The Lafayette, La.-based, publicly traded company forged an agreement Tuesday with Life Care Home Health, the home health division of Life Care Centers of America, based in Cleveland, Tenn. For $10 million in cash, LHC will take control of Life Care's home health agencies, which are scattered across seven states.
LHC Group continues expansion of home health business
LHC—and other large home health providers—has turned to consolidation as a way to offset declining Medicare payments. The CMS pitched reducing Medicare rates to home health providers by 0.3%, or $58 million in 2015, one year after rates dropped by 1.1%, or $200 million. The CMS expects to cut home health payments by $22 billion through fiscal 2017.
In 2013, Medicare represented almost 80% of LHC's net service revenue.
Most recently, LHC completed a $60 million deal to acquire Deaconess HomeCare, adding 32 post-acute facilities to its ranks. Adding in other smaller deals and the Life Care transaction, LHC will operate 352 locations in 30 states.
LHC recorded a 35% drop in profit in the first quarter of this year, realizing $4 million on $163.7 million in revenue. The company expects full-year revenue will be between $700 million and $720 million.
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