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What changed in CHEMED CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CHEMED CORP's 2023 and 2024 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 2024 report.

+129 added−128 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in CHEMED CORP's 2024 10-K

129 paragraphs added · 128 removed · 111 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+6 added−8 removed150 unchanged
Biggest changeIt had a term of five years during which it imposed monitoring, reporting, certification, oversight, screening and training obligations, certain of which had previously been implemented by VITAS. It also required VITAS to engage an Independent Review Organization (“IRO”) to perform audit and review functions and to prepare reports regarding compliance with federal healthcare programs.
Biggest changeThe CIA formalized various aspects of VITAS’ already existing Compliance Program and contained requirements designed to document compliance with federal healthcare program requirements. It had a term of five years during which it imposed monitoring, reporting, certification, oversight, screening and training obligations, certain of which had previously been implemented by VITAS.
The Company cannot assure that future regulatory changes will not result in hospice services becoming subject to the Stark Law’s ownership, investment or compensation prohibitions in the future. 9 Many states where VITAS operates have laws similar to the Stark Law, but with broader effect because they apply regardless of the source of payment for care.
The Company cannot assure that future regulatory changes will not result in hospice services becoming subject to the Stark Law’s ownership, investment or compensation prohibitions in the future. Many states where VITAS operates have laws similar to the Stark Law, but with broader effect because they apply regardless of the source of payment for care.
The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are electronically available through the SEC (http://www.sec.gov) or the Company’s website as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC.
The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of 12 the Exchange Act are electronically available through the SEC (http://www.sec.gov) or the Company’s website as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC.
These states may require some form of state agency review or approval prior to opening a new hospice program, to adding or expanding hospice services, to undertaking significant capital expenditures or under other specified circumstances. Approval under these certificate of need laws is generally 4 conditioned on the showing of a demonstrable need for services in the community.
These states may require some form of state agency review or approval prior to opening a new hospice program, to adding or expanding hospice services, to undertaking significant capital expenditures or under other specified circumstances. Approval under these Certificate of Need laws is generally conditioned on the showing of a demonstrable need for services in the community.
Medicare pays for hospice services on a prospective payment system basis under which VITAS receives an established payment rate for each day that it provides hospice services to a Medicare beneficiary. These rates are subject to annual adjustments for inflation and vary based upon the geographic location where the services are provided.
Medicare pays for hospice services on a prospective payment system basis under which VITAS receives an established payment rate for each day that it provides hospice services to a Medicare beneficiary. These rates are subject to annual 5 adjustments for inflation and vary based upon the geographic location where the services are provided.
Specifically, the Medicare hospice benefit provides for two initial 90 day benefit periods followed by an unlimited number of 60 day periods. In order to qualify for hospice care, a Medicare 5 beneficiary must elect hospice care and waive any right to other Medicare benefits related to his or her terminal illness.
Specifically, the Medicare hospice benefit provides for two initial 90 day benefit periods followed by an unlimited number of 60 day periods. In order to qualify for hospice care, a Medicare beneficiary must elect hospice care and waive any right to other Medicare benefits related to his or her terminal illness.
The Anti- 7 Kickback Law applies regardless of whether the remuneration is provided directly or indirectly, in cash or in kind. Although the Anti-Kickback statute does not prohibit all financial transactions or relationships that providers of healthcare items or services may have with each other, interpretations of the law have been very broad.
The Anti-Kickback Law applies regardless of whether the remuneration is provided directly or indirectly, in cash or in kind. Although the Anti-Kickback statute does not prohibit all financial transactions or relationships that providers of healthcare items or services may have with each other, interpretations of the law have been very broad.
For example, in New York, a hospice generally cannot be owned by a corporation that has another corporation as a stockholder. These types of restrictions could affect VITAS’ ability to expand into New York, or in other jurisdictions with similar restrictions. Limits on Acquisitions or Conversions.
For example, in New York, a hospice generally cannot be owned by a corporation that has another corporation as a 4 stockholder. These types of restrictions could affect VITAS’ ability to expand into New York, or in other jurisdictions with similar restrictions. Limits on Acquisitions or Conversions.
Roto-Rooter’s ability to engage in the plumbing repair business is also subject to certain limitations and restrictions imposed by state and local licensing laws and regulations. 2 VITAS General. The health care industry and VITAS’ hospice programs are subject to extensive federal and state regulation.
Roto-Rooter’s ability to engage in the plumbing repair business is also subject to certain limitations and restrictions imposed by state and local licensing laws and regulations. 2 VITAS General. The health care industry and VITAS’ hospice and palliative care programs are subject to extensive federal and state regulation.
Licensure . Each hospice and all hospice personnel must be licensed, certified or registered in accordance with applicable federal, state and local laws and regulations. Central Clinical Records . Hospice programs must maintain clinical records for each hospice patient that are organized in such a way that they may be easily retrieved.
Each hospice and all hospice personnel must be licensed, certified or registered in accordance with applicable federal, state and local laws and regulations. Central Clinical Records . Hospice programs must maintain clinical records for each hospice patient that are organized in such a way that they may be easily retrieved.
From time to time, various federal and state agencies, such as HHS and the OIG, issue a variety of pronouncements, including fraud alerts, the OIG’s Annual Work Plan and other reports, identifying practices that may be subject to heightened governmental 8 scrutiny.
From time to time, various federal and state agencies, such as HHS and the OIG, issue a variety of pronouncements, including fraud alerts, the OIG’s Annual Work Plan and other reports, identifying practices that may be subject to heightened governmental scrutiny.
Violations of the Anti-Kickback Law carry potentially severe penalties including imprisonment of up to ten years, criminal fines of up to $100,000 per act, civil money penalties of up to $100,000 per act, and additional damages of up to three times the amounts claimed or remuneration offered or paid.
Violations of the Anti-Kickback Law carry potentially severe penalties including imprisonment of up to ten years, criminal fines of up to $100,000 per act, civil money penalties of up to $100,000 per act, and additional damages of up to three times the amounts 7 claimed or remuneration offered or paid.
Civil monetary penalties may be imposed for violations of the anti-kickback statute and for the failure to return known overpayments, among other things. Prohibition on Employing or Contracting with Excluded Providers.
Civil monetary penalties may be imposed for violations of the anti-kickback statute and for the failure to return known overpayments, among other things. 9 Prohibition on Employing or Contracting with Excluded Providers.
For certain other activities, such as septic tank and grease trap pumping, Roto-Rooter is subject to state and local environmental health and sanitation regulations. At December 31, 2023, the Company’s accrual for its estimated liability for potential environmental cleanup and related costs arising from the 1991 sale of DuBois Chemicals Inc. (“DuBois”) amounted to $1.7 million.
For certain other activities, such as septic tank and grease trap pumping, Roto-Rooter is subject to state and local environmental health and sanitation regulations. At December 31, 2024, the Company’s accrual for its estimated liability for potential environmental cleanup and related costs arising from the 1991 sale of DuBois Chemicals Inc. (“DuBois”) amounted to $1.7 million.
During 2023, Chemed conducted its business operations in two segments: the VITAS segment (“VITAS”) and the Roto-Rooter segment (“Roto-Rooter”). VITAS provides hospice and palliative care services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers.
During 2024, Chemed conducted its business operations in two segments: the VITAS segment (“VITAS”) and the Roto-Rooter segment (“Roto-Rooter”). VITAS provides hospice and palliative care services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers.
Capital expenditures for the purpose of complying with environmental laws and regulations during 2022 and 2023 with respect to continuing operations are not material in amount; there can be no assurance, however, that presently unforeseen legislative enforcement actions will not require additional expenditures.
Capital expenditures for the purpose of complying with environmental laws and regulations during 2023 and 2024 with respect to continuing operations are not material in amount; there can be no assurance, however, that presently unforeseen legislative enforcement actions will not require additional expenditures.
For fiscal 2023, less than 2% of VITAS’ net revenue was attributable to physician services. Medicare Limits on Hospice Care Payments . Medicare payments for hospice services are subject to two additional limits or “caps”. Each of VITAS’ hospice programs is separately subject to both of these “caps”.
For fiscal 2024, less than 2% of VITAS’ net revenue was attributable to physician services. Medicare Limits on Hospice Care Payments . Medicare payments for hospice services are subject to two additional limits or “caps”. Each of VITAS’ hospice programs is separately subject to both of these “caps”.
