What changed in Aveanna Healthcare Holdings, Inc.'s 10-K — 2022 vs 2023
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Paragraph-level year-over-year comparison of Aveanna Healthcare Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.
+832 added−829 removedSource: 10-K (2023-03-16) vs 10-K (2022-03-28)
Top changes in Aveanna Healthcare Holdings, Inc.'s 2023 10-K
832 paragraphs added · 829 removed · 620 edited across 2 sections
- Item 1A. Risk Factors+680 / −677 · 486 edited
- Item 1. Business+152 / −152 · 134 edited
Item 1. Business
Business — how the company describes what it does
134 edited+18 added−18 removed159 unchanged
Item 1. Business
Business — how the company describes what it does
134 edited+18 added−18 removed159 unchanged
2022 filing
2023 filing
Biggest changeSee “Risk Factors—Risks Related to our Business and Industry—The home health and hospice industries have historically experienced shortages in qualified employees and management, and competition for qualified personnel may increase our labor costs and reduce profitability.” Government Regulation General Aveanna’s business is subject to extensive federal, state and, in some instances, local regulations and standards which govern, among other things: Medicare, Medicaid, TRICARE (the Department of Defense’s managed healthcare program for military personnel/retirees and their families) and other government-funded reimbursement programs; reporting requirements, certification and licensing standards and in some cases, Certificate of Need (“CON”) requirements for certain home health agencies and hospices. 13 Aveanna’s compliance with these regulations and standards may affect its participation in Medicare, Medicaid, TRICARE and other federal and state healthcare programs, as well as its ability to be reimbursed by private payers.
Biggest changeGovernment Regulation General Aveanna’s business is subject to extensive federal, state and, in some instances, local regulations and standards which govern, among other things: Medicare, Medicaid, TRICARE (the Department of Defense’s managed healthcare program for military personnel/retirees and their families) and other government-funded reimbursement programs; reporting requirements, certification and licensing standards and in some cases, Certificate of Need (“CON”) requirements for certain home health agencies and hospices.
The requirements for licensure, certification and accreditation are subject to change and, in order to remain qualified, it may become necessary for us to make changes in our services, facilities, equipment, personnel and services in the future, which could have a material adverse impact on operations.
The requirements for licensure, certification and accreditation are subject to change and, in order to remain qualified, it may become necessary for us to make changes in our services, facilities, equipment and personnel in the future, which could have a material adverse impact on operations.
These regulations include, among other things: prohibitions against the offering or making of direct or indirect payments to actual or potential referral sources for obtaining or influencing patient referrals; rules generally prohibiting physicians from making referrals under Medicare and Medicaid for clinical services to a home health agency with which the physician or his or her immediate family member has certain types of financial relationships; laws against the filing of false claims; and laws against making payment or offering items of value to patients to induce their self-referral to the provider.
These regulations include, among other things: prohibitions against the offering or making of direct or indirect payments to actual or potential referral sources for obtaining or influencing patient referrals; rules generally prohibiting physicians from making referrals under Medicare and Medicaid for clinical 12 services to a home health agency with which the physician or his or her immediate family member has certain types of financial relationships; laws against the filing of false claims; and laws against making payment or offering items of value to patients to induce their self-referral to the provider.
In addition, CMS engages or has engaged a number of third-party audit contractors to conduct an additional documentation request (known as an “ADR,” a request for a provider’s medical record documentation to review specific claims), and other third-party firms, including Recovery Audit Contractors, Program Safeguard Contractors, Zone Program Integrity Contractors, Uniform Program Integrity Contractors, Targeted Probe and Educate, and Medicaid Integrity Contractors, to conduct extensive reviews of claims data and state and federal government healthcare program laws and regulations applicable to healthcare providers.
In addition, CMS engages or has engaged a number of third-party audit contractors to conduct an additional documentation request (known as an “ADR,” a request for a provider’s medical record documentation to review specific claims), and other third-party firms, including Recovery Audit Contractors, Program Safeguard Contractors, Zone Program Integrity Contractors, Uniform Program Integrity Contractors, Targeted Probe and Educate, Supplemental Medical Review Contractors and Medicaid Integrity Contractors, to conduct extensive reviews of claims data and state and federal government healthcare program laws and regulations applicable to healthcare providers.
Stark Law Federal law includes a provision commonly known as the “Stark Law.” This law prohibits a physician (defined to include a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor) from referring Medicare and Medicaid patients to certain types of entities with which the physician or any of the physician’s immediate family members have a financial relationship, unless an exception to the law’s prohibition is met.
Stark Law Federal law includes a provision commonly known as the “Stark Law.” This law prohibits a physician (defined to include a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor) from referring Medicare and Medicaid patients to certain types of entities with which the physician or any of the 14 physician’s immediate family members have a financial relationship, unless an exception to the law’s prohibition is met.
Our DEI Mission Our DEI mission is to attract and sustain a diverse and inclusive workforce by recruiting, hiring, developing, retaining and promoting high-performing individuals who work collaboratively with one another to achieve our vision as defined by our core values. Our DEI Strategic Initiative 23 We understand that the most effective business strategies require vision and long-term commitment.
Our DEI Mission Our DEI mission is to attract and sustain a diverse and inclusive workforce by recruiting, hiring, developing, retaining and promoting high-performing individuals who work collaboratively with one another to achieve our vision as defined by our core values. Our DEI Strategic Initiative We understand that the most effective business strategies require vision and long-term commitment.
Bonuses and penalties will begin in 2023 with the maximum of plus or minus 5%. Home Health Payment Reform On February 9, 2018, Congress passed the Bipartisan Budget Act of 2018 (“BBA of 2018”), which funded government operations, set two-year government spending limits and enacted a variety of healthcare related policies.
Bonuses and penalties will begin in 2023 with the maximum of plus or minus 5%. 18 Home Health Payment Reform On February 9, 2018, Congress passed the Bipartisan Budget Act of 2018 (“BBA of 2018”), which funded government operations, set two-year government spending limits and enacted a variety of healthcare related policies.
The IMO team coordinates seamlessly with our executive leadership through a steering committee-led governance structure that provides strategic direction and oversight for each acquisition. Our IMO team oversees the integration of essential functional areas, including operations, IT, revenue cycle, human resources, compliance and finance, in partnership with our business teams.
The IMO team coordinates seamlessly with our executive leadership through a steering committee-led governance structure that provides strategic direction and oversight for each acquisition. Our IMO team oversees the integration of essential functional areas, including clinical operations, IT, revenue cycle, human resources, compliance and finance, in partnership with our business teams.
Our Aveanna Hope Devices and point-of-care technology that we have deployed to our frontline caregivers on tablets and mobile devices significantly improves caregiver efficiency and data collection. We believe our platform is a significant competitive advantage in the marketplace, driving superior operating performance and margins that enable us to reinvest in growth.
Our Aveanna Hope Devices and point-of-care technology that we have deployed to our frontline caregivers on tablets and mobile devices significantly improves caregiver efficiency and data collection. We believe our platform is a significant competitive 7 advantage in the marketplace, driving superior operating performance and margins that enable us to reinvest in growth.
The IMPACT Act also included provisions impacting Medicare-certified hospices, including: (1) increasing survey frequency for Medicare-certified hospices to once every 36 months; (2) imposing a medical review process for facilities with a high percentage of stays in excess of 180 days; and (3) updating the annual aggregate Medicare payment cap.
The IMPACT Act also included provisions impacting Medicare-certified hospices, including: (1) increasing survey frequency for Medicare-certified hospices to once every 36 months; (2) imposing a 17 medical review process for facilities with a high percentage of stays in excess of 180 days; and (3) updating the annual aggregate Medicare payment cap.
The Company performs many compliance program activities, such as: • drafting and revising the Company’s policies and procedures related to compliance and ethics issues; • reviewing, making recommended revisions, disseminating and tracking attestations to our Code of Conduct; • measuring compliance with our policies and procedures, Code of Conduct and legal and regulatory requirements related to the Medicare and Medicaid programs and other government healthcare programs, laws and regulations; • developing and providing compliance-related training and education to all of our employees and, as appropriate, directors, contractors and other representatives and agents, including new-hire compliance training for all new employees, annual compliance training for all employees, sales compliance training to all members of our sales team, billing compliance training to all members of our billing and revenue cycle team and other job-specific and role-based compliance training of certain employees; • verifying that current and potential employees are not classified as an excluded individual who is prohibited from participation in any federal healthcare program, such as Medicare or Medicaid; • implementing an annual compliance auditing and monitoring work plan and performing and following up on various risk-based auditing and monitoring activities, including both clinical and non-clinical auditing and monitoring activities at the corporate level and at the local agency/facility level; • developing, implementing and overseeing our HIPAA privacy and security compliance program; • monitoring, responding to and overseeing the resolution of issues and concerns raised through our anonymous compliance hotline; • monitoring, responding to and resolving all compliance and ethics-related issues and concerns raised through any other form of communication; and • ensuring that we take appropriate corrective and disciplinary action when noncompliant or improper conduct is identified.
The Company performs many compliance program activities, such as: • drafting and revising the Company’s policies and procedures related to compliance and ethics issues; • reviewing, making recommended revisions, disseminating and tracking attestations to our Code of Conduct; • measuring compliance with our policies and procedures, Code of Conduct and legal and regulatory requirements related to the Medicare and Medicaid programs and other government healthcare programs, laws and regulations; • developing and providing compliance-related training and education to all of our employees and, as appropriate, directors, contractors and other representatives and agents, including new-hire compliance training for all new employees, annual compliance training for all employees, sales compliance training to all members of our sales team, billing compliance training to all members of our billing and revenue cycle team and other job-specific and role-based compliance training of certain employees; • monthly verification that current and potential employees are not classified as an excluded individual who is prohibited from participation in any federal healthcare program, such as Medicare or Medicaid; • implementing an annual compliance auditing and monitoring work plan and performing and following up on various risk-based auditing and monitoring activities, including both clinical and non-clinical auditing and monitoring activities at the corporate level and at the local agency/facility level; • developing, implementing and overseeing our HIPAA privacy and security compliance program; • monitoring, responding to and overseeing the resolution of issues and concerns raised through our anonymous compliance hotline; • monitoring, responding to and resolving all compliance and ethics-related issues and concerns raised through any other form of communication; and • ensuring that we take appropriate corrective and disciplinary action when noncompliant or improper conduct is identified.
Importantly, the IMO team begins developing a tailored integration plan for each acquisition we make early in the merger and acquisition process, in parallel with our due diligence and prior to signing. 7 This enables the IMO to launch an integration plan expeditiously once an acquisition is signed and maintain that momentum through and after closing.
Importantly, the IMO team begins developing a tailored integration plan for each acquisition we make early in the merger and acquisition process, in parallel with our due diligence and prior to signing. This enables the IMO to launch an integration plan expeditiously once an acquisition is signed and maintain that momentum through and after closing.
We believe the team we have built is the most essential element of our platform. Our Culture Our culture is the glue that binds our organization together. We have purposefully built a culture that attracts like-minded people who are aligned with our mission to change the way home care is delivered, one patient at a time.
We believe the team we have built is the most essential element of our platform. Our Culture 6 Our culture is the glue that binds our organization together. We have purposefully built a culture that attracts like-minded people who are aligned with our mission to change the way home care is delivered, one patient at a time.
The final rule created new exceptions to the Stark Law for value-based arrangements by permitting physicians and other healthcare providers to design and enter into value-based arrangements. Additionally, the final rule modified existing exceptions governing compensation provided to a physician by another healthcare provider by providing new guidance on how to determine fair market value.
The final rule created new exceptions to the Stark Law for value-based care arrangements by permitting physicians and other healthcare providers to design and enter into value-based care arrangements. Additionally, the final rule modified existing exceptions governing compensation provided to a physician by another healthcare provider by providing new guidance on how to determine fair market value.
Qualifying patients also may receive reimbursement for occupational therapy, medical social services, and home health aide services if these additional services are part of a plan of care prescribed by a physician. We submit all home health Medicare claims through Medicare Administrative Contractors for the federal government.
