Amedisys Inc's (AMED.O) first-quarter profit fell as the home healthcare provider indicated that it would continue to struggle with offsetting the impact of changes in Medicare reimbursement rates.
"Home health experienced substantial Medicare reimbursement cuts in 2011 and 2012, and will continue to face reimbursement pressure in 2013 and beyond," Chief Executive Bill Borne said on a conference call with analysts.
Shares in the company, which have fallen 55 percent in the last one year, were down 10 percent at $13.21 on Tuesday afternoon, after hitting a low of $13.20 earlier in the day.
The cuts to Medicare reimbursement for 2012 have weighed on the profits of most home healthcare providers, including Gentiva Health Inc GTIV.O and Almost Family (AFAM.O).
First-quarter revenue from home health, Amedisys' biggest division, fell 6 percent to $301.4 million. Gross margins at the division fell 500 basis points to $42.9 percent.
"A number of factors contributed to this gross margin decline in home health, including the reimbursement cut, a slight increase in cost per visit, and face-to-face write offs," Chief Financial Officer Ron LaBorde said on the call.
The company, which has also been subjected to a series of federal probes regarding its billing practices over the last year, said it was left with 14 percent less in cash and cash equivalents at the end of the quarter.
First-quarter net income from continuing operations fell to $6.5 million, or 22 cents per share, from $16.9 million, or 59 cents per share, a year ago.
Net service revenue rose about 3 percent to $370.8 million.
(Reporting by Zeba Siddiqui in Bangalore; Editing by Roshni Menon)