Of this balance, $896,000 is included in other liabilities and $826,000 is included in other current liabilities. The Company is contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million.
Of this balance, $895,000 is included in other liabilities and $826,000 is included in other current liabilities. The Company is contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million.
In addition to its standard program, that includes trainings on standard safety issues including OSHA matters and other regulatory safety matters, throughout the COVID-19 pandemic, VITAS has adapted to the changing landscape of the disease and guidance from the CDC and other regulatory agencies, and has put together dozens of trainings for its employees to help deal with continuing to provide safe patient care.
In addition to its standard program, that includes trainings on standard safety issues including OSHA matters and other regulatory safety matters, throughout the COVID-19 pandemic, VITAS adapted to the changing landscape of the disease and guidance from the CDC and other regulatory agencies, and put together dozens of trainings for its employees as guidance continually changed to help deal with continuing to provide safe patient care.
Financial Information about Industry Segments The required segment and geographic data for the Company’s continuing operations (as described below) for three years ended December 31, 2021, 2022 and 2023 are shown in Note 5 of the Notes to Consolidated Financial Statements on pages 59-60 of the 2023 Annual Report to Stockholders and are incorporated herein by reference.
Financial Information about Industry Segments The required segment and geographic data for the Company’s continuing operations (as described below) for three years ended December 31, 2022, 2023 and 2024 are shown in Note 5 of the Notes to Consolidated Financial Statements on pages 57-60 of the 2024 Annual Report to Stockholders and are incorporated herein by reference.
It has an automated recruitment process, designed to increase efficiencies and decrease the time to fill open positions, as well as continue to grow its brand presence in the talent market. It has continued to adapt to the new hiring and retention challenges brought on by the pandemic and current healthcare labor environment on a market-by-market and role-by-role basis.
It has an automated recruitment process, designed to increase efficiencies and decrease the time to fill open positions, as well as continue to grow its brand presence in the talent market. It adapted to the new hiring and retention challenges brought on by the pandemic and healthcare labor environment on a market-by-market and role-by-role basis.
States maintain flexibility to establish their own hospice election procedures and to limit the number and duration of benefit periods for which they will pay for hospice services. Reimbursement from state Medicaid programs in 2023 accounted for approximately 5% of VITAS’ revenues. Nursing Home Residents.
States maintain flexibility to establish their own hospice election procedures and to limit the number and duration of benefit periods for which they will pay for hospice services. Reimbursement from state Medicaid programs in 2024 accounted for approximately 4% of VITAS’ revenues. Nursing Home Residents.
Description of Business by Segment The information called for by this item is included within Note 5 of the Notes to Consolidated Financial Statements appearing on pages 59-60 of the 2023 Annual Report to Stockholders is incorporated herein by reference.
Description of Business by Segment The information called for by this item is included within Note 5 of the Notes to Consolidated Financial Statements appearing on pages 57-60 of the 2024 Annual Report to Stockholders is incorporated herein by reference.
Many hospice employees are subject to federal and state laws and regulations governing the ethics and practice of their profession, including physicians, physical, speech and occupational therapists, social workers, home health aides, pharmacists and nurses.
Professional Licensure and Participation Agreements . Many hospice employees are subject to federal and state laws and regulations governing the ethics and practice of their profession, including physicians, physical, speech and occupational therapists, social workers, home health aides, pharmacists and nurses.
For example, in order to help with the attraction and retention of healthcare workers during the pandemic induced healthcare worker shortage, VITAS adopted the “Difference Maker Program” in July 2022 which provided stay-bonuses, for eligible existing employees and new employees who were hired during the application of the program.
For example, in order to help with the attraction and retention of healthcare workers during the pandemic induced healthcare worker shortage, VITAS adopted the “Difference Maker Program” in July 2022 which provided stay-bonuses, for eligible existing employees and new employees who were hired during the application of the program. Throughout the program, VITAS paid over $39.2 million in bonuses.
A registered nurse must be designated to coordinate the plan of care. Volunteers. Hospice programs are required to recruit and train volunteers to provide patient care services or administrative services. Volunteer services must be provided in an amount equal to at least five percent of the total patient care hours provided by all paid hospice employees and contract staff.
Hospice programs are required to recruit and train volunteers to provide patient care services or administrative services. Volunteer services must be provided in an amount equal to at least five percent of the total patient care hours provided by all paid hospice employees and contract staff. Licensure .
A hospice must provide ongoing training for its employees. Quality Assurance. A hospice must conduct ongoing and comprehensive self-assessments of the quality and appropriateness of care it provides and that its contractors provide under arrangements to hospice patients.
A hospice must provide ongoing training for its employees. Quality Assurance. A hospice must conduct ongoing and comprehensive self-assessments of the quality and appropriateness of care it provides and that its contractors provide under arrangements to hospice patients. Interdisciplinary Team . A hospice must designate an interdisciplinary team to provide or supervise hospice care services.
A hospice must designate an interdisciplinary team to provide or supervise hospice care services. The interdisciplinary team develops and updates plans of care, and establishes policies governing the day-to-day provision of hospice 3 services. The team must include at least a physician, registered nurse, social worker and spiritual or other counselor.
The interdisciplinary team develops and updates plans of care, and establishes policies governing the day-to-day provision of hospice services. The team must include at least a physician, registered nurse, social worker and spiritual or other counselor. A registered nurse must be designated to coordinate the plan of care. 3 Volunteers.
In most cases, the hospice program and regulatory authorities will agree upon any steps to be taken to bring the hospice into compliance with applicable regulatory requirements.
In most cases, the hospice program and regulatory authorities will agree upon any steps to be taken to bring the hospice into compliance with applicable regulatory requirements or will undertake CMS’ informal dispute resolution process.
First, under a Medicare rule known as the “80-20” rule applicable to the Medicare inpatient services, if the number of inpatient care days furnished by a hospice to Medicare beneficiaries exceeds 20% of the total days of hospice care furnished by such hospice to Medicare beneficiaries, Medicare payments to the hospice for inpatient care days exceeding the cap are reduced to the routine home care rate. 6 Second, Medicare payments to a hospice are also subject to a separate cap based on overall average payments per admission.
First, under a Medicare rule known as the “80-20” rule applicable to the Medicare inpatient services, if the number of inpatient care days furnished by a hospice to Medicare beneficiaries exceeds 20% of the total days of hospice care furnished by such hospice to Medicare beneficiaries, Medicare payments to the hospice for inpatient care days exceeding the cap are reduced to the routine home care rate.
On August 10, 2023, the Centers for Medicare and Medicaid Services released the 2024 inflationary increase effective October 1, 2023, which was 3.1% Other Healthcare Regulations Federal and State Anti-Kickback Laws and Safe Harbor Provisions .
On September 11, 2024, the Centers for Medicare and Medicaid Services released the 2025 inflationary increase effective October 1, 2024, which was 2.9%. Other Healthcare Regulations Federal and State Anti-Kickback Laws and Safe Harbor Provisions .
In the fourth quarter of 2023, CMS finalized its regulations implementing a Special Focus Program (“SFP”) that is intended to identify “poor performing” hospices based on a number of indicators.
Special Focus Program . In the fourth quarter of 2023, CMS finalized its regulations implementing a Special Focus Program (“SFP”) that is intended to identify “poor performing” hospices based on a number of factors through an algorithm designed and adopted by CMS.
In October 2023, California enacted the Climate Corporate Data Accountability Act (SB 253) and Greenhouse Gases Climate-Related Financial Risk (SB 261).
California has enacted and subsequently amended the Climate Corporate Data Accountability Act (SB 253) and Greenhouse Gases Climate-Related Financial Risk (SB 261).
The principal methods of competition are advertising, range of services provided, name recognition, emergency-service availability, speed and quality of customer service, service guarantees, and pricing. VITAS Hospice care in the United States is competitive. Plans of care for hospice services are not proprietary.
Private equity businesses have recently made significant investments in home service companies, including plumbing. The principal methods of competition are advertising, range of services provided, name recognition, emergency-service availability, speed and quality of customer service, service guarantees, and pricing. VITAS Hospice care in the United States is competitive. Plans of care for hospice services are not proprietary.
Roto-Rooter instills as key values that part of each employee’s job is to both “Take Care of the Customer” and “Make it a Great Place to Work.” Through this focus, as well as a competitive compensation structure and promote-from-within culture, Roto-Rooter has been able to increase its workforce of technicians across the company during the difficult labor market of the COVID-19 pandemic.
