Healthcare Business News

HealthSouth blames weather for weak quarterly results

By Beth Kutscher
Posted: April 28, 2014 - 6:15 pm ET

Severe winter weather affected another healthcare bottom line Monday as Birmingham, Ala.-based HealthSouth Corp. blamed weather, weak patient volume and Medicare reimbursement for its lower net income in the first quarter. Earlier in the day, lab services provider Laboratory Corporation of America cited the weather for its lower earnings; last week, Quest Diagnostics, the largest provider of lab services in the country, also talked about winter weather affecting its quarterly performance.

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HealthSouth, the largest operator of inpatient rehabilitation facilities in the country, saw a 6.7% decrease in net income in the first quarter despite a 3.2% increase in net operating revenue.

However, the company said it is already seeing a rebound in discharges and expects to reach the high end of its earnings projections for the full year.

HealthSouth blamed winter storms for a 2.4% decline in discharges last quarter; sequestration took another $9 million from net patient revenue. In total, net patient revenue increased 1.5%, instead of the 3.2% the company would have booked without sequestration.

For the quarter, HealthSouth reported $61.5 million in net income on $591.2 million in net operating revenue compared with $65.9 million in income on $572.6 million in revenue during the same period last year.

The company said after the market closed Friday that the U.S. Justice Department had expanded its investigation into whether the chain submitted improper or fraudulent claims to Medicare and Medicaid. The scope of the inquiry, which initially focused on four facilities, has expanded to include seven more hospitals.

Follow Beth Kutscher on Twitter: @MHbkutscher

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