Qualifying patients also may receive reimbursement for 10 occupational therapy, medical social services, and home health aide services if these additional services are part of a plan of care prescribed by a physician. We submit all home health Medicare claims through Medicare Administrative Contractors for the federal government.
The changes to HIPAA enacted as part of ARRA reflect a Congressional intent that HIPAA’s privacy and security provisions be more strictly enforced. These changes have stimulated increased enforcement activity and enhanced the potential that healthcare providers will be subject to financial penalties for violations of HIPAA.
The changes to HIPAA enacted as part of ARRA reflect a Congressional intent that HIPAA’s privacy and security provisions be more 15 strictly enforced. These changes have stimulated increased enforcement activity and enhanced the potential that healthcare providers will be subject to financial penalties for violations of HIPAA.
When determining whether to enter into a contract with an MCO or commercial payer, the Company considers whether the rate and other contract terms offered are generally acceptable based on commercial billing and collection practices and also allow the Company to appropriately attract and retain caregivers at a market rate.
When determining whether to enter into or continue a contract with an MCO or commercial payer, the Company considers whether the rate and other contract terms offered are generally acceptable based on commercial billing and collection practices and also allow the Company to appropriately attract and retain caregivers at a market rate.
CMS has adopted alternative sanction enforcement options which allow CMS to (i) impose temporary management, direct plans of correction or direct training and (ii) impose payment suspensions and civil monetary penalties in each case on providers out of compliance with the COPs.
CMS has adopted alternative sanction enforcement options which allow CMS to (i) impose temporary management, direct plans of correction or direct training and (ii) impose payment suspensions and civil monetary penalties in each case on providers out of 13 compliance with the COPs.
We also provide personal care services 5 which include non-medical assistance with activities of daily living and can help seniors avoid costlier downstream medical costs and hospitalizations. Medical Solutions We provide needed supplies to patients requiring enteral nutrition services or respiratory care.
We also provide personal care services which include non-medical assistance with activities of daily living and can help seniors avoid costlier downstream medical costs and hospitalizations. Medical Solutions We provide needed supplies to patients requiring enteral nutrition services or respiratory care.
Our caregivers, a majority of whom are registered nurses and licensed practical nurses, monitor an individual’s condition, administer medications and treatment regimens, provide enteral and other forms of tube feeding, monitor and maintain ventilators, administer pain management treatments and coordinate other forms of medical care.
Our caregivers, a majority of whom are registered nurses and licensed practical nurses, monitor an individual’s condition, administer 4 medications and treatment regimens, provide enteral and other forms of tube feeding, monitor and maintain ventilators, administer pain management treatments and coordinate other forms of medical care.
Cross-Sell Enteral Services to Our PDN and Home Care Patient Base 9 We believe that Aveanna’s unique ability to bundle PDN and enteral nutrition services to our patients is both a significant differentiator for our customers as well as a future growth opportunity.
Cross-Sell Enteral Services to Our PDN and Home Care Patient Base We believe that Aveanna’s unique ability to bundle PDN and enteral nutrition services to our patients is both a significant differentiator for our customers as well as a future growth opportunity.
Violations of the federal Anti-Kickback Statute can result in imprisonment, the imposition of penalties topping $100,000, plus three times the amount of the improper remuneration and potentially, exclusion from furnishing services under any government healthcare 15 program.
Violations of the federal Anti-Kickback Statute can result in imprisonment, the imposition of penalties topping $100,000, plus three times the amount of the improper remuneration and potentially, exclusion from furnishing services under any government healthcare program.
The final home health agency regulations introduced by CMS (CMS-1689-FC) updated the Medicare HHPPS and finalized the implementation of an alternative case-mix adjustment methodology, PDGM, that became effective on 20 January 1, 2020.
The final home health agency regulations introduced by CMS (CMS-1689-FC) updated the Medicare HHPPS and finalized the implementation of an alternative case-mix adjustment methodology, PDGM, that became effective on January 1, 2020.
The same is true of our long-term DEI Strategic Initiative. Our DEI Strategic Initiative recognizes and seeks to maximize the benefit of our clients, patients, employees and other stakeholders who are of diverse backgrounds, cultures, socioeconomic levels, customs and more.
The same is true of our long-term DEI Strategic Initiative. Our DEI Strategic Initiative recognizes and seeks to maximize the benefit of our clients, patients, employees and other stakeholders who are of diverse backgrounds, cultures, socioeconomic levels, customs, abilities, and more.
We cannot 18 predict the ultimate outcome of any regulatory and other governmental audits and investigations. While such audits and investigations are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve.
We cannot predict the ultimate outcome of any regulatory and other governmental audits and investigations. While such audits and investigations are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve.
Further, once the appropriate claim approval rate is reached, a provider can elect to opt-out of claim reviews except for a spot check of 19 5% of its claims to ensure continued compliance.
Further, once the appropriate claim approval rate is reached, a provider can elect to opt-out of claim reviews except for a spot check of 5% of its claims to ensure continued compliance.
There is continual competition from new entrants into Aveanna’s markets. 12 Aveanna’s Medicare MS business line could be impacted by the future Durable Medical Equipment, Prosthetics, Orthotics and Supplies (“DMEPOS”) competitive bid award. The DMEPOS program provides Medicare reimbursement to suppliers of medical items, including, among such other things, enteral nutrition products and oxygen, for Medicare beneficiaries.
There is continual competition from new entrants into Aveanna’s markets. 11 Aveanna’s Medicare MS business line could be impacted by the future Durable Medical Equipment, Prosthetics, Orthotics and Supplies (“DMEPOS”) competitive bid award. The DMEPOS program provides Medicare reimbursement to suppliers of medical items, including, among such other things, enteral nutrition products and oxygen, for Medicare beneficiaries.
Similar to our enteral services, many of our PDN patients also require in-home therapy and we are able to deliver differentiated levels of service and efficiency as a “one stop shop provider.” Unskilled Services We administer payer authorized unskilled respite care (a form of non-medical personal care) and related services primarily to patients with intellectual and developmental disabilities or special needs.
Similar to our enteral services, many of our PDN patients also require in-home therapy and we are able to deliver differentiated levels of service and efficiency as a “one stop shop provider.” Non-Clinical Services We administer payer authorized respite care (a form of non-medical personal care) and related services primarily to patients with intellectual and developmental disabilities or special needs.
In an October 21, 2019 release, CMS announced that it would reschedule the next phase of its RCD to allow agencies time to transition to the Patient-Driven Groupings Model (“PDGM”). CMS announced that RCD implementation would resume on March 2, 2020 in Texas, followed by demonstrations in North Carolina and Florida on May 4, 2020.
On October 21, 2019, CMS announced that it would reschedule the next phase of its RCD to allow agencies time to transition to the Patient-Driven Groupings Model (“PDGM”). CMS announced that RCD implementation would resume on March 2, 2020 in Texas, followed by demonstrations in North Carolina and Florida on May 4, 2020.
Our expansion targets are larger in scale and are meant to diversify our geographic footprint while gaining immediate scale and density in new markets, with integration time of one to two months. In our existing and new markets, we will augment our growth by opening up new agencies to further drive local market density and relevance to all constituents.
Our expansion targets are larger in scale and are meant to diversify our geographic footprint while gaining immediate scale and density in new markets, with integration time of one to two months. In our existing and new markets, we can augment our growth by opening up new agencies to further drive local market density and relevance to all constituents.
Scale Advantages Result in a Network Effect, Accelerating Growth 8 Our scale enables a virtuous cycle of network effects and competitive advantages to our business.
Scale Advantages Result in a Network Effect, Accelerating Growth Our scale enables a virtuous cycle of network effects and competitive advantages to our business.
Governmental Review, Audits and Investigations The HHS, CMS, Department of Justice (“DOJ”) and other federal and state agencies continue to impose intensive enforcement policies and conduct random and directed audits, reviews, and investigations designed to insure compliance with applicable healthcare program participation and payment laws and regulations.
Governmental Review, Audits and Investigations The HHS, CMS, Department of Justice (“DOJ”) and other federal and state agencies continue to impose intensive enforcement policies and conduct random and directed audits, reviews, and investigations designed to ensure compliance with applicable healthcare program participation and payment laws and regulations.
Unless the context otherwise requires, all references in this Annual Report on Form 10-K to “Aveanna”, the “Company”, “we,” “our” and “us” refer to Aveanna Healthcare Holdings Inc., including its consolidated subsidiaries. Overview We are a leading, diversified home care platform focused on providing care to medically complex, high-cost patient populations.
Unless the context otherwise requires, all references in this Annual Report on Form 10-K to “Aveanna”, the “Company”, “we”, “our”, and “us” refer to Aveanna Healthcare Holdings Inc., including its consolidated subsidiaries. Overview We are a leading, diversified home care platform focused on providing care to medically complex, high-cost patient populations.
Specific to home health, the BBA of 2018 provides for a targeted extension of the home health rural add-on payment, a reduction of the 2020 market basket update, modification of eligibility documentation requirements and reform to the Home Health Prospective Payment Systems (“HHPPS”).
Specific to home health, the BBA of 2018 provided for a targeted extension of the home health rural add-on payment, a reduction of the 2020 market basket update, modification of eligibility documentation requirements and reform to the Home Health Prospective Payment Systems (“HHPPS”).
In addition to the federal mandate for coverage of our services, we believe our reimbursement is significantly more stable than other government reimbursed services because private duty nursing patients (many of whom are children with complex medical diagnosis) represent a medically fragile population supported by strong, vocal advocacy groups, and therefore funding for our services typically receives broad bi-partisan support in state legislatures.
In addition to the federal mandate for coverage of these services, we believe our reimbursement is significantly more stable than other government reimbursed services because private duty nursing patients (many of whom are children with complex medical diagnosis) represent a medically fragile population supported by strong, active advocacy groups, and therefore funding for our services typically receives broad bi-partisan support in state legislatures and Congress.
In the unskilled business, the family primarily recruits and supervises the care provider. We oversee the administration of payroll taxes, provide cardiopulmonary resuscitation training and/or first aid certification and U.S. Department of Justice clearance for the care provider. Our unskilled business has had highly stable reimbursement historically allowing for durable, profitable growth.
In the non-clinical business, the family primarily recruits and supervises the care provider. We oversee the administration of payroll taxes, provide cardiopulmonary resuscitation training and/or first aid certification and U.S. Department of Justice clearance for the care provider. Our non-clinical business has had highly stable reimbursement historically allowing for durable, profitable growth.
Our Platform 6 We believe the platform we have built is truly differentiated in our ability to serve our stakeholders and grow rapidly in a range of home care end markets. Key elements of our platform include: Our Team Our team is the driving force that has enabled us to build an industry leading home care platform in five years.
Our Platform We believe the platform we have built is truly differentiated in our ability to serve our stakeholders and grow rapidly in a range of home care end markets. Key elements of our platform include: Our Team Our team is the driving force that has enabled us to build an industry leading home care platform.
Health care providers, including HHAs and hospices, are also subject to a growing number of requirements intended to promote the interoperability and exchange of patient health information.
Health care providers, including Home Health Agencies ("HHAs") and hospices, are also subject to a growing number of requirements intended to promote the interoperability and exchange of patient health information.
Our frontline caregivers leverage our technology-enabled solutions, such as our tablet-based care management tools that we deploy into every patient’s home to enhance data collection and the efficiency and quality of the caregiver experience, and our automated tools for patient scheduling, which seek to ensure appropriately trained nurses are scheduled for our most clinically complex patients.
Our frontline caregivers leverage our technology-enabled solutions, such as our tablet-based care management tools that we deploy into patient homes to enhance data collection and the efficiency and quality of the caregiver experience, and our automated tools for patient scheduling, which seek to ensure appropriately trained nurses are scheduled for our most clinically complex patients.
