x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 11-3131700 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.001 per share | The NASDAQ Global Select Market |
Large accelerated filer þ | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company ☐ | |
Emerging growth company ☐ |
Period | Base Episode Payment | ||
January 1, 2016 through December 31, 2016 | $ | 2,965 | |
January 1, 2017 through December 31, 2017 | $ | 2,990 | |
January 1, 2018 through December 31, 2018 | $ | 3,040 | |
January 1, 2019 through December 31, 2019 | $ | 3,154 |
• | Inpatient Cap - One cap limits the number of days of inpatient care an agency may provide to not more than 20 percent of its total patient care days. The daily Medicare payment rate for any inpatient days of service that exceed the cap is set at the routine home care rate, and the provider is required to reimburse Medicare for any amounts it receives in excess of the cap. |
• | Overall Payment Cap - The other cap is an absolute dollar limit on the average annual payment per beneficiary a hospice agency can receive. This cap is calculated by the Medicare fiscal intermediary at the end of each hospice cap period to determine the maximum allowable payments per provider number. We estimate our potential cap exposure using information available for both inpatient day limits as well as per beneficiary cap amounts. The total cap amount for each provider is calculated by multiplying the number of beneficiaries electing hospice care during the period by a statutory amount that is indexed for inflation. |
• | Coding – Specified international classification of disease ("ICD") diagnosis codes are assigned to each of our patients based on their particular health conditions (such as diabetes, coronary artery disease or congestive heart failure). Because coding regulations are complex and are subject to frequent change, we maintain controls surrounding our coding process. To reduce associated risk of coding failures, we provide coding training and annual update training to clinical managers and provide training during orientation for new employees to ensure accurate information is gathered and provided to our coding team. For home health, we also provide monthly specialized coding education, obtain outside expert coding instruction, have certified clinician coders review all patient outcome and assessment information sets (“OASIS”) and assign the appropriate ICD code. Our electronic medical records system (Homecare Homebase) includes automated home health coding edits based on pre-defined compliance metrics. |
• | Clinical Operations – Regulatory requirements allow patients to be eligible for home health care benefits if they are considered homebound and require skilled nursing, physical therapy or speech therapy services. These clinical services may include: educating the patient about their disease, assessment and observation of disease status, delivery of clinical skills such as wound care, administration of injections or intravenous fluids, management and evaluation of a patient’s plan of care, physical therapy services to assist patients with functional limitations and speech therapy services for speech or swallowing disorders. Patients eligible for hospice care are terminally ill (with a life expectancy of six months or less if the illness runs its normal course). Our hospice program provides care and support to our patients and their families with services including physical care, counseling, medication management and needed equipment and supplies for the terminal illness and related condition. To help monitor and promote compliance with regulatory requirements, we provide education on Medicare Guidelines for Coverage and Conditions of Participation, hold recurrent homecare regulatory education, utilize outside expert regulatory services, and have a toll-free hotline to offer additional assistance. |
• | Billing – We maintain controls over our billing processes to help promote accurate and complete billing. To promote the accuracy and completeness of our billing, we have annual billing compliance testing; use formalized billing attestations; limit access to billing systems; use automated daily billing operational indicators; and take prompt corrective action with employees who knowingly fail to follow our billing policies and procedures in accordance with a well-publicized “Zero Tolerance Policy.” |
• | Patient Recertification – In order to be recertified for an additional episode of care, a patient must continue to meet qualifying criteria and have a continuing medical need. Changes in the patient’s condition may require changes to the patient’s medical regimen or modified care protocols within the episode of care. The patient’s progress towards established goals is evaluated prior to recertification. As with the initial episode of care, a recertification requires orders from the patient’s physician. Before any employee recommends recertification to a physician, we conduct a care center level, multidisciplinary care team conference. Specific tools are used to ensure that the patient continues to meet coverage criteria prior to recertifying. |
• | Compliance – We develop, implement and maintain ethics and compliance programs as a component of the centralized corporate services provided to our home health, hospice and personal-care care centers. Our ethics and compliance program includes a Code of Conduct for our employees, officers, directors, contractors and affiliates and a disclosure program for reporting regulatory or ethical concerns to our compliance team through a confidential hotline, which is augmented by exit interviews of departing employees. We promote a culture of compliance within our company through educational presentations, regular newsletters and persistent messaging from our senior leadership to our employees stressing the importance of strict compliance with legal requirements and company policies and procedures. Additionally, we have mandatory compliance training and testing for all new employees upon hire and annually for all staff thereafter. We also maintain a robust compliance audit program focusing on key risk areas. |
• | licensure and certification; |
• | adequacy and quality of health care services; |
• | qualifications of health care and support personnel; |
• | quality and safety of medical equipment; |
• | confidentiality, maintenance and security issues associated with medical records and claims processing; |
• | relationships with physicians and other referral sources; |
• | operating policies and procedures; |
• | emergency preparedness risk assessments and policies and procedures; |
• | policies and procedures regarding employee relations; |
• | addition of facilities and services; |
• | billing for services; |
• | requirements for utilization of services; |
• | documentation required for billing and patient care; and |
• | reporting and maintaining records regarding adverse events. |
• | increasing our administrative and other costs; |
• | increasing or decreasing mandated services; |
• | causing us to abandon business opportunities we might have otherwise pursued; |
• | decreasing utilization of services; |
• | forcing us to restructure our relationships with referral sources and providers; or |
• | requiring us to implement additional or different programs and systems. |
• | required refunding or retroactive adjustment of amounts we have been paid pursuant to the federal or state programs or from private payors; |
• | state or federal agencies imposing fines, penalties and other sanctions on us; |
• | loss of our right to participate in the Medicare program, state programs, or one or more private payor networks; or |
• | damage to our business and reputation in various markets. |
• | it could require us to dedicate a portion of our cash flow from operations to payments on our indebtedness, which could reduce the availability of cash flow to fund acquisitions, start-ups, working capital, capital expenditures and other general corporate purposes; |
• | it could limit our ability to borrow money or sell stock for working capital, capital expenditures, debt service requirements and other purposes; |
• | it could limit our flexibility in planning for, and reacting to, changes in our industry or business; |
• | it could make us more vulnerable to unfavorable economic or business conditions; and |
• | it could limit our ability to make acquisitions or take advantage of other business opportunities. |
• | incur additional debt; |
• | redeem or repurchase stock, pay dividends or make other distributions; |
• | make certain investments; |
• | create liens; |
• | enter into transactions with affiliates; |
• | make acquisitions; |
• | enter into joint ventures; |
• | merge or consolidate; |
• | invest in foreign subsidiaries; |
• | amend acquisition documents; |
• | enter into certain swap agreements; |
• | make certain restricted payments; |
• | transfer, sell or leaseback assets; and |
• | make fundamental changes in our corporate existence and principal business. |
• | our operating and financial performance; |
• | variances in our quarterly financial results compared to research analyst expectations; |
• | the depth and liquidity of the market for our common stock; |
• | future purchases or sales of common stock by the Company or large stockholders or the perception that such purchases or sales could occur; |
• | investor, analyst and media perception of our business and our prospects; |
• | developments relating to litigation or governmental investigations; |
• | changes or proposed changes in health care laws or regulations or enforcement of these laws and regulations, or announcements relating to these matters; |
• | departure of key personnel; |
• | changes in the Medicare, Medicaid and private insurance payment rates for home health and hospice; |
• | announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; or |
• | general economic and stock market conditions. |
As of December 31, 2018 | ||
Common stock outstanding | 31,973,505 | |
Preferred stock outstanding | — | |
Common stock available under 2018 Omnibus Incentive Compensation Plan | 2,350,831 | |
Stock options outstanding | 833,315 | |
Stock options exercisable | 462,845 | |
Non-vested stock outstanding | 14,904 | |
Non-vested stock units outstanding | 467,077 |
State | Home Health | Hospice | Personal Care | State | Home Health | Hospice | Personal Care | |||||||||||||
Alabama | 30 | 7 | — | New Jersey | 2 | 1 | — | |||||||||||||
Arkansas | 5 | — | — | New York | 5 | — | — | |||||||||||||
Arizona | 3 | 1 | — | New Hampshire | 3 | 3 | — | |||||||||||||
California | 4 | — | — | North Carolina | 8 | 6 | — | |||||||||||||
Connecticut | 4 | 1 | — | Ohio | 1 | 2 | — | |||||||||||||
Delaware | 2 | — | — | Oklahoma | 6 | — | — | |||||||||||||
Florida | 20 | — | 1 | Oregon | 3 | 1 | — | |||||||||||||
Georgia | 62 | 6 | — | Pennsylvania | 7 | 6 | — | |||||||||||||
Illinois | 3 | — | — | Rhode Island | 1 | 2 | — | |||||||||||||
Indiana | 5 | 1 | — | South Carolina | 20 | 7 | — | |||||||||||||
Kansas | 1 | 1 | — | Tennessee | 43 | 11 | 1 | |||||||||||||
Kentucky | 17 | — | — | Texas | 1 | 1 | — | |||||||||||||
Louisiana | 10 | 4 | — | Virginia | 13 | 2 | — | |||||||||||||
Massachusetts | 5 | 9 | 10 | Washington | 1 | — | — | |||||||||||||
Maine | 2 | 4 | — | West Virginia | 11 | 6 | — | |||||||||||||
Maryland | 8 | 2 | — | Wisconsin | 1 | — | — | |||||||||||||
Mississippi | 9 | — | — | Washington, D.C. | 1 | — | — | |||||||||||||
Missouri | 6 | — | — | Total | 323 | 84 | 12 |
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 | |||||||||||
October 1, 2018 to October 31, 2018 | 2,025 | $ | 115.10 | — | $ | — | |||||||||
November 1, 2018 to November 30, 2018 | — | — | — | — | |||||||||||
December 1, 2018 to December 31, 2018 | 7,379 | 124.24 | — | — | |||||||||||
9,404 | (1) | $ | 122.27 | — | $ | — |
(1) | 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. |
12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | ||||||||||||||||||
Amedisys, Inc. | $ | 100.00 | $ | 200.62 | $ | 268.76 | $ | 291.39 | $ | 360.29 | $ | 800.48 | |||||||||||
NASDAQ Composite | $ | 100.00 | $ | 114.62 | $ | 122.81 | $ | 133.19 | $ | 172.11 | $ | 165.84 | |||||||||||
2018 Peer Group | $ | 100.00 | $ | 123.58 | $ | 137.25 | $ | 159.62 | $ | 201.35 | $ | 259.78 | |||||||||||
2017 Peer Group | $ | 100.00 | $ | 129.70 | $ | 188.39 | $ | 190.10 | $ | 254.78 | $ | 390.52 |
2018 | 2017 (2) | 2016 (3) | 2015 (4) | 2014 (5) | |||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||||||
Income Statement Data: | |||||||||||||||||||
Net service revenue from continuing operations (1) | $ | 1,662,578 | $ | 1,511,272 | $ | 1,419,261 | $ | 1,266,489 | $ | 1,188,111 | |||||||||
Operating income (loss) from continuing operations | $ | 155,148 | $ | 78,524 | $ | 57,340 | $ | (9,166 | ) | $ | 24,047 | ||||||||
Net income (loss) from continuing operations attributable to Amedisys, Inc. | $ | 119,346 | $ | 30,301 | $ | 37,261 | $ | (3,021 | ) | $ | 12,992 | ||||||||
Net income (loss) from continuing operations attributable to Amedisys, Inc. per basic share | $ | 3.64 | $ | 0.90 | $ | 1.12 | $ | (0.09 | ) | $ | 0.40 | ||||||||
Net income (loss) from continuing operations attributable to Amedisys, Inc. per diluted share | $ | 3.55 | $ | 0.88 | $ | 1.10 | $ | (0.09 | ) | $ | 0.40 |
(1) | Net service revenue has been recast to present our retrospective adoption of 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. |
(2) | During 2017, we recorded charges related to the Securities Class Action Lawsuit settlement, net and related legal fees in the amount of $29.8 million ($18.1 million, net of tax). Additionally, we recorded a charge in the amount of $21.4 million as the result of H.R. 1 (Tax Cuts and Jobs Act) enacted on December 22, 2017. |
(3) | During 2016, we recorded charges related to Homecare Homebase (“HCHB”) implementation costs in the amount of $8.4 million ($5.1 million, net of tax) and recognized a non-cash charge to write off assets as a result of our conversion to the HCHB platform in the amount of $4.4 million ($2.7 million, net of tax). |
(4) | During 2015, we recorded non-cash charges to write off the software costs incurred related to the development of AMS3 Home Health and Hospice in the amount of $75.2 million ($45.5 million, net of tax) and to reduce the carrying value of our corporate headquarters in the amount of $2.1 million ($1.2 million, net of tax). |
(5) | During 2014, we recorded charges for relators’ fees and exit and restructuring activity in the amount of $13.9 million ($8.5 million, net of tax) and recognized non-cash other intangibles impairment charges of $3.1 million ($2.0 million, net of tax). |
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets (1) | $ | 717,118 | $ | 813,482 | $ | 734,029 | $ | 681,715 | $ | 666,956 | |||||||||
Total debt, including current portion (1) | $ | 7,387 | $ | 88,841 | $ | 93,029 | $ | 96,630 | $ | 113,586 | |||||||||
Total Amedisys, Inc. stockholders’ equity | $ | 481,582 | $ | 515,321 | $ | 460,203 | $ | 409,568 | $ | 397,167 | |||||||||
Cash dividends declared per common share | $ | — | $ | — | $ | — | $ | — | $ | — |
(1) | Total assets and Total debt, including current portion have been recast to present our retrospective adoption of Accounting Standards Update 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. |
Home Health | Hospice | Personal Care | ||||||
At December 31, 2015 | 332 | 81 | — | |||||
Acquisitions/Start-Ups | 1 | — | 14 | |||||
Closed/Consolidated | (3 | ) | — | — | ||||
At December 31, 2016 | 330 | 81 | 14 | |||||
Acquisitions/Start-Ups | 3 | 2 | 7 | |||||
Closed/Consolidated | (10 | ) | — | (6 | ) | |||
At December 31, 2017 | 323 | 83 | 15 | |||||
Acquisitions/Start-Ups | 1 | 1 | 1 | |||||
Closed/Consolidated | (1 | ) | — | (4 | ) | |||
At December 31, 2018 | 323 | 84 | 12 |
• | Continued to deliver on our goal of clinical distinction with 94% of our care centers at 4+ Stars in the January 2019 Home Health Compare ("HHC") release. |
• | Lowered company voluntary turnover rate to 20%. |
• | Expanded home health gross margin as a percentage of revenue by 40 basis points. |
• | Signed a definitive agreement to acquire Compassionate Care Hospice, the 8th largest hospice provider in the United States (subsequently closed on February 1, 2019). |
• | Invested in Medalogix, a predictive data and analytics company, helping to further optimize our current business and enabling us to work more closely with Medicare Advantage payors. |
• | Acquired the assets of Bring Care Home and East Tennessee Personal Care Services, further solidifying our position as the largest personal care provider in Massachusetts and establishing our presence in Tennessee. |
• | Increased total revenue 10% and operating income 98%. |
• | Exceeded 7,800 in hospice average daily census. |
• | Continue our commitment to clinical distinction with a goal of all care centers achieving a 4.0 Quality Star Rating. |
• | Focus on recruitment and retention of world class employees while fostering a culture of engagement to become the employer of choice in the industry. |
• | Continue to reduce voluntary turnover, specifically within our registered nurse ("RN") cohort. |
• | Implement pay practice changes and staffing model efficiencies to further drive operational excellence. |
• | Invest in the business to prepare ourselves for the Patient-Driven Groupings Model ("PDGM"). |
• | Continue to build on our industry-leading hospice platform by exploring various growth opportunities including small and large acquisitions and denovos. |
• | Partner with innovative companies to drive new payment arrangements and new product offerings for Medicare Advantage payors. |
• | Continue to focus on organic growth (denovos) and inorganic expansion in all three segments. |
Home Health | Hospice | ||||||||||||||||
2019 (1) | 2018 (2) | 2017 | 2019 (3) | 2018 | 2017 | ||||||||||||
Market Basket Update | 3.0 | % | 1.0 | % | 2.8 | % | 2.9 | % | 1.0 | % | 2.7 | % | |||||
Rebasing | — | — | (2.3 | ) | — | — | — | ||||||||||
50/50 Blend of Wage Index | — | — | — | — | — | — | |||||||||||
Nominal Case Mix Adjustment | — | (0.9 | ) | (0.9 | ) | — | — | — | |||||||||
PPACA Adjustment | — | — | — | (0.3 | ) | — | (0.3 | ) | |||||||||
Budget Neutrality Adjustment Factor | — | — | — | — | — | — | |||||||||||
Productivity Adjustment | (0.8 | ) | — | (0.3 | ) | (0.8 | ) | — | (0.3 | ) | |||||||
Estimated Industry Impact | 2.2 | % | 0.1 | % | (0.7 | )% | 1.8 | % | 1.0 | % | 2.1 | % | |||||
Estimated Company-Specific Impact (4) | 1.2 | % | (0.7 | )% | (2.0 | )% | 1.6 | % | 1.0 | % | 2.0 | % |
(1) | Effective for episodes scheduled to be completed on or after January 1, 2019. |
(2) | Includes the targeted extension of the home health rural add-on payment from the Bipartisan Budget Act of 2018. |
(3) | Effective for services provided from October 1, 2018 to September 30, 2019. |
