Amedisys restructures Fla. home health operations, names new CFO
Amedisys, one of the nation's largest home health operators, revealed that it will restructure its home health segment this year and shut down some of its Florida facilities.
The company will close four locations in Florida and consolidate three more facilities, the company noted in a recent financial disclosure.
Amedisys said it plans to complete the reorganization in the fourth quarter. The home health operator expects it will take a $2 million charge in the third quarter and a $2 million to $3 million hit in the fourth quarter to cover lease terminations, severance and other costs.
The restructuring should yield annual improvements of between $7 million and $9 million in earnings before interest, taxes, depreciation and amortization, the company noted.
Amedisys spokeswoman Kendra Kimmons said in a statement that the company is closing or consolidating the underperforming centers to focus on the 20 that will remain.
"Our local teams at the affected care centers are working closely with the referring doctors, patients and patients' loved ones to help bridge them to other Amedisys care centers or assist them in finding another provider," she said.
Amedisys also named Scott Ginn as its new chief financial officer. Ginn has been with Amedisys for 10 years and previously served as chief accounting officer.
He replaces Gary Willis, who left to become CFO of another healthcare company after less than a year with Amedisys.
Ginn had been responsible for all of Amedisys' accounting functions including Securities & Exchange Commission reporting, payroll, budgeting and taxes. Ginn has also successfully led the internal audit and risk management departments.
"He has played a pivotal role in leading financial operations and building strong relationships with our analysts, lenders and shareholders," Amedisys CEO Paul Kusserow said.
Baton Rouge, La.-based Amedisys also is dealing with a potentially costly Medicare audit in Florida that found the company overcharged the CMS for home health services at two locations from January 2014 to September 2016.
Medicare has asked for repayment of $34 million from Amedisys' Infinity Home Care of Lakeland and another $4.8 million from its Infinity Home Care of Pinellas.
Amedisys said in a financial disclosure that it "will aggressively challenge" the audit and disputes the findings of a contractor that came up with the amount. Amedisys is challenging the methodology of a Medicare administrative contractor, which used a sample of $200,000 worth of claims in each location to extrapolate the alleged overcharges.
The company also said it has repaid some of the reimbursement after a self-audit, and the CMS did not acknowledge that effort.
Amedisys acquired the Lakeland Care Centers and the Pinellas Care Center on Dec. 31, 2015.
If Amedisys is subject to repayment, it is contractually indemnified by the previous owners for up to $12.6 million against Pinellas claims before Dec. 31, 2015, Amedisys said.
Amedisys' repayment exposure on the low end is about $6.5 million, said David Pearce, Amedisys chief compliance officer.
"We are confident that we will succeed in one or more of the measures available to us to mitigate the financial impact to the company," Pearce said in a statement.
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