Enhabit Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brian Tanquilut - Jefferies - Analyst : Congrats on the quarter. Barb, maybe as I think about the performance in Q1 and as we think about the United contract coming in, I mean, how are you thinking about the ramp in further volume growth within the non-Medicare book of business, especially as we give consideration to infer volumes coming through that specific client?

Question: Brian Tanquilut - Jefferies - Analyst : Got it. And then as I think about the labor profile or the labor market in the business lines that you're on, how should we be thinking about kind of like the inflation expectation for the rest of the year?

Question: A.J. Rice - UBS - Analyst : Hi, everybody. First on the hospice side. Obviously, the ADC growth has been really good there. What -- is that you specifically initiatives you're putting on gaining share? Or do you think there's underlying improvement in the overall market that's somehow helping drive that?

Question: A.J. Rice - UBS - Analyst : And then maybe, obviously, one of the areas on home health is your business for episode continues to trend in a good direction there. Maybe flesh out some of the dynamics behind that? Are the newer contracts, allowing you more flexibility on business per episode? Are there other things you're doing that are driving that?

Question: A.J. Rice - UBS - Analyst : Okay. All right. Are you pretty much fully penetrated on the Medalogix just to put a finer point on that?

Question: Ryan Langston - TD Cowen - Analyst : Sticking with hospice, obviously, nice growth cost per patient day down 80 bps. I know you've centralized some of the operations there. I guess how much ability is left to sort of leverage those operations? And I mean if ADC keeps growing nicely like it really has, at some point, are you going to have to make sort of a step investment in those operations just to support all this new growth?

Question: Ryan Langston - TD Cowen - Analyst : Got it. And then just, obviously, the growth has been very impressive. I think it's 14 months of straight ADC growth in hospice. I guess where are you running from a capacity and sort of productivity standpoint in terms of sort of on the ground labor. And I guess, is there any reason we shouldn't sort of assume that this ADC growth won't continue through the rest of the year?

Question: Ryan Langston - TD Cowen - Analyst : Yes. And maybe just to build on that. So if we look at our ADC growth up year over year 12.3%. If we look at the RM capacity that we had exiting March year over year, we were up 16%. So to build on Barb's point, I think we're staying ahead of the curve from an overall kind of (inaudible) in front of our volumes. So we feel confident that teams executing at a really high level. We've got a really strong operating team in the hospice segment, and we have a lot of confidence we'll continue to execute there.

Question: Whit Mayo - Leerink Partners - Analyst : Barb, I was just curious now that you're lapping sort of a year or two of some of the original contracts from plans on your payer innovation strategy, what the rate increases are looking like? Or do you have annual rate escalators or anything on these contracts? Is there any protection you have around keeping up with inflation, that would be helpful.

Question: Whit Mayo - Leerink Partners - Analyst : And then maybe just on research. The research just keeps declining, and perhaps you seem fairly confident that you had some initiatives that would start to stem some of those losses and maybe reverse itself. So just maybe some color around the recertification rates.