Roto-Rooter instills as key values that part of each employee’s job is to both “Take Care of the Customer” and “Make it a Great Place to Work.” Through this focus, as well as a competitive compensation structure and promote-from-within culture, Roto-Rooter has been able to attract and retain technicians and managers across the company throughout its history, including during the recent downturn in the service industry.
Both Roto-Rooter and VITAS highly value diversity in their workplaces and have established and maintained diverse workforces that are constantly evolving to better resemble the communities and populations that we serve. Acquisitions In 2023, Roto-Rooter completed the acquisition of one franchise in South Carolina for $305,000 in cash and one franchise in Georgia for $3.689 million in cash.
Both Roto-Rooter and VITAS highly value diversity in their workplaces and have established and maintained diverse workforces that are constantly evolving to better resemble the communities and populations that we serve. Acquisitions On March 11, 2024, Roto-Rooter completed the acquisition of one franchise in New Jersey for $5.8 million in cash.
Although regulations for these laws have not yet been finalized, these statutes will require the Company to report on its greenhouse gas emissions and report its climate-related financial risk, as well as efforts taken to mitigate that risk, beginning in 2026. The Company’s environmental policy is available on its website at ir.chemed.com/corporate-governance/highlights under governance documents.
Although regulations for these laws have not yet been finalized, these statutes will require the Company to report on its greenhouse gas emissions and report its climate-related financial risk, as well as efforts taken to mitigate that risk, beginning as early as 2026.
The Company denied any violation of law and agreed to settlement without admission of wrongdoing. In connection with the settlement, VITAS and certain of its subsidiaries entered into a corporate integrity agreement (“CIA”) on October 30, 2017. The CIA formalized various aspects of VITAS’ already existing Compliance Program and contained requirements designed to document compliance with federal healthcare program requirements.
The Company denied any violation of law and agreed to settlement without admission of wrongdoing. 8 In connection with the settlement, VITAS and certain of its subsidiaries entered into a corporate integrity agreement (“CIA”) on October 30, 2017.
Any payments exceeding this overall hospice cap must be refunded by the hospice. This cap was set at $32,486.92 per admission for the twelve month period ended on September 30, 2023, increased to $33,494.01 for the twelve month period ending on September 30, 2024, and is adjusted annually to account for inflation.
This cap was set at $33,494.01 per admission for the twelve month period ended on September 30, 2024, increased to $34,465.34 for the twelve month period ending on September 30, 2025, and is adjusted annually to account for inflation.
All managers receive training in human resources topics, ranging from discrimination, to harassment, to workplace violence, 11 leaves of absence, and other relevant matters. Additional training is given in other topics throughout employees’ careers, both on the job and in the classroom, specific to the roles of the employees.
All managers receive training in human resources topics, ranging from discrimination, to harassment, to workplace violence, leaves of absence, and other relevant matters.
Certificate of Need Laws and Other Restrictions . Some states, including Florida and California, have certificate of need laws, restrictions on new licenses, or other similar health planning laws that apply to hospice care providers.
However, we cannot predict whether future billing reviews or similar audits by payors will result in material delays, suspensions, denials or reductions in revenue. Certificate of Need Laws and Other Restrictions . Some states, including Florida and California, have Certificate of Need laws, restrictions on new licenses, or other similar health planning laws that apply to hospice care providers.
After hire, new employees are given appropriate training for their individual roles, with new hires in many roles being managed by a “Hiring Manager” for their first year of employment.
Roto-Rooter’s focus on hiring and retaining the right people starts during the recruitment process, where both local and centralized teams are involved in the process. After hire, new employees are given appropriate training for their individual roles, with new hires in many roles being managed by a “Hiring Manager” for their first year of employment.
Roto-Rooter’s safety program is designed to help ensure the safety of our employees and customers. Its “Safety Certified Program” is deployed to all field employees, including supervisors, managers, and sales personnel.
Roto-Rooter’s safety program is designed to help ensure the safety of our employees and customers. Its “Safety Certified Program” is deployed to all field employees, including supervisors, managers, and sales personnel. The program includes trainings and policies that cover hazard assessment, environmental issues (including lead and asbestos), personal protective equipment, back support injury prevention, fire safety, and infectious disease.
The term of the CIA has lapsed, and on June 22, 2023, the OIG confirmed that VITAS satisfied its obligation under the CIA and that the CIA was concluded. Federal False Claims Acts.
It also required VITAS to engage an Independent Review Organization (“IRO”) to perform audit and review functions and to prepare reports regarding compliance with federal healthcare programs. The term of the CIA has lapsed, and on June 22, 2023, the OIG confirmed that VITAS satisfied its obligation under the CIA and that the CIA was concluded. Federal False Claims Acts.
Heightened scrutiny of these transactions may significantly increase the costs associated with future acquisitions of non-profit hospice programs in some states, otherwise increase the difficulty in completing those acquisitions or prevent them entirely. Additionally, sizable healthcare transaction have recently received heighten scrutiny from antitrust regulators with respect to both horizontal and vertical mergers, which may affect VITAS’ prospects for acquisition.
Heightened scrutiny of these transactions may significantly increase the costs associated with future acquisitions of non-profit hospice programs in some states, otherwise increase the difficulty in completing those acquisitions or prevent them entirely.
Additional Federal and State Regulation. Federal and state governments also regulate various aspects of the hospice industry. In particular, VITAS’ operations are subject to federal and state health regulatory laws covering professional services, the dispensing of drugs and certain types of hospice activities.
In particular, VITAS’ operations are subject to federal and state health regulatory laws covering professional services, the dispensing of drugs and certain types of hospice activities. Some of VITAS’ employees are subject to state laws and regulations governing the ethics and professional practice of medicine, respiratory therapy, pharmacy and nursing. Compliance with Health Regulatory Laws.
In 2022, Roto-Rooter acquired three franchises in New Jersey for a total of $2.29 million in cash. VITAS purchased the hospice assets of one Florida provider for $1.24 million in cash. No acquisitions were completed in 2021. 12 Available Information The Company’s Internet address is www.chemed.com.
In 2023, Roto-Rooter completed the acquisition of one franchise in South Carolina for $305,000 in cash and one franchise in Georgia for $3.689 million in cash. In 2022, Roto-Rooter acquired three franchises in New Jersey for a total of $2.29 million in cash. VITAS purchased the hospice assets of one Florida provider for $1.24 million in cash.
VITAS’ hospices may be subject to future payment reductions or recoupments as the result of this cap. Medicare Managed Care Programs . The Medicare program has entered into contracts with managed care companies to provide managed care benefits to Medicare beneficiaries who elect to participate in managed care programs.
The Medicare program has entered into contracts with managed care companies to provide managed care benefits to Medicare beneficiaries who elect to participate in managed care programs. These managed care programs are 6 commonly referred to as Medicare HMOs, Medicare Advantage or Medicare risk products.
Human Capital Resources As of December 31, 2023, the Company, including its subsidiaries Roto-Rooter and VITAS, had a total of 15,087 employees.
The Company’s environmental policy and sustainability accounting standards board index disclosures are available on its website at chemed.com/company/documents-charters . Human Capital Resources As of December 31, 2024, the Company, including its subsidiaries Roto-Rooter and VITAS, had a total of 15,695 employees.
Similarly, VITAS has developed a safety program designed to help keep its employees and patients healthy and safe.
Additional training is given in other topics throughout employees’ careers, both on the job and in the classroom, specific to the roles of the employees. 11 Similarly, VITAS has developed a safety program designed to help keep its employees and patients healthy and safe.
Some of VITAS’ employees are subject to state laws and regulations governing the ethics and professional practice of medicine, respiratory therapy, pharmacy and nursing. Compliance with Health Regulatory Laws. VITAS maintains an internal regulatory compliance review program and from time to time retains regulatory counsel for guidance on compliance matters.
VITAS maintains an internal regulatory compliance review program and from time to time retains regulatory counsel for guidance on compliance matters.
For example, VITAS also has developed and made available personal healthcare wellness trainings, to help provide assistance to its employees deal with the stresses faced throughout the pandemic. Hiring, Retention, and Compensation Both Roto-Rooter and VITAS are service providers, whose employees engage with their customers and patients on a daily basis.