(4) | Our company-specific impact of the final rules differs depending on differences in the wage index and the impact of coding and outlier changes. |
Performance Year | Year Reward/ Penalty Imposed | Maximum Reward/ Penalty |
2016 | 2018 | 3% |
2017 | 2019 | 5% |
2018 | 2020 | 6% |
2019 | 2021 | 7% |
2020 | 2022 | 8% |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net service revenue | $ | 1,662.6 | $ | 1,511.3 | $ | 1,419.3 | |||||
Gross margin, excluding depreciation and amortization | 669.7 | 607.9 | 584.8 | ||||||||
% of revenue | 40.3 | % | 40.2 | % | 41.2 | % | |||||
Other operating expenses | 514.6 | 499.4 | 523.1 | ||||||||
% of revenue | 30.9 | % | 33.0 | % | 36.9 | % | |||||
Securities Class Action Lawsuit settlement, net | — | 28.7 | — | ||||||||
Asset impairment charge | — | 1.3 | 4.4 | ||||||||
Operating income | 155.1 | 78.5 | 57.3 | ||||||||
Total other income, net | 3.8 | 2.3 | 4.2 | ||||||||
Income tax expense | (38.8 | ) | (50.1 | ) | (23.9 | ) | |||||
Effective income tax rate | 24.4 | % | 62.0 | % | 38.9 | % | |||||
Net income | 120.1 | 30.7 | 37.6 | ||||||||
Net income attributable to noncontrolling interests | (0.8 | ) | (0.4 | ) | (0.4 | ) | |||||
Net income attributable to Amedisys, Inc. | $ | 119.3 | $ | 30.3 | $ | 37.3 |
For the Years Ended December 31, | |||||||
2018 | 2017 | ||||||
Interest income | $ | 0.3 | $ | 0.1 | |||
Interest expense | (7.4 | ) | (5.0 | ) | |||
Equity in earnings from equity method investments | 7.7 | 3.4 | |||||
Miscellaneous, net | 3.2 | 3.8 | |||||
$ | 3.8 | $ | 2.3 |
For the Years Ended December 31, | |||||||
2017 | 2016 | ||||||
Interest income | $ | 0.1 | $ | 0.1 | |||
Interest expense | (5.0 | ) | (5.2 | ) | |||
Equity in earnings from equity method investments | 3.4 | 5.6 | |||||
Miscellaneous, net | 3.8 | 3.7 | |||||
$ | 2.3 | $ | 4.2 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Financial Information (in millions): | |||||||||||
Medicare | $ | 830.8 | $ | 793.3 | $ | 822.4 | |||||
Non-Medicare | 343.7 | 290.6 | 249.3 | ||||||||
Net service revenue | 1,174.5 | 1,083.9 | 1,071.7 | ||||||||
Cost of service | 722.1 | 670.9 | 643.7 | ||||||||
Gross margin | 452.4 | 413.0 | 428.0 | ||||||||
Asset impairment charge | — | 1.3 | — | ||||||||
Other operating expenses | 279.8 | 281.9 | 289.4 | ||||||||
Operating income | $ | 172.6 | $ | 129.8 | $ | 138.6 | |||||
Same Store Growth (1): | |||||||||||
Medicare revenue | 6 | % | (4 | %) | 2 | % | |||||
Non-Medicare revenue | 18 | % | 17 | % | 3 | % | |||||
Total admissions | 5 | % | 2 | % | 2 | % | |||||
Total volume (2) | 7 | % | 4 | % | 2 | % | |||||
Total Episodic admissions (3) | 4 | % | 1 | % | 4 | % | |||||
Total Episodic volume (4) | 5 | % | 3 | % | 3 | % | |||||
Key Statistical Data - Total (5): | |||||||||||
Medicare: | |||||||||||
Admissions | 190,748 | 190,132 | 194,662 | ||||||||
Recertifications | 112,773 | 106,774 | 103,193 | ||||||||
Total volume | 303,521 | 296,906 | 297,855 | ||||||||
Completed episodes | 296,223 | 290,227 | 289,862 | ||||||||
Visits | 5,261,315 | 5,067,436 | 5,124,002 | ||||||||
Average revenue per completed episode (6) | $ | 2,854 | $ | 2,823 | $ | 2,839 | |||||
Visits per completed episode (7) | 17.6 | 17.3 | 17.5 | ||||||||
Non-Medicare: | |||||||||||
Admissions | 118,577 | 107,665 | 98,448 | ||||||||
Recertifications | 55,736 | 46,364 | 38,618 | ||||||||
Total volume | 174,313 | 154,029 | 137,066 | ||||||||
Visits | 2,772,339 | 2,347,363 | 2,050,975 | ||||||||
Total (5): | |||||||||||
Visiting Clinician Cost per Visit | $ | 81.88 | $ | 82.04 | $ | 81.18 | |||||
Clinical Manager Cost per Visit | $ | 8.01 | $ | 8.44 | $ | 8.53 | |||||
Total Cost per Visit | $ | 89.89 | $ | 90.48 | $ | 89.71 | |||||
Visits | 8,033,654 | 7,414,799 | 7,174,977 |
(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. |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Financial Information (in millions): | |||||||||||
Medicare | $ | 390.2 | $ | 350.7 | $ | 297.7 | |||||
Non-Medicare | 20.7 | 17.1 | 14.2 | ||||||||
Net service revenue | 410.9 | 367.8 | 311.9 | ||||||||
Cost of service | 212.0 | 187.5 | 164.5 | ||||||||
Gross margin | 198.9 | 180.3 | 147.4 | ||||||||
Other operating expenses | 85.7 | 77.5 | 71.5 | ||||||||
Operating income | $ | 113.2 | $ | 102.8 | $ | 75.9 | |||||
Same Store Growth (1): | |||||||||||
Medicare revenue | 11 | % | 17 | % | 15 | % | |||||
Non-Medicare revenue | 21 | % | 20 | % | (16 | %) | |||||
Hospice admissions | 8 | % | 11 | % | 17 | % | |||||
Average daily census | 11 | % | 15 | % | 16 | % | |||||
Key Statistical Data - Total (2): | |||||||||||
Hospice admissions | 27,596 | 25,381 | 22,526 | ||||||||
Average daily census | 7,588 | 6,820 | 5,912 | ||||||||
Revenue per day, net | $ | 148.36 | $ | 147.75 | $ | 144.11 | |||||
Cost of service per day | $ | 76.53 | $ | 75.31 | $ | 75.97 | |||||
Average discharge length of stay | 100 | 93 | 96 |
(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. |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Financial Information (in millions): | |||||||||||
Medicare | $ | — | $ | — | $ | — | |||||
Non-Medicare | 77.2 | 59.6 | 35.7 | ||||||||
Net service revenue | 77.2 | 59.6 | 35.7 | ||||||||
Cost of service | 58.8 | 45.0 | 26.3 | ||||||||
Gross margin | 18.4 | 14.6 | 9.4 | ||||||||
Other operating expenses | 13.1 | 9.7 | 5.8 | ||||||||
Operating income | $ | 5.3 | $ | 4.9 | $ | 3.6 | |||||
Key Statistical Data: | |||||||||||
Billable hours | 3,248,304 | 2,604,794 | 1,539,093 | ||||||||
Clients served | 17,981 | 16,774 | 10,219 | ||||||||
Shifts | 1,468,541 | 1,195,511 | 696,956 | ||||||||
Revenue per hour | 23.75 | 22.86 | 23.22 | ||||||||
Revenue per shift | 52.54 | 49.80 | 51.29 | ||||||||
Hours per shift | 2.2 | 2.2 | 2.2 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Financial Information (in millions): | |||||||||||
Other operating expenses | $ | 127.6 | $ | 117.8 | $ | 144.0 | |||||
Depreciation and amortization | 8.4 | 12.5 | 12.4 | ||||||||
Total operating expenses before asset impairment charge and Securities Class Action Lawsuit settlement, net | $ | 136.0 | $ | 130.3 | $ | 156.4 | |||||
Asset impairment charge | — | — | 4.4 | ||||||||
Securities Class Action Lawsuit settlement, net | — | 28.7 | — | ||||||||
Total operating expenses | $ | 136.0 | $ | 159.0 | $ | 160.8 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cash provided by operating activities | $ | 223.5 | $ | 105.7 | $ | 62.2 | |||||
Cash used in investing activities | (22.2 | ) | (44.0 | ) | (52.0 | ) | |||||
Cash used in financing activities | (267.4 | ) | (5.5 | ) | (7.5 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (66.1 | ) | 56.2 | 2.7 | |||||||
Cash and cash equivalents at beginning of period | 86.4 | 30.2 | 27.5 | ||||||||
Cash and cash equivalents at end of period | $ | 20.2 | $ | 86.4 | $ | 30.2 |
0-90 | 91-180 | 181-365 | Over 365 | Total | |||||||||||||||
At December 31, 2018: | |||||||||||||||||||
Medicare patient accounts receivable | $ | 95.5 | $ | 8.1 | $ | 1.0 | $ | 1.8 | $ | 106.4 | |||||||||
Other patient accounts receivable: | |||||||||||||||||||
Medicaid | 13.1 | 2.7 | 1.1 | — | 16.9 | ||||||||||||||
Private | 51.3 | 6.7 | 4.4 | 3.3 | 65.7 | ||||||||||||||
Total | $ | 64.4 | $ | 9.4 | $ | 5.5 | $ | 3.3 | $ | 82.6 | |||||||||
Total patient accounts receivable | $ | 189.0 | |||||||||||||||||
Days revenue outstanding (1) | 38.0 |
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, net is derived by dividing our ending net patient accounts receivable at December 31, 2018 and 2017 by our average daily net patient revenue for the three-month periods ended December 31, 2018 and 2017, respectively. |
Payments Due by Period | |||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
Long-term obligations | $ | 8.6 | $ | 0.5 | $ | 0.6 | $ | 7.5 | $ | — | |||||||||
Interest on long-term obligations (1) | 0.1 | 0.1 | — | — | — | ||||||||||||||
Capital lease obligations | 2.3 | 1.1 | 1.2 | — | — | ||||||||||||||
Operating leases | 78.7 | 23.3 | 31.9 | 13.7 | 9.8 | ||||||||||||||
Capital commitments | 0.5 | 0.5 | — | — | — | ||||||||||||||
Purchase obligations | 23.4 | 10.2 | 10.3 | 2.9 | — | ||||||||||||||
Uncertain tax positions | 2.7 | — | 2.7 | — | — | ||||||||||||||
$ | 116.3 | $ | 35.7 | $ | 46.7 | $ | 24.1 | $ | 9.8 |
(1) | Interest on debt with variable rates was calculated using the current rate of that particular debt instrument at December 31, 2018. |
As of December 31, | |||||||
2018 | 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 20,229 | $ | 86,363 | |||
Patient accounts receivable | 188,972 | 201,196 | |||||
Prepaid expenses | 7,568 | 7,329 | |||||
Other current assets | 7,349 | 16,268 | |||||
Total current assets | 224,118 | 311,156 | |||||
Property and equipment, net of accumulated depreciation of $95,472 and $146,814 | 29,449 | 31,122 | |||||
Goodwill | 329,480 | 319,949 | |||||
Intangible assets, net of accumulated amortization of $33,050 and $30,610 | 44,132 | 46,061 | |||||
Deferred income taxes | 35,794 | 56,064 | |||||
Other assets | 54,145 | 49,130 | |||||
Total assets | $ | 717,118 | $ | 813,482 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 28,531 | $ | 25,384 | |||
Payroll and employee benefits | 92,858 | 89,936 | |||||
Accrued expenses | 99,475 | 89,104 | |||||
Current portion of long-term obligations | 1,612 | 10,638 | |||||
Total current liabilities | 222,476 | 215,062 | |||||
Long-term obligations, less current portion | 5,775 | 78,203 | |||||
Other long-term obligations | 6,234 | 3,791 | |||||
Total liabilities | 234,485 | 297,056 | |||||
Commitments and Contingencies – Note 9 | |||||||
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; 36,252,280 and 35,747,134 shares issued; and 31,973,505 and 33,964,767 shares outstanding | 36 | 35 | |||||
Additional paid-in capital | 603,666 | 568,780 | |||||
Treasury stock at cost 4,278,775 and 1,782,367 shares of common stock | (241,685 | ) | (53,713 | ) | |||
Accumulated other comprehensive income | 15 | 15 | |||||
Retained earnings | 119,550 | 204 | |||||
Total Amedisys, Inc. stockholders’ equity | 481,582 | 515,321 | |||||
Noncontrolling interests | 1,051 | 1,105 | |||||
Total equity | 482,633 | 516,426 | |||||
Total liabilities and equity | $ | 717,118 | $ | 813,482 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net service revenue | $ | 1,662,578 | $ | 1,511,272 | $ | 1,419,261 | |||||
Cost of service, excluding depreciation and amortization | 992,863 | 903,377 | 834,381 | ||||||||
General and administrative expenses: | |||||||||||
Salaries and benefits | 316,522 | 305,938 | 306,981 | ||||||||
Non-cash compensation | 17,887 | 16,295 | 16,401 | ||||||||
Other | 166,897 | 159,980 | 180,048 | ||||||||
Depreciation and amortization | 13,261 | 17,123 | 19,678 | ||||||||
Asset impairment charge | — | 1,323 | 4,432 | ||||||||
Securities Class Action Lawsuit settlement, net | — | 28,712 | — | ||||||||
Operating expenses | 1,507,430 | 1,432,748 | 1,361,921 | ||||||||
Operating income | 155,148 | 78,524 | 57,340 | ||||||||
Other income (expense): | |||||||||||
Interest income | 278 | 158 | 75 | ||||||||
Interest expense | (7,370 | ) | (5,031 | ) | (5,164 | ) | |||||
Equity in earnings from equity method investments | 7,692 | 3,381 | 5,588 | ||||||||
Miscellaneous, net | 3,240 | 3,769 | 3,727 | ||||||||
Total other income, net | 3,840 | 2,277 | 4,226 | ||||||||
Income before income taxes | 158,988 | 80,801 | 61,566 | ||||||||
Income tax expense | (38,859 | ) | (50,118 | ) | (23,935 | ) | |||||
Net income | 120,129 | 30,683 | 37,631 | ||||||||
Net income attributable to noncontrolling interests | (783 | ) | (382 | ) | (370 | ) | |||||
Net income attributable to Amedisys, Inc. | $ | 119,346 | $ | 30,301 | $ | 37,261 | |||||
Basic earnings per common share: | |||||||||||
Net income attributable to Amedisys, Inc. common stockholders | $ | 3.64 | $ | 0.90 | $ | 1.12 | |||||
Weighted average shares outstanding | 32,791 | 33,704 | 33,198 | ||||||||
Diluted earnings per common share: | |||||||||||
Net income attributable to Amedisys, Inc. common stockholders | $ | 3.55 | $ | 0.88 | $ | 1.10 | |||||
Weighted average shares outstanding | 33,609 | 34,304 | 33,741 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net income | $ | 120,129 | $ | 30,683 | $ | 37,631 | |||||
Other comprehensive income | — | — | — | ||||||||
Comprehensive income | 120,129 | 30,683 | 37,631 | ||||||||
Comprehensive income attributable to non-controlling interests | (783 | ) | (382 | ) | (370 | ) | |||||
Comprehensive income attributable to Amedisys, Inc. | $ | 119,346 | $ | 30,301 | $ | 37,261 |
Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss (Income) | Retained Earnings (Deficit) | Noncontrolling Interests | ||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||
Balance, December 31, 2015 | $ | 410,436 | 34,786,966 | $ | 35 | $ | 504,290 | $ | (26,966 | ) | $ | 15 | $ | (67,806 | ) | $ | 868 | |||||||||||||
Issuance of stock – employee stock purchase plan | 2,483 | 63,688 | — | 2,483 | — | — | — | — | ||||||||||||||||||||||
Issuance of stock – 401(k) plan | 6,682 | 145,660 | — | 6,682 | — | — | — | — | ||||||||||||||||||||||
Issuance/(cancellation) of non-vested stock | — | 257,263 | — | — | — | — | — | — | ||||||||||||||||||||||
Non-cash compensation | 16,401 | — | — | 16,401 | — | — | — | — | ||||||||||||||||||||||
Tax benefit from stock options exercised and restricted stock vesting | 7,241 | — | — | 7,241 | — | — | — | — | ||||||||||||||||||||||
Surrendered shares | (7,493 | ) | — | — | — | (7,493 | ) | — | — | — | ||||||||||||||||||||
Shares repurchased | (12,315 | ) | — | — | — | (12,315 | ) | — | — | — | ||||||||||||||||||||
Noncontrolling interest distribution | (329 | ) | — | — | — | — | — | — | (329 | ) | ||||||||||||||||||||
Assets contributed to equity investment | 405 | — | — | 375 | — | — | — | 30 | ||||||||||||||||||||||
Net income | 37,631 | — | — | — | — | — | 37,261 | 370 | ||||||||||||||||||||||
Balance, December 31, 2016 | 461,142 | 35,253,577 | 35 | 537,472 | (46,774 | ) | 15 | (30,545 | ) | 939 | ||||||||||||||||||||
Issuance of stock – employee stock purchase plan | 2,382 | 53,848 | — | 2,382 | — | — | — | — | ||||||||||||||||||||||
Issuance of stock – 401(k) plan | 8,223 | 156,487 | — | 8,223 | — | — | — | — | ||||||||||||||||||||||
Issuance/(cancellation) of non-vested stock | — | 139,016 | — | — | — | — | — | — | ||||||||||||||||||||||
Exercise of stock options | 4,554 | 144,206 | — | 4,554 | — | — | — | — | ||||||||||||||||||||||
Non-cash compensation | 16,295 | — | — | 16,295 | — | — | — | — | ||||||||||||||||||||||
Tax benefit from stock options exercised and restricted stock vesting | 448 | — | — | — | — | — | 448 | — | ||||||||||||||||||||||
Surrendered shares | (6,939 | ) | — | — | — | (6,939 | ) | — | — | — | ||||||||||||||||||||
Noncontrolling interest distribution | (216 | ) | — | — | — | — | — | — | (216 | ) | ||||||||||||||||||||
Assets contributed to equity investment | (146 | ) | — | — | (146 | ) | — | — | — | — | ||||||||||||||||||||
Net income | 30,683 | — | — | — | — | — | 30,301 | 382 | ||||||||||||||||||||||
Balance, December 31, 2017 | 516,426 | 35,747,134 | 35 | 568,780 | (53,713 | ) | 15 | 204 | 1,105 | |||||||||||||||||||||
Issuance of stock – employee stock purchase plan | 2,429 | 38,961 | — | 2,429 | — | — | — | — | ||||||||||||||||||||||
Issuance of stock – 401(k) plan | 9,232 | 129,451 | — | 9,232 | — | — | — | — | ||||||||||||||||||||||
Issuance/(cancellation) of non-vested stock | — | 174,044 | 1 | (1 | ) | — | — | — | — | |||||||||||||||||||||
Exercise of stock options | 5,953 | 162,690 | — | 5,953 | — | — | — | — | ||||||||||||||||||||||
Non-cash compensation | 17,887 | — | — | 17,887 | — | — | — | — | ||||||||||||||||||||||
Surrendered shares | (6,570 | ) | — | — | — | (6,570 | ) | — | — | — | ||||||||||||||||||||
Shares repurchased | (181,402 | ) | — | — | — | (181,402 | ) | — | — | — | ||||||||||||||||||||
Noncontrolling interest distribution | (1,090 | ) | — | — | — | — | — | — | (1,090 | ) | ||||||||||||||||||||
Repurchase of noncontrolling interest | (361 | ) | — | — | (614 | ) | — | — | — | 253 | ||||||||||||||||||||
Net income | 120,129 | — | — | — | — | — | 119,346 | 783 | ||||||||||||||||||||||
Balance, December 31, 2018 | $ | 482,633 | 36,252,280 | $ | 36 | $ | 603,666 | $ | (241,685 | ) | $ | 15 | $ | 119,550 | $ | 1,051 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income | $ | 120,129 | $ | 30,683 | $ | 37,631 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 13,261 | 17,123 | 19,678 | ||||||||
Non-cash compensation | 17,887 | 16,295 | 16,401 | ||||||||
401(k) employer match | 8,976 | 8,754 | 6,875 | ||||||||
Write-off of investment | — | — | 196 | ||||||||
Loss on disposal of property and equipment | 714 | — | 582 | ||||||||
Deferred income taxes | 20,271 | 52,178 | 24,547 | ||||||||
Equity in earnings from equity method investments | (7,692 | ) | (3,381 | ) | (5,588 | ) | |||||
Amortization of deferred debt issuance costs/debt discount | 797 | 735 | 740 | ||||||||
Return on equity investment | 6,158 | 5,321 | 4,323 | ||||||||
Asset impairment charge | — | 1,323 | 4,432 | ||||||||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||||||
Patient accounts receivable | 12,224 | (34,672 | ) | (36,000 | ) | ||||||
Other current assets | 8,679 | (4,940 | ) | 4,231 | |||||||
Other assets | 2,947 | (12,749 | ) | (11,415 | ) | ||||||
Accounts payable | 3,165 | (2,843 | ) | 3,970 | |||||||
Accrued expenses | 13,524 | 31,843 | (7,618 | ) | |||||||
Other long-term obligations | 2,443 | 61 | (726 | ) | |||||||
Net cash provided by operating activities | 223,483 | 105,731 | 62,259 | ||||||||
Cash Flows from Investing Activities: | |||||||||||
Proceeds from sale of deferred compensation plan assets | 715 | 622 | 230 | ||||||||
Proceeds from the sale of property and equipment | 54 | 249 | — | ||||||||
Purchases of property and equipment | (6,558 | ) | (10,707 | ) | (15,717 | ) | |||||
Investments in equity method investees | (7,144 | ) | (476 | ) | (1,040 | ) | |||||
Acquisitions of businesses, net of cash acquired | (9,260 | ) | (33,715 | ) | (35,522 | ) | |||||
Net cash used in investing activities | (22,193 | ) | (44,027 | ) | (52,049 | ) | |||||
Cash Flows from Financing Activities: | |||||||||||
Proceeds from issuance of stock upon exercise of stock options | 5,953 | 4,554 | — | ||||||||
Proceeds from issuance of stock to employee stock purchase plan | 2,429 | 2,382 | 2,483 | ||||||||
Shares withheld upon stock vesting | (6,570 | ) | (6,939 | ) | — | ||||||
Tax benefit from stock options exercised and restricted stock vesting | — | — | 7,241 | ||||||||
Non-controlling interest distribution | (1,090 | ) | (216 | ) | (329 | ) | |||||
Proceeds from borrowings under revolving line of credit | 138,000 | — | 134,500 | ||||||||
Repayments of borrowings under revolving line of credit | (130,500 | ) | — | (134,500 | ) | ||||||
Principal payments of long-term obligations | (91,450 | ) | (5,319 | ) | (5,000 | ) | |||||
Debt issuance costs | (2,433 | ) | — | — | |||||||
Purchase of company stock | (181,402 | ) | — | (12,315 | ) | ||||||
