medicare revenue per episode is recognized based on a pro-rated service output method, utilizing our historical average length of episode prior to discharge.

The base episode payment can be adjusted based on each patient's health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. Medicare can also make various adjustments to payments received if we are unable to produce appropriate billing documentation or acceptable authorizations. In addition, we make adjustments to Medicare revenue if we find we are unable to obtain appropriate billing documentation, authorizations or face-to-face documentation. We estimate the impact of such adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered as an estimated price concession and a corresponding reduction to patient accounts receivable.

A portion of reimbursement from each Medicare episode is billed near the start of each episode, and cash is typically received before all services are rendered. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the company's average percentage of days complete on episodes as of the end of the year. As of June 30, 2018 and 2017, the difference between the cash received from Medicare for a request for anticipated payment (“RAP”) on episodes in progress and the associated estimated revenue was immaterial and, therefore, the resulting credits were recorded as a reduction to our outstanding patient accounts receivable in our condensed consolidated balance sheets for such periods.

Non-Medicare Revenue

Episodic-based Revenue. We recognize revenue in a similar manner as we recognize Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs; however, these rates can vary based upon the negotiated terms which generally range from 90% to 100% of Medicare rates.

Non-episodic based Revenue. Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established or estimated per-visit rates. Contractual adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third parties and others for services provided and are deducted from gross revenue to determine net service revenue. We also make adjustments to non-episodic revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price. We receive a minimal amount of our net service revenue from patients who are either self-insured or are obligated for an insurance co-payment.

Hospice Revenue Recognition

Hospice Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounts for 99% of our total net Medicare hospice service revenue for each of the three and six-month periods ended June 30, 2018, and 99% and 98% of our total net Medicare hospice service revenue for each of the three and six-month periods ended June 30, 2017, respectively. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse (“RN”) or medical social worker (“MSW”) for patients in a routine level of care.

The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.

We make adjustments to Medicare revenue for an inability to obtain appropriate billing documentation or acceptable authorizations and other reasons unrelated to credit risk. We estimate the impact of these adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record it during the period services are rendered as an estimated price concession and as a reduction to our outstanding patient accounts receivable.

Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in other accrued liabilities. Beginning for the cap year ending October 31, 2017, providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of June 30, 2018, we have settled our Medicare hospice reimbursements for all fiscal years through October 31, 2012. As of June 30, 2018, we have recorded $1.1 million for estimated amounts due back to Medicare in other accrued liabilities for the Federal cap years ended October 31, 2013 through September 30, 2018. As of December 31, 2017, we had recorded $0.9 million for estimated amounts due back to Medicare in other accrued liabilities for the Federal cap years ended October 31, 2013 through September 30, 2018.

Hospice Non-Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established rates or estimated per day rates, as applicable. Contractual adjustments are recorded for the difference between our established rates and the amounts estimated to be realizable from patients, third parties and others for services provided and are deducted from gross revenue to determine our net service revenue. We also make adjustments to non-Medicare revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price.

Personal Care Revenue Recognition

Personal Care Revenue

We generate net service revenues by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that is either contractual or fixed by legislation, which are recognized as net service revenue at the time services are rendered. We receive payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors include the following elder service agencies: Aging Services Access Points (ASAPs), Senior Care Options (SCOs), Program of All-Inclusive Care for the Elderly (PACE) and the Veterans Administration (VA).

Patient Accounts Receivable

We report accounts receivable from services rendered at their estimated transaction price, which includes price concessions based on the amounts expected to be due from payors. Our patient accounts receivable are uncollateralized and consist of amounts due from Medicare, Medicaid, other third-party payors and patients. As of June 30, 2018, there is only one single payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables (approximately 11.8%). Thus, we believe there are no other significant concentrations of receivables that would subject us to any significant credit risk in the collection of our patient accounts receivable. We write off accounts on a monthly basis once we have exhausted our collection efforts and deem an account to be uncollectible.

We believe the collectibility risk associated with our Medicare accounts, which represent 56% and 59% of our patient accounts receivable at June 30, 2018 and December 31, 2017, respectively, is limited due to our historical collection rate of over 99% from Medicare and the fact that Medicare is a U.S. government payor. Accordingly, we do not record an allowance for doubtful accounts for our Medicare patient accounts receivable, which are recorded at their net realizable value after recording estimated price concessions as discussed above. During the three and six-month periods ended June 30, 2018, we recorded $2.5 million and $4.2 million, respectively, in estimated revenue adjustments to Medicare revenue as compared to $5.0 million and $8.4 million during the three and six-month periods ended June 30, 2017, respectively.

We do not believe there are any significant concentrations of revenues from any payor that would subject us to any significant credit risk in the collection of our accounts receivable.

Medicare Home Health

For our home health patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We submit a RAP for 60% of our estimated payment for the initial episode at the start of care or 50% of the estimated payment for any subsequent episodes of care contiguous with the first episode for a particular patient. The full amount of the episode is billed after the episode has been completed (“final billed”). The RAP received for that particular episode is then deducted from our 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 RAPs received for that episode will be recouped by Medicare from any other claims in process for that particular provider number. The RAP and final claim must then be resubmitted.

Medicare Hospice

For our hospice patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare on a monthly basis for the services provided to the patient.

Non-Medicare Home Health, Hospice and Personal Care

For our non-Medicare patients, our pre-billing process primarily begins with verifying a patient’s eligibility for services with the applicable payor. Once the patient has been confirmed for eligibility, we will provide services to the patient and bill the applicable payor. Our review and evaluation of non-Medicare accounts receivable includes a detailed review of outstanding balances and special consideration to concentrations of receivables from particular payors or groups of payors with similar characteristics that would subject us to any significant credit risk.

Property and Equipment

Property and equipment is stated at cost and we depreciate it on a straight-line basis over the estimated useful lives of the assets. Additionally, we have internally developed computer software for our own use. Additions and improvements (including interest

costs for construction of qualifying long-lived assets) are capitalized. Maintenance and repair expenses are charged to expense as incurred. The cost of property and equipment sold or disposed of and the related accumulated depreciation are eliminated from the property and related accumulated depreciation accounts, and any gain or loss is credited or charged to other general and administrative expenses.

During the six-month period ended June 30, 2018, we reviewed the balances of our property and equipment and as a result, eliminated those asset balances for which the asset was no longer in service. The following table summarizes the balances related to our property and equipment for the periods indicated (amounts in millions):

	As of June 30, 2018			As of December 31, 2017
Building and leasehold improvements	$	8.8		$	7.8
Equipment and furniture	56.9			72.9
Computer software	63.4			97.2
	129.1			177.9
Less: accumulated depreciation	(101.1		)	(146.8		)
	$	28.0		$	31.1

Fair Value of Financial Instruments

The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels of inputs are as follows:

• Level 1 – Quoted prices in active markets for identical assets and liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Our deferred compensation plan assets are recorded at fair value and are considered a level 2 measurement. For our other financial instruments, including our cash and cash equivalents, patient accounts receivable, accounts payable, payroll and employee benefits and accrued expenses, we estimate the carrying amounts approximate fair value. As of June 30, 2018, the carrying amount of our long-term debt is subject to a variable rate of interest based on current market rates, and as such, the carrying values approximate fair value.

Weighted-Average Shares Outstanding

Net income per share attributable to Amedisys, Inc. common stockholders, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The following table sets forth, for the periods indicated, shares used in our computation of the weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):

	For the Three- Month Periods Ended June 30,		For the Six- Month Periods Ended June 30,
	2018	2017	2018	2017
Weighted average number of shares outstanding - basic	33,439	33,637	33,705	33,540
Effect of dilutive securities:
Stock options	425	329	381	285
Non-vested stock and stock units	315	363	305	378
Weighted average number of shares outstanding - diluted	34,179	34,329	34,391	34,203
Anti-dilutive securities	57	169	88	248

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ACQUISITIONS

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

We complete acquisitions from time to time in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health, hospice and personal care services. The purchase price paid for acquisitions is negotiated through arm’s length transactions, with consideration based on our analysis of, among other things, comparable acquisitions and expected cash flows. Acquisitions are accounted for as purchases and are included in our consolidated financial statements from their respective acquisition dates. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets because of the expected contributions of the acquisitions to our overall corporate strategy. We typically engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets. The preliminary purchase price allocation is adjusted, as necessary, up to one year after the acquisition closing date if management obtains more information regarding asset valuations and liabilities assumed.

On March 1, 2018, we acquired the assets of Christian Care at Home which provides home health services to the state of Kentucky for a total purchase price of $2.3 million. The purchase price was paid with cash on hand on the date of the transaction. Based on our preliminary purchase price allocation, we recorded goodwill of $2.3 million in connection with the acquisition during the three-month period ended March 31, 2018.

On May 1, 2018, we acquired the assets of East Tennessee Personal Care Services which owns and operates one personal-care care center servicing the state of Tennessee for a total purchase price of $2.0 million (subject to certain adjustments, of which $0.2 million was placed in a promissory note to be paid over 24 months, subject to any offsets or withholds for indemnification purposes). The purchase price was paid with cash on hand on the date of the transaction. During the three-month period ended June 30, 2018, we recorded goodwill of $1.9 million and other intangibles - non-compete agreements of $0.1 million in connection with the acquisition. The non-compete agreement will be amortized over a weighted-average period of 2.8 years.