Hiring, Retention, and Compensation Both Roto-Rooter and VITAS are service providers, whose employees engage with their customers and patients on a daily basis. For both businesses, hiring and keeping productive employees is an essential function and focus of the business.
VITAS cannot assure that it will not encounter regulatory or governmental obstacles in connection with any proposed acquisition of non-profit hospice programs in the future. Professional Licensure and Participation Agreements .
Additionally, sizable healthcare transactions have recently received heightened scrutiny from antitrust regulators including initiating a lawsuit to prevent an acquisition with respect to both horizontal and vertical mergers, which may affect VITAS’ prospects for transactions. VITAS cannot assure that it will not encounter regulatory or governmental obstacles in connection with any proposed acquisition of non-profit hospice programs in the future.
Throughout the program, VITAS paid over $31.6 million in bonuses, and has $8.9 million remaining accrued at December 31, 2023 to pay bonuses earned through June 2024. Diversity Maintaining a diverse and inclusive workforce is necessary to continue our success. Diverse perspectives help foster continued innovation.
The program succeeded in helping VITAS retain and add to its frontline healthcare workers during the pandemic and it has continued to build its workforce through its most recent period of revenue and ADC growth. Diversity Maintaining a diverse and inclusive workforce is necessary to continue our success. Diverse perspectives help foster continued innovation.
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The SFP will identify the bottom 10% of performers and provide additional oversight over the lowest 1% of performers to assist the programs with “continuous improvement.” While the effective date of the program was January 1, 2024, CMS has indicated that selection of hospices for the SFP is not anticipated to start until late in 2024. Interdisciplinary Team .
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Second, Medicare payments to a hospice are also subject to a separate cap based on overall average payments per admission. Any payments exceeding this overall hospice cap must be refunded by the hospice.
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However, we cannot predict whether future billing reviews or similar audits by payors will result in material delays, suspensions, denials or reductions in revenue. Corporate Integrity Agreement .
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As discussed on page 14, Medicare payment rates increase differently on a county-by-county basis, and may increase significantly more than the Medicare cap amount in any year. VITAS’ hospices may be subject to future payment reductions or recoupments as the result of this cap. Medicare Managed Care Programs .
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VITAS and certain of its subsidiaries entered into a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General (“OIG”) on October 30, 2017 in connection with the settlement of a False Claims Act case. The CIA formalized various aspects of VITAS’ already existing Compliance Program and contained requirements designed to document ongoing compliance with federal healthcare program requirements.
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After initial implementation of the SFP, a lawsuit was filed seeking to enjoin the program, and on February 14, 2025, CMS announced that it had ceased implementation of the SFP to further evaluate the program. Additional Federal and State Regulation. Federal and state governments also regulate various aspects of the hospice industry.
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It had a term of five years, during which it imposed monitoring, reporting, certification, oversight, screening and training obligations, certain of which had previously been implemented by VITAS. The term of the CIA has lapsed, and on June 22, 2023 the OIG confirmed that VITAS satisfied its requirements under the CIA and that the CIA was concluded.
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On March 27, 2024, Roto-Rooter completed the acquisition of one franchise in Texas for $1.5 million in cash. On August 20, 2024, Roto-Rooter completed the acquisition of one franchise in Kentucky for $5.1 million in cash.
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These managed care programs are commonly referred to as Medicare HMOs, Medicare Advantage or Medicare risk products.
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On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $85.0 million in cash.
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During the pandemic, both businesses adapted to new safety challenges, including sourcing PPE for employees and ensuring that it is available as needed, implementing new protocols in their offices or in dealing with customers and patients (including expanding telehealth offerings), contracting with third parties to ensure that COVID tests and vaccines were available, and making work-from-home or other different working arrangements available when feasible.
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Available Information The Company’s Internet address is www.chemed.com.
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The program includes trainings and policies that cover hazard assessment, environmental issues (including lead and asbestos), personal protective equipment, back support injury prevention, fire safety, and infectious disease (specifically including COVID-19 awareness and protocols).
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For both businesses, hiring and keeping productive employees is an essential function and focus of the business. Roto-Rooter’s focus on hiring and retaining the right people starts during the recruitment process, where both local and centralized teams are involved in the process.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+11 added−9 removed74 unchanged
Biggest changeVITAS’ headquarters and a significant portion of its operations are in south Florida The occurrence of a natural disaster in any region that VITAS has significant operations could have a negative impact on the business. VITAS’ headquarters are located in south Florida. In addition, two of our largest programs and an office complex are in south 18 Florida.
Biggest changeHowever, if CMS revises the program and its reimplementation identifies any VITAS programs as “poor performers”, such designation could negatively affect VITAS’ brand reputation, and any additional governmental oversight could materially adversely affect the operations profitability of any affected programs. 18 VITAS’ headquarters and a significant portion of its operations are in Florida The occurrence of a natural disaster in any region that VITAS has significant operations could have a negative impact on the business.
Additionally, regulators are increasing scrutiny of claims, including through the new TPE program, which may require additional resources to respond to audits, and which may cause additional delays or denials in receiving payments. Medicare and Medicaid currently adjust the various hospice payment rates annually based primarily on the increase or decrease of the hospital wage index basket, regionally adjusted.
Additionally, regulators are increasing scrutiny of claims, including through the TPE program, which may require additional resources to respond to audits, and which may cause additional delays or denials in receiving payments. Medicare and Medicaid currently adjust the various hospice payment rates annually based primarily on the increase or decrease of the hospital wage index basket, regionally adjusted.
VITAS’ ability to comply with such regulations is a key factor in determining the success of its business. See the “Government Regulations” section of this 10-K for a greater description of these matters. 15 VITAS maintains an internal regulatory compliance review program and from time to time retains regulatory counsel for guidance on compliance matters.
VITAS’ ability to comply with such regulations is a key factor in determining the success of its business. See the “Government Regulations” section of this 10-K for a greater description of these matters. VITAS maintains an internal regulatory compliance review program and from time to time retains regulatory counsel for guidance on compliance matters.
Although VITAS currently maintains liability insurance intended to cover certain claims, we cannot 17 assure you that the coverage limits of such insurance policies will be adequate or that all such claims will be covered by the insurance. In addition, VITAS’ insurance policies must be renewed annually and may be subject to cancellation during the policy period.
Although VITAS currently maintains liability insurance intended to cover certain claims, we cannot assure you that the coverage limits of such insurance policies will be adequate or that all such claims will be covered by the insurance. In addition, VITAS’ insurance policies must be renewed annually and may be subject to cancellation during the policy period.
In addition, the Medicare and Medicaid programs are subject to statutory and regulatory changes, retroactive and prospective rate and payment adjustments, administrative rulings, freezes and funding reductions, 14 all of which may adversely affect the level of program payments and could have a material adverse effect on VITAS’ business.
In addition, the Medicare and Medicaid programs are subject to statutory and regulatory changes, retroactive and prospective rate and payment adjustments, administrative rulings, freezes and funding reductions, all of which may adversely affect the level of program payments and could have a material adverse effect on VITAS’ business.
Increases in 16 the wages and benefits required to attract and retain qualified nurses or an increase in reliance on contract nurses could negatively impact profitability.
Increases in the wages and benefits required to attract and retain qualified nurses or an increase in reliance on contract nurses could negatively impact profitability.
The healthcare industry is subject to extensive federal, state and local laws, rules and regulations relating to, among others: Payment for services; Conduct of operations, including quality assurance, fraud and abuse, anti-kickback prohibitions, self-referral prohibitions and false claims; Privacy and security of medical records; Employment practices; and Various state approval requirements, such as facility and professional licensure, certificate of need, compliance surveys and other certification or recertification requirements.
The healthcare industry is subject to extensive federal, state and local laws, rules and regulations relating to, among others: Payment for services; Conduct of operations, including quality assurance and compliance with conditions of participation, fraud and abuse, anti-kickback prohibitions, self-referral prohibitions and false claims; Privacy and security of medical records; Employment practices; and 15 Various state approval requirements, such as facility and professional licensure, Certificate of Need, compliance surveys and other certification or recertification requirements.
The Medicare program is frequently mentioned as a target for spending cuts and within the Medicare program the hospice benefit is often specifically targeted for cuts and a lowering of the Medicare Caps. The full impact on our business of any future cuts in Medicare (including lowering of the Medicare Caps) or other programs is uncertain.