Assets contributed to equity investment | — | — | 405 | ||||||||
Repurchase of noncontrolling interest | (361 | ) | — | — | |||||||
Net cash used in financing activities | (267,424 | ) | (5,538 | ) | (7,515 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (66,134 | ) | 56,166 | 2,695 | |||||||
Cash and cash equivalents at beginning of period | 86,363 | 30,197 | 27,502 | ||||||||
Cash and cash equivalents at end of period | $ | 20,229 | $ | 86,363 | $ | 30,197 | |||||
Supplemental Disclosures of Cash Flow Information: | |||||||||||
Cash paid for interest | $ | 3,522 | $ | 2,697 | $ | 2,897 | |||||
Cash paid for income taxes, net of refunds received | $ | 14,278 | $ | 315 | $ | 755 | |||||
Supplemental Disclosures of Non-Cash Financing Activities: | |||||||||||
Note payable issued for software licenses | $ | 418 | $ | — | $ | — | |||||
Capital leases | $ | 2,936 | $ | — | $ | — |
As Previously Reported | Adjustment for the Adoption of ASC 606 | As Adjusted | |||||||
As of December 31, 2017 | |||||||||
Consolidated Balance Sheets | |||||||||
Patient accounts receivable | $ | 201,196 | $ | — | $ | 201,196 | |||
Allowance for doubtful accounts | $ | 20,866 | $ | (20,866 | ) | $ | — | ||
For the year ended December 31, 2017 | |||||||||
Consolidated Statements of Operations | |||||||||
Net service revenue | $ | 1,533,680 | $ | (22,408 | ) | $ | 1,511,272 | ||
Cost of service, excluding depreciation and amortization | $ | 900,726 | $ | 2,651 | $ | 903,377 | |||
Provision for doubtful accounts | $ | 25,059 | $ | (25,059 | ) | $ | — | ||
Net income attributable to Amedisys, Inc. | $ | 30,301 | $ | — | $ | 30,301 | |||
Consolidated Statements of Cash Flows | |||||||||
Provision for doubtful accounts | $ | 25,059 | $ | (25,059 | ) | $ | — | ||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||||
Patient accounts receivable | $ | (59,731 | ) | $ | 25,059 | $ | (34,672 | ) | |
For the year ended December 31, 2016 | |||||||||
Consolidated Statements of Operations | |||||||||
Net service revenue | $ | 1,437,454 | $ | (18,193 | ) | $ | 1,419,261 | ||
Cost of service, excluding depreciation and amortization | $ | 833,055 | $ | 1,326 | $ | 834,381 | |||
Provision for doubtful accounts | $ | 19,519 | $ | (19,519 | ) | $ | — | ||
Net income attributable to Amedisys, Inc. | $ | 37,261 | $ | — | $ | 37,261 | |||
Consolidated Statements of Cash Flows | |||||||||
Provision for doubtful accounts | $ | 19,519 | $ | (19,519 | ) | $ | — | ||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||||
Patient accounts receivable | $ | (55,519 | ) | $ | 19,519 | $ | (36,000 | ) |
As of December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Home Health Medicare | 50 | % | 53 | % | 58 | % | ||
Home Health Non-Medicare - Episodic-based | 9 | % | 8 | % | 6 | % | ||
Home Health Non-Medicare - Non-episodic based | 12 | % | 11 | % | 11 | % | ||
Hospice Medicare | 23 | % | 23 | % | 21 | % | ||
Hospice Non-Medicare | 1 | % | 1 | % | 1 | % | ||
Personal Care | 5 | % | 4 | % | 3 | % | ||
100 | % | 100 | % | 100 | % |
• | A significant change in the extent or manner in which the long-lived asset group is being used. |
• | A significant change in the business climate that could affect the value of the long-lived asset group. |
• | A significant change in the market value of the assets included in the asset group. |
Years | |
Building | 39 |
Leasehold improvements | Lesser of lease term or expected useful life |
Equipment and furniture | 3 to 7 |
Vehicles | 5 |
Computer software | 3 to 5 |
Capital leases | 3 |
As of December 31, | |||||||
2018 | 2017 | ||||||
Building and leasehold improvements | 8.7 | 7.8 | |||||
Equipment and furniture | 53.4 | 72.9 | |||||
Capital leases | 2.9 | — | |||||
Computer software | 59.9 | 97.2 | |||||
124.9 | 177.9 | ||||||
Less: accumulated depreciation | (95.5 | ) | (146.8 | ) | |||
$ | 29.4 | $ | 31.1 |
• | 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. |
For the Years Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Weighted average number of shares outstanding – basic | 32,791 | 33,704 | 33,198 | |||||
Effect of dilutive securities: | ||||||||
Stock options | 502 | 281 | 162 | |||||
Non-vested stock and stock units | 316 | 319 | 381 | |||||
Weighted average number of shares outstanding – diluted | 33,609 | 34,304 | 33,741 | |||||
Anti-dilutive securities | 50 | 271 | 221 |
Goodwill | |||||||||||||||
Home Health | Hospice | Personal Care | Total | ||||||||||||
Balances at December 31, 2015 (1) | $ | 67.1 | $ | 194.6 | $ | — | $ | 261.7 | |||||||
Additions | 4.4 | — | 22.7 | 27.1 | |||||||||||
Adjustments related to acquisitions (2) | 0.1 | — | — | 0.1 | |||||||||||
Balances at December 31, 2016 | 71.6 | 194.6 | 22.7 | 288.9 | |||||||||||
Additions | 13.4 | 4.7 | 12.9 | 31.0 | |||||||||||
Balances at December 31, 2017 | 85.0 | 199.3 | 35.6 | 319.9 | |||||||||||
Additions | 2.1 | — | 7.5 | 9.6 | |||||||||||
Balances at December 31, 2018 (1) | $ | 87.1 | $ | 199.3 | $ | 43.1 | $ | 329.5 |
(1) | Net of prior years' accumulated impairment losses of $733.7 million, which is inclusive of write-offs related to the sale and closure of care centers. |
(2) | During 2016, we adjusted goodwill by $0.1 million as a result of our completion of the purchase price accounting for our 2015 acquisition of Infinity HomeCare. |
Other Intangible Assets, Net | |||||||||||||||
Certificates of Need and Licenses | Acquired Names of Business | Non-Compete Agreements (3) | Total | ||||||||||||
Balances at December 31, 2015 | $ | 23.9 | $ | 14.2 | $ | 5.9 | $ | 44.0 | |||||||
Additions | 0.2 | 3.5 | 1.5 | 5.2 | |||||||||||
Amortization | — | — | (2.5 | ) | (2.5 | ) | |||||||||
Balances at December 31, 2016 | 24.1 | 17.7 | 4.9 | 46.7 | |||||||||||
Additions | 0.1 | 2.7 | 0.6 | 3.4 | |||||||||||
Write-off (1) | (0.5 | ) | (0.8 | ) | — | (1.3 | ) | ||||||||
Amortization | — | — | (2.7 | ) | (2.7 | ) | |||||||||
Balances at December 31, 2017 | 23.7 | 19.6 | 2.8 | 46.1 | |||||||||||
Additions | 0.2 | — | 0.3 | 0.5 | |||||||||||
Amortization | — | — | (2.5 | ) | (2.5 | ) | |||||||||
Balances at December 31, 2018 (2) | $ | 23.9 | $ | 19.6 | $ | 0.6 | $ | 44.1 |
(1) | Write-off of intangible assets related to the closure and consolidation of care centers as discussed in Note 12 - Exit and Restructuring Activities. |
(2) | Net of prior years' accumulated amortization of $0.5 million for acquired names of business and $21.7 million for non-compete agreements. |
(3) | The weighted average amortization period of our non-compete agreements is 1.7 years. |
2019 | $ | 0.4 | |
2020 | 0.2 | ||
2021 | — | ||
2022 | — | ||
2023 | — | ||
$ | 0.6 |
As of December 31, | |||||||
2018 | 2017 | ||||||
Other current assets: | |||||||
Payroll tax escrow | $ | 1.5 | $ | 7.2 | |||
Income tax receivable | 1.6 | 3.4 | |||||
Due from joint ventures | 1.9 | 2.0 | |||||
Other | 2.3 | 3.7 | |||||
$ | 7.3 | $ | 16.3 | ||||
Other assets: | |||||||
Workers’ compensation deposits | $ | 0.4 | $ | 0.4 | |||
Health insurance deposits | 0.5 | 0.5 | |||||
Other miscellaneous deposits | 0.8 | 0.9 | |||||
Indemnity receivable | 14.2 | 17.0 | |||||
Equity method investments | 35.1 | 26.4 | |||||
Other | 3.1 | 3.9 | |||||
$ | 54.1 | $ | 49.1 | ||||
Accrued expenses: | |||||||
Health insurance | $ | 12.4 | $ | 14.1 | |||
Workers’ compensation | 30.9 | 29.3 | |||||
Florida ZPIC audit, gross liability | 17.4 | 17.4 | |||||
Legal settlements and other audits | 13.0 | 6.4 | |||||
Lease liability | 0.3 | 0.9 | |||||
Charity care | 1.7 | 1.5 | |||||
Estimated Medicare cap liability | 1.7 | 0.9 | |||||
Hospice cost of revenue | 9.9 | 9.1 | |||||
Patient liability | 6.3 | 5.3 | |||||
Other | 5.9 | 4.2 | |||||
$ | 99.5 | $ | 89.1 | ||||
Other long-term obligations: | |||||||
Reserve for uncertain tax positions | $ | 2.9 | $ | — | |||
Deferred compensation plan liability | 1.3 | 1.9 | |||||
Other | 2.0 | 1.9 | |||||
$ | 6.2 | $ | 3.8 |
As of December 31, | |||||||
2018 | 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 (3.57% at December 31, 2017); due August 28, 2020 | $ | — | $ | 90.0 | |||
$550.0 million Revolving Credit Facility; interest only payments; interest rate at Base Rate plus Applicable Rate or Eurodollar Rate plus the Applicable Rate (3.85% at December 31, 2018); due June 29, 2023 | 7.5 | — | |||||
Promissory notes | 1.1 | 0.7 | |||||
Capital leases | 2.3 | — | |||||
Principal amount of long-term obligations | 10.9 | 90.7 | |||||
Deferred debt issuance costs | (3.5 | ) | (1.9 | ) | |||
7.4 | 88.8 | ||||||
Current portion of long-term obligations | (1.6 | ) | (10.6 | ) | |||
Total | $ | 5.8 | $ | 78.2 |
Long-term obligations | |||
2019 | $ | 1.6 | |
2020 | 1.4 | ||
2021 | 0.4 | ||
2022 | — | ||
2023 | 7.5 | ||
$ | 10.9 |
Consolidated Leverage Ratio | Base Rate Loans | Eurodollar Rate Loans | Commitment Fee | Letter of Credit Fee | ||||||||
> 3.00 to 1.0 | 1.25 | % | 2.25 | % | 0.35 | % | 2.00 | % | ||||
≤ 3.00 to 1.0 but > 2.00 to 1.0 | 1.00 | % | 2.00 | % | 0.30 | % | 1.75 | % | ||||
≤ 2.00 to 1.0 but > 1.00 to 1.0 | 0.75 | % | 1.75 | % | 0.25 | % | 1.50 | % | ||||
≤ 1.00 to 1.0 | 0.50 | % | 1.50 | % | 0.20 | % | 1.25 | % |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Current income tax expense/(benefit): | |||||||||||
Federal | $ | 16.4 | $ | (2.0 | ) | $ | (0.5 | ) | |||
State and local | 2.1 | (0.1 | ) | (0.1 | ) | ||||||
18.5 | (2.1 | ) | (0.6 | ) | |||||||
Deferred income tax expense/(benefit): | |||||||||||
Federal | 14.5 | 51.2 | 22.1 | ||||||||
State and local | 5.8 | 1.0 | 2.4 | ||||||||
20.3 | 52.2 | 24.5 | |||||||||
Income tax expense | $ | 38.8 | $ | 50.1 | $ | 23.9 |
For the Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Income from continuing operations | $ | 38.8 | $ | 50.1 | $ | 23.9 | |||||
Interest expense | 0.1 | — | (0.1 | ) | |||||||
Stockholders’ equity | — | (0.3 | ) | (7.2 | ) | ||||||
$ | 38.9 | $ | 49.8 | $ | 16.6 |
For the Years Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Income tax expense at U.S. federal statutory rate (1) | 21.0 | % | 35.0 | % | 35.0 | % | ||
State and local income taxes, net of federal income tax benefit | 4.8 | 3.8 | 4.8 | |||||
Excess tax benefits from share-based compensation (2) | (1.6 | ) | (3.5 | ) | — | |||
Tax rate change (3) | — | 26.5 | — | |||||
Other items, net (4) | 0.2 | 0.2 | (0.9 | ) | ||||
Income tax expense/(benefit) | 24.4 | % | 62.0 | % | 38.9 | % |
(1) | On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act was enacted, which eliminated the progressive U.S. federal corporate tax rate structure with a maximum corporate tax rate of 35% and replaced it with a flat tax rate of 21%, effective January 1, 2018. |
(2) | In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplified the accounting for share-based payment award transactions, including income tax consequences. The new guidelines required excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. As a result, the Company recognized a $2.5 million and $2.9 million federal income tax benefit in the consolidated statement of operations (rather than additional paid-in capital) for the years ended December 31, 2018 and December 31, 2017, respectively, from share-based compensation excess tax benefits. |
(3) | According to Accounting Standard Codification ("ASC") 740, Income Taxes, deferred tax assets and liabilities are remeasured to reflect the effects of enacted changes in tax rates at the date of enactment, even though the tax rate changes are not effective until a future period. The Company's remeasurement of its deferred tax assets and liabilities to reflect the enacted reduced tax rate, pursuant to the Tax Cuts and Jobs Act, resulted in a $21.4 million deferred income tax expense during the three-month period ended December 31, 2017. |
(4) | Includes various items such as, non-deductible expenses, non-taxable income, tax credits, valuation allowance, uncertain tax positions and return-to-accrual adjustments. |
As of December 31, | |||||||
2018 | 2017 (1) | ||||||
Deferred tax assets: | |||||||
Allowance for doubtful accounts | $ | 5.6 | $ | 5.3 | |||
Accrued payroll & employee benefits | 11.2 | 9.0 | |||||
Workers’ compensation | 8.3 | 7.9 | |||||
Amortization of intangible assets | 14.7 | 26.0 | |||||
Share-based compensation | 6.9 | 6.1 | |||||
Net operating loss carryforwards (2) | 5.9 | 20.1 | |||||
Tax credit carryforwards (3) | 2.8 | 4.6 | |||||
Other | 2.9 | 2.4 | |||||
Gross deferred tax assets | 58.3 | 81.4 | |||||
Less: valuation allowance | (0.7 | ) | (0.7 | ) | |||
Net deferred tax assets | 57.6 | 80.7 | |||||
Deferred tax (liabilities): | |||||||
Property and equipment | (4.4 | ) | (4.0 | ) | |||
Deferred revenue | (13.5 | ) | (18.0 | ) | |||
Investment in partnerships | (3.1 | ) | (2.1 | ) | |||
Other liabilities | (0.8 | ) | (0.5 | ) | |||
Gross deferred tax liabilities | (21.8 | ) | (24.6 | ) | |||
Net deferred tax assets (liabilities) | $ | 35.8 | $ | 56.1 |
(1) | According to ASC 740, Income Taxes, deferred tax assets and liabilities are remeasured to reflect the effects of enacted changes in tax rates at the date of enactment, even though the tax rate changes are not effective until a future period. The Company's remeasurement of its deferred tax assets and liabilities to reflect the enacted reduced tax rate, pursuant to the Tax Cuts and Jobs Act, resulted in a $21.4 million deferred income tax expense during the three-month period ended December 31, 2017. |
(2) | According to ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, an unrecognized tax benefit is presented in the financial statements as a reduction to a deferred tax asset when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to settle taxes that would result from the disallowance of the tax position. Otherwise, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional incomes taxes that would result from the disallowance of a tax position, the unrecognized tax benefit is presented in the financial statements as a liability and is not combined with deferred tax assets. As of December 31, 2017, the net operating loss (“NOL”) carryforwards in the income tax returns include unrecognized tax benefits resulting from uncertain tax positions. Accordingly, the deferred tax assets recognized for the NOL carryforwards, as of December 31, 2017, were presented net of unrecognized tax benefits of $2.1 million. As of December 31, 2018, however, the unrecognized tax benefits of $2.1 million were reclassified to other long-term obligations, since the Company utilized its remaining federal NOL carryforward and much of its remaining state NOL carryforwards in 2018. |
(3) | According to ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, an unrecognized tax benefit is presented in the financial statements as a reduction to a deferred tax asset when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to settle taxes that would result from the disallowance of the tax position. Otherwise, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional incomes taxes that would result from the disallowance of a tax position, the unrecognized tax benefit is presented in the financial statements as a liability and is not combined with deferred tax assets. As of December 31, 2017, the tax credit carryforwards in the income tax returns include unrecognized tax benefits resulting from uncertain tax positions. Accordingly, the deferred tax assets recognized for the tax credit carryforwards, as of December 31, 2017, were presented net of unrecognized tax benefits of $0.7 million. As of December 31, 2018, however, the unrecognized tax benefits of $0.7 million were reclassified to other long-term obligations, since the Company utilized its remaining federal tax credit carryforwards in 2018. |
For the Years Ended December 31, | |||||||
2018 | 2017 | ||||||
Balance at beginning of period | $ | 2.7 | $ | 4.1 | |||
Additions for tax positions related to current year | — | — | |||||
Additions for tax positions related to prior year | — | — | |||||
Reductions for tax positions related to prior years | — | — | |||||
Lapse of statute of limitations | — | (0.3 | ) | ||||
Change in statutory tax rate (1) | — | (1.1 | ) | ||||
Settlements | — | — | |||||
Balance at end of period | $ | 2.7 | $ | 2.7 |
Employee Stock Purchase Plan Period | Shares Issued | Price | ||||
2016 and Prior | 3,039,200 | $ | 14.72 | |||
January 1, 2017 to March 31, 2017 | 13,244 | 43.43 | ||||
April 1, 2017 to June 30, 2017 | 11,446 | 53.39 | ||||
July 1, 2017 to September 30, 2017 | 12,276 | 47.57 | ||||
October 1, 2017 to December 31, 2017 | 13,323 | 44.80 | ||||
January 1, 2018 to March 31, 2018 | 10,913 | 51.29 | ||||
April 1, 2018 to June 30, 2018 | 8,673 | 72.64 | ||||
July 1, 2018 to September 30, 2018 | 6,052 | 106.22 | ||||
October 1, 2018 to December 31, 2018 | 7,856 | 99.54 | ||||
3,122,983 |
For the Years Ended December 31, | |||||
2018 | 2017 | 2016 | |||
Risk Free Rate | 2.56% - 3.04% | 1.99% - 2.16% | 1.19% - 1.58% | ||
Expected Volatility | 42.00% - 45.32% | 50.18% - 51.81% | 53.44% - 54.89% | ||
Expected Term | 4.12 - 6.25 years | 5.78 - 6.25 years | 5.86 - 6.25 years | ||
Weighted Average Fair Value | $42.48 | $28.02 | $25.99 | ||
Dividend Yield | —% | —% | —% |
Number of Shares | Weighted Average Exercise Price | Weighted Average Contractual Life (Years) | ||||||
Outstanding options at January 1, 2018 | 909,730 | $ | 33.25 | 7.62 | ||||
Granted | 163,666 | 55.87 | ||||||
Exercised | (162,690 | ) | 36.59 | |||||
Canceled, forfeited or expired | (77,391 | ) | 35.95 | |||||
Outstanding options at December 31, 2018 | 833,315 | $ | 36.79 | 6.76 | ||||
Exercisable options at December 31, 2018 | 462,845 | $ | 27.97 | 6.17 |
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Non-vested stock options at January 1, 2018 | 527,798 | $ | 23.00 | |||
Granted | 163,666 | 42.48 | ||||
Vested | (246,442 | ) | 23.11 | |||
Forfeited | (74,552 | ) | 25.78 | |||
Non-vested stock options at December 31, 2018 | 370,470 | $ | 30.97 |
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Non-vested stock at January 1, 2018 | 46,998 | $ | 41.48 | |||
Granted | 14,904 | 80.54 | ||||
Vested | (46,998 | ) | 41.48 | |||
Canceled, forfeited or expired | — | — | ||||
Non-vested stock at December 31, 2018 | 14,904 | $ | 80.54 |
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Non-vested stock units at January 1, 2018 | 234,842 | $ | 47.58 | |||
Granted | 107,051 | 95.14 | ||||
Vested | (71,658 | ) | 46.55 | |||
Canceled, forfeited or expired | (29,835 | ) | 44.20 | |||
Non-vested stock units at December 31, 2018 | 240,400 | $ | 69.49 |
Number of Shares | Weighted Average Grant Date Fair Value | |||||
Non-vested stock units at January 1, 2018 | 252,948 | $ | 51.15 | |||
Granted | 115,338 | 79.59 | ||||
Vested | (87,482 | ) | 49.91 | |||
Canceled, forfeited or expired | (54,127 | ) | 52.60 | |||
Non-vested stock units at December 31, 2018 | 226,677 | $ | 65.76 |
2019 | $ | 23.3 | |
2020 | 18.7 | ||
2021 | 13.2 | ||
2022 | 8.5 | ||
2023 | 5.2 | ||
Future years | 9.8 | ||
Total | $ | 78.7 |
As of December 31, | |||||||
Type of Insurance | 2018 | 2017 | |||||