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LONG-TERM OBLIGATIONS

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

LONG-TERM OBLIGATIONS

LONG-TERM OBLIGATIONS

Long-term debt consisted of the following for the periods indicated (amounts in millions):

	June 30, 2018			December 31, 2017
$100.0 million Term Loan; principal payments plus accrued interest payable quarterly; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate; due August 28, 2020	$	—		$	90.0
$200.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate; due August 28, 2020	—			—
$550.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate (3.7% at June 30, 2018); due June 29, 2023	127.5			—
Promissory notes	0.9			0.7
Capital leases	0.1			—
Principal amount of long-term obligations	128.5			90.7
Deferred debt issuance costs	(3.9		)	(1.9		)
	124.6			88.8
Current portion of long-term obligations	(0.7		)	(10.6		)
Total	$	123.9		$	78.2

Credit Agreement

On June 29, 2018, we entered into our Amended and Restated Credit Agreement ("Credit Agreement") that provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $550.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility provides for and includes within its $550.0 million limit a $25.0 million swingline facility and commitments for up to $60.0 million in letters of credit. Upon lender approval, we may increase the aggregate loan amount under the Revolving Credit Facility by either i) $125.0 million or ii) an unlimited amount subject to a leverage limit of 0.5x under the maximum allowable consolidated leverage ratio per the Credit Agreement.

The net proceeds of the Revolving Credit Facility were used to pay off our existing indebtedness under our prior credit agreement, dated as of August 28, 2015 (the "Prior Credit Agreement"), with a principal balance of $127.5 million. The final maturity of the Revolving Credit Facility is June 29, 2023 and there is no mandatory amortization on the outstanding principal balances which are payable in full upon maturity. The Revolving Credit Facility may be used to provide ongoing working capital and for general corporate purposes of the Company and our subsidiaries, including permitted acquisitions, as defined in the Credit Agreement.

The interest rate on borrowings under the Revolving Credit Facility shall be selected by us from the following: (i) the Base Rate plus the Applicable Rate or (ii) the Eurodollar Rate plus the Applicable Rate. The “Base Rate” means a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 0.50% per annum, (b) the prime rate of interest established by the Administrative Agent, and (c) the Eurodollar Rate plus 1% per annum. The “Eurodollar Rate” means the quoted rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable successor rate approved by the Administrative Agent for an interest period of one, two, three or six months (as selected by us). The “Applicable Rate” is based on the consolidated leverage ratio and is presented in the table below. As of June 30, 2018, the Applicable Rate is 0.50% per annum for Base Rate Loans and 1.50% per annum for Eurodollar Rate Loans. We are also subject to a commitment fee and letter of credit fee under the terms of the Credit Agreement, as presented in the table below.

Pricing Tier	Consolidated Leverage Ratio	Commitment Fee	Letter of Credit Fee	Eurodollar Rate Loans	Base Rate Loans
I	> 3.00 to 1.0	0.35%	2.00%	2.25%	1.25%
II	≤ 3.00 to 1.0 but > 2.00 to 1.0	0.30%	1.75%	2.00%	1.00%
III	≤ 2.00 to 1.0 but > 1.00 to 1.0	0.25%	1.50%	1.75%	0.75%
IV	≤ 1.00 to 1.0	0.20%	1.25%	1.50%	0.50%

The Credit Agreement requires maintenance of two financial covenants: (i) a consolidated leverage ratio of funded indebtedness to EBITDA, as defined in the Credit Agreement, and (ii) a consolidated interest coverage ratio of EBITDA to cash interest charges, all as defined in the Credit Agreement. Each of these covenants is calculated over rolling four-quarter periods and also is subject to certain exceptions and baskets. The Credit Agreement also contains customary covenants, including, but not limited to, restrictions on: incurrence of liens; incurrence of additional debt; sales of assets and other fundamental corporate changes; investments; and declarations of dividends. These covenants contain customary exclusions and baskets as detailed in the Credit Agreement.

The Credit Facility is guaranteed by substantially all of our wholly-owned direct and indirect subsidiaries. The Credit Agreement requires at all times that we (i) provide guarantees from wholly-owned subsidiaries that in the aggregate represent not less than 95% of our consolidated net revenues and adjusted EBITDA from all wholly-owned subsidiaries and (ii) provide guarantees from subsidiaries that in the aggregate represent not less than 70% of consolidated adjusted EBITDA, subject to certain exceptions.

In connection with entering into the Credit Agreement, we entered into (i) a Security Agreement with the Administrative Agent dated June 29, 2018 and (ii) a Pledge Agreement with the Administrative Agent dated as of June 29, 2018 for the purpose of securing the payment of our obligations under the Credit Agreement. Pursuant to the Security Agreement and the Pledge Agreement, as of the effective date of the Credit Agreement, our obligations under the Credit Agreement are secured by (i) the grant of a first lien security interest in the non-real estate assets of substantially all of our direct and indirect, wholly-owned subsidiaries (subject to exceptions) and (ii) the pledge of the equity interests in (a) substantially all of our direct and indirect, wholly-owned corporate, limited liability company and limited partnership subsidiaries and (b) those joint ventures which constitute subsidiaries under the Credit Agreement (subject, in the case of the Pledge Agreement, to exceptions). In connection with our entry into the Credit Agreement, we recorded $2.4 million in deferred debt issuance costs as long-term obligations, less current portion within our condensed consolidated balance sheet.

Our weighted average interest rate for our $100.0 million Term Loan, under our Prior Credit Agreement, was 3.9% and 3.8% for the three and six-month periods ended June 30, 2018, respectively, and 3.0% and 2.9% for the three and six-month periods ended June 30, 2017, respectively. Our weighted average interest rate for our $550.0 million Revolving Credit Facility was 3.7% at June 30, 2018.

As of June 30, 2018, our consolidated leverage ratio was 0.8, our consolidated interest coverage ratio was 51.0 and we are in compliance with our covenants under the Credit Agreement. In the event we are not in compliance with our debt covenants in the future, we would pursue various alternatives in an attempt to successfully resolve the non-compliance, which might include, among other things, seeking debt covenant waivers or amendments.

As of June 30, 2018, our availability under our $550.0 million Revolving Credit Facility was $388.1 million as we have $127.5 million outstanding in borrowings and $34.4 million outstanding in letters of credit.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Legal Proceedings - Ongoing

We are involved in the following legal actions:

Subpoena Duces Tecum Issued by the U.S. Department of Justice

On May 21, 2015, we received a Subpoena Duces Tecum (“Subpoena”) issued by the U.S. Department of Justice. The Subpoena requests the delivery of information regarding 53 identified hospice patients to the United States Attorney’s Office for the District of Massachusetts. It also requests the delivery of documents relating to our hospice clinical and business operations and related compliance activities. The Subpoena generally covers the period from January 1, 2011 through May 21, 2015. We are fully cooperating with the U.S. Department of Justice with respect to this investigation. Based on the information currently available to us, we cannot predict the timing or outcome of this investigation or reasonably estimate the amount or range of potential losses, if any, which may arise from this matter.

Civil Investigative Demands Issued by the U.S. Department of Justice

On November 3, 2015, we received a civil investigative demand (“CID”) issued by the U.S. Department of Justice pursuant to the federal False Claims Act relating to claims submitted to Medicare and/or Medicaid for hospice services provided through designated facilities in the Morgantown, West Virginia area. The CID requests the delivery of information to the United States Attorney’s Office for the Northern District of West Virginia regarding 66 identified hospice patients, as well as documents relating to our hospice clinical and business operations in the Morgantown area. The CID generally covers the period from January 1, 2009 through August 31, 2015. We are fully cooperating with the U.S. Department of Justice with respect to this investigation. Based on the information currently available to us, we cannot predict the timing or outcome of this investigation or reasonably estimate the amount or range of potential losses, if any, which may arise from this matter.

On June 27, 2016, we received a CID issued by the U.S. Department of Justice pursuant to the federal False Claims Act relating to claims submitted to Medicare and/or Medicaid for hospice services provided through designated facilities in the Parkersburg, West Virginia area. The CID requests the delivery of information to the United States Attorney’s Office for the Southern District of West Virginia regarding 68 identified hospice patients, as well as documents relating to our hospice clinical and business operations in the Parkersburg area. The CID generally covers the period from January 1, 2011 through June 20, 2016. We are fully cooperating with the U.S. Department of Justice with respect to this investigation. Based on the information currently available to us, we cannot predict the timing or outcome of this investigation or reasonably estimate the amount or range of potential losses, if any, which may arise from this matter.

In addition to the matters referenced in this note, we are involved in legal actions in the normal course of business, some of which seek monetary damages, including claims for punitive damages. We do not believe that these normal course actions, when finally concluded and determined, will have a material impact on our consolidated financial condition, results of operations or cash flows.