Our investments in compliance and training have resulted in a very strong track record of patient safety, with an average of less than one safety-related injury per 2,000,000 hours of service provided from 2018 to date.
Our investments in compliance and training have resulted in a very strong track record of patient safety, with an average of less than one patient safety-related injury per 1,900,000 hours of service provided from 2018 to date.
Our nationwide recruiting model is customized to localized workforces and seeks to attract the best clinicians with a powerful story, unique opportunities to provide one-on-one care in the home with flexible schedules, and 24/7 clinical support and electronic charting.
Our nationwide recruiting model is customized to localized workforces and seeks to attract the best clinicians with our powerful mission, unique opportunities to provide one-on-one care in the home with flexible schedules, and 24/7 clinical support and electronic charting.
Our clinical model is led by our caregivers, who provide a range of specialized skilled care and unskilled services to address the complex needs of each patient we serve across the full range of patient populations: newborns, children, adults and seniors.
Our clinical model is led by our caregivers, who provide a range of specialized clinical care and non-clinical services to address the complex needs of each patient we serve across the full range of patient populations: newborns, children, adults and seniors.
Our ability to serve as a single source provider to our patients, families and referral sources provides ad ded cost savings and convenience relative to sourcing from multiple providers. The MS business serves patients who have short or long-term disabilities and require a supply of infant, pediatric and adult formulas.
Our ability to serve as a single source provider to our patients, families and referral sources provides added cost savings and convenience relative to sourcing from multiple providers. 5 The MS business serves patients who have short or long-term disabilities and require a supply of infant, pediatric and adult formulas.
Now called the Review Choice Demonstration for Home Health Services (“RCD”), the revised demonstration will give home health agencies in the demonstration states 3 options: PCR of all claims, post-payment review of all claims, or minimal post-payment review with a 25% payment reduction for all home health services.
Now called the Review Choice Demonstration for Home Health Services (“RCD”), the revised demonstration gave home health agencies in the demonstration states 3 options: PCR of all claims, post-payment review of all claims, or minimal post-payment review with a 25% payment reduction for all home health services.
Home Health & Hospice We provide home health, hospice and specialty program services to predominately elderly populations seeking compassionate care and assistance with activities of daily living in the home. Our home health services help our patients recover from surgery or ill n ess, live with chronic diseases and prevent avoidable hospital readmissions.
Home Health & Hospice We provide home health, hospice and specialty program services to predominately elderly populations seeking compassionate care and assistance with activities of daily living in the home. Our home health services help our patients recover from surgery or illness, live with chronic diseases and prevent avoidable hospital readmissions.
Second, we expect to launch a number of de novo adult home health and hospice branches around newly acquired branches as well as our existing home care footprint, leveraging our platform acros s 33 states and the 129 Medicare licenses we already have in existing PDN, home health, and hospice locations.
Second, we 8 expect to launch a number of de novo adult home health and hospice branches around newly acquired branches as well as our existing home care footprint, leveraging our platform across 33 states and the 129 Medicare licenses we already have in existing PDN, home health, and hospice locations.
Accreditations The Community Health Accreditation Program (the “CHAP”) and Accreditation Commission for Health Care (the “ACHC”) are nationwide commissions that establish standards relating to the physical plant, administration, quality of patient care and operation of medical staffs of healthcare organizations. Currently, CHAP and ACHC accreditation of home health and hospice agencies is voluntary.
Accreditations The Community Health Accreditation Program (the “CHAP”) and Accreditation Commission for Health Care (the “ACHC”) are nationwide commissions that establish standards relating to the physical plant, administration, quality of patient care and operation of medical staffs of healthcare organizations. Currently, CHAP and ACHC accreditation of home health, home care, hospice and our AMS division is voluntary.
Our Growth Strategy Increase Volumes within Our Existing Footprint We expect to continue to gain share in our existing local markets through our “virtuous cycle” strategy, leveraging our highly regarded brand, service breadth, nurse recruiting and go-to-market capabilities to win a higher share of cases each year, expand our number of referral sources and grow our payer relationships.
Our Growth Strategy Increase Volumes within Our Existing Footprint We expect to continue to gain share in our existing local markets through our “virtuous cycle” strategy, leveraging our highly regarded brand, service breadth, nurse recruiting and go-to-market capabilities to win a higher share of cases each year, expand our number of referral sources and grow our payer partnerships to deliver value in our services.
State health authorities in certain states and the District of Columbia require a CON or its equivalent in order to establish and operate a home health agency or hospice care cen ter. We operate home health agencies and/or provide hospice services in the following CON states: Alabama, Georgia, North Carolina, Tennessee and Washington.
State health authorities in certain states and the District of Columbia require a CON or its equivalent in order to establish and operate a home health agency or hospice care center. We operate home health agencies and/or provide hospice services in the following CON states: Alabama, Georgia, North Carolina, South Carolina, Tennessee and Washington.
Our patient-centered care delivery platform is designed to improve the quality of care our patients receive, which allows them to remain in their homes and minimizes the overutilization of high-cost care settings such as hospitals.
Our patient-centered care delivery platform is designed to improve the quality of care our patients receive, which allows them to remain in their homes and minimizes the overutilization of high-cost care settings such as hospitals or skilled nursing facilities.
It is common for our PDN patients to continue to receive our services into adulthood, as approximately 50% of our PDN patients are over the age of 18. Private Duty Nursing 4 We are one of the largest providers of skilled PDN services in the United States.
It is common for our PDN patients to continue to receive our services into adulthood, as approximately 30% of our PDN patients are over the age of 18. Private Duty Nursing We are one of the largest providers of PDN services in the United States.
Our human capital resources objectives center around employee engagement, fostering our culture, and leadership development. We maintain and grow our team utilizing historically proven practices and technologies that help us identify, hire, incentivize and retain our existing employees and integrate new employees into our culture.
Our human capital resources objectives center around employee engagement, fostering our culture, and leadership development. We maintain and grow our team utilizing proven practices and technologies that help us identify, hire, incentivize and retain our existing employees.
Payers • We are a trusted frontline caregiver with the ability to deliver faster discharges into the home or allow patients to remain in the home as opposed to an acute care setting. • We offer efficiency as a single-source contracting solution across a wide range of services and markets. • We are well-positioned to engage in value-based care models to align interests and save costs for payers.
Payers • We are a trusted frontline caregiver with close relationships with our payer partners, giving Aveanna the ability to deliver faster discharges into the home or allow patients to remain in the home as opposed to an acute care setting. • We offer efficiency as a single-source contracting solution across a wide range of services and markets. • We are well-positioned to engage in value-based care models to align interests and save costs for payers.
While we focus primarily on pediatric PDN services, we continue to provide PDN services to our patients as they mature into adulthood. The majority of adult PDN patients have aged out of eligibility for pediatric PDN through Medicaid and can apply via waiver programs to continue to receive PDN services.
While we focus primarily on pediatric PDN services, we continue to provide PDN services to our patients as they mature into adulthood. The majority of adult PDN patients have aged out of eligibility for pediatric PDN through Medicaid and are eligible for Medicaid waiver programs to continue to receive PDN services.
For 2022, penalties for HIPAA violations can range from $120 to $1.806 million per violation with a maximum fine of $1.806 million for identical violations during a calendar year. ARRA also authorized State Attorneys General to bring civil enforcement actions under HIPAA, and attorney generals are actively engaged in enforcement.
For 2023, penalties for HIPAA violations can range from $127 to $1.919 million per violation with a maximum fine of $1.919 million for identical violations during a calendar year. ARRA also authorized State Attorneys General to bring civil enforcement actions under HIPAA, and attorney generals are actively engaged in enforcement.
People at all levels on our team have worked together over several decades and bring a wealth of experience in home health at industry leading companies, such as Healthfield and Gentiva.
People at all levels on our team have worked together over several decades and bring a wealth of experience in home health at industry leading companies.
Our compliance program focuses on regulations related to the federal False Claims Act, the Stark Law, the federal Anti-Kickback Statute, billing and overall adherence to healthcare regulations.
Our compliance program focuses on regulations related to the federal False Claims Act, the Stark Law, the federal Anti-Kickback Statute, fraud, waste and abuse, privacy, billing, and overall adherence to healthcare regulations.
Changes to our reimbursement tend to mirror wage inflation, supporting historically stable gross margins. The majority of our employees are skilled clinical workers that earn well above minimum wage and are not impacted by minimum wage increases. 10 Private Duty Services Reimbursement The primary payers for the private duty services we deliver are state-based Medicaid programs and MCOs.
Changes to our reimbursement tend to mirror wage inflation, supporting historically stable gross margins. The majority of our caregivers earn well above minimum wage and are not impacted by minimum wage increases. Private Duty Services Reimbursement The primary payers for the private duty services we deliver are state-based Medicaid programs and MCOs.
In states where traditional FFS Medicaid is the primary payer source for PDN services, there is no rate negotiation; providers simply must accept the rate offered by the state Medicaid system or choose to not do business in the state.
In states where traditional FFS Medicaid is the primary payer source for PDN services, there is no rate negotiation; providers simply must accept the rate offered by the state Medicaid system or choose not to accept Medicaid patients and/or be reimbursed by the state Medicaid system.
In addition, we intend to gain market share through investments in strong local branch leaders and technology infrastructure to enable digital and remote workforce training and onboarding amidst the COVID-19 pandemic.
In addition, we intend to gain market share through investments in strong local branch leaders and technology infrastructure to enable digital and remote workforce training and onboarding.
Acquirer of Choice with Proven Ability to Integrate Acquisitions and Realize Synergies Our scaled, national platform in otherwise highly fragmented markets positions us as a clear acquirer of choice for smaller providers seeking to partner with a leading platform.
Acquirer of Choice with Proven Ability to Integrate Acquisitions and Realize Synergies Our scaled, national platform in otherwise highly fragmented markets positions us as a clear acquirer of choice for smaller providers seeking to partner with a leading platform. Since our Formation, we have completed and integrated sixteen acquisitions.
HIPAA transaction regulations establish form, format and data content requirements for most electronic healthcare transactions, such as healthcare claims that are submitted electronically. The HIPAA privacy regulations establish comprehensive requirements relating to the use and disclosure of protected health information.
HIPAA transaction regulations establish form, format and data content requirements for most electronic healthcare transactions, such as healthcare claims that are submitted electronically. The HIPAA privacy regulations establish comprehensive requirements relating to the use and disclosure of protected health information. The HIPAA security regulations establish minimum standards for the protection of protected health information that is stored or transmitted electronically.
Our Acquisition Team and Integration Management Office (IMO) We have a proven team of 18 people dedicated to sourcing, evaluating and executing on all aspects of our merger and acquisition strategy.
Our Acquisition Team and Integration Management Office (IMO) We have a proven team of six people dedicated to sourcing, evaluating and executing on all aspects of our merger and acquisition strategy, as well as transformational initiatives.
Because such adjustments are determined upon the completion date of the episode, retroactive adjustments could impact our financial results. The base payment rate for Medicare home nursing was $1,901.12 per 30-day episode for the year ended December 31, 2021.
Because such adjustments are determined upon the completion date of the episode, retroactive adjustments could impact our financial results. The base payment rate for Medicare home nursing was $2,031.64 per 30-day episode for the year ended December 31, 2022.
Our technology infrastructure includes cloud-based solutions that enable essential functions of our business to run more efficiently, including, from front to back: (i) iCIMS for digital workforce management, (ii) internally developed Aveanna Hope Devices installed in every patient home to capture care reporting, (iii) Netsmart, Homecare Homebase, and Brightree Cloud electronic medical records workflows for managing our specialized PDN, adult home health, and MS clinical workflows, respectively, (iv) GLS, Homecare Homebase and Brightree for revenue cycle management, and (v) Workday for core enterprise resource planning workflows around financial management, payroll and HR.