Health insurance | $ | 12.4 | $ | 14.1 | |||
Workers’ compensation | 30.9 | 29.3 | |||||
Professional liability | 4.3 | 4.3 | |||||
47.6 | 47.7 | ||||||
Less: long-term portion | (1.1 | ) | (1.2 | ) | |||
$ | 46.5 | $ | 46.5 |
2017 Exit Activity | |||||||
Lease Termination | Severance | ||||||
Balances at December 31, 2016 | $ | — | $ | — | |||
Charge in 2017 | 0.6 | 3.0 | |||||
Cash expenditures in 2017 | — | (0.7 | ) | ||||
Balances at December 31, 2017 | 0.6 | 2.3 | |||||
Charge in 2018 | — | — | |||||
Cash expenditures in 2018 | (0.5 | ) | (2.3 | ) | |||
Balances at December 31, 2018 | $ | 0.1 | $ | — |
For the Year Ended December 31, 2018 | |||||||||||||||||||
Home Health | Hospice | Personal Care | Other | Total | |||||||||||||||
Net service revenue | $ | 1,174.5 | $ | 410.9 | $ | 77.2 | $ | — | $ | 1,662.6 | |||||||||
Cost of service, excluding depreciation and amortization | 722.1 | 212.0 | 58.8 | — | 992.9 | ||||||||||||||
General and administrative expenses | 276.3 | 84.6 | 12.8 | 127.6 | 501.3 | ||||||||||||||
Depreciation and amortization | 3.5 | 1.1 | 0.3 | 8.4 | 13.3 | ||||||||||||||
Operating expenses | 1,001.9 | 297.7 | 71.9 | 136.0 | 1,507.5 | ||||||||||||||
Operating income (loss) | $ | 172.6 | $ | 113.2 | $ | 5.3 | $ | (136.0 | ) | $ | 155.1 |
For the Year Ended December 31, 2017 | |||||||||||||||||||
Home Health | Hospice | Personal Care | Other | Total | |||||||||||||||
Net service revenue | $ | 1,083.9 | $ | 367.8 | $ | 59.6 | $ | — | $ | 1,511.3 | |||||||||
Cost of service, excluding depreciation and amortization | 670.9 | 187.5 | 45.0 | — | 903.4 | ||||||||||||||
General and administrative expenses | 278.4 | 76.6 | 9.5 | 117.8 | 482.3 | ||||||||||||||
Depreciation and amortization | 3.5 | 0.9 | 0.2 | 12.5 | 17.1 | ||||||||||||||
Securities Class Action Lawsuit settlement, net | — | — | — | 28.7 | 28.7 | ||||||||||||||
Asset impairment charge | 1.3 | — | — | — | 1.3 | ||||||||||||||
Operating expenses | 954.1 | 265.0 | 54.7 | 159.0 | 1,432.8 | ||||||||||||||
Operating income (loss) | $ | 129.8 | $ | 102.8 | $ | 4.9 | $ | (159.0 | ) | $ | 78.5 |
For the Year Ended December 31, 2016 | |||||||||||||||||||
Home Health | Hospice | Personal Care | Other | Total | |||||||||||||||
Net service revenue | $ | 1,071.7 | $ | 311.9 | $ | 35.7 | $ | — | $ | 1,419.3 | |||||||||
Cost of service, excluding depreciation and amortization | 643.7 | 164.5 | 26.3 | — | 834.5 | ||||||||||||||
General and administrative expenses | 283.4 | 70.2 | 5.8 | 144.0 | 503.4 | ||||||||||||||
Depreciation and amortization | 6.0 | 1.3 | — | 12.4 | 19.7 | ||||||||||||||
Asset impairment charge | — | — | — | 4.4 | 4.4 | ||||||||||||||
Operating expenses | 933.1 | 236.0 | 32.1 | 160.8 | 1,362.0 | ||||||||||||||
Operating income (loss) | $ | 138.6 | $ | 75.9 | $ | 3.6 | $ | (160.8 | ) | $ | 57.3 |
Net Income (Loss) Attributable to Amedisys, Inc. Common Stockholders (1) | |||||||||||||||
Revenue | Net Income (Loss) Attributable to Amedisys, Inc. | Basic | Diluted | ||||||||||||
2018 | |||||||||||||||
1st Quarter | $ | 399.3 | $ | 27.2 | $ | 0.80 | $ | 0.79 | |||||||
2nd Quarter | 411.6 | 33.3 | 1.00 | 0.98 | |||||||||||
3rd Quarter | 417.3 | 31.4 | 0.99 | 0.96 | |||||||||||
4th Quarter | 434.4 | 27.5 | 0.86 | 0.84 | |||||||||||
$ | 1,662.6 | $ | 119.3 | $ | 3.64 | $ | 3.55 | ||||||||
2017 | |||||||||||||||
1st Quarter | $ | 364.7 | $ | 15.1 | $ | 0.45 | $ | 0.44 | |||||||
2nd Quarter (2) | 374.9 | 4.5 | 0.13 | 0.13 | |||||||||||
3rd Quarter | 373.7 | 14.6 | 0.43 | 0.42 | |||||||||||
4th Quarter (3) | 398.0 | (3.8 | ) | (0.11 | ) | (0.11 | ) | ||||||||
$ | 1,511.3 | $ | 30.3 | $ | 0.90 | $ | 0.88 |
(1) | Because of the method used in calculating per share data, the quarterly per share data may not necessarily total to the per share data as computed for the entire year. |
(2) | During the second quarter of 2017, we incurred certain costs associated with the Securities Class Action Lawsuit settlement. Net of income taxes, the costs amounted to $18.0 million for the three-month period ended June 30, 2017. |
(3) | During the fourth quarter of 2017, we recorded a charge of $21.4 million, net of income taxes as the result of the enactment of H.R. 1 (Tax Cuts and Jobs Act). |
Consolidated Leverage Ratio | Base Rate Loans | Eurodollar Rate Loans | Commitment Fee | Letter of Credit Fee | ||||||||
≥ 3.00 to 1.0 | 1.00 | % | 2.00 | % | 0.35 | % | 1.75 | % | ||||
< 3.00 to 1.0 but ≥ 2.00 to 1.0 | 0.75 | % | 1.75 | % | 0.30 | % | 1.50 | % | ||||
< 2.00 to 1.0 but ≥ 0.75 to 1.0 | 0.50 | % | 1.50 | % | 0.25 | % | 1.25 | % | ||||
< 0.75 to 1.0 | 0.25 | % | 1.25 | % | 0.20 | % | 1.00 | % |
(a) | 1. | Financial Statements | ||
All financial statements are set forth under Part II, Item 8 of this report. | ||||
2. | Financial Statement Schedules | |||
There are no financial statement schedules included in this report as they are either not applicable or included in the financial statements. | ||||
3. | Exhibits | |||
The Exhibits are listed in the Exhibit Index required by Item 601 of Regulation S-K preceding the signature page of this report. |
Exhibit Number | Document Description | Report or Registration Statement | SEC File or Registration Number | Exhibit or Other Reference | ||||
2.1 | The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 | 0-24260 | 2.1 | |||||
2.2 | The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 | 0-24260 | 10.1 | |||||
2.3 | The Company's current Report on Form 8-K filed on June 4, 2018 | 0-24260 | 2.1 | |||||
2.4 | The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 | 0-24260 | 2.1 | |||||
3.1 | The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 | 0-24260 | 3.1 | |||||
3.2 | The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 | 0-24260 | 3.2 | |||||
4.1 | The Company’s Registration Statement on Form S-3 filed August 20, 2007 | 333-145582 | 4.8 | |||||
10.1 | The Company’s Annual Report on Form 10-K for the year ended December 31, 2008 | 0-24260 | 10.1 | |||||
10.2* | The Company’s Current Report on Form 8-K filed June 8, 2012 | 0-24260 | 10.1 | |||||
10.3* | The Company's Annual Report on Form 10-K for the year ended December 31, 2016 | 0-24260 | 10.3 | |||||
10.4* | The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 | 0-24260 | 10.3 |
Exhibit Number | Document Description | Report or Registration Statement | SEC File or Registration Number | Exhibit or Other Reference | ||||
10.5* | The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 | 0-24260 | 10.4 | |||||
10.6* | The Company’s Annual Report on Form 10-K for the year ended December 31, 2014 | 0-24260 | 10.6 | |||||
10.7* | The Company’s Annual Report on Form 10-K for the year ended December 31, 2014 | 0-24260 | 10.7 | |||||
10.8* | The Company’s Annual Report on Form 10-K for the year ended December 31, 2014 | 0-24260 | 10.8 | |||||
10.9* | The Company’s Annual Report on Form 10-K for the year ended December 31, 2014 | 0-24260 | 10.9 | |||||
†10.10* | ||||||||
†10.11* | ||||||||
†10.12* | ||||||||
10.13* | The Company’s Registration Statement on Form S-8 filed June 22, 2007 | 333-143967 | 4.2 | |||||
10.14* | The Company’s Annual Report on Form 10-K for the year ended December 31, 2005 | 0-24260 | 10.4 |
Exhibit Number | Document Description | Report or Registration Statement | SEC File or Registration Number | Exhibit or Other Reference | ||||
10.15* | The Company’s Current Report on Form 8-K filed on October 3, 2018 | 0-24260 | 10.1 | |||||
10.16* | The Company's Annual Report on Form 10-K for the year ended December 31, 2016 | 0-24260 | 10.15 | |||||
10.17* | The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 | 0-24260 | 10.1 | |||||
10.18* | The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 | 0-24260 | 10.2 | |||||
10.19* | The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 | 0-24260 | 10.1 | |||||
10.20* | The Company's Definitive Proxy Statement filed on April 25, 2018 | 0-24260 | Appendix A | |||||
10.21* | The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 | 0-24260 | 10.1 | |||||
10.22* | The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 | 0-24260 | 10.2 |
Exhibit Number | Document Description | Report or Registration Statement | SEC File or Registration Number | Exhibit or Other Reference | ||||
10.23 | The Company’s current Report on Form 8-K filed on July 2, 2018 | 0-24260 | 10.1 | |||||
10.24 | The Company’s current Report on Form 8-K filed on July 2, 2018 | 0-24260 | 10.2 | |||||
10.25 | The Company’s current Report on Form 8-K filed on July 2, 2018 | 0-24260 | 10.3 | |||||
10.26 | The Company’s Current Report on Form 8-K filed on April 24, 2014 | 0-24260 | 10.1 | |||||
10.27 | The Company’s Current Report on Form 8-K filed on April 24, 2014 | 0-24260 | 10.2 |
Exhibit Number | Document Description | Report or Registration Statement | SEC File or Registration Number | Exhibit or Other Reference | ||||
10.28 | The Company’s Annual Report on Form 10-K for the year ended December 31, 2015 | 0-24260 | 10.27 | |||||
10.29 | The Company’s Annual Report on Form 10-K for the year ended December 31, 2015 | 0-24260 | 10.28 | |||||
†21.1 | ||||||||
†23.1 | ||||||||
†31.1 | ||||||||
†31.2 | ||||||||
††32.1 | ||||||||
††32.2 | ||||||||
†101.INS | XBRL Instance | |||||||
†101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
†101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
Exhibit Number | Document Description | Report or Registration Statement | SEC File or Registration Number | Exhibit or Other Reference | ||||
†101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
†101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |||||||
†101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
AMEDISYS, INC. | ||
By: | /S/ PAUL B. KUSSEROW | |
Paul B. Kusserow, | ||
President, Chief Executive Officer and | ||
Member of the Board |
Signature | Title | Date | ||
/S/ PAUL B. KUSSEROW | President, Chief Executive Officer and Member of the Board (Principal Executive Officer) | February 28, 2019 | ||
Paul B. Kusserow | ||||
/S/ SCOTT G. GINN | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | February 28, 2019 | ||
Scott G. Ginn | ||||
/S/ LINDA J. HALL | Director | February 28, 2019 | ||
Linda J. Hall | ||||
/S/ JULIE D. KLAPSTEIN | Director | February 28, 2019 | ||
Julie D. Klapstein | ||||
/S/ RICHARD A. LECHLEITER | Director | February 28, 2019 | ||
Richard A. Lechleiter | ||||
/S/ JAKE L. NETTERVILLE | Director | February 28, 2019 | ||
Jake L. Netterville | ||||
/S/ BRUCE D. PERKINS | Director | February 28, 2019 | ||
Bruce D. Perkins | ||||
/S/ JEFFREY A. RIDEOUT | Director | February 28, 2019 | ||
Jeffrey A. Rideout | ||||
/S/ DONALD A. WASHBURN | Non-Executive Chairman of the Board | February 28, 2019 | ||
Donald A. Washburn | ||||
/S/ NATHANIEL M. ZILKHA | Director | February 28, 2019 | ||
Nathaniel M. Zilkha |
3. | Effect of Termination of Employment. [The Participant’s rights to the RSU on termination of Employment are described in the Omnibus Plan.] / [This Section 3 modifies the terms of Omnibus Plan regarding the effect of termination of the Participant’s Employment (as defined in the Omnibus Plan). |
(a) | Termination without Cause or with Good Reason Not Due to a Change in Control. If the Participant’s Employment is terminated without Cause or with Good Reason (as such terms are defined in the Amedisys Holding, L.L.C. Severance Plan for Key Executives) at any time prior to a Change in Control (as such term is defined in the Omnibus Plan), or following the second anniversary of a Change in Control, the Participant shall be entitled to a pro rata vesting of a number of the RSUs. The pro rata calculation (which shall take into account the total number of RSUs that have previously vested) shall be determined by multiplying (x) the total number of RSUs granted under Section 1(a) of this Agreement by (y) a fraction, the numerator of which is the total number of whole months between the Grant Date and the date of termination and the denominator of which is [number of total months]. |
(b) | Other Termination of Employment. Except as provided in this Section 3, the Participant’s rights to the RSU on termination of Employment are governed by the Omnibus Plan.] |
/S/ Paul B. Kusserow |
Paul B. Kusserow |
President and Chief Executive Officer |
(Principal Executive Officer) |
/S/ Scott G. Ginn |
Scott G. Ginn |
Chief Financial Officer |
(Principal Financial Officer) |
/S/ Paul B. Kusserow |
Paul B. Kusserow |
President and Chief Executive Officer |
(Principal Executive Officer) |
/S/ Scott G. Ginn |
Scott G. Ginn |
Chief Financial Officer |
(Principal Financial Officer) |
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Document and Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 22, 2019 |
Jun. 29, 2018 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
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 | 32,010,292 | ||
Entity Public Float | $ 2.3 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 95,472 | $ 146,814 |
Intangible assets, accumulated amortization | $ 33,050 | $ 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) | 36,252,280 | 35,747,134 |
Common stock, outstanding (shares) | 31,973,505 | 33,964,767 |
Treasury stock at cost (shares) | 4,278,775 | 1,782,367 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 120,129 | $ 30,683 | $ 37,631 |
Other comprehensive income | 0 | 0 | 0 |
Comprehensive income | 120,129 | 30,683 | 37,631 |
Comprehensive income attributable to non-controlling interests | (783) | (382) | (370) |
Comprehensive income attributable to Amedisys, Inc. | $ 119,346 | $ 30,301 | $ 37,261 |
NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS |
12 Months Ended |
---|---|
Dec. 31, 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 73%, 76% and 79% of our revenue derived from Medicare for 2018, 2017 and 2016, respectively. As of December 31, 2018, we owned and operated 323 Medicare-certified home health care centers, 84 Medicare-certified hospice care centers and 12 personal-care care centers in 34 states within the United States and the District of Columbia. 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. Generally Accepted Accounting Principles ("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 provision for doubtful accounts are now considered a 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 provision for doubtful accounts within operating expenses within our 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 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. 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 consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting, which simplified the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liability, and classification within the statement of cash flows. The ASU was effective for annual and interim periods beginning after December 15, 2016. We adopted this ASU effective January 1, 2017, and as a result, we recorded a $0.4 million increase to our non-current deferred tax asset and retained earnings for tax benefits that were not previously recognized under the prior rules. Additionally, on a prospective basis, we recorded excess tax benefits as a discrete item in our income tax provision within our consolidated statements of operations. We recorded excess tax benefits of $3.2 million within our consolidated statements of operations for the year ended December 31, 2017. Historically, these amounts were recorded as additional paid-in capital in our consolidated balance sheet. We also elected to prospectively apply the change to the presentation of cash payments made to taxing authorities on the employees' behalf for shares withheld upon stock vesting within our consolidated statements of cash flows for the year ended December 31, 2017. We have also elected to continue our current policy of estimating forfeitures of stock-based compensation awards at grant date and revising in subsequent periods to reflect actual forfeitures. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a lease liability and right-of-use asset ("ROU asset") for all leases with a term greater than twelve months and to disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, Codification Improvements to Topic 842, Leases; and ASU 2018-11, Targeted Improvements (collectively, "Topic 842"). Under Topic 842, leases will be classified as either financing or operating. The classification will determine the pattern of expense recognition and classification within the income statement. Topic 842 is effective for us on January 1, 2019, with early adoption permitted. We expect to adopt the new standard on the effective date using a modified retrospective transition approach, which requires the new standard to be applied to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We will use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides several optional practical expedients that can be adopted at transition. We expect to elect the "package of practical expedients," which allows us to not reassess our prior conclusions regarding lease identification, lease classification and initial direct costs. We do not expect to elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect adoption of this standard to have a material effect on our financial statements. We are still evaluating the overall impact of adoption; however, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and fleet operating leases; and (2) significant new disclosures about our leasing activities. We do not expect a significant change in our leasing activities between now and adoption. On adoption, we are expecting to recognize additional operating liabilities of approximately $80 million, with corresponding ROU assets of approximately the same amount, based on the present value of the remaining minimum rental payments under current leasing arrangements for our existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We are planning to elect the practical expedient that allows us to not separate lease and non-lease components for all of our leases. We are also planning to apply the short-term lease recognition exemption to certain information technology leases; therefore, we will not recognize ROU assets and lease liabilities for these leases. Use of Estimates Our accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially 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 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 consolidated financial statements, and business combinations accounted for as purchases have been included in our 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. 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 consolidated financial statements. During 2016, we sold a 30% interest in one of our care centers while maintaining a controlling interest in the newly formed joint venture; we repurchased the 30% interest during 2018. 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. During 2018, we made a $7.0 million investment in a healthcare analytics company; this investment will be accounted for under the equity method. The book value of investments that we account for under the equity method of accounting is $35.1 million and $26.4 million as of December 31, 2018 and 2017, respectively and is reflected in other assets within our consolidated balance sheets. 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. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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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):