The Medicare program is frequently mentioned as a target for spending cuts and within the Medicare program the hospice benefit is often specifically targeted for cuts. The full impact on our business of any future cuts in Medicare or other programs is uncertain.
We cannot assure that VITAS will be able to maintain its existing relationships or that it will be able to develop and maintain new relationships in existing or new markets. Moreover, if pandemic-related or other shifts to referrals continue, it could materially adversely affect the business.
We cannot assure that VITAS will be able to maintain its existing relationships or that it will be able to develop and maintain new relationships in existing or new markets. Moreover, if shifts to referrals continue, it could materially adversely affect the business.
We have not experienced any known attacks on our information technology systems that have compromised patient data or the Company’s proprietary data. We maintain our information technology systems with safeguard protection against cyber-attacks including active intrusion protection, firewalls and virus detection software. As discussed previously, we are subject to and comply with HIPAA and HITECH regulations.
We have not experienced any known material system/data breaches on our information technology systems that compromised customer data or the company’s proprietary data. We maintain our information technology systems with safeguard protection against cyber-attacks including active intrusion protection, firewalls and virus detection software. As discussed previously, we are subject to and comply with HIPAA and HITECH regulations.
We cannot assure, however, that payment for hospice services will continue to be excluded from HMO payment under Medicare risk contracts and similar Medicare managed care plans or that if not excluded, managed care organizations or other large third-party payors would not use their power to influence and exert pressure on health care providers to reduce costs in a manner that could have a material adverse effect on VITAS’ business, financial condition and results of operations.
We cannot assure, however, that payment for hospice services will continue to be excluded from HMO payment under Medicare risk contracts and similar Medicare managed care plans or that if not excluded, managed care organizations or other large third-party payors would not use their power to influence and exert pressure on health care providers to reduce costs in a manner that could have a material adverse effect on VITAS’ business, financial condition and results of operations. 17 Liability claims may have an adverse effect on VITAS, and its insurance coverage may be inadequate.
Similarly, there recently has been a shortage of home health aides, who provide many of the hospice services provided by VITAS. VITAS has also adjusted its wages and benefits to recruit and retain home health and other aides.
In response to this shortage, VITAS has adjusted its wages and benefits to recruit and retain nurses and to engage contract nurses. Similarly, there recently has been a shortage of home health aides, who provide many of the hospice services provided by VITAS. VITAS has also adjusted its wages and benefits to recruit and retain home health and other aides.
VITAS maintains a reputation management risk program however, a loss of brand reputation at VITAS could adversely affect referral sources’ willingness to refer our service and thus, adversely affect our future operating performance. It is unclear what affects that CMS’ new Special Focus Program (“SFP”) may have on VITAS’ brand reputation.
VITAS maintains a reputation management risk program however, a loss of brand reputation at VITAS could adversely affect referral sources’ willingness to refer our service and thus, adversely affect our future operating performance. It is unclear what effects that CMS’ Special Focus Program (“SFP”) may have on VITAS’ brand reputation. CMS has halted implementation of the program.
Because VITAS receives a per diem fee to provide eligible services to all patients, VITAS’ profitability is largely dependent upon its ability to manage the costs of providing hospice services to patients.
Such payments are made primarily on a “per diem” basis. Because VITAS receives a per diem fee to provide eligible services to all patients, VITAS’ profitability is largely dependent upon its ability to manage the costs of providing hospice services to patients.
Liability claims may have an adverse effect on VITAS, and its insurance coverage may be inadequate. Participants in the hospice industry are subject to lawsuits alleging negligence, professional liability, wage and hour or other similar legal theories, many of which involve large claims and significant defense costs.
Participants in the hospice industry are subject to lawsuits alleging negligence, professional liability, wage and hour or other similar legal theories, many of which involve large claims and significant defense costs.
Additionally, the pandemic may lead to different claims or a higher volume of claims than we typically face. We are also subject to the risk of lawsuits under the False Claims Act and comparable state laws for allegedly submitting fraudulent bills for services to the Medicare and Medicaid programs and other federal and state healthcare programs.
We are also subject to the risk of lawsuits under the False Claims Act and comparable state laws for allegedly submitting fraudulent bills for services to the Medicare and Medicaid programs and other federal and state healthcare programs.
Insider or employee cyber and security threats are increasingly a concern for all large companies, including ours. VITAS’ success is highly dependent on its brand reputation VITAS’ reputation for performing quality routine and high acuity patient hospice care within the regulations mandated by Medicare, Medicaid and commercial payors is critical to our success.
VITAS’ success is highly dependent on its brand reputation VITAS’ reputation for performing quality routine and high acuity patient hospice care within the regulations mandated by Medicare, Medicaid and commercial payors is critical to our success.
If there are changes in the rate or methods governing these payments, VITAS’ net patient service revenue and profits could be materially affected. In excess of 95% of VITAS’ net patient service revenue consists of payments from the Medicare and Medicaid programs. Such payments are made primarily on a “per diem” basis, subject to annual reimbursement caps.
VITAS VITAS is highly dependent on payments from Medicare and Medicaid. If there are changes in the rate or methods governing these payments, VITAS’ net patient service revenue and profits could be materially affected. In excess of 95% of VITAS’ net patient service revenue consists of payments from the Medicare and Medicaid programs.
We cannot assure you that we will prevail in pending cases. Regardless of the outcome, such litigation is costly to manage, investigate and defend, and the related defense costs, diversion of management’s time and related publicity may adversely affect the conduct of our business and the results of our operations.
Regardless of the outcome, such litigation is costly to manage, investigate and defend, and the related defense costs, diversion of management’s time and related publicity may adversely affect the conduct of our business and the results of our operations. We have historically incurred debt to finance the operations of the Company.
We cannot assure you that our cash flow from operations would be sufficient to service our future operating needs, which would require us to borrow additional funds, or restructure or otherwise refinance our debt. In addition, the Company has the ability to expand its existing debt and borrowing capacity subject to various restrictions and covenants defined by its creditors.
The Company has historically had debt service obligations and has the ability through its existing credit facility to incur debt that may restrict our operating flexibility. We cannot assure you that our cash flow from operations would be sufficient to service our future operating needs, which would require us to borrow additional funds, or restructure or otherwise refinance our debt.
The loss of one or more of Roto-Rooter’s key senior management personnel or its inability to hire and retain new skilled employees could negatively impact its ability to maintain or increase customer calls and jobs, a key aspect of its growth strategy, and could adversely affect its future operating results. 13 Competition for skilled employees, particularly licensed plumbers, is intense, and the process of locating and recruiting skilled employees with the combination of qualifications and attributes required to adequately perform plumbing duties can be difficult and lengthy.
The loss of one or more of Roto-Rooter’s key senior management personnel or its inability to hire and retain new skilled employees could negatively impact its ability to maintain or increase customer calls and jobs, a key aspect of its growth strategy, and could adversely affect its future operating results.
A nationwide shortage of qualified nurses and aides could adversely affect VITAS’ profitability, growth and ability to continue to provide quality, responsive hospice services to its patients as nursing and health aides’ wages and benefits increase. A significant portion of VITAS’ workforce is licensed nurses. VITAS depends on qualified nurses to provide quality, responsive hospice services to its patients.
VITAS’ business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees. 16 A nationwide shortage of qualified nurses and aides could adversely affect VITAS’ profitability, growth and ability to continue to provide quality, responsive hospice services to its patients as nursing and health aides’ wages and benefits increase.
A successful attack on our information technology systems could have significant consequences to the business including liability for compromised patient information and business interruption.
Chemed’s Chief Legal Officer and Chief Financial Officer are alerted to any potential issues and evaluate those issues for cybersecurity materiality A successful attack on our information technology systems could have significant consequences to the business including liability for compromised patient information and business interruption.
These rules and regulations require us to provide all of our prospective franchisees with specific information regarding us and our franchise program in the form of a detailed franchise offering circular. In addition, a number of states require us to register our franchise offering prior to offering or selling franchises in such states.
Our franchising activities are subject to various federal and state franchising laws and regulations, including the rules and regulations of the FTC regarding the offering or sale of franchises. These rules and regulations require us to provide all of our prospective franchisees with specific information regarding us and our franchise program in the form of a detailed franchise offering circular.
We cannot assure you that VITAS will be successful in attracting, retaining or training highly skilled nursing, management, community education, operations, admissions and other personnel. VITAS’ business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees.