Legal Proceedings - Settled

Securities Class Action Lawsuits

As previously disclosed, between June 10 and July 28, 2010, several putative securities class action complaints were filed in the United States District Court for the Middle District of Louisiana (the “District Court”) against the Company and certain of our former senior executives. The cases were consolidated into the first-filed action Bach, et al. v. Amedisys, Inc., et al. Case No. 3:10-cv-00395, and the District Court appointed as co-lead plaintiffs the Public Employees’ Retirement System of Mississippi and the Puerto Rico Teachers’ Retirement System (the “Co-Lead Plaintiffs”).

The Plaintiffs were granted leave to file a First Amended Consolidated Complaint (the “First Amended Securities Complaint”) on behalf of all purchasers or acquirers of Amedisys’ securities between August 2, 2005 and September 30, 2011. The First Amended Securities Complaint alleges that the Company and seven individual defendants violated Section 10(b), Section 20(a), and Rule 10b-5 of the Securities Exchange Act of 1934 by materially misrepresenting the Company’s financial results and concealing a scheme to obtain higher Medicare reimbursements and additional patient referrals by (1) providing medically unnecessary care to patients, including certifying and re-certifying patients for medically unnecessary 60-day treatment episodes; (2) implementing clinical tracks such as “Balanced for Life” and wound care programs that provided a pre-set number of therapy visits irrespective of medical need; (3) “upcoding” patients’ Medicare forms to attribute a “primary diagnosis” to a medical condition associated with higher billing rates; and (4) providing improper and illegal remuneration to physicians to obtain patient certifications or re-certifications. The First Amended Securities Complaint seeks certification of the case as a class action and an unspecified amount of damages, as well as interest and an award of attorneys’ fees.

On June 12, 2017, the Company reached an agreement-in-principle to settle this matter. All parties to the action executed a binding term sheet that, subject to final documentation and court approval, provided in part for a settlement payment of approximately $43.7 million, which we accrued as of June 30, 2017, and the dismissal with prejudice of the litigation. Approximately $15.0 million of the settlement amount paid by the Company’s insurance carriers during the three-month period ended September 30, 2017, was previously recorded within other current assets in our condensed consolidated balance sheet as of June 30, 2017. The net of these two amounts, $28.7 million, was recorded as a charge in our condensed consolidated statements of operations during the three-month period ended June 30, 2017 and paid with cash on hand during the three-month period ended September 30, 2017. On December 19, 2017, the Court entered the final order and judgment on the case.

Other Investigative Matters - Ongoing

Corporate Integrity Agreement

On April 23, 2014, with no admissions of liability on our part, we entered into a settlement agreement with the U.S. Department of Justice relating to certain of our clinical and business operations. Concurrently with our entry into this agreement, we entered into a corporate integrity agreement (“CIA”) with the Office of Inspector General-HHS (“OIG”). The CIA formalizes various aspects of our already existing ethics and compliance programs and contains other requirements designed to help ensure our ongoing compliance with federal health care program requirements. Among other things, the CIA requires us to maintain our existing compliance program, executive compliance committee and compliance committee of the Board of Directors; provide certain compliance training; continue screening new and current employees to ensure they are eligible to participate in federal health care programs; engage an independent review organization to perform certain auditing and reviews and prepare certain reports regarding our compliance with federal health care programs, our billing submissions to federal health care programs and our compliance and risk mitigation programs; and provide certain reports and management certifications to the OIG. Additionally, the CIA specifically requires that we report substantial overpayments that we discover we have received from federal health care programs, as well as probable violations of federal health care laws. Upon breach of the CIA, we could become liable for payment of certain stipulated penalties, or could be excluded from participation in federal health care programs. The corporate integrity agreement has a term of five years.

Third Party Audits - Ongoing

From time to time, in the ordinary course of business, we are subject to audits under various governmental programs in which third party firms engaged by the Centers for Medicare and Medicaid Services (“CMS”) conduct extensive review of claims data to identify potential improper payments under the Medicare program.

In July 2010, our subsidiary that provides hospice services in Florence, South Carolina received from a Zone Program Integrity Contractor (“ZPIC”) a request for records regarding a sample of 30 beneficiaries who received services from the subsidiary during the period of January 1, 2008 through March 31, 2010 (the “Review Period”) to determine whether the underlying services met pertinent Medicare payment requirements. We acquired the hospice operations subject to this review on August 1, 2009; the Review Period covers time periods both before and after our ownership of these hospice operations. Based on the ZPIC’s findings for 16 beneficiaries, which were extrapolated to all claims for hospice services provided by the Florence subsidiary billed during the Review Period, on June 6, 2011, the Medicare Administrative Contractor (“MAC”) for the subsidiary issued a notice of overpayment seeking recovery from our subsidiary of an alleged overpayment. We dispute these findings, and our Florence subsidiary has filed appeals through the Original Medicare Standard Appeals Process, in which we are seeking to have those findings overturned. An administrative law judge ("ALJ") hearing was held in early January 2015. On January 18, 2016, we received a letter dated January 6, 2016 referencing the ALJ hearing decision for the overpayment issued on June 6, 2011. The decision was partially favorable with a new overpayment amount of $3.7 million with a balance owed of $5.6 million, including interest, based on 9 disputed claims (originally 16). We filed an appeal to the Medicare Appeals Council on the remaining 9 disputed claims and also argued that the statistical method used to select the sample was not valid. No assurances can be given as to the timing or outcome of the Medicare Appeals Council decision. As of June 30, 2018, Medicare has withheld payments of $5.7 million (including additional interest) as part of their standard procedures once this level of the appeal process has been reached. In the event we are not able to recoup this alleged overpayment, we are entitled to be indemnified by the prior owners of the hospice operations for amounts relating to the period prior to August 1, 2009. As of June 30, 2018, we have an indemnity receivable of approximately $4.9 million for the amount withheld related to the period prior to August 1, 2009.

In July 2016, the Company received a request for medical records from SafeGuard Services, L.L.C (“SafeGuard”), a ZPIC related to services provided by some of the care centers that the Company acquired from Infinity Home Care, L.L.C. The review period covers time periods both before and after our ownership of the care centers, which were acquired on December 31, 2015. In August 2017, the Company received Requests for Repayment from Palmetto GBA, LLC ("Palmetto") regarding Infinity Home Care of Lakeland, LLC ("Lakeland Care Centers") and Infinity Home Care of Pinellas, LLC ("Clearwater Care Center"). The Palmetto letters are based on statistical extrapolation performed by SafeGuard which alleged an overpayment of $34.0 million for the Lakeland Care Centers on a universe of 72 Medicare claims totaling $0.2 million in actual claims payments using a 100% error rate and an overpayment of $4.8 million for the Clearwater Care Center on a universe of 70 Medicare claims totaling $0.2 million in actual claims payments using a 100% error rate.

The Lakeland Request for Repayment covers claims between January 2, 2014 and September 13, 2016. The Clearwater Request for Repayment covers claims between January 2, 2015 and December 9, 2016. As a result of Level I Administrative Appeals, also known as Redetermination, the alleged overpayment for the Lakeland Care Centers has been reduced to $27.0 million and the alleged overpayment for the Clearwater Care Center has been reduced to $3.3 million. The Company filed Level II Administrative Appeals, also known as Reconsideration, and has received the decision of the Qualified Independent Contractor ("QIC"), which was partially favorable and partially unfavorable. With regard to the extrapolation, the QIC found that although SafeGuard made certain mistakes in performing the extrapolation, it did not invalidate the extrapolation. The QIC directed Palmetto to ensure that the Company received credit for all payments made as a result of an extensive self-audit. We have requested that Palmetto recalculate the amount allegedly due consistent with the findings of the QIC. The Company will continue to vigorously pursue its appeal rights, which include contesting the methodology used by the ZPIC contractor to perform statistical extrapolation. The Company is contractually entitled to indemnification by the prior owners for all claims prior to December 31, 2015, for up to $12.6 million.

At this stage of the review, based on the information currently available to the Company, the Company cannot predict the timing or outcome of this review. The Company estimates a low-end potential range of loss related to this review of $6.5 million (assuming the Company is successful in seeking indemnity from the prior owners and unsuccessful in demonstrating that the extrapolation method used by SafeGuard was erroneous). The Company has reduced its high-end potential range of loss from $38.8 million (the maximum amount Palmetto claims has been overpaid for both the Lakeland Care Centers and the Clearwater Care Center of which amount $12.6 million is subject to indemnification by the prior owners) to $30.3 million based on the partial success achieved by the Company in prosecuting its Level I Administrative Appeals.

As of June 30, 2018, we have an accrued liability of approximately $17.4 million related to this matter. We expect to be indemnified by the prior owners for approximately $10.9 million of the total $12.6 million available indemnification related to this matter and have recorded this amount within other assets, net in our condensed consolidated balance sheet as of June 30, 2018. The net of these two amounts, $6.5 million, was recorded as a reduction in revenue in our condensed consolidated statements of operations during the three-month period ended September 30, 2017. As of June 30, 2018, $2.7 million of receivables have been impacted by this payment suspension.

Insurance

We are obligated for certain costs associated with our insurance programs, including employee health, workers’ compensation and professional liability. While we maintain various insurance programs to cover these risks, we are self-insured for a substantial portion of our potential claims. We recognize our obligations associated with these costs, up to specified deductible limits in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported. These costs have generally been estimated based on historical data of our claims experience. Such estimates, and the resulting reserves, are reviewed and updated by us on a quarterly basis.