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 estimates for explicit and implicit price concessions. Explicit price concessions include contractual adjustments provided to patients and third-party payors. Implicit price concessions include discounts provided to self-pay, uninsured patients or other payors, adjustments resulting from payment reviews and adjustments arising from our inability to obtain appropriate billing documentation, authorizations or face-to-face documentation. 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. Explicit price concessions are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third party payors and others for services provided. Implicit price concessions are recorded for self-pay, uninsured patients and other payors by major payor class based on our historical collection experience, aged accounts receivable by payor and current economic conditions. The implicit price concession represents the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. The Company assesses its ability to collect for the healthcare services provided 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 represents approximately 73% of the Company's consolidated net service revenue. 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 determine our estimates for price concessions related to payment reviews based on our historical experience and success rates in the claim appeals and adjudication process. Revenue is recorded at amounts we estimate to be realizable for services provided. We determine our estimates for price concessions related to our inability to obtain appropriate billing documentation, authorizations, or face-to-face documentation based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims. Revenue by payor class as a percentage of total net service revenue is as follows:
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 a 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 four or fewer; (c) a partial payment if a patient transferred to another provider or we admitted a patient transferring 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) 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; (f) changes in the base episode payments established by the Medicare Program; and (g) adjustments to the base episode payments for case mix and geographic wages. 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 December 31, 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 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. Explicit price concessions 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 accounted for 97% of our total net Medicare hospice service revenue for each of 2018, 2017 and 2016, 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 our 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 accrued expenses within our consolidated balance sheet. 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 December 31, 2018, we have settled our Medicare hospice reimbursements for all fiscal years through October 31, 2012. As of December 31, 2018, we have recorded $1.7 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2013 through September 30, 2019. As of December 31, 2017, we had recorded $0.9 million for estimated amounts due back to Medicare in accrued expenses 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. Explicit price concessions 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. Net service revenue is recognized at the time services are rendered based on gross charges for the services provided, reduced by estimates for price concessions. 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). Cash and Cash Equivalents Cash and cash equivalents include certificates of deposit and all highly liquid debt instruments with maturities of three months or less when purchased. 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 December 31, 2018, there is no single payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables. 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 net patient accounts receivable at December 31, 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. 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 depreciated on a straight-line basis over the estimated useful lives of the assets or life of the lease, if shorter. 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. We assess the impairment of a long-lived asset group whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include but are not limited to the following:
If we determine that the carrying value of long-lived assets may not be recoverable, we compare the carrying value of the asset group to the undiscounted cash flows expected to be generated by the asset group. If the carrying value exceeds the undiscounted cash flows, an impairment charge is indicated. An impairment charge is recognized to the extent that the carrying value of the asset group exceeds its fair value. We generally provide for depreciation over the following estimated useful service lives.
During 2015, we began the transition of all our care centers from our proprietary operating system to Homecare Homebase (“HCHB”), a leading home health and hospice platform, with all of our care centers operating on HCHB as of December 31, 2016. As part of our conversion process, we determined that a number of assets (primarily laptops) were not compatible with HCHB and had no other alternative or secondary use. As a result, we recorded a non-cash asset impairment charge of $4.4 million to write-off these assets during the year ended December 31, 2016. During 2018, we reviewed the balances of our property and equipment and as a result, eliminated those asset balances and related accumulated depreciation for which the asset was no longer in service. The following table summarizes the balances related to our property and equipment for 2018 and 2017 (amounts in millions):
Depreciation expense for 2018, 2017 and 2016 was $10.8 million, $14.4 million and $17.2 million, respectively. Goodwill and Other Intangible Assets Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. These events or circumstances include, but are not limited to, a significant adverse change in the business environment, regulatory environment or legal factors, or a substantial decline in the market capitalization of our stock. Each of our operating segments described in Note 13 – Segment Information is considered to represent an individual reporting unit for goodwill impairment testing purposes. We consider each of our home health care centers to constitute an individual business for which discrete financial information is available. However, since these care centers have substantially similar operating and economic characteristics and resource allocation and significant investment decisions concerning these businesses are centralized and the benefits broadly distributed, we have aggregated these care centers and deemed them to constitute a single reporting unit. We have applied this same aggregation principle to our hospice and personal-care care centers and have also deemed each of them to be a single reporting unit. During 2018, we performed a qualitative assessment to determine if it is more likely than not that the fair value of the reporting units are less than their carrying values by evaluating relevant events and circumstances including financial performance, market conditions and share price. Based on this assessment, we did not record any goodwill impairment charges and none of the goodwill associated with our various reporting units was considered at risk of impairment as of October 31, 2018. Since the date of our last annual goodwill impairment test, there have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our reporting units would be less than their carrying amounts. Intangible assets consist of Certificates of Need, licenses, acquired names and non-compete agreements. We amortize non-compete agreements and acquired names that we do not intend to use in the future on a straight-line basis over their estimated useful lives, which is generally three years for non-compete agreements and up to five years for acquired names. Our indefinite-lived intangible assets are reviewed for impairment annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. During 2018, we performed a qualitative assessment to determine that our indefinite-lived intangible assets were not impaired. There have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our intangible assets would be less than their carrying amounts. Debt Issuance Costs During 2018, we recorded an additional $2.4 million in deferred debt issuance costs as a reduction to long-term obligations, less current portion in our consolidated balance sheet in connection with our new Credit Agreement (See Note 6 - Long-Term Obligations). As of December 31, 2018 and 2017, we had unamortized debt issuance costs of $3.5 million and $1.9 million, respectively, recorded as long-term obligations, less current portion in our accompanying consolidated balance sheets. We amortize deferred debt issuance costs related to our long-term obligations over the term of the obligation through interest expense, unless the debt is extinguished, in which case unamortized balances are immediately expensed. We amortized $0.8 million, $0.7 million and $0.7 million in deferred debt issuance costs in 2018, 2017 and 2016, respectively. The unamortized debt issuance costs of $3.5 million at December 31, 2018, will be amortized over a weighted-average amortization period of 4.5 years. 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:
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 December 31, 2018, the carrying amount of our long-term debt approximates fair value. Income Taxes We use the asset and liability approach for measuring deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates. Our deferred tax calculation requires us to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when we believe it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect of a change in tax rate is recognized as income or expense in the period that includes the enactment date. As of December 31, 2018 and 2017, our net deferred tax assets were $35.8 million and $56.1 million, respectively. Our net deferred tax asset at December 31, 2017 was reduced $21.4 million as a result of the remeasurement of deferred taxes using the reduced U.S. corporate tax rates included in H.R. 1 (Tax Cuts and Jobs Act) enacted on December 22, 2017. Management regularly assesses the ability to realize deferred tax assets recorded in the Company’s entities based upon the weight of available evidence, including such factors as the recent earnings history and expected future taxable income. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, we could be required to increase the valuation allowance for deferred tax assets. This would result in an increase in our effective tax rate. Share-Based Compensation We record all share-based compensation as expense in the financial statements measured at the fair value of the award. We recognize compensation cost on a straight-line basis over the requisite service period for each separately vesting portion of the award. Upon adoption of ASU 2016-09 in 2017, we started recording the excess tax benefits related to stock option exercises as operating cash flows; these amounts were previously classified as financing cash flows. Share-based compensation expense for 2018, 2017 and 2016 was $17.9 million, $16.3 million and $16.4 million, respectively, and the total income tax benefit recognized for these expenses was $4.3 million, $6.4 million and $6.4 million, respectively. 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 weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):
Advertising Costs We expense advertising costs as incurred. Advertising expense for 2018, 2017 and 2016 was $7.0 million, $6.5 million and $7.8 million, respectively. |
ACQUISITIONS |
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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 for significant acquisitions. 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 valuation and liabilities assumed. 2018 Acquisitions Home Health Division On March 1, 2018, we acquired the assets of Christian Care at Home which provided 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 ($2.3 million) in connection with the acquisition during the three-month period ended March 31, 2018. During the three-month period ended December 31, 2018, we reduced our preliminary goodwill by $0.2 million and recorded a corresponding increase in other intangibles - certificate of need. We expect the entire amount of goodwill recorded for this acquisition to be deductible for income tax purposes over approximately 15 years. Personal Care Division On May 1, 2018, we acquired the assets of East Tennessee Personal Care Services which owned and operated 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 ($1.9 million) and other intangibles - non-compete agreements ($0.1 million) in connection with the acquisition. We expect the entire amount of goodwill recorded for this acquisition to be deductible for income tax purposes over approximately 15 years. On October 1, 2018, we acquired the assets of Bring Care Home which serviced the state of Massachusetts for a total purchase price of $5.7 million (subject to certain adjustments, of which $0.6 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 December 31, 2018, we recorded goodwill ($5.5 million) and other intangibles - non-compete agreements ($0.2 million) in connection with the acquisition. We expect the entire amount of goodwill recorded for this acquisition to be deductible for income tax purposes over approximately 15 years. 2017 Acquisitions Home Health and Hospice Divisions On May 1, 2017, we acquired three home health care centers (one in each Illinois, Massachusetts, and Texas) and two hospice care centers (one in each Arizona and Massachusetts) from Tenet Healthcare for a total purchase price of $20.5 million, (subject to certain adjustments). 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 ($20.9 million) and other assets and liabilities, net ($0.8 million) in connection with this acquisition during the three-month period ended June 30, 2017. During the three-month period ended December 31, 2017, we received the final report from our outside appraisal firm. As a result, we reduced our preliminary goodwill by $2.8 million and recorded corresponding increases in other intangibles - Medicare licenses ($0.1 million) and other intangibles - acquired names of business ($2.7 million). We expect the entire amount of goodwill recorded for this acquisition to be deductible for income tax purposes over approximately 15 years. Personal Care Division On February 1, 2017, we acquired the assets of Home Staff, L.L.C. which owned and operated three personal-care care centers servicing the state of Massachusetts for a total purchase price of $4.0 million (subject to certain adjustments), of which $0.4 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. We recorded goodwill ($3.8 million), other intangibles - non-compete agreements ($0.2 million) and other assets and liabilities, net ($0.5 million) in connection with the acquisition. We expect the entire amount of goodwill recorded for this acquisition to be deductible for income tax purposes over approximately 15 years. On October 1, 2017, we acquired the assets of Intercity Home Care which owned and operated four personal-care care centers servicing the state of Massachusetts for a total purchase price of $9.6 million (subject to certain adjustments), of which $1.0 million was placed in escrow for indemnification purposes and working capital price adjustments. The purchase price was paid with cash on hand on the date of the transaction. We recorded goodwill ($9.1 million), other intangibles - non-compete agreements ($0.4 million) and other assets and liabilities, net ($0.1 million) in connection with the acquisition. We expect the entire amount of goodwill recorded for this acquisition to be deductible for income tax purposes over approximately 15 years. |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET During 2018, 2017 and 2016, we did not record any goodwill impairment charges as a result of our annual impairment test and none of the goodwill associated with our various reporting units was considered at risk of impairment as of October 31st of each respective year (the date of our annual goodwill impairment test). Since the date of our last annual goodwill impairment test, there have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our reporting units would be less than their carrying amounts. During 2017, we recorded a non-cash other intangible assets impairment charge of $1.3 million related to those care centers that were closed or consolidated during 2017 as discussed in Note 12 - Exit and Restructuring Activities. The following table summarizes the activity related to our goodwill for 2018, 2017 and 2016 (amounts in millions):
The following table summarizes the activity related to our other intangible assets, net for 2018, 2017 and 2016 (amounts in millions):
See Note 3 – Acquisitions for further details on additions to goodwill and other intangible assets, net. The estimated aggregate amortization expense related to intangible assets for each of the five succeeding years is as follows (amounts in millions):
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DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS |
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DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS | DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS Additional information regarding certain balance sheet accounts is presented below (amounts in millions):
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LONG-TERM OBLIGATIONS |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM OBLIGATIONS | LONG-TERM OBLIGATIONS Long-term debt consists of the following for the periods indicated (amounts in millions):
Maturities of debt as of December 31, 2018 are as follows (amounts in millions):
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 which is currently 3.0x per the Credit Agreement. The funds available under 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 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 December 31, 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 Facilities, as presented in the table below.
