* Third-qtr adj loss 1 cent/share vs est. profit 13
* Net services revenue falls 17 pct
* Cuts 2013 earnings forecast to 20-25 cents/share from
* To close or consolidate 19 care centers in fourth quarter
* Shares fall as much as 20 pct
(Adds CEO and analyst comments, background; updates share
By Vrinda Manocha
Nov 12 Amedisys Inc reported a surprise
quarterly loss due to higher costs per patient visit and lower
admissions at its centers, and the home healthcare provider cut
its full-year earnings forecast.
The company's shares fell as much as 20 percent on Tuesday
on the Nasdaq.
"There's clearly pressure on the top-line from rate cuts,"
CRT Capital analyst Sheryl Skolnick said. "Their revenue per
episode (of care) continues to decline due to cuts that went
into effect on Jan. 1, sequestration being the largest."
U.S. home healthcare providers including Almost Family
, and Gentiva Health Services Inc have been
suffering all year from cuts to Medicare reimbursement under
President Barack Obama's healthcare law.
Amedisys's same-center admissions fell by 2 percent in its
home health business and by 7 percent in its hospice business in
the third quarter ended Sept. 30.
The company blamed underperformance by some of its care
centers for the weak admissions.
"We identified 19 (care centers) that we will close or
consolidate in the fourth quarter," Chief Executive William
Borne told analysts on a post-earnings conference call.
He said the company would have 450 centers after these
closures. "Locations that don't show meaningful positive
performance will likely be closed or consolidated in the coming
year," Borne said.
He also said Amedisys had 35 centers that were too small to
become profitable in the reimbursement environment, and the
company would invest in them to boost their growth.
The company slashed its full-year earnings forecast to 20-25
cents per share from 45-55 cents. It also lowered the top end of
its 2013 net service revenue forecast range to $1.24
billion-$1.25 billion from $1.24 billion-$1.28 billion.
CRT Capital's Skolnick said the forecast was still too high
as Amedisys had not taken into account the resetting of Medicare
payment rates for home health and hospice services next year.
"The outlook for reimbursement is not better next year. In
fact, it's worse," she said.
The company booked a charge of $150 million in the third
quarter related to a tentative settlement with the U.S.
Department of Justice over an investigation launched in 2010
into its reimbursement and billing claims.
"The $150 million settlement severely impairs balance sheet
flexibility, likely limiting the company's capacity for
near-term mergers and acquisitions," Raymond James analyst John
Ransom wrote in a note.
The company, while denying any wrongdoing, said it expected
to enter into an integrity agreement with the U.S. Department of
Health and Human Services as a part of the settlement.
Amedisys will pay $115 million once the agreement is
finalized and the remaining $35 million six months after that.
The agreement would mean that Amedisys would not be excluded
from participation in federal programs such as Medicare and
The company recorded a net loss from continuing operations
of $90.4 million, or $2.87 per share, in the third quarter
compared with earnings of $10.4 million, or 34 cents per share,
a year earlier.
Excluding items, Amedisys reported a loss of 1 cent per
share. Net service revenue fell 17 percent to $301.6 million.
Analysts on average had expected earnings of 13 cents per
share on revenue of $314.30 million, according to Thomson
Amedisys shares were down 17 percent at $14.39 on Tuesday
afternoon on the Nasdaq. The stock has risen 73 percent in the
12 months to its Monday close.
(Editing by Kirti Pandey and Ted Kerr)