Our health insurance has an exposure limit of $1.0 million for any individual covered life. Our workers’ compensation insurance has a retention limit of $0.5 million per incident and our professional liability insurance has a retention limit of $0.3 million per incident.

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SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Our operations involve servicing patients through our three reportable business segments: home health, hospice and personal care. Our home health segment delivers a wide range of services in the homes of individuals who may be recovering from surgery, have a chronic disability or terminal illness or need assistance with completing important personal tasks. Our hospice segment provides palliative care and comfort to terminally ill patients and their families. Our personal care segment provides patients with assistance with the essential activities of daily living. The “other” column in the following tables consists of costs relating to executive management and administrative support functions, primarily information services, accounting, finance, billing and collections, legal, compliance, risk management, procurement, marketing, clinical administration, training, human resources and administration.

Management evaluates performance and allocates resources based on the operating income of the reportable segments, which includes an allocation of corporate expenses directly attributable to the specific segment and includes revenues and all other costs directly attributable to the specific segment. Segment assets are not reviewed by the company’s chief operating decision maker and therefore are not disclosed below (amounts in millions).

	For the Three-Month Period Ended June 30, 2018
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	291.5	$	101.4	$	18.7	$	—		$	411.6
Cost of service, excluding depreciation and amortization	176.5		51.7		14.4		—			242.6
General and administrative expenses	68.4		20.3		3.3		31.1			123.1
Depreciation and amortization	0.8		0.3		—		2.0			3.1
Operating expenses	245.7		72.3		17.7		33.1			368.8
Operating income (loss)	$	45.8	$	29.1	$	1.0	$	(33.1	)	$	42.8
	For the Three-Month Period Ended June 30, 2017
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	270.3	$	90.3	$	14.3	$	—		$	374.9
Cost of service, excluding depreciation and amortization	164.8		45.4		10.3		—			220.5
General and administrative expenses	68.9		19.1		3.0		30.0			121.0
Depreciation and amortization	1.0		0.2		—		3.3			4.5
Securities Class Action Lawsuit settlement, net	—		—		—		28.7			28.7
Operating expenses	234.7		64.7		13.3		62.0			374.7
Operating income (loss)	$	35.6	$	25.6	$	1.0	$	(62.0	)	$	0.2
	For the Six-Month Period Ended June 30, 2018
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	575.6	$	198.7	$	36.6	$	—		$	810.9
Cost of service, excluding depreciation and amortization	350.9		101.8		28.2		—			480.9
General and administrative expenses	136.4		40.3		6.5		61.3			244.5
Depreciation and amortization	1.6		0.5		0.1		4.5			6.7
Operating expenses	488.9		142.6		34.8		65.8			732.1
Operating income (loss)	$	86.7	$	56.1	$	1.8	$	(65.8	)	$	78.8
	For the Six-Month Period Ended June 30, 2017
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	537.9	$	173.9	$	27.8	$	—		$	739.6
Cost of service, excluding depreciation and amortization	327.8		88.4		20.7		—			436.9
General and administrative expenses	136.9		37.0		6.2		59.5			239.6
Depreciation and amortization	1.9		0.5		0.1		6.5			9.0
Securities Class Action Lawsuit settlement, net	—		—		—		28.7			28.7
Operating expenses	466.6		125.9		27.0		94.7			714.2
Operating income (loss)	$	71.3	$	48.0	$	0.8	$	(94.7	)	$	25.4

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SHARE REPURCHASE SHARE REPURCHASE

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

SHARE REPURCHASE

SHARE REPURCHASE

On June 4, 2018, we purchased 2,418,304 of our common shares from affiliates of KKR Credit Advisors (US) LLC ("KKR"), representing one-half of KKR's holdings in the Company and 7.1% of the aggregate outstanding shares of the Company's common stock for a total purchase price of $181.4 million including related direct costs. The Company repurchased the shares at $73.96 which represents 96% of the closing stock price of the Company's common stock on June 4, 2018.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations, and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of results of our operations for the entire year and have not been audited by our independent auditors.

This report should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission (“SEC”) on February 28, 2018 (the “Form 10-K”), which includes information and disclosures not included herein.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (collectively, “ASC 606”), the new accounting standards issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition, using the full retrospective method. ASC 606 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The standards supersede existing revenue recognition requirements and eliminate most industry-specific guidance from U.S. GAAP. The core principle of the revenue recognition standard is to require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. As a result of the Company's adoption of ASC 606, the revenue and related estimated uncollectible amounts owed to us by non-Medicare payors that were historically classified as a provision for doubtful accounts are now considered an implicit price concession in determining net service revenue. Accordingly, the Company reports uncollectible balances due from third-party payors and uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore, as a reduction in net service revenue (or as it relates to Hospice room and board, an increase in cost of service, excluding depreciation and amortization) when historically these amounts were classified as a provision for doubtful accounts within operating expenses within our condensed consolidated statements of operations. In addition, the adoption of ASC 606 resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides specific guidance on eight cash flow classification issues not specifically addressed by U.S. GAAP. The ASU is effective for annual and interim periods beginning after December 15, 2017. The standard should be applied using a retrospective transition method unless it is impractical to do so for some of the issues. In such case, the amendments for those issues would be applied prospectively as of the earliest date practicable. Our adoption of this standard on January 1, 2018, using a retrospective transition method for each period presented, did not have an effect on our condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance to assist entities with evaluating whether transactions should be accounted for as an acquisition (or disposal) of assets or a business. The ASU is effective for annual and interim periods beginning after December 15, 2017. We adopted this ASU effective January 1, 2018, on a prospective basis. The impact on our consolidated financial statements and related disclosures will depend on the facts and circumstances of any specific future transactions as evaluated under the new framework.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350)—Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2 of the goodwill impairment test). Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. The ASU is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We adopted this ASU effective January 1, 2018, on a prospective basis and will apply this guidance to our future tests of goodwill impairment.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which will require lessees to recognize a lease liability and right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. The ASU is effective for annual and interim periods beginning on or after December 15, 2018. Early adoption is permitted. The standard requires a modified retrospective transition method which requires recognition and disclosure under the new guidance for all periods presented. While the Company expects adoption of this standard to lead to a material increase in the assets and liabilities recorded on our balance sheet, we are still evaluating the overall impact on our consolidated financial statements and related disclosures and the effect of the standard on our ongoing financial reporting.

Use of Estimates

Use of Estimates

Our accounting and reporting policies conform with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications and Comparability

Reclassifications and Comparability

Certain reclassifications have been made to prior periods’ financial statements in order to conform to the current period’s presentation.

Principles of Consolidation

Principles of Consolidation

These unaudited condensed consolidated financial statements include the accounts of Amedisys, Inc., and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in our accompanying unaudited condensed consolidated financial statements, and business combinations accounted for as purchases have been included in our unaudited condensed consolidated financial statements from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth below.

Equity Investments

Equity Investments

We consolidate investments when the entity is a variable interest entity and we are the primary beneficiary or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third party equity interests in our consolidated joint ventures are reflected as noncontrolling interests in our condensed consolidated financial statements.

We account for investments in entities in which we have the ability to exercise significant influence under the equity method if we hold 50% or less of the voting stock and the entity is not a variable interest entity in which we are the primary beneficiary. The book value of investments that we accounted for under the equity method of accounting was $29.0 million and $26.4 million as of June 30, 2018 and December 31, 2017, respectively. We account for investments in entities in which we have less than a 20% ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee.

Revenue Recognition

Revenue Recognition

Our adoption of ASC 606 on January 1, 2018, on a full retrospective basis, impacted the Company's previously reported results as follows (amounts in thousands, unaudited):

	As Previously Reported			Adjustment for the Adoption of ASC 606			As Adjusted
	As of December 31, 2017
Condensed Consolidated Balance Sheets
Patient accounts receivable	$	201,196		$	—		$	201,196
Allowance for doubtful accounts	$	20,866		$	20,866		$	—
	For the three-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	378,821		$	(3,875	)	$	374,946
Cost of service, excluding depreciation and amortization	$	219,765		$	776		$	220,541
Provision for doubtful accounts	$	4,651		$	(4,651	)	$	—
Net income attributable to Amedisys, Inc.	$	4,461		$	—		$	4,461
	For the six-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	749,279		$	(9,672	)	$	739,607
Cost of service, excluding depreciation and amortization	$	435,550		$	1,320		$	436,870
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Net income attributable to Amedisys, Inc.	$	19,591		$	—		$	19,591
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	$	(17,825	)	$	10,992		$	(6,833	)

We earn net service revenue through our home health, hospice and personal care segments through the delivery of a variety of services that best suit our patients' needs, whether that is home-based recovery and rehabilitation after an operation or injury, care that empowers patients to manage a chronic disease, hospice care at the end of life, or providing assistance with daily activities through our personal care segment. We account for revenue from contracts with customers in accordance with ASC 606, and as such, we recognize revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers, in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. The Company's cost of obtaining contracts is not material.

Revenues are recognized as performance obligations are satisfied, which varies based on the nature of the services provided. Our performance obligation is the delivery of patient care services in accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.