The Credit Agreement requires maintenance of two financial covenants: (i) a consolidated leverage ratio of funded indebtedness to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the Credit Agreement, and (ii) a consolidated interest coverage ratio of EBITDA to cash interest charges, 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 Revolving 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 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 a reduction to long-term obligations, less current portion within our consolidated balance sheet during 2018. Our weighted average interest rate for our $100.0 million Term Loan, under our Prior Credit Agreement, was 3.1% for the period ended December 31, 2017. Our weighted average interest rate for borrowings under our $550.0 million Revolving Credit Facility was 3.8% for the period ended December 31, 2018. As of December 31, 2018, our consolidated leverage ratio was 0.1, our consolidated interest coverage ratio was 59.9 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 December 31, 2018, our availability under our $550.0 million Revolving Credit Facility was $508.4 million as we have $7.5 million outstanding in borrowings and $34.1 million outstanding in letters of credit. On February 4, 2019, we entered into a first amendment to the Credit Agreement (the "First Amendment"). See Note 16 - Subsequent Events for additional information on the First Amendment. Promissory Notes Our promissory notes outstanding of $1.1 million, issued in conjunction with acquisitions and software licenses, bear interest rates ranging from 2.9% to 7.0%. Capital Leases Our capital leases outstanding of $2.3 million relate to leased equipment and bear interest rates ranging from 5.2% to 14.3%. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Income taxes attributable to continuing operations consist of the following (amounts in millions):
Total income tax expense for the years ended December 31, 2018, 2017 and 2016 was allocated as follows (amounts in millions):
A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21 percent in 2018 and 35 percent in 2017 and 2016 to income before taxes is as follows:
As of December 31, 2018 and 2017, the Company had income taxes receivable of $1.6 million and $3.4 million, respectively, included in other current assets. The income tax receivable at December 31, 2017 includes a $2.3 million Alternative Minimum Tax ("AMT") credit carryforward. The Tax Cuts and Jobs Act repealed the AMT for corporations and made it refundable in years 2018 through 2020. As a result, the company utilized its AMT credit carryforward to reduce taxable income in 2018. The AMT credit carryforward was reclassified from deferred income taxes to other current assets as of December 31, 2017. Deferred tax assets (liabilities) consist of the following components (amounts in millions):
The Company utilized its remaining U.S. NOL carryforwards, research and development tax credits and employment tax credits and approximately half of its remaining state NOL carryforwards and tax credits in 2018. As of December 31, 2018, we have state NOL carryforwards of $118.8 million that are available to reduce future taxable income and $3.6 million of various state tax credits available to reduce future state income taxes. The state NOL and tax credit carryforwards begin to expire at various times. The valuation allowance for deferred tax assets which is primarily related to certain state NOLs and state tax credit carryforwards was $0.7 million as of December 31, 2018, unchanged from the year ended December 31, 2017. The net change in the total valuation allowance for the year ended December 31, 2017 was an increase of $0.3 million. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those jurisdictions during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. In order to fully realize the deferred tax assets, the Company will need to generate future taxable income before the expiration of the carryforwards governed by the tax code. Based on the current level of pretax earnings, the Company will generate the minimum amount of future taxable income needed to support the realization of the deferred tax assets. As a result, as of December 31, 2018, management believes that it is more likely than not that we will realize the benefits of these deferred tax assets, net of the existing valuation allowances. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Uncertain Tax Positions We account for uncertain tax positions in accordance with the authoritative guidance for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (amounts in millions):
(1) The Company's remeasurement of its deferred tax assets and liabilities to reflect the enacted reduced tax rate as a result of the recent tax reform resulted in a $1.1 million reduction in its uncertain tax positions recorded in net deferred tax assets at December 31, 2017. According to ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, an unrecognized tax benefit is presented in the financial statements as a reduction to a deferred tax asset when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to settle taxes that would result from the disallowance of the tax position. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date to settle any additional incomes taxes that would result from the disallowance of a tax position, the unrecognized tax benefit is presented in the financial statements as a liability and is not combined with deferred tax assets. As of December 31, 2018, the Company no longer has a federal net operating loss nor tax credit carryforwards available to settle taxes that would result from the disallowance of its uncertain tax positions; therefore, the Company reclassified the unrecognized tax benefits of $2.7 million from deferred income taxes to other long-term obligations as of December 31, 2018, that if recognized in future periods, would impact our effective tax rate. We are subject to income taxes in the U.S. and in many of the 50 individual states, with significant operations in Louisiana, Alabama, Georgia, Massachusetts and Tennessee. We are open to examination in the U.S. and in various individual states for tax years ended December 31, 2014 through December 31, 2018. We are also open to examination in various states for the years ended 2004 – 2018 resulting from net operating losses generated and available for carryforward from those years. |
CAPITAL STOCK AND SHARE-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL SOCK AND SHARE-BASED COMPENSATION | CAPITAL STOCK AND SHARE-BASED COMPENSATION We are authorized by our Certificate of Incorporation to issue 60,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value. As of December 31, 2018, there were 36,252,280 and 31,973,505 shares of common stock issued and outstanding, respectively, and no shares of preferred stock issued or outstanding. Our Board of Directors is authorized to fix the dividend rights and terms, conversion and voting rights, redemption rights and other privileges and restrictions applicable to our preferred stock. Share-Based Awards On March 29, 2018, our Board of Directors and the Compensation Committee approved, subject to stockholder approval, the Amedisys, Inc. 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”). On June 6, 2018, our stockholders approved the 2018 Plan at the Company's annual meeting of stockholders. The 2018 Plan replaces our 2008 Omnibus Incentive Compensation Plan (the “2008 Plan”), which terminated on June 6, 2018 when the stockholders approved the 2018 Plan. The 2018 Plan authorizes the grant of various types of equity-based awards, such as stock awards, restricted stock units, stock appreciation rights and stock options to eligible participants, which include all of our employees and all employees of our 50% or more owned subsidiaries, our non-employee directors and certain consultants. The vesting terms of the awards may be tied to continued employment (or, for our non-employee directors, continued service on the Board of Directors) and/or achievement of certain pre-determined performance goals. We refer to stock awards subject to service-based vesting conditions as “non-vested stock” and restricted stock units subject to service-based or a combination of service-based and performance-based vesting conditions as “non-vested stock units.” The 2018 Plan is administered by the Compensation Committee of our Board of Directors, which determines, within the provisions of the 2018 Plan, those eligible participants to whom, and the times at which, awards shall be granted. The Compensation Committee, in its discretion, may delegate its authority and duties under the 2018 Plan to specified officers; however, only the Compensation Committee may approve the terms of awards to our executive officers. Equity-based awards may be granted for a number of shares not to exceed, in the aggregate, approximately 2.5 million shares of common stock. We had approximately 2.4 million shares available at December 31, 2018. The price per share for stock options shall be no less than the greater of (a) 100% of the fair value of a share of common stock on the date the option is granted or (b) the aggregate par value of the shares of our common stock on the date the option is granted. If a stock option is granted to any owner of 10% or more of the total combined voting power of us and our subsidiaries, the price is to be at least 110% of the fair value of a share of our common stock on the date the award is granted. Each equity-based award vests ratably over a 12 month to five year period, with the exception of those issued under contractual arrangements that specify otherwise, and may be exercised during a period as determined by our Compensation Committee or as otherwise approved by our Compensation Committee. The contractual terms of stock options exercised shall not exceed ten years from the date such option is granted. The Company analyzes historical data of forfeited awards to develop an estimated forfeiture rate that is applied to the Company's non-cash compensation expense; however, all non-cash compensation expense is adjusted to reflect actual vestings and forfeitures. Employee Stock Purchase Plan (“ESPP”) We have a plan whereby our eligible employees may purchase our common stock at 85% of the market price at the time of purchase. On June 7, 2012, our stockholders ratified an amendment adopted by our Board of Directors to increase the total number of shares of our common stock authorized for the issuance under our ESPP from 2,500,000 shares to 4,500,000 shares, and as of December 31, 2018, there were 1,377,017 shares available for future issuance. The following is a detail of the purchases that were made or pending Board of Director approval under the plan:
ESPP expense included in general and administrative expense in our accompanying consolidated statements of operations was $0.5 million for 2018 and $0.4 million for each of 2017 and 2016, respectively. Stock Options We use the Black-Scholes option pricing model to estimate the fair value of our stock options. There were 163,666, 308,292 and 268,538 options granted during 2018, 2017 and 2016, respectively. Stock option compensation expense included in general and administrative expense in our accompanying consolidated statements of operations was $5.7 million, $5.6 million and $6.3 million for 2018, 2017 and 2016, respectively. The fair values of the awards were estimated using the following assumptions for each 2018, 2017 and 2016:
We used the simplified method to estimate the expected term for the stock options granted during 2018 as adequate historical experience is not available to provide a reasonable estimate. The following table presents our stock option activity for 2018:
The aggregate intrinsic value of our outstanding options and exercisable options at December 31, 2018 was $66.9 million and $41.3 million, respectively. Total intrinsic value of options exercised was $9.7 million and $3.9 million for 2018 and 2017, respectively; there were no options exercised during 2016. The tax benefit from stock options exercised during the period amounted to $1.6 million and $0.3 million for 2018 and 2017, respectively; there were no options exercised during 2016. The following table presents our non-vested stock option activity for 2018:
At December 31, 2018, there was $5.1 million of unrecognized compensation cost related to stock options that we expect to be recognized over a weighted-average period of 1.7 years. Non-Vested Stock We issue shares of non-vested stock with vesting terms ranging from one to five years. The compensation expense is determined based on the market price of our common stock at the date of grant applied to the total number of shares that are anticipated to fully vest. Non-vested stock compensation expense included in general and administrative expenses in our accompanying consolidated statements of operations was $1.4 million, $1.7 million and $2.3 million for 2018, 2017 and 2016, respectively. The following table presents our non-vested stock activity for 2018:
The weighted average grant date fair value of non-vested stock granted was $80.54, $62.67 and $50.55 in 2018, 2017 and 2016, respectively. At December 31, 2018, there was $0.5 million of unrecognized compensation cost related to non-vested stock award payments that we expect to be recognized over a weighted average period of 0.4 years. Non-Vested Stock Units We issue non-vested stock unit awards that are service-based, performance-based or a combination of both with vesting terms ranging from one to five years. Based on the terms and conditions of these awards, we determine if the awards should be recorded as either equity or liability instruments. The compensation expense is determined based on the market price of our common stock at the date of grant, applied to the total number of units that are anticipated to vest, unless the award specifies differently. We account for such awards similar to our non-vested stock awards; however, no shares of stock are issued to the recipient until the stock unit awards have vested and after the pre-determined delivery date has occurred. Non-Vested Stock Units – Service-Based Service-based non-vested stock unit compensation expense included in general and administrative expenses in our accompanying consolidated statements of operations was $4.5 million, $3.6 million and $3.6 million for 2018, 2017 and 2016, respectively. The following table presents our service-based non-vested stock units activity for 2018:
The weighted average grant date fair value of service-based non-vested stock units granted was $95.14, $53.79 and $45.60 in 2018, 2017 and 2016, respectively. At December 31, 2018, there was $11.0 million of unrecognized compensation cost related to our service-based non-vested stock units that we expect to be recognized over a weighted average period of 2.3 years. Non-Vested Stock Units – Service-Based and Performance-Based Awards During 2018, we awarded performance-based awards to certain employees. The target level established by the award, which is based on the Company’s 2018 adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), provided for the recipients to receive 115,338 non-vested stock units if the target was achieved. The target number of shares to be potentially awarded has been reduced by forfeitures as indicated in the table below. Performance-based non-vested stock units compensation expense included in general and administrative expenses in our consolidated statements of operations was $5.8 million, $5.0 million and $3.7 million for 2018, 2017 and 2016, respectively. The following table presents our performance-based non-vested stock units activity for 2018:
The weighted average grant date fair value of performance-based non-vested stock units granted was $79.59, $52.99 and $46.29 in 2018, 2017 and 2016, respectively. At December 31, 2018, there was $8.3 million in unrecognized compensation costs related to our performance-based non-vested stock units that we expect to be recognized over a weighted average period of 1.9 years. |
COMMITMENTS AND CONTINGENCIES |
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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 Demand 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 fees related to all legal matters are expensed as incurred. Legal Proceedings – Settled Wage and Hour Litigation On July 25, 2012, a putative collective and class action complaint was filed in the United States District Court for the District of Connecticut against us in which three former employees allege wage and hour law violations. The former employees claim that they were not paid overtime for all hours worked over 40 hours in violation of the Federal Fair Labor Standards Act (“FLSA”), as well as the Pennsylvania Minimum Wage Act. More specifically, they allege they were paid on both a per-visit and an hourly basis, and that such a pay scheme resulted in their misclassification as exempt employees, thereby denying them overtime pay. On June 10, 2015, the Company and plaintiffs participated in a mediation whereby they agreed to fully resolve all of plaintiffs’ claims in the lawsuit for $8.0 million, subject to approval by the Court. As of September 30, 2015, we had an accrual of $8.0 million for this matter. On January 29, 2016, the Court approved the final settlement of this case. The settlement became effective on February 26, 2016. As a result of the final amount calculated by the settlement administrator based on claims timely submitted, we reduced our accrual to $5.3 million as of December 31, 2015; this amount was paid during the three-month period ended March 31, 2016. On September 13, 2012, a putative collective and class action complaint was filed in the United States District Court for the Northern District of Illinois against us in which a former employee alleges wage and hour law violations. The former employee claims she was paid on both a per-visit and an hourly basis, and that such a pay scheme resulted in her misclassification as an exempt employee, thereby denying her overtime. The plaintiff alleges violations of federal and state law and seeks damages under the FLSA and the Illinois Minimum Wage Law. On December 23, 2015, the parties agreed to explore the possibility of a mediated settlement of the Illinois case, and a mediation occurred on April 18, 2016. The parties agreed to settle the case for $0.8 million, subject to court approval, which the Company had accrued as of September 30, 2016. On August 4, 2016, the Court approved the final settlement of this case. The final payment of $0.6 million was paid on November 21, 2016. Frontier Litigation On April 2, 2015, Frontier Home Health and Hospice, L.L.C. (“Frontier”) filed a complaint against the Company in the United States District Court for the District of Connecticut alleging breach of contract, negligent misrepresentation and unfair and deceptive trade practices under Conn. Gen. Stat. §42-110b. Frontier acquired our interest in five home health and four hospice care centers in Wyoming and Idaho in April 2014. The complaint alleges that certain of the hospice patients on service at the time of the acquisition did not meet Medicare eligibility requirements and that we breached certain of the representations and warranties under the purchase agreement and therefore, the businesses were worth less than the purchase price. Under the complaint, Frontier seeks declaratory judgment from the District Court that, under the terms of the purchase agreement with Frontier, we are obligated to determine the amount of the alleged Medicare overpayments and reimburse the government for the same in a timely manner, as well as unspecified compensatory and punitive damages, attorneys’ fees and pre- and post-judgment interest. The Company resolved the Frontier litigation for $2.9 million during the three-month period ended December 31, 2016. 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 sought 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, and the dismissal with prejudice of the litigation. Approximately $15.0 million of the settlement amount was paid by the Company’s insurance carriers. The net of these two amounts, $28.7 million, was recorded as a charge in our consolidated statements of operations and paid with cash on hand during 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 audits 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. Idaho and Wyoming Self-Report During 2016, the Company engaged an independent auditing firm to perform a clinical audit of the hospice care centers acquired by Frontier Home Health and Hospice in April 2014. As of December 31, 2018, we have recorded $1.3 million to accrued expenses in our consolidated balance sheet related to this matter. Other Investigative Matters – Settled Corporate Integrity Agreement During the course of our compliance with the CIA, the Company identified several reportable events and notified the OIG as required. As of December 31, 2015, the Company had an accrual of $4.7 million for these matters. On May 5, 2016, the company entered into a settlement agreement with the OIG and the matters were fully resolved for $4.7 million; this amount was paid during the three-month period ended June 30, 2016. 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. 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 December 31, 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. On January 10, 2019, an arbitration panel from the American Health Lawyers Association determined that the prior owners' liability for their indemnification obligation was $2.8 million. Accordingly, the Company reduced its indemnity receivable from $4.9 million to $2.8 million. The $2.1 million impact was recorded to general and administrative expenses, other within our consolidated statements of operations. As of December 31, 2018, we have an indemnity receivable of approximately $2.8 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 a 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 partially successful Level I and Level II Administrative Appeals, the alleged overpayment for the Lakeland Care Centers has been reduced to $26.0 million and the alleged overpayment for the Clearwater Care Center has been reduced to $3.3 million. The Company has now filed Level III Administrative Appeals, and 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 $29.3 million based on the partial success achieved by the Company in prosecuting its Level I and II Administrative Appeals. As of December 31, 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 in our consolidated balance sheet as of December 31, 2018. The net of these two amounts, $6.5 million, was recorded as a reduction in revenue in our consolidated statements of operations during 2017. As of December 31, 2018, $1.5 million of net receivables have been impacted by this payment suspension. Compliance From time to time, the Company performs internal reviews of claims data to identify potential improper payments. Any overpayments are recorded as a reduction in revenue in our consolidated statements of operations. As of December 31, 2018, we have recorded $5.6 million to accrued expenses in our consolidated balance sheet as a result of these reviews. Operating Leases We have leased office space at various locations under non-cancelable agreements that expire between 2019 and 2028, and require various minimum annual rentals. Our operating leases are for lease terms of one to ten years and may include, in addition to base rental amounts, certain landlord pass-through costs for our pro-rata share of the lessor’s real estate taxes, utilities and common area maintenance costs. Some of our operating leases contain escalation clauses, in which annual minimum base rentals increase over the term of the lease. Total minimum rental commitments for leased office space as of December 31, 2018 are as follows (amounts in millions):
Rent expense for non-cancelable operating leases was $27.8 million, $28.6 million and $27.5 million for 2018, 2017 and 2016, respectively. 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. The following table presents details of our insurance programs, including amounts accrued for the periods indicated (amounts in millions) in accrued expenses in our accompanying balance sheets. The amounts accrued below represent our total estimated liability for individual claims that are less than our noted insurance coverage amounts, which can include outstanding claims and claims incurred but not reported.
