Addus HomeCare Corporation provides home care services.
The company’s services are principally provided in-home under agreements with federal, state and local government agencies; managed care organizations; commercial insurers; and private individuals. The company’s consumers are predominantly ‘dual eligible,’ meaning they are eligible to receive both Medicare and Medicaid benefits.
As of December 31, 2022, the company provided services in 22 states. For the year ended December 31, 2022, the...
Addus HomeCare Corporation provides home care services.
The company’s services are principally provided in-home under agreements with federal, state and local government agencies; managed care organizations; commercial insurers; and private individuals. The company’s consumers are predominantly ‘dual eligible,’ meaning they are eligible to receive both Medicare and Medicaid benefits.
As of December 31, 2022, the company provided services in 22 states. For the year ended December 31, 2022, the company served approximately 66,000 discrete consumers.
The company continues to drive organic growth while also growing through acquisitions, focusing on growth in the states in which it has a presence while adding clinical care services to its offerings. As of December 31, 2022, the company provided all three levels of care, personal care, home health and hospice services, in Ohio, Illinois and New Mexico; and strategically continued to pursue other markets.
The company completed two acquisitions in 2022: JourneyCare Inc. (‘JourneyCare’) on February 1, 2022 and Apple Home Healthcare, LTD (‘Apple Home’) on October 1, 2022.
Segments
The company operates through three segments: Personal Care, Hospice, and Home Health.
Personal Care
The company’s Personal Care segment provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled. The services the company provides include assistance with bathing, grooming, oral care, feeding and dressing, medication reminders, meal planning and preparation, housekeeping and transportation services. Many consumers need such services on a long-term basis to address chronic or acute conditions. The company’s Personal Care segment also includes staffing services, with clients, including assisted living facilities, nursing homes and hospice facilities.
Hospice
The company’s Hospice segment provides physical, emotional and spiritual care for people who are terminally ill as well as related services for their families. The hospice services the company provides include palliative nursing care, social work, spiritual counseling, homemaker services and bereavement counseling. Generally, patients receiving hospice services have a life expectancy of six months or less.
Home Health
The company’s Home Health segment provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy. The company generally provides home health services on a short-term, intermittent or episodic basis to individuals, typically to assist patients recovering from an illness or injury.
Growth Strategy
The company’s growth strategies are to consistently provide high-quality care; drive organic growth in existing markets; market to managed care organizations; and grow through acquisitions.
Payors
The company’s payor clients are principally federal, state and local governmental agencies and managed care organizations. The company’s commercial insurance payor clients are typically for-profit companies. Most of the company’s services are provided pursuant to agreements with state and local governmental social and aging service agencies.
Sales and Marketing
The company focuses on initiating and maintaining working relationships with state and local governmental agencies responsible for the provision of the services it offers.
The company receives substantially all of its personal care consumers through third-party referrals, including state departments on aging, rehabilitation, mental health and children’s services, county departments of social services, managed care organizations, the Veterans Health Administration and city departments on aging. Generally, family members of potential consumers are made aware of available in-home or alternative living arrangements through state or local case management systems. These systems are operated by governmental or private agencies.
The company provides ongoing education and outreaches in its target communities in order to inform the community about state and locally-subsidized care options and to communicate its role in providing quality personal care services. The company also utilizes consumer-directed sales, marketing and advertising programs designed to attract consumers.
With respect to the company’s hospice and home health patients, it receives substantially all of its referrals through other healthcare providers, such as hospitals, physicians, nursing homes and assisted living facilities. The company has a team of community liaisons in its hospice and home health operations that educate and develop relationships with other healthcare providers and the community at large.
Payment for Services
The company is reimbursed for substantially all of its services by federal, state and local government programs, such as Medicare and Medicaid state programs, managed care organizations, other state agencies and the Veterans Health Administration. In addition, the company is reimbursed by commercial insurance and private pay consumers.
A significant amount of the company’s net service revenues from its Personal Care segment are derived from once specific payor client, the Illinois Department on Aging, which accounted for 20.7% of the company’s net service revenues for 2022.
Government Regulation
The laws and regulations governing the company’s operations, including the terms of participation in Medicare, Medicaid and other government programs, impose certain requirements and limitations on its operations, business arrangements and the company’s interactions with providers and consumers. These laws include, but are not limited to, the federal Anti-Kickback Statute, the federal Stark law, the federal False Claims Act (FCA), the federal Civil Monetary Penalties Law, other federal and state fraud and abuse, insurance fraud, and fee-splitting laws, which may extend to services reimbursable by any payer, including private insurers.
The fraud and abuse laws and regulations to which the company is subject include but are not limited to:
The federal Anti-Kickback statute, which prohibits providers and others from directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or orders for services or items covered by a federal healthcare program. Courts have interpreted this statute broadly and held that there is a violation of the Anti-Kickback Statute if just one purpose of the remuneration is to generate referrals.
The federal physician self-referral law, commonly known as the Stark Law, which prohibits physicians from referring Medicare and Medicaid patients to healthcare entities in which they or any of their immediate family members have ownership interests or other financial arrangements, if these entities provide certain ‘designated health services’ (including home health services) reimbursable by Medicare or Medicaid, unless an exception applies. The Stark Law also prohibits entities that provide designated health services reimbursable by Medicare and Medicaid from billing the Medicare and Medicaid programs for any items or services that result from a prohibited referral and requires the entities to refund amounts received for items or services provided pursuant to the prohibited referral on a timely basis.
The federal FCA and similar state laws that govern the submission of claims for reimbursement and prohibit the making of false claims or statements.
The federal Civil Monetary Penalties Law, which prohibits, among other conduct, offering remuneration to influence a Medicare or Medicaid beneficiary’s selection of a healthcare provider, contracting with an individual or entity known to be excluded from a federal healthcare program, billing for services not rendered or for medically unnecessary services, misrepresenting actual services rendered in order to obtain higher reimbursement, and the failure to return overpayments in a timely manner.
State anti-kickback and self-referral provisions, false claims laws, insurance fraud laws, and fee-splitting laws. The scope and interpretation of these state laws vary, and in some cases apply to items or services reimbursed by any payer, including patients and commercial insurers. For instance, the Illinois Insurance Claims Fraud Prevention Act penalizes the knowing offer or payment of remuneration to induce a person to procure client or patients under a contract of insurance, including commercial insurance plans.
As a ‘covered entity’ subject to HIPAA, the company is required to maintain privacy and security policies, train workforce members, maintain physical, administrative, and technical safeguards, enter into confidentiality agreements with vendors that handle protected health information (business associates), and permit individuals to access and amend their protected health information.
History
Addus HomeCare Corporation was founded in 1979. The company was incorporated in Delaware in 2006.