The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the optional exemption provided by ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.

We determine the transaction price based on gross charges for services provided, reduced by contractual adjustments provided to third-party payors and estimates of implicit price concessions provided to self-pay or uninsured patients or other payors. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare contributes to approximately 74% of the Company's consolidated net service revenue. We determine our estimates of contractual adjustments and implicit price concessions by major payor class based on contractual agreements with individual third-party payors, our historical collection experience, aged accounts receivable by payor and current economic conditions. The implicit price concession included in estimating the transaction price represents the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. Subsequent changes to the estimate of the transaction price are recorded as adjustments to net service revenue in the period of change. Subsequent changes that are determined to be the result of an adverse change in the patient's ability to pay (i.e. change in credit risk) are recorded as a provision for doubtful accounts.

We record our service revenue net of estimated revenue adjustments related to third-party payor payment reviews to reflect amounts we estimate to be realizable for services provided. Amounts due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), include variable consideration for retroactive revenue adjustments due to settlements of audits and reviews. We make estimates for these revenue adjustments based on our historical experience and success rates in the claim appeals and adjudication process.

Home Health Revenue Recognition

Medicare Revenue

Net service revenue is recorded under the Medicare prospective payment system (“PPS”) based on an established Federal Medicare home health episode payment rate, that is subject to adjustment based on certain variables, including, but not limited to (a) an outlier payment if our patient’s care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits was fewer than five; (c) a partial payment if our patient transferred to another provider or we received a patient from another provider before completing the episode; (d) a payment adjustment based upon the level of therapy services required (with various incremental adjustments made for additional visits, with larger payment increases associated with the sixth, fourteenth and twentieth visit thresholds); (e) adjustments to payments if we are unable to perform periodic therapy assessments; (f) the number of episodes of care provided to a patient, regardless of whether the same home health provider provided care for the entire series of episodes; (g) changes in the base episode payments established by the Medicare Program; (h) adjustments to the base episode payments for case mix and geographic wages; and (i) recoveries of overpayments. Medicare rates are based on the severity of the patient's condition, service needs and goals, and other factors relating to the cost of providing services and supplies, bundled into an episode of care, not to exceed 60 days. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier, with multiple continuous episodes allowed.

The Medicare home health benefit requires that beneficiaries be homebound (meaning that the beneficiary is unable to leave their home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services, and receive treatment under a plan of care established and periodically reviewed by a physician. All Medicare contracts are required to have a signed plan of care which represents a single performance obligation, comprising of the delivery of a series of distinct services that are substantially similar and have a similar pattern of transfer to the customer. Accordingly, the Company accounts for the series of services ("episode") as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. Expected Medicare revenue per episode is recognized based on a pro-rated service output method, utilizing our historical average length of episode prior to discharge.

The base episode payment can be adjusted based on each patient's health including clinical condition, functional abilities, and service needs, as well as for the applicable geographic wage index, low utilization, patient transfers and other factors. The services covered by the episode payment include all disciplines of care in addition to medical supplies. Medicare can also make various adjustments to payments received if we are unable to produce appropriate billing documentation or acceptable authorizations. In addition, we make adjustments to Medicare revenue if we find we are unable to obtain appropriate billing documentation, authorizations or face-to-face documentation. We estimate the impact of such adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered as an estimated price concession and a corresponding reduction to patient accounts receivable.

A portion of reimbursement from each Medicare episode is billed near the start of each episode, and cash is typically received before all services are rendered. The amount of revenue recognized for episodes of care which are incomplete at period end is based on the company's average percentage of days complete on episodes as of the end of the year. As of June 30, 2018 and 2017, the difference between the cash received from Medicare for a request for anticipated payment (“RAP”) on episodes in progress and the associated estimated revenue was immaterial and, therefore, the resulting credits were recorded as a reduction to our outstanding patient accounts receivable in our condensed consolidated balance sheets for such periods.

Non-Medicare Revenue

Episodic-based Revenue. We recognize revenue in a similar manner as we recognize Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs; however, these rates can vary based upon the negotiated terms which generally range from 90% to 100% of Medicare rates.

Non-episodic based Revenue. Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established or estimated per-visit rates. Contractual adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third parties and others for services provided and are deducted from gross revenue to determine net service revenue. We also make adjustments to non-episodic revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price. We receive a minimal amount of our net service revenue from patients who are either self-insured or are obligated for an insurance co-payment.

Hospice Revenue Recognition

Hospice Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounts for 99% of our total net Medicare hospice service revenue for each of the three and six-month periods ended June 30, 2018, and 99% and 98% of our total net Medicare hospice service revenue for each of the three and six-month periods ended June 30, 2017, respectively. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse (“RN”) or medical social worker (“MSW”) for patients in a routine level of care.

The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.

We make adjustments to Medicare revenue for an inability to obtain appropriate billing documentation or acceptable authorizations and other reasons unrelated to credit risk. We estimate the impact of these adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record it during the period services are rendered as an estimated price concession and as a reduction to our outstanding patient accounts receivable.

Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in other accrued liabilities. Beginning for the cap year ending October 31, 2017, providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of June 30, 2018, we have settled our Medicare hospice reimbursements for all fiscal years through October 31, 2012. As of June 30, 2018, we have recorded $1.1 million for estimated amounts due back to Medicare in other accrued liabilities for the Federal cap years ended October 31, 2013 through September 30, 2018. As of December 31, 2017, we had recorded $0.9 million for estimated amounts due back to Medicare in other accrued liabilities for the Federal cap years ended October 31, 2013 through September 30, 2018.

Hospice Non-Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established rates or estimated per day rates, as applicable. Contractual adjustments are recorded for the difference between our established rates and the amounts estimated to be realizable from patients, third parties and others for services provided and are deducted from gross revenue to determine our net service revenue. We also make adjustments to non-Medicare revenue for any implicit price concessions, based on historical experience, to reflect the estimated transaction price.

Personal Care Revenue Recognition

Personal Care Revenue

We generate net service revenues by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that is either contractual or fixed by legislation, which are recognized as net service revenue at the time services are rendered. We receive payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors include the following elder service agencies: Aging Services Access Points (ASAPs), Senior Care Options (SCOs), Program of All-Inclusive Care for the Elderly (PACE) and the Veterans Administration (VA).

Patient Accounts Receivable

Patient Accounts Receivable

We report accounts receivable from services rendered at their estimated transaction price, which includes price concessions based on the amounts expected to be due from payors. Our patient accounts receivable are uncollateralized and consist of amounts due from Medicare, Medicaid, other third-party payors and patients. As of June 30, 2018, there is only one single payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables (approximately 11.8%). Thus, we believe there are no other significant concentrations of receivables that would subject us to any significant credit risk in the collection of our patient accounts receivable. We write off accounts on a monthly basis once we have exhausted our collection efforts and deem an account to be uncollectible.

We believe the collectibility risk associated with our Medicare accounts, which represent 56% and 59% of our patient accounts receivable at June 30, 2018 and December 31, 2017, respectively, is limited due to our historical collection rate of over 99% from Medicare and the fact that Medicare is a U.S. government payor. Accordingly, we do not record an allowance for doubtful accounts for our Medicare patient accounts receivable, which are recorded at their net realizable value after recording estimated price concessions as discussed above. During the three and six-month periods ended June 30, 2018, we recorded $2.5 million and $4.2 million, respectively, in estimated revenue adjustments to Medicare revenue as compared to $5.0 million and $8.4 million during the three and six-month periods ended June 30, 2017, respectively.

We do not believe there are any significant concentrations of revenues from any payor that would subject us to any significant credit risk in the collection of our accounts receivable.

Medicare Home Health

For our home health patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We submit a RAP for 60% of our estimated payment for the initial episode at the start of care or 50% of the estimated payment for any subsequent episodes of care contiguous with the first episode for a particular patient. The full amount of the episode is billed after the episode has been completed (“final billed”). The RAP received for that particular episode is then deducted from our 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 RAPs received for that episode will be recouped by Medicare from any other claims in process for that particular provider number. The RAP and final claim must then be resubmitted.

Medicare Hospice

For our hospice patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare on a monthly basis for the services provided to the patient.

Non-Medicare Home Health, Hospice and Personal Care

For our non-Medicare patients, our pre-billing process primarily begins with verifying a patient’s eligibility for services with the applicable payor. Once the patient has been confirmed for eligibility, we will provide services to the patient and bill the applicable payor. Our review and evaluation of non-Medicare accounts receivable includes a detailed review of outstanding balances and special consideration to concentrations of receivables from particular payors or groups of payors with similar characteristics that would subject us to any significant credit risk.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost and we depreciate it on a straight-line basis over the estimated useful lives of the assets. Additionally, we have internally developed computer software for our own use. Additions and improvements (including interest

costs for construction of qualifying long-lived assets) are capitalized. Maintenance and repair expenses are charged to expense as incurred. The cost of property and equipment sold or disposed of and the related accumulated depreciation are eliminated from the property and related accumulated depreciation accounts, and any gain or loss is credited or charged to other general and administrative expenses.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels of inputs are as follows:

• Level 1 – Quoted prices in active markets for identical assets and liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Our deferred compensation plan assets are recorded at fair value and are considered a level 2 measurement. For our other financial instruments, including our cash and cash equivalents, patient accounts receivable, accounts payable, payroll and employee benefits and accrued expenses, we estimate the carrying amounts approximate fair value.

