Enhabit (EHAB) 2024 Wells Fargo Healthcare Conference summary

Strategic contract and payer innovation updates

• Notice of termination was given to UnitedHealthcare due to successful negotiation of 68 new payer innovation contracts, including two national contracts, reducing reliance on a single payer and improving reimbursement rates.

• New contracts have discounts of 0-25% versus the previous 40% discount, supporting a shift to better-paying payers and enabling volume replacement from United.

• Branch-level execution and business development are key to growing volumes under new contracts, with local teams actively managing referrals and admissions.

Medicare and non-Medicare reimbursement outlook

• Proposed 2025 home health rule suggests a -1.7% industry rate cut, with company-specific impact estimated at -1%; final rule is expected to be less severe, possibly flat or slightly positive.

• Non-Medicare volumes and rates are improving due to payer innovation strategy, with ongoing efforts to shift United volumes to higher-paying contracts.

Hospice segment strategy and performance

• Hospice segment has achieved sequential monthly census growth in 2024, following successful clinical capacity expansion and elimination of contract labor.

• Recruitment of experienced business development leaders and creation of centralized admission offices have accelerated growth.