Our technology infrastructure includes cloud-based solutions that enable essential functions of our business to run more efficiently, including, from front to back: (i) Internet Collaborative Information Management Systems ("iCIMS") for sourcing, recruiting and onboarding; (ii) CellTrak EVV technology, as well as internally developed Aveanna Hope Devices with mobile connectivity installed in patient homes to capture care reporting; (iii) Netsmart myUnity, Homecare Homebase, and Brightree Cloud electronic medical records workflows for managing our specialized PDN, adult home health, and MS clinical workflows, respectively, (iv) GLS, Homecare Homebase and Brightree for revenue cycle management, and (v) Workday for core enterprise resource planning workflows around financial management, payroll and HR.
The DEI Committee has been designed as a core group to propose ideas and develop programming to support a sense of belonging and community in collaboration with our DEI Leadership Team and Employee Resource Groups (“ERGs”). Annual Enterprise-Wide Bias/Sensitivity Training .
The DEI Committee has been designed as a core group to propose ideas and develop programming to support a sense of belonging and community in collaboration with our DEI Leadership Team and through our growing Employee Resource Groups (“ERGs”). Annual Enterprise-Wide Inclusion Sensitivity Training . We have implemented programming, education and training on diversity, inclusion, and belonging.
Violations of the privacy, security and breach notification regulations are punishable by civil and criminal penalties. The American Recovery and Economic Reinvestment Act of 2009 (“ARRA”) increased the amount of civil monetary penalties that can be imposed for violations of HIPAA, and the amounts are updated annually for inflation.
The American Recovery and Economic Reinvestment Act of 2009 (“ARRA”) increased the amount of civil monetary penalties that can be imposed for violations of HIPAA, and the amounts are updated annually for inflation.
Under the demonstration, home health agencies with higher performance receive bonuses, while those with lower scores receive lower payments relative to current levels. Home health agency performance is evaluated against separate improvement and attainment scores, with payment tied to the higher of these two scores.
The measures used may be subject to modification or change by CMS. Under the demonstration, home health agencies with higher performance receive bonuses, while those with lower scores receive lower payments relative to current levels. Home health agency performance is evaluated against separate improvement and attainment scores, with payment tied to the higher of these two scores.
While our unskilled caregivers generally earn at or near the minimum wage, this has not historically been a source of risk to our margins, as our unskilled reimbursement rates generally have mechanisms to adjust commensurate with local changes in minimum wage.
While our non-medical caregivers generally earn at or above the minimum wage, this has not historically been a source of risk to our margins, as our non-clinical reimbursement rates generally have mechanisms to adjust commensurate with state and local changes in applicable minimum wages.
In states that outsource some or all of the Medicaid administration to managed care, MCOs receive a per-member-per-month capitation payment from the state, and then contract for reimbursement rates with each provider of services within the state. Contracts between MCOs and PDN providers generally express reimbursement rates as a percentage of the state’s FFS rate.
In states that outsource some or all of the Medicaid administration to managed care, MCOs receive a per-member-per-month capitation payment from the state, and then contract for reimbursement rates with each provider of services within the state.
Federal and State Anti-Fraud and Anti-Kickback Laws As a provider under the Medicare and Medicaid systems, we are subject to various federal anti-fraud and abuse laws, including, without limitation, the federal healthcare programs’ anti-kickback statute, 42 U.S.C. § 1320a-7b (the “Anti-Kickback Statute”).
As we acquire companies, we apply for accreditation 12 to 18 months after completing the acquisition. Federal and State Anti-Fraud and Anti-Kickback Laws As a provider under the Medicare and Medicaid systems, we are subject to various federal anti-fraud and abuse laws, including, without limitation, the federal healthcare programs’ anti-kickback statute, 42 U.S.C. § 1320a-7b (the “Anti-Kickback Statute”).
Suppliers are required to submit a bid for selected products. On March 7, 2019, CMS announced plans to consolidate the CBAs included in the Round 2 Recompete and Round 1 2017 DMEPOS Competitive Bidding Program into a single round of competition named Round 2021. Round 2021 will include 130 CBAs.
Suppliers are required to submit a bid for selected products. On March 7, 2019, CMS announced plans to consolidate the CBAs included in the Round 2 Recompete and Round 1 2017 DMEPOS Competitive Bidding Program into a single round of competition named Round 2021. Round 2021 contracts became effective on January 1, 2021, and extend through December 31, 2023.
In particular, we believe that (1) our larger nursing panel and one stop shop service offering translate into higher referent satisfaction levels, higher win rates and more case volumes, (2) our advantaged nurse recruiting, training and staffing capability translate into higher case fill rates and a higher quality of care, (3) our large and sophisticated sales team translates into higher rates of referent penetration in local hospitals, (4) our stronger set of regional management leaders translates into better execution, and (5) our investments in technology drive efficiency and quality.
In particular, we believe that (1) our larger nursing panel and one stop shop service offering translate into higher referent satisfaction levels, higher win rates and more case volumes, (2) our advantaged nurse recruiting, training and staffing capability translate into higher case fill rates and a higher quality of care, (3) our large and sophisticated sales team translates into higher rates of referent penetration in local hospitals, (4) our robust experience with managing payer relations gives us the ability to have conversations with our Managed Care partners to create value-based care arrangements, (5) our stronger set of regional management leaders translates into better execution, and (6) our investments in technology drive efficiency and quality.
Our IMO team has extensive experience, having integrated home health acquisitions at Aveanna and in prior roles, as well as deep functional experience in operations, consulting, finance, IT and administrative roles. We complement our internal team with a core group of third-party advisors with whom we have worked for decades.
Our IMO team has extensive integration experience, with both private duty services and home health businesses, as well as deep functional experience in operations, consulting, finance, IT and administrative roles. We complement our internal team with a core group of third-party advisors with whom we have worked for decades.
Our Reimbursement Sources We have a highly diverse range of payers that reimburse us. Our payer diversity is due to both our geographic diversity as well as the variety of services we provide, many of which are reimbursed by different payers and have different payment models.
Our payer diversity is due to both our geographic diversity as well as the variety of services we provide, many of which are reimbursed by different payers and have different payment models.
Leverage Our Scale and Capabilities to Drive Value-Based Care Arrangements in Partnership with our MCO Payer Partners We believe that value-based care is the future of home health and have worked to equip ourselves to lead the transition.
Leverage Our Scale and Capabilities to Drive Value-Based Care Arrangements in Partnership with our MCO Payer Partners We believe that value-based care is the future of home health and have worked to equip ourselves to lead the transition. We believe that Aveanna is uniquely well-positioned to benefit from a shift towards value-based care by virtue of our scale.
The per-claim penalty range is between $12,537 and $25,076 (last updated 2022). The Fraud Enforcement and Recovery Act of 2009 (“FERA”) amended the FCA with the intent of enhancing the powers of government enforcement authorities and whistleblowers to bring FCA cases.
The per-claim penalty range is between $13,508 and $27,018 (last updated 2023). The Fraud Enforcement and Recovery Act of 2009 (“FERA”) amended the FCA with the intent of enhancing the powers of government enforcement authorities and whistleblowers to bring FCA cases.
The majority of the Company’s PDN patients are covered by either Medicaid fee-for service (“FFS”) or Medicaid MCOs. State legislatures set Medicaid FFS hourly reimbursement rates applicable to providers of PDN services.
The majority of the Company’s PDN patients are covered by either Medicaid fee-for service (“FFS”) or Medicaid MCOs. State legislatures or responsible state agencies determine Medicaid FFS reimbursement rates for PDN services.
All of our employees, with the exception of certain executives with employment agreements, work with us on an at-will basis and the Company is not subject to any collective bargaining agreements. Based on our employee engagement survey data, together with other key indicators that we review, we believe that we enjoy good relationships with our employees.
All of our employees, with the exception of certain executives with employment agreements, work with us on an at-will basis and none are union members or subject to any collective bargaining agreements. Our employee engagement survey data, together with other key indicators that we monitor, demonstrate that we enjoy good relationships with our employees.
FERA also included amendments to FCA procedures, expanding the government’s ability to use the Civil Investigative Demand process to investigate defendants, and permitting government complaints in intervention to relate back to the filing of the whistleblower’s original complaint. FERA has increased both the volume and liability exposure of FCA cases brought against healthcare providers.
FERA also included amendments to FCA procedures, expanding the government’s ability to use the Civil Investigative Demand process to investigate defendants, and permitting government complaints in intervention to relate back to the filing of the whistleblower’s original complaint.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
486 edited+194 added−191 removed606 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
486 edited+194 added−191 removed606 unchanged
2022 filing
2023 filing
Biggest changeResults of Operations Fiscal Year Ended January 1, 2022 Compared to the Fiscal Year Ended January 2, 2021 65 The following table summarizes our consolidated results of operations for the fiscal years indicated: For the fiscal years ended (dollars in thousands) January 1, 2022 % of Revenue January 2, 2021 % of Revenue Change % Change Revenue $ 1,678,618 100.0 % $ 1,495,105 100.0 % $ 183,513 12.3 % Cost of revenue, excluding depreciation and amortization 1,136,214 67.7 % 1,040,590 69.6 % 95,624 9.2 % Gross margin $ 542,404 32.3 % $ 454,515 30.4 % $ 87,889 19.3 % Branch and regional administrative expenses 297,381 17.7 % 240,946 16.1 % 56,435 23.4 % Field contribution $ 245,023 14.6 % $ 213,569 14.3 % $ 31,454 14.7 % Corporate expenses 130,387 7.8 % 113,828 7.6 % 16,559 14.5 % Goodwill impairment 117,702 7.0 % 75,727 5.1 % 41,975 55.4 % Depreciation and amortization 20,550 1.2 % 17,027 1.1 % 3,523 20.7 % Acquisition-related costs 12,832 0.8 % 9,564 0.6 % 3,268 34.2 % Other operating (income) expenses (337 ) 0.0 % 910 0.1 % (1,247 ) -137.0 % Operating loss $ (36,111 ) -2.2 % $ (3,487 ) -0.2 % $ (32,624 ) -935.6 % Interest expense, net (68,677 ) (82,638 ) 13,961 -16.9 % Loss on debt extinguishment (13,702 ) (73 ) (13,629 ) 18669.9 % Other income (expense) 4,914 34,464 (29,550 ) -85.7 % Income tax expense (3,468 ) (5,316 ) 1,848 -34.8 % Net loss $ (117,044 ) $ (57,050 ) $ (59,994 ) -105.2 % The following table summarizes our consolidated key performance measures, including Field contribution and Field contribution margin, which are non-GAAP measures (see “Non-GAAP Financial Measures” below), for the fiscal years indicated: For the fiscal years ended (dollars in thousands) January 1, 2022 January 2, 2021 Change % Change Revenue $ 1,678,618 $ 1,495,105 $ 183,513 12.3 % Cost of revenue, excluding depreciation and amortization 1,136,214 1,040,590 95,624 9.2 % Gross margin $ 542,404 $ 454,515 $ 87,889 19.3 % Gross margin percentage 32.3 % 30.4 % Branch and regional administrative expenses 297,381 240,946 56,435 23.4 % Field contribution $ 245,023 $ 213,569 $ 31,454 14.7 % Field contribution margin 14.6 % 14.3 % Corporate expenses $ 130,387 $ 113,828 $ 16,559 14.5 % As a percentage of revenue 7.8 % 7.6 % Operating loss $ (36,111 ) $ (3,487 ) $ (32,624 ) 935.6 % As a percentage of revenue -2.2 % -0.2 % The following tables summarize our key performance measures by segment for the fiscal years indicated: 66 PDS For the fiscal years ended (dollars and hours in thousands) January 1, 2022 January 2, 2021 Change % Change Revenue $ 1,358,116 $ 1,329,745 $ 28,371 2.1 % Cost of revenue, excluding depreciation and amortization 963,257 949,048 14,209 1.5 % Gross margin $ 394,859 $ 380,697 $ 14,162 3.7 % Gross margin percentage 29.1 % 28.6 % 0.5 % (4) Hours 37,867 37,885 (18 ) 0.0 % Revenue rate $ 35.87 $ 35.10 $ 0.77 2.1 % (1) Cost of revenue rate $ 25.44 $ 25.05 $ 0.39 1.5 % (2) Spread rate $ 10.43 $ 10.05 $ 0.38 3.7 % (3) HHH For the fiscal years ended (dollars and admissions/episodes in thousands) January 1, 2022 January 2, 2021 Change % Change Revenue $ 177,272 $ 31,180 $ 146,092 468.5 % Cost of revenue, excluding depreciation and amortization 93,557 17,869 75,688 423.6 % Gross margin $ 83,715 $ 13,311 $ 70,404 528.9 % Gross margin percentage 47.2 % 42.7 % 4.5 % (4) Home health total admissions (5) ** 39.6 ** ** ** Home health episodic admissions (6) ** 24.9 ** ** ** Home health total episodes (7) ** 37.5 ** ** ** Home health revenue per completed episode (8) ** $ 2,917 ** ** ** MS For the fiscal years ended (dollars and UPS in thousands) January 1, 2022 January 2, 2021 Change % Change Revenue $ 143,230 $ 134,180 $ 9,050 6.7 % Cost of revenue, excluding depreciation and amortization 79,400 73,673 5,727 7.8 % Gross margin $ 63,830 $ 60,507 $ 3,323 5.5 % Gross margin percentage 44.6 % 45.1 % -0.5 % (4) Unique patients served (“UPS”) 306 294 12 4.1 % Revenue rate $ 468.07 $ 456.39 $ 11.68 2.6 % (1) Cost of revenue rate $ 259.48 $ 250.59 $ 8.89 3.7 % (2) Spread rate $ 208.59 $ 205.80 $ 2.79 1.4 % (3) 1.