Weighted-Average Shares Outstanding

Weighted-Average Shares Outstanding

Net income per share attributable to Amedisys, Inc. common stockholders, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Schedule of Effect of Adoption of ASC 606

Our adoption of ASC 606 on January 1, 2018, on a full retrospective basis, impacted the Company's previously reported results as follows (amounts in thousands, unaudited):

	As Previously Reported			Adjustment for the Adoption of ASC 606			As Adjusted
	As of December 31, 2017
Condensed Consolidated Balance Sheets
Patient accounts receivable	$	201,196		$	—		$	201,196
Allowance for doubtful accounts	$	20,866		$	20,866		$	—
	For the three-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	378,821		$	(3,875	)	$	374,946
Cost of service, excluding depreciation and amortization	$	219,765		$	776		$	220,541
Provision for doubtful accounts	$	4,651		$	(4,651	)	$	—
Net income attributable to Amedisys, Inc.	$	4,461		$	—		$	4,461
	For the six-month period ended June 30, 2017
Condensed Consolidated Statements of Operations
Net service revenue	$	749,279		$	(9,672	)	$	739,607
Cost of service, excluding depreciation and amortization	$	435,550		$	1,320		$	436,870
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Net income attributable to Amedisys, Inc.	$	19,591		$	—		$	19,591
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts	$	10,992		$	(10,992	)	$	—
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	$	(17,825	)	$	10,992		$	(6,833	)

Schedule of Property and Equipment

The following table summarizes the balances related to our property and equipment for the periods indicated (amounts in millions):

	As of June 30, 2018			As of December 31, 2017
Building and leasehold improvements	$	8.8		$	7.8
Equipment and furniture	56.9			72.9
Computer software	63.4			97.2
	129.1			177.9
Less: accumulated depreciation	(101.1		)	(146.8		)
	$	28.0		$	31.1

Schedule of Weighted-Average Shares Outstanding

The following table sets forth, for the periods indicated, shares used in our computation of the weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):

	For the Three- Month Periods Ended June 30,		For the Six- Month Periods Ended June 30,
	2018	2017	2018	2017
Weighted average number of shares outstanding - basic	33,439	33,637	33,705	33,540
Effect of dilutive securities:
Stock options	425	329	381	285
Non-vested stock and stock units	315	363	305	378
Weighted average number of shares outstanding - diluted	34,179	34,329	34,391	34,203
Anti-dilutive securities	57	169	88	248

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LONG-TERM OBLIGATIONS LONG-TERM OBLIGATIONS (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt consisted of the following for the periods indicated (amounts in millions):

	June 30, 2018			December 31, 2017
$100.0 million Term Loan; principal payments plus accrued interest payable quarterly; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate; due August 28, 2020	$	—		$	90.0
$200.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate; due August 28, 2020	—			—
$550.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate (3.7% at June 30, 2018); due June 29, 2023	127.5			—
Promissory notes	0.9			0.7
Capital leases	0.1			—
Principal amount of long-term obligations	128.5			90.7
Deferred debt issuance costs	(3.9		)	(1.9		)
	124.6			88.8
Current portion of long-term obligations	(0.7		)	(10.6		)
Total	$	123.9		$	78.2

Schedule of Commitment Fee Under Credit Facilities

We are also subject to a commitment fee and letter of credit fee under the terms of the Credit Agreement, as presented in the table below.

Pricing Tier	Consolidated Leverage Ratio	Commitment Fee	Letter of Credit Fee	Eurodollar Rate Loans	Base Rate Loans
I	> 3.00 to 1.0	0.35%	2.00%	2.25%	1.25%
II	≤ 3.00 to 1.0 but > 2.00 to 1.0	0.30%	1.75%	2.00%	1.00%
III	≤ 2.00 to 1.0 but > 1.00 to 1.0	0.25%	1.50%	1.75%	0.75%
IV	≤ 1.00 to 1.0	0.20%	1.25%	1.50%	0.50%

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SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of Operating Income of Reportable Segments

	For the Three-Month Period Ended June 30, 2018
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	291.5	$	101.4	$	18.7	$	—		$	411.6
Cost of service, excluding depreciation and amortization	176.5		51.7		14.4		—			242.6
General and administrative expenses	68.4		20.3		3.3		31.1			123.1
Depreciation and amortization	0.8		0.3		—		2.0			3.1
Operating expenses	245.7		72.3		17.7		33.1			368.8
Operating income (loss)	$	45.8	$	29.1	$	1.0	$	(33.1	)	$	42.8
	For the Three-Month Period Ended June 30, 2017
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	270.3	$	90.3	$	14.3	$	—		$	374.9
Cost of service, excluding depreciation and amortization	164.8		45.4		10.3		—			220.5
General and administrative expenses	68.9		19.1		3.0		30.0			121.0
Depreciation and amortization	1.0		0.2		—		3.3			4.5
Securities Class Action Lawsuit settlement, net	—		—		—		28.7			28.7
Operating expenses	234.7		64.7		13.3		62.0			374.7
Operating income (loss)	$	35.6	$	25.6	$	1.0	$	(62.0	)	$	0.2
	For the Six-Month Period Ended June 30, 2018
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	575.6	$	198.7	$	36.6	$	—		$	810.9
Cost of service, excluding depreciation and amortization	350.9		101.8		28.2		—			480.9
General and administrative expenses	136.4		40.3		6.5		61.3			244.5
Depreciation and amortization	1.6		0.5		0.1		4.5			6.7
Operating expenses	488.9		142.6		34.8		65.8			732.1
Operating income (loss)	$	86.7	$	56.1	$	1.8	$	(65.8	)	$	78.8
	For the Six-Month Period Ended June 30, 2017
	Home Health		Hospice		Personal Care		Other			Total
Net service revenue	$	537.9	$	173.9	$	27.8	$	—		$	739.6
Cost of service, excluding depreciation and amortization	327.8		88.4		20.7		—			436.9
General and administrative expenses	136.9		37.0		6.2		59.5			239.6
Depreciation and amortization	1.9		0.5		0.1		6.5			9.0
Securities Class Action Lawsuit settlement, net	—		—		—		28.7			28.7
Operating expenses	466.6		125.9		27.0		94.7			714.2
Operating income (loss)	$	71.3	$	48.0	$	0.8	$	(94.7	)	$	25.4

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NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) state care_center	Jun. 30, 2017	Jun. 30, 2018 USD ($) state care_center	Jun. 30, 2017	Dec. 31, 2017 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of states with facilities | state	34		34
Minimum ownership percentage for controlling interest (percent)	50.00%		50.00%
Maximum ownership percentage for equity method investment (percent)	50.00%		50.00%
Equity method investment, aggregate cost | $	$ 29.0		$ 29.0		$ 26.4
Maximum ownership percentage for cost method investment (percent)	20.00%		20.00%
Home Health
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of owned and operated care centers	322		322
Hospice
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of owned and operated care centers	83		83
Personal Care
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Number of owned and operated care centers	15		15
Net Service Revenue | Medicare Revenue
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Percent of net services revenue	74.00%	76.00%	74.00%	76.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition Impact From Adoption (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Condensed Consolidated Balance Sheets
Patient accounts receivable	$ 197,592		$ 197,592		$ 201,196
Allowance for doubtful accounts					0
Condensed Consolidated Statements of Operations
Net service revenue	411,603	$ 374,946	810,865	$ 739,607
Cost of service, excluding depreciation and amortization	242,564	220,541	480,873	436,870
Provision for doubtful accounts		0		0
Net income attributable to Amedisys, Inc.	$ 33,349	4,461	60,508	19,591
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts		0		0
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable			$ 3,604	(6,833)
ASU 2014-09 | As Previously Reported
Condensed Consolidated Balance Sheets
Patient accounts receivable					201,196
Allowance for doubtful accounts					(20,866)
Condensed Consolidated Statements of Operations
Net service revenue		378,821		749,279
Cost of service, excluding depreciation and amortization		219,765		435,550
Provision for doubtful accounts		4,651		10,992
Net income attributable to Amedisys, Inc.		4,461		19,591
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts		4,651		10,992
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable				(17,825)
ASU 2014-09 | Adjustment for the Adoption of ASC 606
Condensed Consolidated Balance Sheets
Patient accounts receivable					0
Allowance for doubtful accounts					$ 20,866
Condensed Consolidated Statements of Operations
Net service revenue		(3,875)		(9,672)
Cost of service, excluding depreciation and amortization		776		1,320
Provision for doubtful accounts		(4,651)		(10,992)
Net income attributable to Amedisys, Inc.		0		0
Condensed Consolidated Statements of Cash Flows
Provision for doubtful accounts		$ (4,651)		(10,992)
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable				$ 10,992