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. Effective January 1, 2019, our workers compensation insurance retention limit will increase to $1.0 million per incident. Severance We have commitments related to our Key Executive Severance Plan applicable to a number of our senior executives, as well as the employment agreement entered into with our Chief Executive Officer, each of which generally commit us to pay severance benefits under certain circumstances. Other We are subject to various other types of claims and disputes arising in the ordinary course of our business. While the resolution of such issues is not presently determinable, we believe that the ultimate resolution of such matters will not have a significant effect on our consolidated financial condition, results of operations and cash flows. |
EMPLOYEE BENEFIT PLANS |
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Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS 401(k) Benefit Plan We maintain a plan qualified under Section 401(k) of the Internal Revenue Code for all employees who have reached 21 years of age, effective the first month after hire date. Under the plan, eligible employees may elect to defer a portion of their compensation, subject to Internal Revenue Service limits. Effective January 1, 2017, our match of contributions to be made to each eligible employee contribution is $0.44 for every $1.00 contributed up to the first 6% of their salary. During 2016, our match of contributions to be made to each eligible employee contribution was $0.375 for every $1.00 contributed up to the first 6% of their salary. The match is discretionary and thus is subject to change at the discretion of management. These contributions are made in the form of our common stock, valued based upon the fair value of the stock as of the end of each calendar quarter end. We expensed approximately $9.0 million, $8.8 million and $6.9 million related to our 401(k) benefit plan for 2018, 2017 and 2016, respectively. Deferred Compensation Plan We had a Deferred Compensation Plan for additional tax-deferred savings for a select group of management or highly compensated employees. Amounts credited under the Deferred Compensation Plan were funded into a rabbi trust, which is managed by a trustee. The trustee has the discretion to manage the assets of the Deferred Compensation Plan as deemed fit, thus, the assets are not necessarily reflective of the same investment choices that would have been made by the participants. Effective January 1, 2015, all prospective salary deferrals ceased. Participants will be allowed to make transactions with any remaining account balances as they wish per plan guidelines. |
SHARE REPURCHASE |
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Equity [Abstract] | |
SHARE REPURCHASE | SHARE REPURCHASE 2018 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. The repurchased shares are classified as treasury shares. Stock Repurchase Program On September 9, 2015, we announced that our Board of Directors authorized a stock repurchase program allowing for the repurchase of up to $75 million of our outstanding common stock on or before September 6, 2016, the date on which the stock repurchase program expired. Under the terms of the program, we were allowed to repurchase shares from time to time in open market transactions, block purchases or in private transactions in accordance with applicable federal securities laws and other legal requirements. We were allowed to enter into Rule 10b5-1 plans to effect some or all of the repurchases. The timing and the amount of the repurchases were determined by management based on a number of factors, including but not limited to share price, trading volume and general market conditions, as well as on working capital requirements, general business conditions and other factors. Pursuant to this program, we repurchased 324,141 shares of our common stock at a weighted average price of $37.96 per share and a total cost of approximately $12.3 million during 2016 and 116,859 shares of our common stock at a weighted average price of $39.20 per share and a total cost of approximately $4.6 million during 2015. The repurchased shares are classified as treasury shares. |
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EXIT AND RESTRUCTURING ACTIVITIES | EXIT AND RESTRUCTURING ACTIVITIES During 2017, we closed four Florida home health care centers, consolidated another three Florida home health care centers with care centers servicing the same markets and implemented a plan to restructure our home health division. As a result of these actions, we recorded non-cash charges of $1.3 million in asset impairment expense related to the write-off of intangible assets, $0.6 million in other general and administrative expenses related to lease termination costs and $3.0 million in salaries and benefits related to severance costs which was offset by a reduction in non-cash compensation of approximately $1.0 million within our consolidated statements of operations for 2017. Our reserve activity for our 2017 exit and restructuring activity is as follows (amounts in millions):
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SEGMENT INFORMATION |
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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 the essential activities of daily living. Our hospice segment provides palliative care and comfort to terminally ill patients and their families. Our personal care segment, which was established with the acquisition of Associated Home Care during the three-month period ended March 31, 2016, 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. During 2018, management revised its measurement of the personal care segment's operating income (loss) to exclude certain expenses that were not directly attributable to the support of the segment, but rather a corporate support function. Prior periods have been restated to conform to the current presentation. 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).
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UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION | UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION
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RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS 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. At the time of the transaction, KKR held approximately 14.2% of the Company's outstanding shares of common stock. On November 20, 2015, we engaged KKR Consulting, LLC (“KKR Capstone”), a consulting company of operational professionals that works exclusively with portfolio companies of Kohlberg Kravis Roberts & Co. Nathaniel M. Zilkha, a member of our Board of Directors, is a member of KKR Management, LLC, which is an affiliate of KKR Asset Management LLC (“KAM”), a substantial stockholder of our Company, and an affiliate of Kohlberg Kravis Roberts & Co. During 2016, we incurred costs of approximately $1.6 million related to consulting services provided to the Company in the ordinary course of business. Mr. Zilkha did not receive any direct compensation or direct financial benefit from the engagement of KKR Capstone. Effective October 22, 2015, we entered into a contract for telemonitoring services with Care Innovations, LLC (“Care Innovations”). At that time, Paul Kusserow, our President and Chief Executive Officer, was a member of the Advisory Board to Care Innovations. In connection with our contract for telemonitoring services for the Company, Care Innovations was to receive an annual fee of approximately $1.8 million. During 2016, we incurred costs of approximately $1.5 million related to this related party engagement. We did not incur any additional costs related to this engagement during 2017 or 2018. Mr. Kusserow did not receive any direct compensation or direct financial benefit from the engagement of Care Innovations as our telemonitoring partner and no longer serves as a member of Care Innovations' Advisory Board. |
SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Acquisitions On February 1, 2019, we acquired Compassionate Care Hospice ("CCH"), a national hospice care provider headquartered in New Jersey, for a purchase price of $340 million, which is inclusive of approximately $50 million in payments related to a tax asset and working capital. On February 14, 2019, we signed a definitive agreement to acquire the assets of RoseRock Healthcare, an Oklahoma based hospice provider for a purchase price of $17.5 million. First Amendment to Amended and Restated Credit Agreement On February 4, 2019, we entered into the First Amendment to the Credit Agreement (as amended by the First Amendment, the “Amended Credit Agreement”). The Amended Credit Agreement provides for a senior secured credit facility in an initial aggregate principal amount of up to $725 million, which includes the $550 million Revolving Credit Facility under the Credit Agreement, and a term loan facility in the principal amount of up to $175 million (the “Term Loan Facility” and collectively with the Revolving Credit Facility, the “Credit Facility”), which was added by the First Amendment. We borrowed the entire principal amount of the Term Loan Facility on February 4, 2019 in order to fund a portion of the purchase price of the CCH acquisition, with the remainder of the purchase price and associated transactional fees and expenses funded by proceeds from the Revolving Credit Facility. The loans issued under the Credit Facility bear interest on a per annum basis, at our election, at either (i) the Base Rate plus an Applicable Rate or (ii) the Eurodollar Rate plus an Applicable Rate. The Amended Credit Agreement provides for an Applicable Rate that is 0.25% lower than the rate provided in the Credit Agreement. As a result, the current Applicable Rate for Base Rate loans and Eurodollar Rate loans is equal to 0.50% per annum and 1.50% per annum, respectively. We are also subject to a commitment fee and letter of credit fee under the terms of the Amended Credit Agreement, as presented in the table below.
The final maturity date of the Credit Facility is February 4, 2024. The Revolving Facility will terminate and be due and payable as of the final maturity date. The Term Loan Facility, however, is subject to quarterly amortization of principal in the amount of (i) 0.625% for the period commencing on February 4, 2019 and ending on March 31, 2020, (ii) 1.250% for the period commencing on April 1, 2020 and ending on March 31, 2023, and (iii) 1.875% for the period commencing on April 1, 2023 and ending on February 4, 2024. The remaining balance of the Term Loan Facility must be paid upon the final maturity date. In addition to the scheduled amortization of the Term Loan Facility, and subject to customary exceptions and reinvestment rights, we are required to prepay the Term Loan Facility, first, and the Revolving Credit Facility, second, with 100% of all net cash proceeds received by any loan party or any subsidiary thereof in connection with (a) any asset sale or disposition where such loan party receives net cash proceeds in excess of $5 million or (b) any debt issuance that is not permitted under the Amended Credit Agreement. Joinder Agreement In connection with the CCH acquisition, we entered into a Joinder Agreement, dated as of February 4, 2019, pursuant to which CCH and its subsidiaries were made parties to, and became subject to the terms and conditions of, the Amended Credit Agreement, the Amended and Restated Security Agreement, dated as of June 29, 2018, and the Amended and Restated Pledge Agreement, dated as of June 29, 2018. Pursuant to the Joinder, the Amended and Restated Security Agreement, and the Amended and Restated Pledge Agreement, CCH and its subsidiaries granted in favor of the Administrative Agent a first lien security interest in substantially all of their personal property assets and pledged to the Administrative Agent each of their respective subsidiaries’ issued and outstanding equity interests. CCH and its subsidiaries also guaranteed our obligations, whether now existing or arising after the effective date of the Joinder, under the Amended Credit Agreement pursuant to the terms of the Joinder and the Amended Credit Agreement. Stock Repurchase Program On February 25, 2019, we announced that our Board of Directors authorized a stock repurchase program, under which we may repurchase up to $100 million of our outstanding common stock through March 1, 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Recently Issued 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. Generally Accepted Accounting Principles ("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 provision for doubtful accounts are now considered a 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 provision for doubtful accounts within operating expenses within our 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 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. 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 consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting, which simplified the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liability, and classification within the statement of cash flows. The ASU was effective for annual and interim periods beginning after December 15, 2016. We adopted this ASU effective January 1, 2017, and as a result, we recorded a $0.4 million increase to our non-current deferred tax asset and retained earnings for tax benefits that were not previously recognized under the prior rules. Additionally, on a prospective basis, we recorded excess tax benefits as a discrete item in our income tax provision within our consolidated statements of operations. We recorded excess tax benefits of $3.2 million within our consolidated statements of operations for the year ended December 31, 2017. Historically, these amounts were recorded as additional paid-in capital in our consolidated balance sheet. We also elected to prospectively apply the change to the presentation of cash payments made to taxing authorities on the employees' behalf for shares withheld upon stock vesting within our consolidated statements of cash flows for the year ended December 31, 2017. We have also elected to continue our current policy of estimating forfeitures of stock-based compensation awards at grant date and revising in subsequent periods to reflect actual forfeitures. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a lease liability and right-of-use asset ("ROU asset") for all leases with a term greater than twelve months and to disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, Codification Improvements to Topic 842, Leases; and ASU 2018-11, Targeted Improvements (collectively, "Topic 842"). Under Topic 842, leases will be classified as either financing or operating. The classification will determine the pattern of expense recognition and classification within the income statement. Topic 842 is effective for us on January 1, 2019, with early adoption permitted. We expect to adopt the new standard on the effective date using a modified retrospective transition approach, which requires the new standard to be applied to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We will use the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides several optional practical expedients that can be adopted at transition. We expect to elect the "package of practical expedients," which allows us to not reassess our prior conclusions regarding lease identification, lease classification and initial direct costs. We do not expect to elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We expect adoption of this standard to have a material effect on our financial statements. We are still evaluating the overall impact of adoption; however, we currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and fleet operating leases; and (2) significant new disclosures about our leasing activities. We do not expect a significant change in our leasing activities between now and adoption. On adoption, we are expecting to recognize additional operating liabilities of approximately $80 million, with corresponding ROU assets of approximately the same amount, based on the present value of the remaining minimum rental payments under current leasing arrangements for our existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We are planning to elect the practical expedient that allows us to not separate lease and non-lease components for all of our leases. We are also planning to apply the short-term lease recognition exemption to certain information technology leases; therefore, we will not recognize ROU assets and lease liabilities for these leases. |
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Use of Estimates | Use of Estimates Our accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
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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. |
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Principles of Consolidation | Principles of Consolidation These 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 consolidated financial statements, and business combinations accounted for as purchases have been included in our 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. |
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Investments | 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 consolidated financial statements. During 2016, we sold a 30% interest in one of our care centers while maintaining a controlling interest in the newly formed joint venture; we repurchased the 30% interest during 2018. 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. During 2018, we made a $7.0 million investment in a healthcare analytics company; this investment will be accounted for under the equity method. The book value of investments that we account for under the equity method of accounting is $35.1 million and $26.4 million as of December 31, 2018 and 2017, respectively and is reflected in other assets within our consolidated balance sheets. 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. |
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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):
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 estimates for explicit and implicit price concessions. Explicit price concessions include contractual adjustments provided to patients and third-party payors. Implicit price concessions include discounts provided to self-pay, uninsured patients or other payors, adjustments resulting from payment reviews and adjustments arising from our inability to obtain appropriate billing documentation, authorizations or face-to-face documentation. 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. Explicit price concessions are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third party payors and others for services provided. Implicit price concessions are recorded for self-pay, uninsured patients and other payors by major payor class based on our historical collection experience, aged accounts receivable by payor and current economic conditions. The implicit price concession represents the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. The Company assesses its ability to collect for the healthcare services provided 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 represents approximately 73% of the Company's consolidated net service revenue. 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 determine our estimates for price concessions related to payment reviews based on our historical experience and success rates in the claim appeals and adjudication process. Revenue is recorded at amounts we estimate to be realizable for services provided. We determine our estimates for price concessions related to our inability to obtain appropriate billing documentation, authorizations, or face-to-face documentation based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims. Revenue by payor class as a percentage of total net service revenue is as follows:
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 a 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 four or fewer; (c) a partial payment if a patient transferred to another provider or we admitted a patient transferring 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) 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; (f) changes in the base episode payments established by the Medicare Program; and (g) adjustments to the base episode payments for case mix and geographic wages. 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 December 31, 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 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. Explicit price concessions 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 accounted for 97% of our total net Medicare hospice service revenue for each of 2018, 2017 and 2016, 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 our 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 accrued expenses within our consolidated balance sheet. 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 December 31, 2018, we have settled our Medicare hospice reimbursements for all fiscal years through October 31, 2012. As of December 31, 2018, we have recorded $1.7 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2013 through September 30, 2019. As of December 31, 2017, we had recorded $0.9 million for estimated amounts due back to Medicare in accrued expenses 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. Explicit price concessions 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. Net service revenue is recognized at the time services are rendered based on gross charges for the services provided, reduced by estimates for price concessions. 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). |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include certificates of deposit and all highly liquid debt instruments with maturities of three months or less when purchased. |
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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 December 31, 2018, there is no single payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables. 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 net patient accounts receivable at December 31, 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. 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. |
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Property and Equipment | Property and Equipment Property and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets or life of the lease, if shorter. 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. We assess the impairment of a long-lived asset group whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include but are not limited to the following:
If we determine that the carrying value of long-lived assets may not be recoverable, we compare the carrying value of the asset group to the undiscounted cash flows expected to be generated by the asset group. If the carrying value exceeds the undiscounted cash flows, an impairment charge is indicated. An impairment charge is recognized to the extent that the carrying value of the asset group exceeds its fair value. We generally provide for depreciation over the following estimated useful service lives.
During 2015, we began the transition of all our care centers from our proprietary operating system to Homecare Homebase (“HCHB”), a leading home health and hospice platform, with all of our care centers operating on HCHB as of December 31, 2016. As part of our conversion process, we determined that a number of assets (primarily laptops) were not compatible with HCHB and had no other alternative or secondary use. As a result, we recorded a non-cash asset impairment charge of $4.4 million to write-off these assets during the year ended December 31, 2016. During 2018, we reviewed the balances of our property and equipment and as a result, eliminated those asset balances and related accumulated depreciation for which the asset was no longer in service. The following table summarizes the balances related to our property and equipment for 2018 and 2017 (amounts in millions):
Depreciation expense for 2018, 2017 and 2016 was $10.8 million, $14.4 million and $17.2 million, respectively. |
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. These events or circumstances include, but are not limited to, a significant adverse change in the business environment, regulatory environment or legal factors, or a substantial decline in the market capitalization of our stock. Each of our operating segments described in Note 13 – Segment Information is considered to represent an individual reporting unit for goodwill impairment testing purposes. We consider each of our home health care centers to constitute an individual business for which discrete financial information is available. However, since these care centers have substantially similar operating and economic characteristics and resource allocation and significant investment decisions concerning these businesses are centralized and the benefits broadly distributed, we have aggregated these care centers and deemed them to constitute a single reporting unit. We have applied this same aggregation principle to our hospice and personal-care care centers and have also deemed each of them to be a single reporting unit. During 2018, we performed a qualitative assessment to determine if it is more likely than not that the fair value of the reporting units are less than their carrying values by evaluating relevant events and circumstances including financial performance, market conditions and share price. Based on this assessment, we did not record any goodwill impairment charges and none of the goodwill associated with our various reporting units was considered at risk of impairment as of October 31, 2018. Since the date of our last annual goodwill impairment test, there have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our reporting units would be less than their carrying amounts. Intangible assets consist of Certificates of Need, licenses, acquired names and non-compete agreements. We amortize non-compete agreements and acquired names that we do not intend to use in the future on a straight-line basis over their estimated useful lives, which is generally three years for non-compete agreements and up to five years for acquired names. Our indefinite-lived intangible assets are reviewed for impairment annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. During 2018, we performed a qualitative assessment to determine that our indefinite-lived intangible assets were not impaired. There have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our intangible assets would be less than their carrying amounts. |
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Debt Issuance Costs | Debt Issuance Costs During 2018, we recorded an additional $2.4 million in deferred debt issuance costs as a reduction to long-term obligations, less current portion in our consolidated balance sheet in connection with our new Credit Agreement (See Note 6 - Long-Term Obligations). As of December 31, 2018 and 2017, we had unamortized debt issuance costs of $3.5 million and $1.9 million, respectively, recorded as long-term obligations, less current portion in our accompanying consolidated balance sheets. We amortize deferred debt issuance costs related to our long-term obligations over the term of the obligation through interest expense, unless the debt is extinguished, in which case unamortized balances are immediately expensed. |
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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:
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. |
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Income Taxes | Income Taxes We use the asset and liability approach for measuring deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates. Our deferred tax calculation requires us to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when we believe it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect of a change in tax rate is recognized as income or expense in the period that includes the enactment date. As of December 31, 2018 and 2017, our net deferred tax assets were $35.8 million and $56.1 million, respectively. Our net deferred tax asset at December 31, 2017 was reduced $21.4 million as a result of the remeasurement of deferred taxes using the reduced U.S. corporate tax rates included in H.R. 1 (Tax Cuts and Jobs Act) enacted on December 22, 2017. Management regularly assesses the ability to realize deferred tax assets recorded in the Company’s entities based upon the weight of available evidence, including such factors as the recent earnings history and expected future taxable income. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, we could be required to increase the valuation allowance for deferred tax assets. This would result in an increase in our effective tax rate. |
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Share-Based Compensation | Share-Based Compensation We record all share-based compensation as expense in the financial statements measured at the fair value of the award. We recognize compensation cost on a straight-line basis over the requisite service period for each separately vesting portion of the award. Upon adoption of ASU 2016-09 in 2017, we started recording the excess tax benefits related to stock option exercises as operating cash flows; these amounts were previously classified as financing cash flows. |
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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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Advertising Costs | Advertising Costs We expense advertising costs as incurred. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue Sources, Health Care Organization [Table Text Block] |
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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):
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Schedule of Estimated Useful Lives of Property and Equipment | We generally provide for depreciation over the following estimated useful service lives.