We cannot assure you that VITAS will be successful in attracting, retaining or training highly skilled nursing, management, community education, operations, admissions and other personnel.
Our future ability to repay or to refinance our indebtedness and to pay interest on our indebtedness will depend on our operating performance, which may be affected by factors beyond our control. These factors could include operating difficulties, increased operating costs, our competitors’ actions and regulatory developments.
Significant changes in these factors could result in a material change in the Company’s interest expense. Our future ability to repay or to refinance our indebtedness and to pay interest on our indebtedness will depend on our operating performance, which may be affected by factors beyond our control.
Additionally, the FTC and other antitrust regulators have recently heightened their scrutiny of both horizontal and vertical merges in healthcare which could delay or prevent potential acquisitions, divestitures or a change in control. 19 An adverse ruling against us in certain litigation could have an adverse effect on our financial condition and results of operations.
The application of Section 203 could have the effect of delaying or preventing a change of control that could be advantageous to stockholders. 19 Additionally, the FTC and other antitrust regulators have recently heightened their scrutiny of both horizontal and vertical merges in healthcare which could delay or prevent potential acquisitions, divestitures or a change in control.
Credit market conditions may make it difficult for us to obtain new financing or refinance our current debt on terms and conditions acceptable to us.
We cannot assure you that we will be able to implement our strategy fully or that the anticipated results of our strategy will be realized. Credit market conditions may make it difficult for us to obtain new financing or refinance our current debt on terms and conditions acceptable to us.
VITAS maintains a disaster recovery program to mitigate this risk; however, natural disasters could have an adverse effect on our future operating performance. GENERAL The agreements and instruments governing borrowing capacity contain restrictions and limitations that could significantly impact our ability to operate our business and adversely affect the price of our Capital Stock.
GENERAL The agreements and instruments governing borrowing capacity contain restrictions and limitations that could significantly impact our ability to operate our business and adversely affect the price of our Capital Stock.
Our operations are subject to numerous laws and regulations, exposing us to potential claims and compliance costs that could adversely affect our business. We are subject to federal, state and local laws and regulations relating to franchising, insurance and other aspects of our business. These are discussed in greater detail under “Government Regulations” in the Description of Business section hereof.
We are subject to federal, state and local laws and regulations relating to franchising, insurance and other aspects of our business. These are discussed in greater detail under “Government Regulations” in the Description of Business section hereof. If we fail to comply with existing or future laws and regulations, we may be subject to governmental or judicial fines and sanctions.
We are involved in litigation incidental to the conduct of our business currently and from time to time. The damages claimed against us in some of these cases can be substantial. See the “Legal Proceedings” sections of this 10-K and the Notes to the Consolidated Financial Statements for discussion of particular matters.
An adverse ruling against us in certain litigation could have an adverse effect on our financial condition and results of operations. We are involved in litigation incidental to the conduct of our business currently and from time to time. The damages claimed against us in some of these cases can be substantial.
Roto-Rooter has developed and tested a response plan in the event of a successful system/data breach and maintains commercial insurance related to cyber-security. We obtain internal control reports from key vendors that maintain company data or process company transactions on a yearly basis. We review these reports to detect any potential cybersecurity issues.
We obtain internal control reports from key vendors that maintain company data or process company transactions on a yearly basis. We review these reports to detect any potential cybersecurity issues. However, these safeguards do not ensure that a significant system/data breach may occur.
Cybersecurity Our information technology systems hold sensitive customer information in the ordinary course of business, including names, addresses, and partial credit card information. We utilize those same systems to perform our day-to-day activities, such as receiving customer calls, dispatching technicians to jobs, and maintaining an accurate record of all transactions.
We utilize those same systems to perform our day-to-day activities, such as receiving customer calls, dispatching technicians to jobs, and maintaining an accurate record of all transactions. We have not experienced any known material system/data breaches on our information technology systems that compromised customer data or the company’s proprietary data.
Roto-Rooter maintains a reputation management risk program, however, a loss of brand reputation at Roto-Rooter could adversely affect consumer willingness to use our service and thus, adversely affect our future operating performance. VITAS VITAS is highly dependent on payments from Medicare and Medicaid.
Adverse publicity, litigation or on-line negative reviews focused on the Roto-Rooter brand could negatively impact Roto-Rooter’s national reputation resulting in decreased future demand for Roto-Rooter branded services. Roto-Rooter maintains a reputation management risk program, however, a loss of brand reputation at Roto-Rooter could adversely affect consumer willingness to use our service and thus, adversely affect our future operating performance.
The interest rate the Company pays will fluctuate from time to time based upon a number of factors including current SOFR rates and Company operating performance. Significant changes in these factors could result in a material change in the Company’s interest expense.
In addition, the Company has the ability to expand its existing debt and borrowing capacity subject to various restrictions and covenants defined by its creditors. The interest rate the Company pays will fluctuate from time to time based upon a number of factors including current SOFR rates and Company operating performance.
Roto-Rooter’s success is highly dependent on its brand reputation Roto-Rooter’s national reputation and brand image for performing necessary, high quality services in a timely manner is critical to Roto-Rooter’s continued success. Adverse publicity, litigation or on-line negative reviews focused on the Roto-Rooter brand could negatively impact Roto-Rooter’s national reputation resulting in decreased future demand for Roto-Rooter branded services.
A successful attack on our information technology systems could significantly affect the business, including liability for compromised customer information and business interruption. Roto-Rooter’s success is highly dependent on its brand reputation Roto-Rooter’s national reputation and brand image for performing necessary, high quality services in a timely manner is critical to Roto-Rooter’s continued success.
Our ability to meet our debt service and other obligations may depend in significant part on the extent to which we successfully implement our business strategy. We cannot assure you that we will be able to implement our strategy fully or that the anticipated results of our strategy will be realized.
These factors could include operating difficulties, increased operating costs, our competitors’ actions and regulatory developments. Our ability to meet our debt service and other obligations may depend in significant part on the extent to which we successfully implement our business strategy.
Every month, we test our information technology systems using cyber-scanning software and other methods to learn how a successful system/data breach may occur. If a deficiency is detected, our IT staff will log and remediate the deficiency prescribed by the vendor or manufacturer.
We maintain our information technology systems with safeguard protection against cyber-attacks, including intrusion detection and protection services, firewalls, and endpoint security software. Every month, we test our information technology systems using cyber-scanning software and other methods to learn how a successful system/data breach may occur.
The sewer, drain and pipe cleaning, excavation, plumbing repair and water restoration businesses are highly fragmented, with the bulk of the competitors consisting of local and regional entities. We compete primarily on the basis of advertising, range of services provided, name recognition, availability of emergency service, speed and quality of customer service, service guarantees and pricing.
The sewer, drain and pipe cleaning, excavation, plumbing repair and water restoration businesses are highly fragmented, with the bulk of the competitors consisting of local and regional entities. Private equity businesses have recently made significant investments in home services companies, including plumbing.
Our competitors may succeed in developing new or enhanced products and services more successful than ours and in marketing and selling existing and new products and services better than we do. In addition, new competitors may emerge. We cannot make any assurances that we will continue to be able to compete successfully with any of these companies.
In addition, new competitors may emerge. We cannot make any assurances that we will continue to be able to compete successfully with any of these companies. Our operations are subject to numerous laws and regulations, exposing us to potential claims and compliance costs that could adversely affect our business.
Each state that maintains a Medicaid program has the option to provide reimbursement for hospice services at reimbursement rates generally required to be at least as much as Medicare rates.
Because of the potentially significant difference between these two calculations, there is a risk that VITAS could incur a significant cap limitation in one or more of its programs, if the actual reimbursement increase for one of it's programs significantly outpaces the associated increase in the per admission cap. 14 Each state that maintains a Medicaid program has the option to provide reimbursement for hospice services at reimbursement rates generally required to be at least as much as Medicare rates.
The current nationwide shortage of qualified nurses impacts some of the markets in which VITAS provides hospice services. In response to this shortage, VITAS has adjusted its wages and benefits to recruit and retain nurses and to engage contract nurses.
A significant portion of VITAS’ workforce is licensed nurses. VITAS depends on qualified nurses to provide quality, responsive hospice services to its patients. The current nationwide shortage of qualified nurses impacts some of the markets in which VITAS provides hospice services.
