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In recent days home health care companies—notably Amedisys , Gentiva and LHC Group , have been whacked after a Senate staff report slammed them for allegedly gaming the Medicare system.
That prompted me to wonder what other areas of healthcare could be susceptible to the government’s Medicare mash.
That’s for-profit hospices, which were the focus of an Office of Inspector General report in July .
Enter Chemed, which gets about 70 percent of its revenue from for-profit hospices, which in turn get 90 percent of their revenue from Medicare; the rest comes from Roto-Rooter. (Really!)
It’s the closest thing to a for-profit hospice pure-play; Gentiva is next, but it gets most of its revenue from home-health care.
After the report came out, Chemed’s stock tumbled , but the company responded in an earnings conference call—not sounding overly worried, in large part because the OIG appeared to zero in on hospices within nursing homes. “We don’t have that issue at all,” CEO Tim O’Toole said. “We are very comfortable with where we sit.”
Maybe, but given the number of subpoenas the company has received in recent years, it has received a “high risk” rating from Disclosure Insight, which rates companies based on five-years worth of various disclosures.
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