Biggest changeResults of Operations Fiscal Year Ended December 31, 2022 Compared to the Fiscal Year Ended January 1, 2022 The following table summarizes our consolidated results of operations for the fiscal years indicated: For the fiscal years ended (dollars in thousands) December 31, 2022 % of Revenue January 1, 2022 % of Revenue Change % Change Revenue $ 1,787,645 100.0 % $ 1,678,618 100.0 % $ 109,027 6.5 % Cost of revenue, excluding depreciation and amortization 1,234,418 69.1 % 1,136,214 67.7 % 98,204 8.6 % Gross margin $ 553,227 30.9 % $ 542,404 32.3 % $ 10,823 2.0 % Branch and regional administrative expenses 357,230 20.0 % 297,381 17.7 % 59,849 20.1 % Field contribution $ 195,997 11.0 % $ 245,023 14.6 % $ (49,026 ) -20.0 % Corporate expenses 137,864 7.7 % 130,387 7.8 % 7,477 5.7 % Goodwill impairment 675,346 37.8 % 117,702 7.0 % 557,644 473.8 % Depreciation and amortization 21,313 1.2 % 20,550 1.2 % 763 3.7 % Acquisition-related costs 99 0.0 % 12,832 0.8 % (12,733 ) -99.2 % Other operating expense (income) 3,651 0.2 % (337 ) 0.0 % 3,988 NM Operating loss $ (642,276 ) -35.9 % $ (36,111 ) -2.2 % $ (606,165 ) NM Interest expense, net (107,041 ) (68,677 ) (38,364 ) 55.9 % Loss on debt extinguishment - (13,702 ) 13,702 -100.0 % Other income 85,503 4,914 80,589 NM Income tax benefit (expense) 1,780 (3,468 ) 5,248 -151.3 % Net loss $ (662,034 ) $ (117,044 ) $ (544,990 ) 465.6 % The following table summarizes our consolidated key performance measures, including Field contribution and Field contribution margin, which are non-GAAP measures (see “Non-GAAP Financial Measures” below), for the fiscal years indicated: 59 For the fiscal years ended (dollars in thousands) December 31, 2022 January 1, 2022 Change % Change Revenue $ 1,787,645 $ 1,678,618 $ 109,027 6.5 % Cost of revenue, excluding depreciation and amortization 1,234,418 1,136,214 98,204 8.6 % Gross margin $ 553,227 $ 542,404 $ 10,823 2.0 % Gross margin percentage 30.9 % 32.3 % Branch and regional administrative expenses 357,230 297,381 59,849 20.1 % Field contribution $ 195,997 $ 245,023 $ (49,026 ) -20.0 % Field contribution margin 11.0 % 14.6 % Corporate expenses $ 137,864 $ 130,387 $ 7,477 5.7 % As a percentage of revenue 7.7 % 7.8 % Operating loss $ (642,276 ) $ (36,111 ) $ (606,165 ) NM As a percentage of revenue -35.9 % -2.2 % The following tables summarize our key performance measures by segment for the fiscal years indicated: PDS For the fiscal years ended (dollars and hours in thousands) December 31, 2022 January 1, 2022 Change % Change Revenue $ 1,415,105 $ 1,358,116 $ 56,989 4.2 % Cost of revenue, excluding depreciation and amortization 1,022,640 963,257 59,383 6.2 % Gross margin $ 392,465 $ 394,859 $ (2,394 ) -0.6 % Gross margin percentage 27.7 % 29.1 % -1.4 % (4) Hours 38,461 37,867 594 1.6 % Revenue rate $ 36.79 $ 35.87 $ 0.92 2.6 % (1) Cost of revenue rate $ 26.59 $ 25.44 $ 1.15 4.6 % (2) Spread rate $ 10.20 $ 10.43 $ (0.23 ) -2.2 % (3) HHH For the fiscal years ended (dollars and admissions/episodes in thousands) December 31, 2022 January 1, 2022 Change % Change Revenue $ 232,584 $ 177,272 $ 55,312 31.2 % Cost of revenue, excluding depreciation and amortization 130,721 93,557 37,164 39.7 % Gross margin $ 101,863 $ 83,715 $ 18,148 21.7 % Gross margin percentage 43.8 % 47.2 % -3.4 % (4) Home health total admissions (5) 49.0 39.6 9.4 23.7 % Home health episodic admissions (6) 30.2 24.9 5.3 21.3 % Home health total episodes (7) 48.5 37.5 11.0 29.3 % Home health revenue per completed episode (8) $ 2,987 $ 2,917 $ 70 2.4 % MS For the fiscal years ended (dollars and UPS in thousands) December 31, 2022 January 1, 2022 Change % Change Revenue $ 139,956 $ 143,230 $ (3,274 ) -2.3 % Cost of revenue, excluding depreciation and amortization 81,057 79,400 1,657 2.1 % Gross margin $ 58,899 $ 63,830 $ (4,931 ) -7.7 % Gross margin percentage 42.1 % 44.6 % -2.5 % (4) Unique patients served (“UPS”) 320 306 14 4.6 % Revenue rate $ 437.36 $ 468.07 $ (30.71 ) -6.9 % (1) Cost of revenue rate $ 253.30 $ 259.48 $ (6.18 ) -2.5 % (2) Spread rate $ 184.06 $ 208.59 $ (24.53 ) -12.3 % (3) 60 1.
If a cybersecurity attack or other unauthorized attempt to access our systems or facilities, or those or our patients or third-party service providers, were to be successful, it could result in the theft, destruction, loss, misappropriation or release of confidential, sensitive or personal information or intellectual property, and could cause operational or business delays that may materially impact our ability to provide various healthcare services.
If a cybersecurity attack or other unauthorized attempt to access our systems or facilities, or those of our patients or third-party service providers, were to be successful, it could result in the theft, destruction, loss, misappropriation or release of confidential, sensitive or personal information or intellectual property, and could cause operational or business delays that may materially impact our ability to provide various healthcare services.
The $586.3 million net cash provided in fiscal year 2021 was primarily related to the following items: • $477.7 million in net proceeds from the IPO; • $120.0 million in net proceeds from our Securitization Facility; • $42.4 million in net proceeds from the issuance and repayment of certain term loans and notes payable in 2021; net of • payment of $15.2 million of debt issuance costs; and • the return of $31.9 million of government stimulus funds, net of $2.5 million of funds received.
The $586.3 million net cash provided in fiscal year 2021 was primarily related to the following items: • $477.7 million in net proceeds from the IPO; • $120.0 million in net proceeds from our Securitization Facility; • $42.4 million in net proceeds from the issuance and repayment of certain term loans and notes payable in fiscal year 2021; net of • payment of $15.2 million of debt issuance costs; and • the return of $31.9 million of government stimulus funds, net of $2.5 million of funds received.
If this is the case, the single identifiable asset or the group of similar assets is not deemed to be a business and is instead deemed to be an asset.
If this is the case, the single identifiable asset or the group of similar assets is not deemed to be a business and is instead deemed to be an asset.
The Extension Amendment converted outstanding balances under all remaining first lien term loans into a single term loan in an aggregate principal amount of $ 860.0 million (the “2021 Extended Term Loan”), and extended the maturity date to July 2028 .
The Extension Amendment converted outstanding balances under all remaining first lien term loans into a single term loan in an aggregate principal amount of $ 860.0 million (the “2021 Extended Term Loan”), and extended the maturity date to July 2028 .
In response to COVID-19, the CARES Act temporarily suspended the automatic 2.0 % reduction of Medicare claim reimbursements for the period from May 1, 2020 through December 31, 2021.
In response to COVID-19, the CARES Act temporarily suspended the automatic 2.0 % reduction of Medicare claim reimbursements for the period from May 1, 2020 through December 31, 2021.
Among other things, our Amended Charter and/or Amended Bylaws include the following provisions: • a staggered board, which means that our Board of Directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause; • limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; • a prohibition on stockholder action by written consent from and after the date on which the Sponsors and each of their respective affiliates cease to beneficially own in the aggregate at least 50% of the outstanding shares of common stock (the “Trigger Event”); • a forum selection clause, which means certain litigation against us can only be brought in Delaware; • from and after the Trigger Event, the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all of the then-outstanding shares of our common stock entitled to vote thereon; 55 • from and after the Trigger Event, requiring the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of common stock to amend provisions of our Amended Charter relating to the management of our business, our Board of Directors, stockholder action by written consent, calling special meetings of stockholders, competition and corporate opportunities, Section 203 of the Delaware General Corporation Law (the “DGCL”), forum selection and the liability of our directors, or to amend, alter, rescind or repeal our Amended Bylaws; • the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
Among other things, our Amended Charter and/or Amended Bylaws include the following provisions: • a staggered board, which means that our Board of Directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause; • limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; • a prohibition on stockholder action by written consent from and after the date on which the Sponsors and each of their respective affiliates cease to beneficially own in the aggregate at least 50% of the outstanding shares of common stock (the “Trigger Event”); • a forum selection clause, which means certain litigation against us can only be brought in Delaware; • from and after the Trigger Event, the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of all of the then-outstanding shares of our common stock entitled to vote thereon; • from and after the Trigger Event, requiring the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of common stock to amend provisions of our Amended Charter relating to the management of our business, our Board of Directors, stockholder action by written consent, calling special meetings of stockholders, competition and corporate opportunities, Section 203 of the Delaware General Corporation Law (the “DGCL”), forum selection and the liability of our directors, or to amend, alter, rescind or repeal our Amended Bylaws; • the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and • advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
However, our Amended Charter contains similar provisions providing that we many not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder, unless (i) prior to the time such stockholder became an interested stockholder, the Board of Directors approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the common stock or (iii) following Board of Directors approval, the business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not held by such interested stockholder at an annual or special meeting of stockholders.
However, our Amended Charter contains similar provisions providing that we many not engage in certain “business combinations” with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder, unless (i) prior to the time such stockholder became an interested stockholder, the Board of Directors approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the common stock or (iii) following Board of Directors approval, the business combination receives the approval of the holders of at 51 least two-thirds of our outstanding common stock not held by such interested stockholder at an annual or special meeting of stockholders.
