During a call with analysts last week, Jacobsmeyer said the contracts increased revenue per visit about 8% between 2022 and 2024, which helped Enhabit offer better pay to nurse recruits. Additional staff helped the company boost home health admissions more than 6% in the second quarter compared with the same period in 2023, Jacobsmeyer said.
Companies said increased Medicaid reimbursement rates also helped spur hiring in some states. The higher reimbursements stem from $12.7 billion in American Rescue Plan Act funding states received from the federal government during the COVID-19 pandemic. They are required to spend the money by March 2025.
Aveanna Healthcare boosted hiring in 12 states where the company negotiated higher Medicaid reimbursements tied to private duty nursing services for disabled children and adults, CEO Jeff Shaner told analysts during an earnings call. Shaner said a rate increase that went into effect in Georgia July 1 allowed the company to increase wages between 30% and 40% for both existing nurses and new hires. He said the company began offering higher wages in May to get ahead of its competitors on recruitment.
“We are seeing fantastic recruiting and retention results in the state of Georgia,” Shaner said on the call.
Better Medicaid reimbursements also helped Addus HomeCare increase wages and set a company hiring record in the second quarter, Chair and CEO Dirk Allison told analysts. Allison said the company averaged 86 hires per business day in the second quarter and had historically low staff turnover. Addus offers non-medical home care, home health and hospice services in about 20 states.
Allison said a slowing economy could also benefit recruitment of lower-wage home care workers in the months ahead.
“Historically over the last 30 or 40 years when there was a recession, Addus has done very well,” Allison told analysts.
He said the company could offer part-time workers additional hours and might recruit workers who left the workforce during the COVID-19 pandemic.
Approximately 280,000 home care workers left the workforce in the early months of the pandemic, according to PHI National,which tracks the direct care workforce. In the past 12 to 18 months, some of those workers have applied for jobs at Right at Home, according to Nikki Holles, the company’s vice president of people strategy. Right at Home offers home care services through 500 franchise locations in 47 states.
“There is less stress and fear about going into homes and working with people who are ill,” Holles said. “[Some workers] also had kids who are back in school now and that is allowing those caregivers who had to stay home to get back into the job market.”
The prospect of more robust hiring in home health and home care continued into the first month of the third quarter. Home health accounted for 22,000 of the 55,000 healthcare jobs the economy added in July, the Labor Department reported last week.
A proposed 1.7% Medicare rate cut for home health companies in 2025 could slow job growth if the Centers for Medicare and Medicaid Services follows through on its plans.
A lower Medicare payment rate is a concern to Pennant Group President and Chief Operating Officer John Gochnour. The company offers home health services in about a dozen mostly western states.
Gochnour told analysts a rate cut could be devastating at a time when consumer prices have been increasing at a much faster clip than the company's revenues. He said Pennant would continue to fight CMS on the proposed rate cut.
