Implementing Visit-Per-Episode Management for Enhanced Efficiency

Enhabit initiated a pilot program for its advanced visit-per-episode management strategy in mid-August, initially rolling it out to 11 branches. Early results have been promising, with a reported decline in the total number of visits per episode in those locations. The program has since been expanded to additional branches, with plans for further implementation by the end of November.

Beyond cost control, Enhabit is actively pursuing opportunities through payer innovation. The company’s scale provides access to a significant number of payer members, and its commitment to high-quality outcomes positions it favorably in negotiations. A recently renegotiated national payer contract demonstrates the success of this strategy. Payer innovation is becoming increasingly important in the home health sector.

Furthermore, Enhabit is pursuing a de novo growth strategy, opening six new locations in the third quarter and a seventh in October. The company anticipates opening a total of 10 locations organically throughout the year, expanding its reach and service area. What impact will this expansion have on Enhabit’s overall market share in the coming years?

Addressing the 2026 Medicare Payment Rule

Like many home health providers, Enhabit is closely monitoring the proposed 2026 Medicare payment rule. The proposed cuts, if finalized, could potentially reduce patient access to home health care. Enhabit has voiced its concerns to the Centers for Medicare & Medicaid Services (CMS), advocating for a reversal of the proposed adjustments.

“As we noted in our comment letter, the proposed cuts, if finalized, will worsen the existing trend of reduced patient access to home health care,” Jacobsmeyer emphasized. “Home health is the patient’s preferred and most cost-effective post-acute care option, and thus saves Medicare money. We urge CMS to reverse the temporary and permanent adjustments contained in the proposed rule to ensure adequate access to home health is restored.”

Despite these concerns, Enhabit’s leadership has identified potential growth opportunities within the proposed rule, suggesting a proactive approach to adapting to the changing regulatory environment. These potential opportunities are being carefully evaluated and incorporated into the company’s strategic planning.

Frequently Asked Questions About Enhabit’s Strategy

• What is Enhabit’s primary strategy for mitigating the impact of the proposed Medicare payment rule?

  Enhabit is focusing on its advanced visit-per-episode management strategy to improve efficiency and reduce costs, alongside payer innovation and organic growth initiatives.

• How is Enhabit leveraging payer innovation to improve its financial performance?

  Enhabit’s scale allows it to access a large number of payer members, and its commitment to high-quality outcomes enables it to negotiate favorable contracts and secure renegotiated agreements.

• What are Enhabit’s plans for geographic expansion?

  Enhabit is pursuing a de novo growth strategy, with plans to open 10 new locations organically throughout 2024.

• What was Enhabit’s net service revenue in Q3?

  Enhabit’s net service revenue in Q3 was $263.6 million, a 3.9% increase year-over-year.

• What is the potential impact of the proposed Medicare payment rule on patient access to home health care?

  Enhabit believes that the proposed cuts, if finalized, could worsen the existing trend of reduced patient access to home health care, despite it being a cost-effective care option.