Given the rapid development of cybersecurity 52 and data privacy laws, we expect to encounter inconsistent interpretation and enforcement of these laws and regulations, as well as frequent changes to these laws and regulations which may expose us to significant penalties or liability for non-compliance, the possibility of fines, lawsuits (including class action privacy litigation), regulatory investigations, criminal or civil sanctions, audits, adverse media coverage, public censure, other claims, significant costs for remediation and damage to our reputation, or otherwise have a material adverse effect on our business and operations.
Given the rapid development of cybersecurity and data privacy laws, we expect to encounter inconsistent interpretation and enforcement of these laws and regulations, as well as frequent changes to these laws and regulations which may expose us to significant penalties or liability for non-compliance, the possibility of fines, lawsuits (including class action privacy litigation), regulatory investigations, criminal or civil sanctions, audits, adverse media coverage, public censure, other claims, significant costs for remediation and damage to our reputation, or otherwise have a material adverse effect on our business and operations.
The Second Lien Term Loan bears interest at a rate per annum equal to, at our option, either (1) an applicable margin (equal to 6.00%) plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, (b) the Prime Rate and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; or an applicable margin (equal to 7.00%) plus LIBOR determined by reference to the cost of funds for U.S. dollar deposits 81 for the interest period relevant to such borrowing adjusted for certain additional costs; provided that such rate is not lower than a floor of 0.50%.
The Second Lien Term Loan bears interest at a rate per annum equal to, at our option, either (1) an applicable margin (equal to 6.00%) plus a base rate determined by reference to the highest of (a) 0.50% per annum plus the Federal Funds Effective Rate, (b) the Prime Rate and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00%; or an applicable margin (equal to 7.00%) plus LIBOR determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs; provided that such rate is not lower than a floor of 0.50%.
The Second Lien Term Loan bears interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin (equal to 6.00 %) plus a base rate determined by reference to the highest of (a) 0.50 % per annum plus the Federal Funds Effective Rate, (b) the Prime Rate and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00 %; or an applicable margin (equal to 7.00 %) plus LIBOR determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs; provided that such rate 108 is not lower than a floor of 0.50 %.
The Second Lien Term Loan bears interest at a rate per annum equal to, at the Company’s option, either (1) an applicable margin (equal to 6.00 %) plus a base rate determined by reference to the highest of (a) 0.50 % per annum plus the Federal Funds Effective Rate, (b) the Prime Rate and (c) the LIBOR rate determined by reference to the cost of funds for U.S. dollar deposits for an interest period of one month adjusted for certain additional costs, plus 1.00 %; or an applicable margin (equal to 7.00 %) plus LIBOR determined by reference to the cost of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs; provided that such rate is not lower than a floor of 0.50 %.
Any successful cybersecurity attack or other unauthorized attempt to access our systems or facilities, or those of our patients or third-party service 33 providers, also could result in negative publicity which could damage our reputation or brand with our patients, referral sources, payers or other third parties and could subject us to substantial sanctions, fines and damages and other additional civil and criminal penalties under HIPAA, the HITECH Act, the HIPAA Omnibus Rule (the “Omnibus Rule”) and other federal and state privacy laws, in addition to litigation with those affected.
Any successful cybersecurity attack or other unauthorized attempt to access our systems or facilities, or those of our patients or third-party service providers, also could result in negative publicity which could damage our reputation or brand with our patients, referral sources, payers or other third parties and could subject us to substantial sanctions, fines and damages and other additional civil and criminal penalties under HIPAA, the HITECH Act, the HIPAA Omnibus Rule (the “Omnibus Rule”) and other federal and state privacy laws, in addition to litigation with those affected.
The Securitization Facility is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and the borrowings are presented as liabilities in the accompanying consolidated balance sheets; (ii) the accompanying consolidated statements of operations reflect the interest expense associated with the collateralized borrowings; and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the accompanying consolidated statements of cash flows. 9.
The Securitization Facility is accounted for as a collateralized financing activity, rather than a sale of assets, and therefore: (i) accounts receivable balances pledged as collateral are presented as assets and the borrowings are presented as liabilities in the accompanying consolidated balance sheets; (ii) the accompanying consolidated statements of operations reflect the interest expense associated with the collateralized borrowings; and (iii) receipts from customers related to the underlying accounts receivable are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the accompanying consolidated statements of cash flows.
Transitionary costs incurred to integrate acquired companies include IT consulting costs and related integration support costs; salary, severance and retention costs associated with duplicative acquired company personnel until such personnel are exited from the Company; accounting, legal and consulting costs; expenses and impairments related to the closure and consolidation of overlapping markets of acquired companies, including lease termination and relocation costs; costs associated with terminating legacy acquired company contracts and systems; and one-time costs associated with rebranding our acquired companies and locations to the Aveanna brand. 74 5.
Transitionary costs incurred to integrate acquired companies include IT consulting costs and related integration support costs; salary, severance and retention costs associated with duplicative acquired company personnel until such personnel are exited from the Company; accounting, legal and consulting costs; expenses and impairments related to the closure and consolidation of overlapping markets of acquired companies, including lease termination and relocation costs; costs associated with terminating legacy acquired company contracts and systems; and one-time costs associated with rebranding our acquired companies and locations to the Aveanna brand. 5.
If the economy were to contract into a recession (for example, as a result of the global COVID-19 pandemic, inflation or as a result of a significant increase in prevailing interest rates), our government payers or other counterparties that owe us money could be delayed in obtaining, or may not be able to obtain, necessary funding and/or financing to meet their cash flow needs.
If the economy were to contract into a recession (for example, as a result of the global COVID-19 pandemic, inflation or as a result of the recent significant increase in prevailing interest rates), our government payers or other counterparties that owe us money could be delayed in obtaining, or may not be able to obtain, necessary funding and/or financing to meet their cash flow needs.
A deterioration in our associative collection rate of revenue recognized or the overall aging of accounts receivable, including, without limitation, in connection with our transition and integration of acquired companies, and the attendant movement of underlying billing and collection operations from legacy systems to future systems, could have a material negative impact on our results of operations and liquidity and could be required to record impairment charges on our financial statements.
A deterioration in our associative collection rate of revenue recognized or the overall aging of accounts receivable, including, without limitation, in connection with our transition and integration of acquired companies, and the attendant movement of underlying billing and collection operations from legacy systems to future systems, could have a material negative impact on our results of operations and liquidity and we could be required to record impairment charges on our financial statements.
Additionally, although we do not grant, deny or adjudicate claims for payment of benefits and we do not believe that we engage in the corporate practice of medicine or the delivery of medical services, there can be no assurance that we will not be subject to claims or litigation related to the authorization or denial of claims for payment of benefits to allegations that we have engaged in fee splitting, which may be prohibited under state laws, or to allegations that we engage in the corporate practice of medicine or the delivery of medical services.
Additionally, although we do not grant, deny or adjudicate claims for payment of benefits and we do not believe that we engage in the corporate practice of medicine or the delivery of medical services, there can be no assurance that we will not be subject to claims or 40 litigation related to the authorization or denial of claims for payment of benefits to allegations that we have engaged in fee splitting, which may be prohibited under state laws, or to allegations that we engage in the corporate practice of medicine or the delivery of medical services.
The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer 54 Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“PCAOB”) and the securities exchanges, impose additional reporting and other obligations on public companies.
The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“PCAOB”) and the securities exchanges, impose additional reporting and other obligations on public companies.
Such person will therefore have no duty to communicate or present corporate opportunities to us, and will have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign or otherwise transfer such corporate opportunity to persons other than us, including to any officers, directors or stockholders or their respective affiliates (other than those who are employees of the Company or its subsidiaries).
Such person will therefore have no duty to communicate or present corporate opportunities to us, and will have the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to recommend, assign 52 or otherwise transfer such corporate opportunity to persons other than us, including to any officers, directors or stockholders or their respective affiliates (other than those who are employees of the Company or its subsidiaries).
Furthermore, if any issues in complying with those requirements are identified (for example, if we or our independent public accounting firm identify a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs to remediate those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Furthermore, if any issues in complying with those requirements are identified (for example, if we or our independent registered public accounting firm identify a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs to remediate those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business and our ability to attract and retain patients and employees. 44 Our balance sheet includes a significant amount of goodwill and intangible assets. An impairment in the carrying value of goodwill could negatively impact our consolidated results of operations and total assets.
Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business and our ability to attract and retain patients and employees. Our balance sheet includes a significant amount of goodwill and intangible assets. An impairment in the carrying value of goodwill could negatively impact our consolidated results of operations and total assets.
We believe our platform creates sustainable competitive advantages that support our ability to continue driving rapid growth, both organically and through acquisitions, and positions us as the partner of choice for the patients we serve. Segments We deliver our services to patients through three segments: Private Duty Services (“PDS”); Home Health & Hospice (“HHH”); and Medical Solutions (“MS”).
We believe our platform creates sustainable competitive advantages that support our ability to continue driving rapid growth, both organically and through acquisitions, and positions us as the partner of choice for the patients we serve. 54 Segments We deliver our services to patients through three segments: Private Duty Services (“PDS”); Home Health & Hospice (“HHH”); and Medical Solutions (“MS”).
On February 4, 2021, we repaid the remaining $4.3 million of direct stimulus funds to Pennsylvania DHS. • Deferred payment of the employer portion of social security taxes: We were permitted to defer payments of the employer portion of social security taxes in fiscal year 2020, which are payable in 50% increments, with the first 50% due by December 31, 2021 and the second 50% due by December 31, 2022.
On February 4, 2021, we repaid the remaining $4.3 million of direct stimulus funds to Pennsylvania DHS. • Deferred payment of the employer portion of social security taxes: We were permitted to defer payments of the employer portion of social security taxes in fiscal year 2020, which were payable in 50% increments, with the first 50% due by December 31, 2021 and the second 50% due by December 31, 2022.
In addition, on May 4, 2021, the Company repaid $ 100.0 million in principal amount of its outstanding indebtedness under the First Lien Credit Agreement. In connection with these repayments of principal amounts, the Company wrote off debt issuance costs totaling $ 8.9 million, which are included in loss on debt extinguishment in the accompanying consolidated statements of operations.
In addition, on May 4, 2021, the Company repaid $ 100.0 million in principal amount of its outstanding indebtedness under the First Lien Credit Agreement. In connection with these repayments of 95 principal amounts, the Company wrote off debt issuance costs totaling $ 8.9 million, which are included in loss on debt extinguishment in the accompanying consolidated statements of operations.
In addition, should private payers, including managed care payers, seek to negotiate discounted fee structures or the assumption by healthcare providers of all or a 25 portion of the financial risk through prepaid capitation arrangements, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.
In addition, should private payers, including managed care payers, seek to negotiate discounted fee structures or the assumption by healthcare providers of all or a portion of the financial risk through prepaid capitation arrangements, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.
We are required to comply with all applicable federal, state and local laws and regulations relating to employment, including occupational safety and health requirements, wage and hour and other compensation requirements, employee benefits, providing leave and sick pay, employment insurance, proper classification of workers as employees or independent contractors, immigration and equal employment opportunity laws.
We are required to comply with all applicable federal, state and local laws and regulations relating to employment, including occupational safety and health requirements, wage and hour and other compensation requirements, employee benefits, providing leave 48 and sick pay, employment insurance, proper classification of workers as employees or independent contractors, immigration and equal employment opportunity laws.
Our second amended and restated certificate of incorporation (the “Amended Charter”) authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, preferences, limitations and relative rights, including preferences over our common stock with respect to dividends and 53 distributions, as our Board of Directors may determine.
Our second amended and restated certificate of incorporation (the “Amended Charter”) authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, preferences, limitations and relative rights, including preferences over our common stock with respect to dividends and distributions, as our Board of Directors may determine.
The 2021 Extended Term Loan and any Delayed Draw Term Loans bear interest, at the Company’s election, at a variable interest rate based on either LIBOR (subject to a minimum of 0.50 % ), or ABR (subject to a minimum of 2.00 % ) for the interest period relevant to such borrowing, plus an applicable margin of 3.75 % for loans accruing interest based on LIBOR and an applicable margin of 2.75 % for loans accruing interest based on ABR.