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017	Jun. 30, 2018 USD ($) visit	Jun. 30, 2017	Dec. 31, 2017 USD ($)
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Episode of care as episodic-based revenue (days)			60 days
Net service revenue episode payment rate (days)			60 days
Percentage of total reimbursement of outlier payment			10.00%
Low utilization payment adjustment, maximum number of visits			5
First threshold of therapy services required (visits)			6
Second threshold of therapy services required (visits)			14
Third threshold of therapy services required (visits)			20
Historical collection rate from Medicare			99.00%
Hospice Medicare revenue rate accounted for routine care	99.00%	99.00%	99.00%	98.00%
Minimum [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Non-Medicare revenue term rates			90.00%
Maximum [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Non-Medicare revenue term rates			100.00%
Home Health
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Historical collection rate from Medicare			99.00%
Hospice
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Historical collection rate from Medicare			99.00%
Cap Year 2013 Through 2018
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Estimated amounts due back to Medicare | $	$ 1.1		$ 1.1		$ 0.9
Medicare Revenue | Net Service Revenue
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Percent of net services revenue	74.00%	76.00%	74.00%	76.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Patient Accounts Receivable Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) day	Jun. 30, 2017 USD ($)	Dec. 31, 2017
Concentration Risk [Line Items]
Percentage of patient receivables outstanding			10.00%
Accounts receivable derived from Medicare	56.00%		56.00%		59.00%
Historical collection rate from Medicare			99.00%
Revenue adjustment to Medicare revenue | $	$ 2.5	$ 5.0	$ 4.2	$ 8.4
Rate of request for anticipated payment submitted for the initial episode of care			60.00%
Rate of request for anticipated payment submitted for subsequent episodes of care			50.00%
Maximum days to submit final bill from the start of episode			120
Maximum days to submit final bill from the date the request for anticipated payment was paid			60
Customer Concentration Risk | Accounts Receivable | Single Payor
Concentration Risk [Line Items]
Concentration risk (percent)			11.80%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 129,100	$ 177,900
Less: accumulated depreciation	(101,128)	(146,814)
Property and equipment	27,998	31,122
Building and leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	8,800	7,800
Equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, gross	56,900	72,900
Computer software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 63,400	$ 97,200

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Weighted-Average Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accounting Policies [Abstract]
Weighted average number of shares outstanding - basic (shares)	33,439	33,637	33,705	33,540
Effect of dilutive securities:
Stock options (shares)	425	329	381	285
Non-vested stock and stock units (shares)	315	363	305	378
Weighted average number of shares outstanding - diluted (shares)	34,179	34,329	34,391	34,203
Anti-dilutive securities (shares)	57	169	88	248

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ACQUISITIONS - Narrative (Details) $ in Millions			3 Months Ended		6 Months Ended
	May 01, 2018 USD ($) care_center	Mar. 01, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Principal amount			$ 128.5		$ 128.5	$ 90.7
Home Health | Christian Care at Home
Business Acquisition [Line Items]
Payments to acquire business		$ 2.3
Goodwill recorded during period				$ 2.3
Personal Care | East Tennessee Personal Care Services
Business Acquisition [Line Items]
Payments to acquire business	$ 2.0
Goodwill recorded during period			1.9
Tennessee [Member] | Personal Care | East Tennessee Personal Care Services
Business Acquisition [Line Items]
Acquisition, number of care centers acquired | care_center	1
Noncompete Agreements [Member] | Personal Care | East Tennessee Personal Care Services
Business Acquisition [Line Items]
Acquisition, other intangibles recorded			0.1		$ 0.1
Weighted-average amortization period					2 years 9 months 18 days
Promissory Notes [Member]
Business Acquisition [Line Items]
Principal amount			$ 0.9		$ 0.9	$ 0.7
Promissory Notes [Member] | Personal Care | East Tennessee Personal Care Services
Business Acquisition [Line Items]
Principal amount	$ 0.2

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LONG-TERM OBLIGATIONS - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Principal amount	$ 128.5	$ 90.7
Deferred debt issuance costs	(3.9)	(1.9)
Long-term obligations, including current portion	124.6	88.8
Current portion of long-term obligations	(0.7)	(10.6)
Long-term obligations, less current portion	123.9	78.2
Term Loan | 100 Million Term Loan
Debt Instrument [Line Items]
Principal amount	0.0	90.0
Promissory Notes [Member]
Debt Instrument [Line Items]
Principal amount	0.9	0.7
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Principal amount	0.1	0.0
Revolving Credit Facility [Member] | 200 Million Revolving Credit Facility
Debt Instrument [Line Items]
Principal amount	0.0	0.0
Revolving Credit Facility [Member] | 550 Million Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Principal amount	$ 127.5	$ 0.0

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LONG-TERM OBLIGATIONS - Schedule of Long-Term Debt Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 29, 2018
Term Loan | 100 Million Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount	$ 100,000,000
Term Loan [Member] | 100 Million Term Loan
Debt Instrument [Line Items]
Maturity Date	Aug. 28, 2020
Revolving Credit Facility [Member] | 200 Million Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, face amount	$ 200,000,000
Maturity Date	Aug. 28, 2020
Revolving Credit Facility [Member] | 550 Million Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 550,000,000	$ 550,000,000
Maturity Date	Jun. 29, 2023
Revolving Credit Facility [Member] | 550 Million Revolving Credit Facility [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	3.70%

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LONG-TERM OBLIGATIONS - Fees and Rates Under Credit Facilities (Details)	6 Months Ended
	Jun. 30, 2018
Consolidated Leverage Ratio: Greater Than 3.00 to 1.0
Line of Credit Facility [Line Items]
Commitment fee percentage	0.35%
Letter Of Credit Fee	2.00%
Consolidated Leverage Ratio: Greater Than 3.00 to 1.0 | Eurodollar [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.25%
Consolidated Leverage Ratio: Greater Than 3.00 to 1.0 | Base Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.25%
Consolidated Leverage Ratio: Less Than Equal To 3.00 to 1.0 but Greater Than 2.00 to 1.0
Line of Credit Facility [Line Items]
Commitment fee percentage	0.30%
Letter Of Credit Fee	1.75%
Consolidated Leverage Ratio: Less Than Equal To 3.00 to 1.0 but Greater Than 2.00 to 1.0 | Eurodollar [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.00%
Consolidated Leverage Ratio: Less Than Equal To 3.00 to 1.0 but Greater Than 2.00 to 1.0 | Base Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Consolidated Leverage Ratio: Less Than Equal to 2.00 to 1.0 but Greater Than 1.00 to 1.0
Line of Credit Facility [Line Items]
Commitment fee percentage	0.25%
Letter Of Credit Fee	1.50%
Consolidated Leverage Ratio: Less Than Equal to 2.00 to 1.0 but Greater Than 1.00 to 1.0 | Eurodollar [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.75%
Consolidated Leverage Ratio: Less Than Equal to 2.00 to 1.0 but Greater Than 1.00 to 1.0 | Base Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.75%
Consolidated Leverage Ratio: Less Than Equal to 1.00 to 1.0
Line of Credit Facility [Line Items]
Commitment fee percentage	0.20%
Letter Of Credit Fee	1.25%
Consolidated Leverage Ratio: Less Than Equal to 1.00 to 1.0 | Eurodollar [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.50%
Consolidated Leverage Ratio: Less Than Equal to 1.00 to 1.0 | Base Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.50%
Minimum [Member] | Consolidated Leverage Ratio: Greater Than 3.00 to 1.0
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio	3.00
Minimum [Member] | Consolidated Leverage Ratio: Less Than Equal To 3.00 to 1.0 but Greater Than 2.00 to 1.0
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio	2.00
Minimum [Member] | Consolidated Leverage Ratio: Less Than Equal to 2.00 to 1.0 but Greater Than 1.00 to 1.0
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio	1.00
Maximum [Member] | Consolidated Leverage Ratio: Less Than Equal To 3.00 to 1.0 but Greater Than 2.00 to 1.0
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio	3.00
Maximum [Member] | Consolidated Leverage Ratio: Less Than Equal to 2.00 to 1.0 but Greater Than 1.00 to 1.0
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio	2.00
Maximum [Member] | Consolidated Leverage Ratio: Less Than Equal to 1.00 to 1.0
Line of Credit Facility [Line Items]
Consolidated Leverage Ratio	1.00