We cannot assure you that Roto-Rooter will be successful in attracting, retaining or training highly skilled personnel. Roto-Rooter’s business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees.
Roto- 13 Rooter’s business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees. Cybersecurity Our information technology systems hold sensitive customer information in the ordinary course of business, including names, addresses, and partial credit card information.
The location of our headquarters and these large programs increases our exposure to hurricanes. A major hurricane in south Florida could impede our ability to bill for our services, operate our businesses and serve our patients in the affected area.
Major hurricanes in Florida could impede our ability to bill for our services, operate our businesses and serve our patients in the affected area. VITAS maintains a disaster recovery program to mitigate this risk and has successfully weathered many hurricanes through the years; however, natural disasters could have an adverse effect on our future operating performance.
Removed
If we fail to comply with existing or future laws and regulations, we may be subject to governmental or judicial fines and sanctions. Our franchising activities are subject to various federal and state franchising laws and regulations, including the rules and regulations of the FTC regarding the offering or sale of franchises.
Added
We compete primarily on the basis of advertising, range of services provided, name recognition, availability of emergency service, speed and quality of customer service, service guarantees and pricing. Our competitors may succeed in developing new or enhanced products and services more successful than ours and in marketing and selling existing and new products and services better than we do.
Removed
We have not experienced any known modern system/data breaches on our information technology systems that compromised customer data or the company’s proprietary data. We maintain our information technology systems with safeguard protection against cyber-attacks, including intrusion detection and protection services, firewalls, and virus detection software.
Added
In addition, a number of states require us to register our franchise offering prior to offering or selling franchises in such states.
Removed
However, these safeguards do not ensure that a significant system/data breach may occur. Due to the pandemic, certain roles have been conducted remotely, increasing the role and importance of our information technology and security systems. A successful attack on our information technology systems could significantly affect the business, including liability for compromised customer information and business interruption.
Added
Competition for skilled employees, particularly licensed plumbers, is intense, and the process of locating and recruiting skilled employees with the combination of qualifications and attributes required to adequately perform plumbing duties can be difficult and lengthy. We cannot assure you that Roto-Rooter will be successful in attracting, retaining or training highly skilled personnel.
Removed
In the event that CMS selects hospices for the SFP program utilizing the current algorithm, it is possible that certain VITAS hospice locations are included in the hospices that the algorithm identifies within the bottom 10% or even bottom 1% of hospices.
Added
If a deficiency is detected, our IT staff will log and remediate the deficiency prescribed by the vendor or manufacturer. Roto-Rooter has developed and tested a response plan in the event of a successful system/data breach and maintains commercial insurance related to cyber-security.
Removed
Although CMS has stated that providers will not be able to replicate the results of the algorithm because not all information utilized by CMS has been made public, given what is known, large providers appear to be significantly more likely to be identified as poor performers because the formula does not account for size of program when analyzing the number of substantiated complaints.
Added
Since the pandemic, certain roles have been conducted remotely, increasing the role and importance of our information technology and security systems. Chemed’s Chief Legal Officer and Chief Financial Officer are alerted to any potential issues and evaluate those issues for cybersecurity materiality.
Removed
Additionally, providers who submit Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) scores (as VITAS does) appear to be more likely to be identified as poor performers. In the event that one or more VITAS programs is identified in the bottom 10% of hospices, it could negatively affect VITAS’ brand reputation in a material adverse manner.
Added
Hospice Medicare reimbursement is subject to certain limitations or “caps” based on the number of inpatient days of care and overall average capitation per admission. The cap per admission is increased yearly based on the national average Medicare reimbursement increase for hospice.
Removed
Additionally, if any VITAS program is identified in the bottom 1% of hospices and placed in the SFP, it will have additional governmental oversight and intervention that could materially adversely affect the operations and profitability of such program.
Added
However, the actual reimbursement increase is calculated on a county-by-county basis and may vary significantly from the national average.
Removed
The application of Section 203 could have the effect of delaying or preventing a change of control that could be advantageous to stockholders.
Added
In the event that CMS re-institutes the SFP and any VITAS program is identified as a “poor performer”, we do not know the extent to which such identification will affect industry referrals or referral patterns.
Removed
We have historically incurred debt to finance the operations of the Company. The Company has historically had debt service obligations and has the ability through its existing credit facility to incur debt that may restrict our operating flexibility.
Added
Insider or employee cyber and security threats are increasingly a concern for all large companies, including ours.
Added
VITAS’ headquarters are located in south Florida. In addition, two of our largest programs and an office complex are in south Florida and a substantial percentage of our revenue is derived from our operations across Florida. The location of our headquarters and the size of our operations across Florida increases our exposure to hurricanes.
Added
See the “Legal Proceedings” sections of this 10-K and the Notes to the Consolidated Financial Statements for discussion of particular matters. We cannot assure you that we will prevail in pending cases.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity The Company treats cybersecurity risk seriously and is focused on maintaining and regularly updating the security of our systems, networks, technologies and data. The number and sophistication of attempts to disrupt or penetrate our systems continues to grow, specifically including the rapid increase of attempts against healthcare companies that was observed in early 2022.
Biggest changeItem 1C. Cybersecurity The Company treats cybersecurity risk seriously and is focused on maintaining and regularly updating the security of our systems, networks, technologies and data. 20 The number and sophistication of attempts to disrupt or penetrate our systems continues to grow, specifically including the rapid increase of attempts against healthcare companies that has been observed since early 2022.
To combat the ever-increasing sophistication of cyberattacks, we continuously work to improve methods for detecting and preventing attacks. We have implemented policies and procedures and developed specific training for our employees, including regular updates and reminders, to help prevent and mitigate 20 any issues that may be caused by any attacks.
To combat the ever-increasing sophistication of cyberattacks, we continuously work to improve methods for detecting and preventing attacks. We have implemented policies and procedures and developed specific training for our employees, including regular updates and reminders, to help prevent and mitigate any issues that may be caused by any attacks.
Additionally, Company senior management reports to the Audit Committee on cybersecurity issues on a regular basis, multiple times a year. The Audit Committee’s reports to the board after these sessions, include the discussions of the cybersecurity risk management process.
Additionally, Company senior management reports to the Audit Committee on cybersecurity issues on a regular basis, multiple times a year. The Audit Committee ’s reports to the board after these sessions, include the discussions of the cybersecurity risk management process.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeVITAS, headquartered in south Florida, operates 50 programs from 170 leased and owned facilities and 25 inpatient units in 16 states and the District of Columbia. All “owned” property is held in fee and is subject to the security interests of the holders of our debt instruments. The leased properties have lease terms ranging from monthly to ten years.
Biggest changeVITAS, headquartered in south Florida, operates 34 Medicare provider numbers across 56 programs from 180 leased and owned facilities and 29 inpatient units in 17 states and the District of Columbia. All “owned” property is held in fee and is subject to the security interests of the holders of our debt instruments.
Item 2. Properties The Company’s corporate offices and the headquarters for Roto-Rooter are located in Cincinnati, Ohio. Roto-Rooter has manufacturing and distribution center facilities in West Des Moines, Iowa and has 369 leased and owned office and service facilities in 34 states.
Item 2. Properties The Company’s corporate offices and the headquarters for Roto-Rooter are located in Cincinnati, Ohio. Roto-Rooter has manufacturing and distribution center facilities in West Des Moines, Iowa and has 402 leased and owned office and service facilities in 34 states.
Management does not foresee any difficulty in renewing or replacing the remainder of its current leases. The Company considers all of its major operating properties to be maintained in good operating condition and to be generally adequate for present and anticipated needs.
The leased properties have lease terms ranging from monthly to ten years. Management does not foresee any difficulty in renewing or replacing the remainder of its current leases. The Company considers all of its major operating properties to be maintained in good operating condition and to be generally adequate for present and anticipated needs.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures None ‎ 21 Executive Officers of the Company Name Age Office First Elected Kevin J. McNamara 70 President and Chief Executive Officer August 2, 1994 (1) Spencer S. Lee 68 Executive Vice President May 15, 2000 (2) Nicholas M. Westfall 45 Executive Vice President June 16, 2016 (3) Michael D.
Biggest changeItem 4. Mine Safety Disclosures None ‎ 21 Executive Officers of the Company Name Age Office First Elected Kevin J. McNamara 71 President and Chief Executive Officer August 2, 1994 (1) Spencer S. Lee 69 Executive Vice President May 15, 2000 (2) Nicholas M. Westfall 46 Executive Vice President June 16, 2016 (3) Michael D.