The 2021 Extended Term Loan and any Delayed Draw Term Loan Facility bear interest, at the Company’s election, at a variable interest rate based on either LIBOR (subject to a minimum of 0.50 % ), or ABR (subject to a minimum of 2.00 % ) for the interest period relevant to such borrowing, plus an applicable margin of 3.75 % for loans accruing interest based on LIBOR and an applicable margin of 2.75 % for loans accruing interest based on ABR.
Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price. Our Sponsors can significantly influence our business and affairs and may have conflicts of interest with us in the future. The Sponsor Affiliates collectively own approximately 70.5% of our common stock.
Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price. Our Sponsors can significantly influence our business and affairs and may have conflicts of interest with us in the future. 49 The Sponsor Affiliates collectively own approximately 70.5% of our common stock.
In addition, on May 4, 2021, we repaid $100.0 million in principal amount of our outstanding indebtedness under our First Lien Credit Agreement. 80 On May 4, 2021, following completion of the initial public offering and satisfaction of the other applicable conditions precedent, the maximum availability of our Revolving Credit Facility increased from $75.0 million to $200.0 million.
In addition, on May 4, 2021, we repaid $100.0 million in principal amount of our outstanding indebtedness under our First Lien Credit Agreement. On May 4, 2021, following completion of the initial public offering and satisfaction of the other applicable conditions precedent, the maximum availability of our Revolving Credit Facility increased from $75.0 million to $200.0 million.
If we are unable to maintain relationships with existing patient referral sources, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected. Our success depends on referrals from physicians, hospitals and other sources in the communities we serve and on our ability to maintain good relationships with existing referral sources.
If we are unable to maintain relationships with existing patient referral sources, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected. 23 Our success depends on referrals from physicians, hospitals and other sources in the communities we serve and on our ability to maintain good relationships with existing referral sources.
Eligible providers, hospitals and suppliers may participate in the MSSP by creating, participating in or contracting with an ACO. The ACO rules adopted by CMS are extremely complex and remain subject to further refinement by CMS. According to CMS, 483 MSSP ACOs served over 11 million patients as of January 1, 2022.
Eligible providers, hospitals and suppliers may participate in the MSSP by creating, participating in 27 or contracting with an ACO. The ACO rules adopted by CMS are extremely complex and remain subject to further refinement by CMS. According to CMS, 483 MSSP ACOs served over 11 million patients as of January 1, 2022.
Broad-based implementation of a new delivery payment model would represent a significant transformation for us and the healthcare industry generally. The development of new delivery and payment systems will almost certainly 30 take significant time and expense. We cannot predict at this time what effect alternative payment models may have on our company.
Broad-based implementation of a new delivery payment model would represent a significant transformation for us and the healthcare industry generally. The development of new delivery and payment systems will almost certainly take significant time and expense. We cannot predict at this time what effect alternative payment models may have on our company.
In December 2021, we also received PRF payments from HHS totaling $2.5 million, which we repaid in full in December 2021. 63 • State Sponsored Relief Funds: In fiscal year 2020, we received $4.8 million of stimulus funds from the Commonwealth of Pennsylvania Department of Human Services (“Pennsylvania DHS”), which we did not apply for or request.
In December 2021, we also received PRF payments from HHS totaling $2.5 million, which we repaid in full in December 2021. • State Sponsored Relief Funds: In fiscal year 2020, we received $4.8 million of stimulus funds from the Commonwealth of Pennsylvania Department of Human Services (“Pennsylvania DHS”), which we did not apply for or request.
The Company did no t receive stimulus funds from any individual state other than Pennsylvania. The Company recognized $ 0.5 million of income related to these funds in fiscal year 2020, with the remaining $ 4.3 million included in government stimulus liabilities in the accompanying consolidated balance sheet as of January 2, 2021.
The Company did no t receive stimulus funds from any individual state other than Pennsylvania. The Company recognized $ 0.5 million of income related to these funds in fiscal year 2020, with the remaining $ 4.3 million included in government stimulus liabilities in the consolidated balance sheet as of January 2, 2021.
In addition to the wage pressures inherent in this environment, the cost of training new employees amid the turnover rates may cause added pressure on our operating results. If our labor costs continue to increase, we may not experience reimbursement rate or pricing increases to offset these additional costs.
In addition to the wage pressures inherent in this environment, the cost of training new employees amid the turnover 33 rates may cause added pressure on our operating results. If our labor costs continue to increase, we may not experience reimbursement rate or pricing increases to offset these additional costs.
An increasing level of governmental and private resources are being devoted to the investigation of 49 allegations of fraud and abuse in the Medicare and Medicaid programs, and federal and state regulatory authorities are taking an increasingly strict view of the requirements imposed on healthcare providers by the Social Security Act, the Medicare and Medicaid programs, and other applicable laws.
An increasing level of governmental and private resources are being devoted to the investigation of allegations of fraud and abuse in the Medicare and Medicaid programs, and federal and state regulatory authorities are taking an increasingly strict view of the requirements imposed on healthcare providers by the Social Security Act, the Medicare and Medicaid programs, and other applicable laws.
If, in the future, our operating or financial results for a particular period do not meet any guidance we provide or the expectations of investment analysts, or if we reduce our guidance for future periods, the market price of our common stock may decline. 57 It em 1B. Unresolved Staff Comments. None. It em 2. Properties.
If, in the future, our operating or financial results for a particular period do not meet any guidance we provide or the expectations of investment analysts, or if we reduce our guidance for future periods, the market price of our common stock may decline. It em 1B. Unresolved Staff Comments. None. It em 2. Properties.
Borrowings under this facility carry variable interest rates tied to BSBY plus an applicable margin. Please see Note 8 – Securitization Facility , to the audited Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion related to the Securitization Facility.
Borrowings under this facility carry variable interest rates tied to BSBY plus an applicable margin. Please see Note 7 – Securitization Facility , to the audited Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion related to the Securitization Facility.
The following exhibits are submitted with this Annual Report on Form 10-K or, where indicated, incorporated by reference to other filings. 128 Exhibit Index Exhibit Number Description 2.1 Membership Interest Purchase Agreement, dated September 27, 2021, by and among Aveanna Healthcare Senior Services LLC, Comfort Care Home Health Services, LLC, Comfort Care Hospice, L.L.C., Premier Medical Housecall, LLC and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 1, 2021). 2.2 Stock Purchase Agreement, dated November 14, 2021, by and among Aveanna Healthcare LLC, Dunn & Berger, Inc. d/b/a Accredited Nursing Services and the other parties thereto (incorporated by reference to Exhibit 2.2 of the Company’s Form 10-Q filed with the SEC on November 15, 2021). 3.1 Second Amended and Restated Certificate of Incorporation of Aveanna Healthcare Holdings Inc.
The following exhibits are submitted with this Annual Report on Form 10-K or, where indicated, incorporated by reference to other filings. 120 Exhibit Index Exhibit Number Description 2.1 Membership Interest Purchase Agreement, dated September 27, 2021, by and among Aveanna Healthcare Senior Services LLC, Comfort Care Home Health Services, LLC, Comfort Care Hospice, L.L.C., Premier Medical Housecall, LLC and the other parties thereto (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 1, 2021). 2.2 Stock Purchase Agreement, dated November 14, 2021, by and among Aveanna Healthcare LLC, Dunn & Berger, Inc. d/b/a Accredited Nursing Services and the other parties thereto (incorporated by reference to Exhibit 2.2 of the Company’s Form 10-Q filed with the SEC on November 15, 2021). 3.1 Second Amended and Restated Certificate of Incorporation of Aveanna Healthcare Holdings Inc.
Alternatively, if a court were to find 56 the Delaware Forum Provision or the Federal Forum Provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition or results of operations.
Alternatively, if a court were to find the Delaware Forum Provision or the Federal Forum Provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition or results of operations.
If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. 82 Business Combinations We account for acquisitions of entities that qualify as business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations.
If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. Business Combinations We account for acquisitions of entities that qualify as business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations.
The time period to resolve claims can vary depending upon the jurisdiction, the nature, and the form of resolution of the claims. The estimation of the timing of payments beyond a year can vary significantly. In addition, if current and 84 future claims differ from historical trends, our estimated reserves for insured claims may be significantly affected.
The time period to resolve claims can vary depending upon the jurisdiction, the nature, and the form of resolution of the claims. The estimation of the timing of payments beyond a year can vary significantly. In addition, if current and future claims differ from historical trends, our estimated reserves for insured claims may be significantly affected.
Further, we cannot assure you that our services will be considered cost-effective by third-party payers, that reimbursement will continue to be available, or that changes to third-party payer reimbursement policies will not have a material adverse effect on our ability to sell our services on a profitable basis, if at all.
Further, we cannot assure you that our services will be considered cost-effective by 25 third-party payers, that reimbursement will continue to be available, or that changes to third-party payer reimbursement policies will not have a material adverse effect on our ability to sell our services on a profitable basis, if at all.
Any such failure of IT and information systems could adversely affect our reputation, our ability to effect transactions and service customers and merchants, disrupt our business or result in the misuse of patient or patient data, financial loss or liability to our 39 patients, the loss of a supplier or regulatory intervention or reputational damage.
Any such failure of IT and information systems could adversely affect our reputation, our ability to effect transactions and service customers and merchants, disrupt our business or result in the misuse of patient or patient data, financial loss or liability to our patients, the loss of a supplier or regulatory intervention or reputational damage.
The cost approach utilizes projected cash outflows and includes significant assumptions such as projected facility costs, projected administrative costs and estimates of the time and effort to acquire a license. The valuations of our significant acquired companies have been performed by a third-party valuation specialist under our management’s supervision.
The cost approach utilizes projected cash outflows and includes significant assumptions such as projected facility costs, projected administrative costs and estimates of the time and effort to acquire a license. The valuations of our significant acquired companies have been performed by 74 a third-party valuation specialist under our management’s supervision.
Insurance Programs The Company self-insures its exposure to professional malpractice and workers’ compensation risk up to selected retention levels. Reserves are established for estimates of the loss that will ultimately be incurred on claims that have been reported but not paid and claims that have been incurred but not reported.
Insurance Programs The Company self-insures its exposure to professional malpractice and workers’ compensation risk up to selected retention levels. Reserves are established for estimates of the loss that will ultimately be incurred on claims that have 88 been reported but not paid and claims that have been incurred but not reported.
In fiscal year 2020, the Company received PRF payments from HHS totaling $ 25.1 million , which were included in government stimulus liabilities in the accompanying consolidated balance sheet as of January 2, 2021. On March 5, 2021, we repaid these PRF payments in full. In December 2021, we also received PRF payments from HHS totaling $ 2.5 million .
In fiscal year 2020, the Company received PRF payments from HHS totaling $ 25.1 million , which were included in government stimulus liabilities in the accompanying consolidated balance sheet as of January 1, 2022. On March 5, 2021, we repaid these PRF payments in full. In December 2021, we also received PRF payments from HHS totaling $ 2.5 million.
As part of the efforts, such payers increasingly are demanding discounted fee structures or the assumption by healthcare providers of all or a portion of the financial risk relating to paying for care provided, often in exchange for exclusive or preferred participation in 28 their benefit plans.
As part of the efforts, such payers increasingly are demanding discounted fee structures or the assumption by healthcare providers of all or a portion of the financial risk relating to paying for care provided, often in exchange for exclusive or preferred participation in their benefit plans.
Subject to certain exceptions, the 36 Month Rule prohibits buyers of certain home health agencies – those that either enrolled in Medicare or underwent a change in majority ownership fewer than 36 months prior to the acquisition – from assuming the Medicare billing privileges of the 43 acquired branch locations.
Subject to certain exceptions, the 36 Month Rule prohibits buyers of certain home health agencies – those that either enrolled in Medicare or underwent a change in majority ownership fewer than 36 months prior to the acquisition – from assuming the Medicare billing privileges of the acquired branch locations.