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Schedule of Property and Equipment | The following table summarizes the balances related to our property and equipment for 2018 and 2017 (amounts in millions):
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Schedule of Weighted-Average Shares Outstanding | The following table sets forth, for the periods indicated, shares used in our computation of weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):
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GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Activity Related to Goodwill and Other Intangible Assets Net | The following table summarizes the activity related to our goodwill for 2018, 2017 and 2016 (amounts in millions):
The following table summarizes the activity related to our other intangible assets, net for 2018, 2017 and 2016 (amounts in millions):
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Schedule of Estimated Aggregate Future Amortization Expense | The estimated aggregate amortization expense related to intangible assets for each of the five succeeding years is as follows (amounts in millions):
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DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details Of Certain Balance Sheet Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets | Additional information regarding certain balance sheet accounts is presented below (amounts in millions):
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Schedule of Other Assets | Additional information regarding certain balance sheet accounts is presented below (amounts in millions):
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Schedule of Accrued Expenses | Additional information regarding certain balance sheet accounts is presented below (amounts in millions):
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Schedule of Other Long-Term Obligations | Additional information regarding certain balance sheet accounts is presented below (amounts in millions):
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LONG-TERM OBLIGATIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt consists of the following for the periods indicated (amounts in millions):
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Schedule of Maturities of Long-Term Debt | Maturities of debt as of December 31, 2018 are as follows (amounts in millions):
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Schedule of Commitment Fee Under Credit Facilities | The “Applicable Rate” is based on the consolidated leverage ratio and is presented in the table below. As of December 31, 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 Facilities, as presented in the table below.
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Provision | Income taxes attributable to continuing operations consist of the following (amounts in millions):
Total income tax expense for the years ended December 31, 2018, 2017 and 2016 was allocated as follows (amounts in millions):
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Schedule of Sources of Tax Effects | A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21 percent in 2018 and 35 percent in 2017 and 2016 to income before taxes is as follows:
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Schedule of Net Deferred Tax Assets | Deferred tax assets (liabilities) consist of the following components (amounts in millions):
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Schedule of Uncertain Tax Positions | Uncertain Tax Positions We account for uncertain tax positions in accordance with the authoritative guidance for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (amounts in millions):
(1) The Company's remeasurement of its deferred tax assets and liabilities to reflect the enacted reduced tax rate as a result of the recent tax reform resulted in a $1.1 million reduction in its uncertain tax positions recorded in net deferred tax assets at December 31, 2017. |
CAPITAL STOCK AND SHARE-BASED COMPENSATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Employee Stock Purchase Plan Activity | The following is a detail of the purchases that were made or pending Board of Director approval under the plan:
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Schedule of Share-based Payment Award Valuation Assumptions | The fair values of the awards were estimated using the following assumptions for each 2018, 2017 and 2016:
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Schedule of Stock Options Activity | The following table presents our non-vested stock option activity for 2018:
The following table presents our stock option activity for 2018:
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Schedule of Non-Vested Stock Activity | The following table presents our non-vested stock activity for 2018:
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Schedule of Non-Vested Stock Unit Activity | The following table presents our service-based non-vested stock units activity for 2018:
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Schedule of Nonvested Performance-based Units Activity | The following table presents our performance-based non-vested stock units activity for 2018:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Commitments | Total minimum rental commitments for leased office space as of December 31, 2018 are as follows (amounts in millions):
Rent expense for non-cancelable operating leases was $27.8 million, $28.6 million and $27.5 million for 2018, 2017 and 2016, respectively. |
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Schedule of Insurance Programs | The following table presents details of our insurance programs, including amounts accrued for the periods indicated (amounts in millions) in accrued expenses in our accompanying balance sheets. The amounts accrued below represent our total estimated liability for individual claims that are less than our noted insurance coverage amounts, which can include outstanding claims and claims incurred but not reported.
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EXIT AND RESTRUCTURING ACTIVITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reserve Activity | Our reserve activity for our 2017 exit and restructuring activity is as follows (amounts in millions):
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SEGMENT INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Income of Reportable Segments | 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).
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UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited Summarized Quarterly Financial Information |
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Patient Accounts Receivable Narrative (Details) - day |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Percentage of patient receivables outstanding | 10.00% | |
Historical collection rate from Medicare | 99.00% | |
Portion of accounts receivable derived from Medicare | 56.00% | 59.00% |
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 | |
Home Health [Member] | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Historical collection rate from Medicare | 99.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Lives of Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 39 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | Lesser of lease term or expected useful life |
Equipment and Furniture [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
Equipment and Furniture [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 7 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 5 years |
Computer Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
Computer Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 5 years |
Capital Lease Obligations [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Balances Related to Property and Equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 124,900 | $ 177,900 |
Less accumulated depreciation | (95,472) | (146,814) |
Property and equipment, net | 29,449 | 31,122 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,700 | 7,800 |
Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 53,400 | 72,900 |
Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,900 | 0 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 59,900 | $ 97,200 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Weighted Average Shares Outstanding (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounting Policies [Abstract] | |||
Weighted average number of shares outstanding – basic | 32,791 | 33,704 | 33,198 |
Effect of dilutive securities: | |||
Stock options | 502 | 281 | 162 |
Non-vested stock and stock units | 316 | 319 | 381 |
Weighted average number of shares outstanding – diluted | 33,609 | 34,304 | 33,741 |
Anti-dilutive securities | 50 | 271 | 221 |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Activity Related to Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill [Line Items] | |||
Goodwill, Impaired, Accumulated Impairment Loss | $ 733,700 | ||
Goodwill [Roll Forward] | |||
Beginning balance | 319,949 | $ 288,900 | $ 261,700 |
Additions | 9,600 | 31,000 | 27,100 |
Adjustments related to acquisitions | 100 | ||
Ending balance | 329,480 | 319,949 | 288,900 |
Home Health [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 85,000 | 71,600 | 67,100 |
Additions | 2,100 | 13,400 | 4,400 |
Adjustments related to acquisitions | 100 | ||
Ending balance | 87,100 | 85,000 | 71,600 |
Hospice [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 199,300 | 194,600 | 194,600 |
Additions | 0 | 4,700 | 0 |
Adjustments related to acquisitions | 0 | ||
Ending balance | 199,300 | 199,300 | 194,600 |
Personal Care [Member] | |||
Goodwill [Roll Forward] | |||
Beginning balance | 35,600 | 22,700 | 0 |
Additions | 7,500 | 12,900 | 22,700 |
Adjustments related to acquisitions | 0 | ||
Ending balance | $ 43,100 | $ 35,600 | $ 22,700 |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Estimated Future Amortization Expense (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2019 | $ 0.4 |
2020 | 0.2 |
2021 | 0.0 |
2022 | 0.0 |
2023 | 0.0 |
Total | $ 0.6 |
LONG-TERM OBLIGATIONS - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Principal amount | $ 10,900 | $ 90,700 |
Deferred debt issuance costs | (3,500) | (1,900) |
Long-term obligations, including current portion | 7,400 | 88,800 |
Current portion of long-term obligations | (1,612) | (10,638) |
Long-term obligations, less current portion | 5,775 | 78,203 |
Term Loan [Member] | 100 Million Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 0 | 90,000 |
Revolving Credit Facility [Member] | Five Hundred Fifty Million Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 7,500 | 0 |
Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | 1,100 | 700 |
Capital Lease Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 2,300 | $ 0 |
LONG-TERM OBLIGATIONS - Summary of Long-Term Debt Additional Information (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Term Loan [Member] | 100 Million Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 100,000,000 | |
Maturity date | Aug. 28, 2020 | |
Term Loan [Member] | 100 Million Term Loan [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument Interest Rate at Period End | 3.57% | |
Revolving Credit Facility [Member] | Five Hundred Fifty Million Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 550,000,000 | |
Maturity date | Jun. 29, 2023 | |
Revolving Credit Facility [Member] | Five Hundred Fifty Million Revolving Credit Facility [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument Interest Rate at Period End | 3.85% |
LONG-TERM OBLIGATIONS - Maturities of Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Long-Term Obligations, Fiscal Year Maturity | ||
2019 | $ 1.6 | |
2020 | 1.4 | |
2021 | 0.4 | |
2022 | 0.0 | |
2023 | 7.5 | |
Total | $ 10.9 | $ 90.7 |
INCOME TAXES - Components of Tax Provision by Jurisdiction (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current income tax expense/(benefit): | |||
Federal | $ 16,400 | $ (2,000) | $ (500) |
State and local | 2,100 | (100) | (100) |
Current income tax expense (benefit) | 18,500 | (2,100) | (600) |
Deferred income tax expense/(benefit): | |||
Federal | 14,500 | 51,200 | 22,100 |
State and local | 5,800 | 1,000 | 2,400 |
Deferred income tax expense (benefit) | 20,271 | 52,178 | 24,547 |
Income tax expense | $ 38,859 | $ 50,118 | $ 23,935 |
INCOME TAXES - Income Tax Expense Allocation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Income from continuing operations | $ 38,859 | $ 50,118 | $ 23,935 |
Interest expense | 100 | 0 | (100) |
Stockholders’ equity | 0 | (300) | (7,200) |
Total income tax expense allocation | $ 38,900 | $ 49,800 | $ 16,600 |
INCOME TAXES - Reconciliation of Effective Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Income tax expense at U.S. federal statutory rate | 21.00% | 35.00% | 35.00% |
State and local income taxes, net of federal income tax benefit | 4.80% | 3.80% | 4.80% |
Excess tax benefits from share-based compensation | (1.60%) | (3.50%) | (0.00%) |
Tax rate change | 0.00% | 26.50% | 0.00% |
Other items, net | 0.20% | 0.20% | (0.90%) |
Income tax expense/(benefit) | 24.40% | 62.00% | 38.90% |
INCOME TAXES - Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 5.6 | $ 5.3 |
Accrued payroll & employee benefits | 11.2 | 9.0 |
Workers’ compensation | 8.3 | 7.9 |
Amortization of intangible assets | 14.7 | 26.0 |
Share-based compensation | 6.9 | 6.1 |
Net operating loss carryforwards | 5.9 | 20.1 |
Tax credit carryforwards | 2.8 | 4.6 |
Other | 2.9 | 2.4 |
Gross deferred tax assets | 58.3 | 81.4 |
Less: valuation allowance | (0.7) | (0.7) |
Net deferred tax assets | 57.6 | 80.7 |
Deferred tax (liabilities): | ||
Property and equipment | (4.4) | (4.0) |
Deferred revenue | (13.5) | (18.0) |
Investment in partnerships | (3.1) | (2.1) |
Other liabilities | (0.8) | (0.5) |
Gross deferred tax liabilities | (21.8) | (24.6) |
Net deferred tax assets (liabilities) | $ 35.8 | $ 56.1 |
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Uncertain tax benefits, beginning balance | $ 2.7 | $ 4.1 |
Additions for tax positions related to current year | 0.0 | 0.0 |
Additions for tax positions related to prior year | 0.0 | 0.0 |
Reductions for tax positions related to prior years | 0.0 | 0.0 |
Lapse of statute of limitations | 0.0 | (0.3) |
Change in statutory tax rate (1) | 0.0 | (1.1) |
Settlements | 0.0 | 0.0 |
Uncertain tax benefits, ending balance | $ 2.7 | $ 2.7 |
CAPITAL STOCK AND SHARE-BASED COMPENSATION - Employee Stock Purchase Plan Purchases (Details) - $ / shares |
3 Months Ended | 55 Months Ended | 79 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2018 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||
Employee Stock Purchase Plan shares issued (shares) | 7,856 | 6,052 | 8,673 | 10,913 | 13,323 | 12,276 | 11,446 | 13,244 | 3,039,200 | 3,122,983 |
Price per Employee Stock Purchase Plan share issued (usd per share) | $ 99.54 | $ 106.22 | $ 72.64 | $ 51.29 | $ 44.80 | $ 47.57 | $ 53.39 | $ 43.43 | $ 14.72 | $ 99.54 |
CAPITAL STOCK AND SHARE-BASED COMPENSATION - Stock Option Valuation Assumptions (Details) - Stock Option [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk Free Rate, minimum | 2.56% | 1.99% | 1.19% |
Risk Free Rate, maximum | 3.04% | 2.16% | 1.58% |
Expected Volatility, minimum | 42.00% | 50.18% | 53.44% |
Expected Volatility, maximum | 45.32% | 51.81% | 54.89% |
Weighted Average Fair Value | $ 42.48 | $ 28.02 | $ 25.99 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected Term | 4 years 1 month 13 days | 5 years 9 months 11 days | 5 years 10 months 10 days |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected Term | 6 years 3 months | 6 years 3 months | 6 years 3 months |
CAPITAL STOCK AND SHARE-BASED COMPENSATION - Stock Option Activity (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Number of Shares | ||
Outstanding, beginning balance (shares) | 909,730 | |
Granted (shares) | 163,666 | |
Exercised (shares) | (162,690) | |
Canceled, forfeited or expired (shares) | (77,391) | |
Outstanding, ending balance (shares) | 833,315 | 909,730 |
Exercisable (shares) | 462,845 | |
Weighted Average Exercise Price | ||
Outstanding, beginning balance (usd per share) | $ 33.25 | |
Granted (usd per share) | 55.87 | |
Exercised (usd per share) | 36.59 | |
Canceled, forfeited or expired (usd per share) | 35.95 | |
Outstanding, ending balance (usd per share) | 36.79 | $ 33.25 |
Exercisable (usd per share) | $ 27.97 | |
Weighted Average Contractual Life (Years) | ||
Outstanding, weighted average contractual life (years) | 6 years 9 months 4 days | 7 years 7 months 13 days |
Exercisable, weighted average contractual life (years) | 6 years 2 months 1 day |
CAPITAL STOCK AND SHARE-BASED COMPENSATION - Non-Vested Stock Option Activity (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
shares
| |
Number of Shares | |
Non-vested stock options beginning balance (shares) | shares | 527,798 |
Granted (shares) | shares | 163,666 |
Vested (shares) | shares | (246,442) |
Forfeited (shares) | shares | (74,552) |
Non-vested stock options ending balance (shares) | shares | 370,470 |
Weighted Average Grant Date Fair Value | |
Non-vested stock options beginning balance (usd per share) | $ / shares | $ 23.00 |
Granted (usd per share) | $ / shares | 42.48 |
Vested (usd per share) | $ / shares | 23.11 |
Forfeited (usd per share) | $ / shares | 25.78 |
Non-vested stock options ending balance (usd per share) | $ / shares | $ 30.97 |
CAPITAL STOCK AND SHARE-BASED COMPENSATION - Non-Vested Stock Activity (Details) - Non-Vested Stock [Member] - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Number of Shares | |||
Non-vested, beginning balance (shares) | 46,998 | ||
Granted (shares) | 14,904 | ||
Vested (shares) | (46,998) | ||
Canceled, forfeited or expired (shares) | 0 | ||
Non-vested, ending balance (shares) | 14,904 | 46,998 | |
Weighted Average Grant Date Fair Value | |||
Non-vested, beginning balance (usd per share) | $ 41.48 | ||
Granted (usd per share) | 80.54 | $ 62.67 | $ 50.55 |
Vested (usd per share) | 41.48 | ||
Canceled, forfeited or expired (usd per share) | 0.00 | ||
Non-vested, ending balance (usd per share) | $ 80.54 | $ 41.48 |
COMMITMENTS AND CONTINGENCIES - Future Minimum Rental Commitments (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Minimum Rental Commitments | |
2019 | $ 23.3 |
2020 | 18.7 |
2021 | 13.2 |
2022 | 8.5 |
2023 | 5.2 |
Future years | 9.8 |
Total | $ 78.7 |
COMMITMENTS AND CONTINGENCIES - Insurance Programs (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Health insurance | $ 12.4 | $ 14.1 |
Workers’ compensation | 30.9 | 29.3 |
Professional liability | 4.3 | 4.3 |
Estimated Insurance Total | 47.6 | 47.7 |
Less: long-term portion | (1.1) | (1.2) |
Estimated Insurance Excluding Long Term Portion | $ 46.5 | $ 46.5 |
EMPLOYEE BENEFIT PLANS - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Retirement Benefits [Abstract] | |||
Employer match amount | $ 0.44 | $ 0.44 | $ 0.375 |
Employee contribution amount | $ 1.00 | $ 1.00 | $ 1.00 |
Maximum percentage of employee salary eligible for employer match (percent) | 6.00% | 6.00% | 6.00% |
401(k) expense recognized | $ 9,000,000 | $ 8,800,000 | $ 6,900,000 |
SHARE REPURCHASE - Narrative (Details) - USD ($) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 04, 2018 |
Sep. 09, 2015 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share Repurchase [Line Items] | ||||||
Purchase of company stock | $ 181,402,000 | $ 0 | $ 12,315,000 | $ 4,600,000 | ||
Stock repurchase program, authorized amount | $ 75,000,000 | |||||
Stock repurchase program, expiration date | Sep. 06, 2016 | |||||
Shares repurchased (shares) | 324,141 | 116,859 | ||||
Shares repurchased, weighted average price per share (usd per share) | $ 37.96 | $ 39.20 | ||||
KKR Share Repurchase [Member] | ||||||
Share Repurchase [Line Items] | ||||||
Percentage of Shares Outstanding | 7.10% | |||||
Purchase of company stock | $ 181,400,000 | |||||
Discounted Closing Stock Price | $ 73.96 | |||||
Percentage of Closing Stock Price | 96.00% | |||||
Shares repurchased (shares) | 2,418,304 |
EXIT AND RESTRUCTURING ACTIVITIES - Reserve Activity (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Lease Termination [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 0.6 | $ 0.0 |
Charges | 0.0 | 0.6 |
Cash expenditures | (0.5) | 0.0 |
Restructuring reserve, ending balance | 0.1 | 0.6 |
Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 2.3 | 0.0 |
Charges | 0.0 | 3.0 |
Cash expenditures | (2.3) | (0.7) |
Restructuring reserve, ending balance | $ 0.0 | $ 2.3 |
SEGMENT INFORMATION - Narrative (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of reportable business segments | 3 |
UNAUDITED SUMMARIZED QUARTERLY FINANCIAL INFORMATION Operating Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net service revenue | $ 434,400 | $ 417,300 | $ 411,600 | $ 399,300 | $ 398,000 | $ 373,700 | $ 374,900 | $ 364,700 | $ 1,662,578 | $ 1,511,272 | $ 1,419,261 |
Net income (loss) attributable to Amedisys, Inc. | $ 27,500 | $ 31,400 | $ 33,300 | $ 27,200 | $ (3,800) | $ 14,600 | $ 4,500 | $ 15,100 | $ 119,346 | $ 30,301 | $ 37,261 |
Net income attributable to Amedisys, Inc. common stockholders - basic (usd per share) | $ 0.86 | $ 0.99 | $ 1.00 | $ 0.80 | $ (0.11) | $ 0.43 | $ 0.13 | $ 0.45 | $ 3.64 | $ 0.90 | $ 1.12 |
Net income attributable to Amedisys, Inc. common stockholders - diluted (usd per share) | $ 0.84 | $ 0.96 | $ 0.98 | $ 0.79 | $ (0.11) | $ 0.42 | $ 0.13 | $ 0.44 | $ 3.55 | $ 0.88 | $ 1.10 |
Quarterly Financial Information [Line Items] | |||||||||||
Effect of Tax Cuts and Jobs Act of 2017, net of income taxes | $ 21,400 | ||||||||||
Securities Class Action Lawsuit [Member] | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Legal fees, net of income taxes | $ 18,000 |
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