Prior to that he served as Vice President and Counsel from January 2019. Each executive officer holds office until the annual election at the next annual organizational meeting of the Board of Directors of the Company which is scheduled to be held on May 20, 2024. PART II
Prior to that he served as Vice President and Counsel from January 2019. Each executive officer holds office until the annual election at the next annual organizational meeting of the Board of Directors of the Company which is scheduled to be held on May 19, 2025. PART II
Witzeman 53 Vice President, Chief Financial Officer, and Controller May 21, 2012 (4) Brian C. Judkins 43 Vice President and Chief Legal Officer August 31, 2020 (5) (1) Mr. K.J. McNamara is President and Chief Executive Officer of the Company and has held these positions since August 1994 and May 2001, respectively.
Witzeman 54 Vice President, Chief Financial Officer, and Controller May 21, 2012 (4) Brian C. Judkins 44 Vice President and Chief Legal Officer August 31, 2020 (5) (1) Mr. K.J. McNamara is President and Chief Executive Officer of the Company and has held these positions since August 1994 and May 2001, respectively.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis number only includes stockholders of record and does not include stockholders with shares beneficially held in nominee name or within clearinghouse positions of brokers, banks or other institutions. 22 During 2023, the number of shares of Capital Stock repurchased by the Company, the weighted average price paid for each share, the cumulative shares repurchased under each program and the dollar amounts remaining under each program were as follows: Company Purchase of Shares of Capital Stock Total Number Weighted Average Cumulative Shares Dollar Amount of Shares Price Paid Per Repurchased Under Remaining Under Repurchased Share the Program The Program February 2011 Program January 1 through January 31, 2023 - $ - 10,458,154 $ 87,867,735 February 1 through February 28, 2023 - - 10,458,154 87,867,735 March 1 through March 31, 2023 - - 10,458,154 $ 87,867,735 First Quarter Total - $ April 1 through April 30, 2023 - $ 10,458,154 $ 87,867,735 May 1 through May 31, 2023 16,620 537.12 10,474,774 78,940,805 June 1 through June 30, 2023 8,380 536.71 10,483,154 $ 74,443,156 Second Quarter Total 25,000 $ 536.98 July 1 through July 31, 2023 - $ - 10,483,154 $ 74,443,156 August 1 through August 31, 2023 11,206 508.01 10,494,360 68,750,411 September 1 through September 30, 2023 17,251 501.52 10,511,611 $ 60,098,765 Third Quarter Total 28,457 $ 504.07 October 1 through October 31, 2023 - $ - 10,511,611 $ 60,098,765 November 1 through November 30, 2023 (1) 40,000 581.62 10,551,611 336,834,085 December 1 through December 31, 2023 39,512 576.52 10,591,123 $ 314,054,431 Fourth Quarter Total 79,512 $ 579.09 (1) In November 2023, our Board of Directors authorized an additional $300 million under the February 2011 Repurchase Program. 23 As of December 31, 2023, the number of stock options and performance share units outstanding under the Company’s equity compensation plans, the weighted average exercise price of outstanding options, and the number of securities remaining available for issuance were as follows: EQUITY COMPENSATION PLAN INFORMATION Number of securities to be issued upon exercise of outstanding warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column) Plan Category Equity compensation plans approved by stockholders (1) 1,161,957 $ 445.12 1,117,223 (1) Amount includes 44,734 shares allocated to certain employees which vest upon attainment of specified earnings per share targets and specified total shareholder return targets. 24 Comparative Stock Performance The graph below compares the yearly percentage change in the Company’s cumulative total stockholder return on Capital Stock (as measured by dividing (i) the sum of (A) the cumulative amount of dividends for the period December 31, 2018, to December 31, 2023, assuming dividend reinvestment, and (B) the difference between the Company’s share price at December 31, 2018 and December 31, 2023; by (ii) the share price at December 31, 2018) with the cumulative total return, assuming reinvestment of dividends, of the (1) S&P 500 Stock Index and (2) Dow Jones Industrial Diversified Index. ‎ 25 Item 6.
Biggest changeThis number only includes stockholders of record and does not include stockholders with shares beneficially held in nominee name or within clearinghouse positions of brokers, banks or other institutions. 22 During 2024, the number of shares of Capital Stock repurchased by the Company, the weighted average price paid for each share, the cumulative shares repurchased under each program and the dollar amounts remaining under each program were as follows: Company Purchase of Shares of Capital Stock Total Number Weighted Average Cumulative Shares Dollar Amount of Shares Price Paid Per Repurchased Under Remaining Under Repurchased Share the Program The Program February 2011 Program January 1 through January 31, 2024 - $ - 10,591,123 $ 314,054,431 February 1 through February 29, 2024 - - 10,591,123 314,054,431 March 1 through March 31, 2024 50,000 646.87 10,641,123 $ 281,710,685 First Quarter Total 50,000 $ 646.87 April 1 through April 30, 2024 11,500 $ 566.75 10,652,623 $ 275,193,028 May 1 through May 31, 2024 54,231 562.69 10,706,854 244,677,666 June 1 through June 30, 2024 34,269 546.69 10,741,123 $ 225,943,169 Second Quarter Total 100,000 $ 557.68 July 1 through July 31, 2024 6,417 $ 554.49 10,747,540 $ 222,385,017 August 1 through August 31, 2024 43,583 577.04 10,791,123 197,235,685 September 1 through September 30, 2024 50,000 582.27 10,841,123 $ 168,122,188 Third Quarter Total 100,000 $ 578.21 October 1 through October 31, 2024 - $ - 10,841,123 $ 168,122,188 November 1 through November 30, 2024 (1) 208,515 557.24 11,049,638 351,929,650 December 1 through December 31, 2024 179,720 537.57 11,229,358 $ 255,317,749 Fourth Quarter Total 388,235 $ 548.13 (1) In November 2024, our Board of Directors authorized an additional $300 million under the February 2011 Repurchase Program. 23 As of December 31, 2024, the number of stock options and performance share units outstanding under the Company’s equity compensation plans, the weighted average exercise price of outstanding options, and the number of securities remaining available for issuance were as follows: EQUITY COMPENSATION PLAN INFORMATION Number of securities to be issued upon exercise of outstanding warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans [excluding securities reflected in column (a)] ( a ) ( b ) ( c ) Plan Category Equity compensation plans approved by stockholders (1) 1,235,051 $ 487.07 1,182,181 (1) Amount includes 52,870 shares allocated to certain employees which vest upon attainment of specified earnings per share targets and specified total shareholder return targets. ‎ 24 Comparative Stock Performance The graph below compares the yearly percentage change in the Company’s cumulative total stockholder return on Capital Stock (as measured by dividing (i) the sum of (A) the cumulative amount of dividends for the period December 31, 2019, to December 31, 2024, assuming dividend reinvestment, and (B) the difference between the Company’s share price at December 31, 2019 and December 31, 2024; by (ii) the share price at December 31, 2019) with the cumulative total return, assuming reinvestment of dividends, of the (1) S&P 500 Stock Index and (2) Dow Jones Industrial Diversified Index.
Res erved Item 7. M anagement’s Discussion and Analysis of Financial Conditions and Results of Operations The information called for by this Item is set forth on pages 74 through 92 of the 2023 Annual Report to Stockholders and is incorporated herein by reference.
M anagement’s Discussion and Analysis of Financial Conditions and Results of Operations The information called for by this Item is set forth on pages 73 through 91 of the 2024 Annual Report to Stockholders and is incorporated herein by reference.
As of February 9, 2024, there were approximately 1,231 stockholders of record of the Company’s Capital Stock.
As of February 10, 2025, there were approximately 1,156 stockholders of record of the Company’s Capital Stock.
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December 31 2019 2020 2021 2022 2023 2024 Chemed Corporation 100.00 121.59 121.14 117.21 134.65 122.37 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 Dow Jones Diversified Industrials 100.00 112.44 123.67 113.61 147.49 203.37 ‎ 25 Item 6. Res erved Item 7.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques. The Company did not have long-term debt at December 31, 2023.
Biggest changeThe Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques. The Company did not have long-term debt at December 31, 2024.

Other CHE 10-K year-over-year comparisons