Share-Based Compensation The fair value of time-vesting employee options is recognized as compensation expense on a straight-line basis over the requisite service period of the award. The fair value of performance-vesting options is recognized as compensation expense ratably over the service fiscal year of each performance tranche when it is probable that the performance target will be achieved.
Share-Based Compensation The fair value of time-vesting options is recognized as compensation expense on a straight-line basis over the requisite service period of the award. The fair value of performance-vesting options is recognized as compensation expense ratably over the service fiscal year of each performance tranche when it is probable that the performance target will be achieved.
The Company notified approximately 170,000 current and former patients that certain information may have been copied and transferred, although there was no confirmation of any unauthorized acquisition, disclosure, use of, or access to such information as a result of the incident.
The Company notified approximately 170,000 current and former patients that certain information may have been copied and transferred, although there was no confirmation 30 of any unauthorized acquisition, disclosure, use of, or access to such information as a result of the incident.
Any future efforts to challenge, repeal or replace the ACA or implement alternative reform measures may result in reduced funding for state Medicaid programs, lower numbers of insured individuals, reduced coverage for 34 insured individuals and could impact providers and other healthcare industry participants.
Any future efforts to challenge, repeal or replace the ACA or implement alternative reform measures may result in reduced funding for state Medicaid programs, lower numbers of insured individuals, reduced coverage for insured individuals and could impact providers and other healthcare industry participants.
During the COVID-19 pandemic, our ability to attract and retain qualified personnel may also depend on our ability to appropriately protect these personnel from exposure to the virus, and upon the effect of vaccine mandates. We 36 cannot be assured we will succeed in any of these areas.
During the COVID-19 pandemic, our ability to attract and retain qualified personnel may also depend on our ability to appropriately protect these personnel from exposure to the virus, and upon the effect of vaccine mandates. We cannot be assured we will succeed in any of these areas.
Any interest or penalties incurred related to unrecognized tax benefits are recorded as a component of the provision for income tax expense. Net Loss per Share 98 Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period.
Any interest or penalties incurred related to unrecognized tax benefits are recorded as a component of the provision for income tax expense. Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding for the period.
Hospice quality reporting was mandated by the ACA, which directs the Secretary of HHS to establish quality reporting requirements for hospice programs. Failure to submit required quality data will result in a 2%-point reduction to the 35 market basket percentage increase for that fiscal year.
Hospice quality reporting was mandated by the ACA, which directs the Secretary of HHS to establish quality reporting requirements for hospice programs. Failure to submit required quality data will result in a 2%-point reduction to the market basket percentage increase for that fiscal year.
The HHS has indicated that for-profit commercial organizations, such as the companies we acquired that received and retained PRF funds prior to the acquisition closing dates, are required to include PRF payments in determining whether 38 they are required to have certain audits performed.
The HHS has indicated that for-profit commercial organizations, such as the companies we acquired that received and retained PRF funds prior to the acquisition closing dates, are required to include PRF payments in determining whether they are required to have certain audits performed.
Management reviews home health total episodes on a monthly basis as to understand the volume of patients who were authorized to receive care during the month. Home Health Revenue Per Completed Episode Home health revenue per completed episode is calculated by dividing total payments received from completed episodes by the number of completed episodes during the period.
Management reviews home health total episodes on a monthly basis to understand the volume of patients who were authorized to receive care during the month. Home Health Revenue Per Completed Episode Home health revenue per completed episode is calculated by dividing total payments received from completed episodes by the number of completed episodes during the period.
The assets acquired and liabilities assumed are generally measured at fair value on the acquisition date using the appropriate valuation method. Goodwill represents the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed. The operations of an acquisition are included in the consolidated financial statements from the respective date of the acquisition.
The assets acquired and liabilities assumed are measured at fair value on the acquisition date using the appropriate valuation method. Goodwill represents the excess of the purchase price over the net fair value of identifiable assets acquired and liabilities assumed. The operations of an acquisition are included in the consolidated financial statements from the respective date of the acquisition.
It also requires the Secretary to establish a national pilot program for integrated care for patients with certain conditions, bundling payment for acute hospital care, physician services, outpatient hospital services (including emergency department services), and post-acute care services, which would include home health.
It also requires the Secretary to establish a national pilot program for integrated care for patients with certain conditions, bundling payment for acute hospital care, 43 physician services, outpatient hospital services (including emergency department services), and post-acute care services, which would include home health.
A determination that we have violated these laws, or the public announcement that we are being investigated for possible violations of these laws, could have a material adverse effect on our business, financial position, results of operations and liquidity, and our business reputation could suffer significantly.
A determination that we have violated these laws, or the public announcement that we are being investigated for 46 possible violations of these laws, could have a material adverse effect on our business, financial position, results of operations and liquidity, and our business reputation could suffer significantly.
If any of our home health or hospice agencies fail to comply with the conditions of participation in the Medicare program, that agency could be terminated from Medicare, which could adversely affect our revenue and net income. Our home health and hospice agencies must comply with the extensive conditions of participation in the Medicare program.
If any of our home health or hospice agencies fail to comply with the conditions of participation in the Medicare program, that agency could be terminated from Medicare, which could adversely affect our revenue and net income. 36 Our home health and hospice agencies must comply with the extensive conditions of participation in the Medicare program.
The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other income (expense) in the accompanying consolidated statements of operations, which are included within cash flows from operating activities in the accompanying consolidated statements of cash flows.
The Company does not apply hedge accounting to these agreements and records all mark-to-market adjustments directly to other income in the accompanying consolidated statements of operations, which are included within cash flows from operating activities in the accompanying consolidated statements of cash flows.
Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s practice to cooperate fully with such inquiries.
Compliance with such laws and regulations can be subject to future governmental review and interpretation as well 108 as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s practice to cooperate fully with such inquiries.
Important Operating Metrics We review the following important metrics on a segment basis and not on a consolidated basis: PDS and MS Segment Operating Metrics Volume 64 Volume represents PDS hours of care provided and MS unique patients served, which is how we measure the amount of our patient services provided.
Important Operating Metrics We review the following important metrics on a segment basis and not on a consolidated basis: PDS Segment and MS Segment Operating Metrics Volume Volume represents PDS hours of care provided and MS unique patients served, which is how we measure the amount of our patient services provided.
The fair value of accelerator-vesting options is recognized as compensation expense ratably over the derived service fiscal year of each accelerator tranche. The fair value of the time-vesting options is determined using the Black-Scholes option pricing model. The fair value of the performance and accelerator vesting options are determined using the Monte Carlo option pricing model.
The fair value of accelerator-vesting options is recognized as compensation expense ratably over the derived service fiscal year of each accelerator tranche. The fair value of the time-vesting options is determined using 89 the Black-Scholes option pricing model. The fair value of the performance and accelerator-vesting options are determined using the Monte Carlo option pricing model.
Certain of the Company’s leases include termination options and renewal options for periods ranging from one to five years . Because the Company is not reasonably certain to exercise termination options, the options are not considered in determining the lease term, and payments for the full lease term are included in lease payments.
Certain of the Company’s leases include termination options and renewal options for periods ranging from one to five years . Because the Company is not reasonably certain to exercise termination options, the options are not 105 considered in determining the lease term, and payments for the full lease term are included in lease payments.
Because 117 the Company is not reasonably certain to exercise renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s leases do not contain material residual value guarantees.
Because the Company is not reasonably certain to exercise renewal options, the options are not considered in determining the lease term, and payments associated with the option years are excluded from lease payments. The Company’s leases do not contain material residual value guarantees.
In some markets, the lack of availability of medical personnel is a significant operating issue facing all healthcare providers. This issue may be exacerbated if immigration is more limited in the future and by the COVID-19 pandemic.
In some markets, the lack of availability of medical personnel is a significant operating issue facing all healthcare providers. This issue may be exacerbated if immigration is more limited in the future and by a resurgence of the COVID-19 pandemic.
We have substantial indebtedness, which will increase our vulnerability to general adverse economic and industry conditions and may limit our ability to pursue strategic alternatives and react to changes in our business and industry or pay dividends. 41 We have a substantial amount of indebtedness.
We have substantial indebtedness, which will increase our vulnerability to general adverse economic and industry conditions and may limit our ability to pursue strategic alternatives and react to changes in our business and industry or pay dividends. We have a substantial amount of indebtedness.
Changes in the regulatory 48 framework, including those associated with healthcare reform, and sanctions from various enforcement actions could have a material adverse effect on our business, financial position, results of operations and liquidity.
Changes in the regulatory framework, including those associated with healthcare reform, and sanctions from various enforcement actions could have a material adverse effect on our business, financial position, results of operations and liquidity.
Even if we believe that intellectual property related claims are without merit, litigation may be necessary to determine the scope and validity of intellectual property or proprietary rights of others or to protect or enforce our intellectual property rights.
Even if we believe that intellectual 37 property related claims are without merit, litigation may be necessary to determine the scope and validity of intellectual property or proprietary rights of others or to protect or enforce our intellectual property rights.
GAAP to recognize these estimated liabilities in its consolidated financial statements on a gross basis; with a corresponding receivable from the insurance carriers reflecting the contractual indemnity provided by the carriers under the related malpractice policies.
GAAP to recognize these estimated liabilities in its consolidated financial statements on a gross basis; with a corresponding receivable from the insurance carriers reflecting the contractual indemnity provided by the carriers under the related insurance policies.
Our failure to develop and properly manage new 40 intellectual property could hurt our market position and business opportunities. Furthermore, recent changes to U.S. intellectual property laws may jeopardize the enforceability and validity of our intellectual property portfolio.
Our failure to develop and properly manage new intellectual property could hurt our market position and business opportunities. Furthermore, recent changes to U.S. intellectual property laws may jeopardize the enforceability and validity of our intellectual property portfolio.
These metrics are also important because they guide us in determining whether or not our branch and regional administrative expenses are appropriately sized to support our caregivers and direct patient care operations.
These metrics are also important because they guide us in determining whether or not our branch and regional administrative expenses are appropriately sized to support our caregivers 67 and direct patient care operations.
In addition, the ACA mandates the creation of a hospice quality reporting program, ensuring public reporting of hospice quality data. Hospices failing to submit quality data will incur a 2% reduction in hospice 47 reimbursements for the following year.
In addition, the ACA mandates the creation of a hospice quality reporting program, ensuring public reporting of hospice quality data. Hospices failing to submit quality data will incur a 2% reduction in hospice reimbursements for the following year.
Information blocking is defined as engaging in activities that are likely to interfere with, prevent or materially 51 discourage access, exchange or use of electronic health information, subject to limited exceptions.
Information blocking is defined as engaging in activities that are likely to interfere with, prevent or materially discourage access, exchange or use of electronic health information, subject to limited exceptions.
Certain companies we acquired in 2020 and 2021 had also deferred payroll taxes of $4.6 million in aggregate in fiscal year 2020. We did not defer any payroll taxes after December 31, 2020.
Certain companies we acquired in fiscal years 2020 and 2021 had also deferred payroll taxes of $4.6 million in aggregate in fiscal year 2020. We did not defer any payroll taxes after December 31, 2020.
Anthony Strange (incorporated by reference to Exhibit 10.11 to the registration statement on Form S-1 (File No. 333-254981), filed with the SEC on April 28, 2021). 129 10.10 First Amendment to Amended and Restated Employment Agreement, dated as of January 23, 2018, by and among Aveanna Healthcare LLC (f/k/a BCPE Eagle Buyer, LLC), Pediatric Services of America, Inc. and H.
Anthony Strange (incorporated by reference to Exhibit 10.11 to the registration statement on Form S-1 (File No. 333-254981), filed with the SEC on April 28, 2021). 121 10.10 First Amendment to Amended and Restated Employment Agreement, dated as of January 23, 2018, by and among Aveanna Healthcare LLC (f/k/a BCPE Eagle Buyer, LLC), Pediatric Services of America, Inc. and H.
Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems also could disrupt or reduce the efficiency of our business.
Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems also could disrupt or reduce the efficiency of our 35 business.
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