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LONG-TERM OBLIGATIONS - Narrative (Details)		3 Months Ended		6 Months Ended
	Jun. 29, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Consolidated leverage ratio		0.8		0.8
Consolidated interest coverage ratio		51.0		51.0
Credit facility, maximum borrowing capacity	$ 550,000,000
Principal payments of long-term obligations				$ 90,475,000	$ 2,500,000
Deferred debt issuance cost		$ 2,400,000		2,400,000
Principal amount		128,500,000		128,500,000		$ 90,700,000
Term Loan | 100 Million Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount		$ 100,000,000		$ 100,000,000
Weighted average interest rate (percent)		3.90%	3.00%	3.80%	2.90%
Principal amount		$ 0		$ 0		90,000,000
Swing Line Loan [Member]
Debt Instrument [Line Items]
Revolving Credit Facility Total	25,000,000
Letter of Credit [Member]
Debt Instrument [Line Items]
Revolving Credit Facility Total	60,000,000
Revolving Credit Facility [Member] | 200 Million Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, face amount		200,000,000		$ 200,000,000
Maturity Date				Aug. 28, 2020
Principal amount		0		$ 0		0
Revolving Credit Facility [Member] | 550 Million Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	550,000,000	$ 550,000,000		$ 550,000,000
Weighted average interest rate (percent)		3.70%		3.70%
Credit facility, maximum additional borrowing capacity	$ 125,000,000
Credit facility, maximum allowable consolidated leverage ratio multiple	0.5
Maturity Date				Jun. 29, 2023
Remaining availability under revolving credit facility		$ 388,100,000		$ 388,100,000
Principal amount		127,500,000		$ 127,500,000		$ 0
Prior Credit Agreement [Member]
Debt Instrument [Line Items]
Principal payments of long-term obligations	$ 127,500,000
Credit Agreement [Member]
Debt Instrument [Line Items]
Additional interest rate above Federal Fund rate				0.50%
Additional interest rate above Eurodollar rate				1.00%
Percentage of consolidated revenue and adjusted EBITDA that guarantor wholly-owned subsidiaries represent				95.00%
Percentage of adjusted EBITDA that guarantor subsidiaries represent				70.00%
Line of Credit [Member] | 550 Million Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Outstanding letters of credit		$ 34,400,000		$ 34,400,000
Base Rate [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Description of variable rate basis				Fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 0.50% per annum, (b) the prime rate of interest established by the Administrative Agent, and (c) the Eurodollar Rate for an interest period of one month plus 1% per annum.
Base Rate [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Basis spread on variable rate				0.50%
Eurodollar [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Description of variable rate basis				Rate at which Eurodollar deposits in the London interbank market for an interest period of one, two, three or six months
Eurodollar [Member] | Revolving Credit Facility [Member] | 550 Million Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Basis spread on variable rate				3.70%
Eurodollar [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Basis spread on variable rate				1.50%

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COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands							1 Months Ended	3 Months Ended			6 Months Ended		27 Months Ended
	Jun. 27, 2016 patient	Jan. 18, 2016 USD ($) claim	Nov. 03, 2015 patient	May 21, 2015 patient	Apr. 23, 2014	Jun. 06, 2011 beneficiary	Aug. 31, 2017 USD ($) claim	Jun. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2010 beneficiary	Dec. 31, 2017 USD ($)
Loss Contingencies [Line Items]
Corporate integrity agreement term (years)					5 years
Securities Class Action Lawsuit settlement, net								$ 0		$ 28,712	$ 0	$ 28,712
Patient accounts receivable								197,592			197,592			$ 201,196
Health insurance retention limit											1,000
Workers compensation insurance retention limit											500
Professional liability insurance retention limit											300
Hospice
Loss Contingencies [Line Items]
Securities Class Action Lawsuit settlement, net										0		0
Home Health
Loss Contingencies [Line Items]
Securities Class Action Lawsuit settlement, net										0		0
South Carolina | Hospice
Loss Contingencies [Line Items]
Number of beneficiaries | beneficiary													30
Indemnity receivable related to amounts withheld prior to August 2009								4,900			4,900
South Carolina | Hospice | Extrapolated
Loss Contingencies [Line Items]
Number of beneficiaries | beneficiary						16
South Carolina | Hospice | Unfavorable
Loss Contingencies [Line Items]
Recovery amount of overpayment made to subsidiary		$ 3,700
Recovery amount of overpayment made to subsidiary including interest		$ 5,600
Number of claims submitted by subsidiary | claim		9
Recovery amount of over payment made to subsidiary including interest withheld								5,700			5,700
US Department of Justice | Massachusetts | Hospice
Loss Contingencies [Line Items]
Number of patients | patient				53
US Department of Justice | Morgantown, West Virginia | Hospice
Loss Contingencies [Line Items]
Number of patients | patient			66
US Department of Justice | Parkersburg, West Virginia | Hospice
Loss Contingencies [Line Items]
Number of patients | patient	68
Securities Class Action Lawsuit [Member]
Loss Contingencies [Line Items]
Payments for legal settlements									$ 28,700
Loss contingency accrual										43,700		43,700
Settlement amount to be paid by company's insurance carriers										15,000		$ 15,000
Securities Class Action Lawsuit settlement, net										$ 28,700
Safeguard Zone Program Integrity Contractor | Florida
Loss Contingencies [Line Items]
Loss contingency accrual								17,400			17,400
Indemnity receivable								10,900			10,900
Indemnification amount								12,600			12,600
Safeguard Zone Program Integrity Contractor | Florida | Infinity HomeCare
Loss Contingencies [Line Items]
Indemnification amount								12,600			12,600
Safeguard Zone Program Integrity Contractor | Florida | Home Health
Loss Contingencies [Line Items]
Florida ZPIC revenue reduction									6,500
Safeguard Zone Program Integrity Contractor | Florida | Home Health | Minimum [Member]
Loss Contingencies [Line Items]
Recovery amount of overpayment made to subsidiary								6,500			6,500
Safeguard Zone Program Integrity Contractor | Florida | Home Health | Maximum [Member]
Loss Contingencies [Line Items]
Recovery amount of overpayment made to subsidiary							$ 38,800	30,300			30,300
Safeguard Zone Program Integrity Contractor | Florida | Home Health | Infinity HomeCare
Loss Contingencies [Line Items]
Patient accounts receivable								2,700			2,700
Safeguard Zone Program Integrity Contractor | Lakeland, Florida | Home Health
Loss Contingencies [Line Items]
Recovery amount of overpayment made to subsidiary							$ 34,000	27,000			27,000
Number of claims submitted by subsidiary | claim							72
Actual claims payment							$ 200
Error rate (percent)							100.00%
Safeguard Zone Program Integrity Contractor | Clearwater, Florida | Home Health
Loss Contingencies [Line Items]
Recovery amount of overpayment made to subsidiary							$ 4,800	$ 3,300			$ 3,300
Number of claims submitted by subsidiary | claim							70
Actual claims payment							$ 200
Error rate (percent)							100.00%
Company's insurance carriers [Member] | Securities Class Action Lawsuit [Member]
Loss Contingencies [Line Items]
Payments for legal settlements									$ 15,000

XML

SEGMENT INFORMATION - Narrative (Details)	6 Months Ended
	Jun. 30, 2018 Segments
Segment Reporting [Abstract]
Number of reportable business segments	3

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SEGMENT INFORMATION - Operating Income of Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Net service revenue	$ 411,603	$ 374,946	$ 810,865	$ 739,607
Cost of service, excluding depreciation and amortization	242,564	220,541	480,873	436,870
General and administrative expenses	123,100	121,000	244,500	239,600
Depreciation and amortization	3,125	4,537	6,718	8,954
Securities Class Action Lawsuit settlement, net	0	28,712	0	28,712
Operating expenses	368,775	374,706	732,032	714,202
Operating income	42,828	240	78,833	25,405
Home Health
Segment Reporting Information [Line Items]
Net service revenue	291,500	270,300	575,600	537,900
Cost of service, excluding depreciation and amortization	176,500	164,800	350,900	327,800
General and administrative expenses	68,400	68,900	136,400	136,900
Depreciation and amortization	800	1,000	1,600	1,900
Securities Class Action Lawsuit settlement, net		0		0
Operating expenses	245,700	234,700	488,900	466,600
Operating income	45,800	35,600	86,700	71,300
Hospice
Segment Reporting Information [Line Items]
Net service revenue	101,400	90,300	198,700	173,900
Cost of service, excluding depreciation and amortization	51,700	45,400	101,800	88,400
General and administrative expenses	20,300	19,100	40,300	37,000
Depreciation and amortization	300	200	500	500
Securities Class Action Lawsuit settlement, net		0		0
Operating expenses	72,300	64,700	142,600	125,900
Operating income	29,100	25,600	56,100	48,000
Personal Care
Segment Reporting Information [Line Items]
Net service revenue	18,700	14,300	36,600	27,800
Cost of service, excluding depreciation and amortization	14,400	10,300	28,200	20,700
General and administrative expenses	3,300	3,000	6,500	6,200
Depreciation and amortization	0	0	100	100
Securities Class Action Lawsuit settlement, net		0		0
Operating expenses	17,700	13,300	34,800	27,000
Operating income	1,000	1,000	1,800	800
Other
Segment Reporting Information [Line Items]
Net service revenue	0	0	0	0
Cost of service, excluding depreciation and amortization	0	0	0	0
General and administrative expenses	31,100	30,000	61,300	59,500
Depreciation and amortization	2,000	3,300	4,500	6,500
Securities Class Action Lawsuit settlement, net		28,700		28,700
Operating expenses	33,100	62,000	65,800	94,700
Operating income	$ (33,100)	$ (62,000)	$ (65,800)	$ (94,700)

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SHARE REPURCHASE Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	Jun. 04, 2018	Jun. 30, 2018	Jun. 30, 2017
Share Repurchase [Line Items]
Purchase of company stock		$ 181,402	$ 0
KKR Share Repurchase [Member]
Share Repurchase [Line Items]
Treasury Stock, shares, acquired	2,418,304
Percentage of shares outstanding	7.10%
Purchase of company stock	$ 181,400
Discounted closing stock price	$ 73.96
Percentage of closing stock price	96.00%