Addus HomeCare Corporation (NASDAQ:ADUS) Q4 2022 Earnings Call Transcript

Brad Bickham: Well, I think when you look at the MA business, we’ve had purposely kind of slow down some of the referral volume that we saw in Q4 and really to get the attention of some of the payers out there. We have found though, once we start having conversations with them they understand some of the challenges that we won, we haven’t really revisited these rates in a while. We’ve had certainly some inflation around wages that need to be addressed. And if they want to have adequate coverage for their beneficiaries, they need to do something about the rates. So we’ve had some success. I think the way we’re approaching is let’s try to get some near-term wins, let’s focus on if we’re on a non-episodic let’s get those non-episodic rates adjusted, right to where we’re at in a position where we can start taking on those referrals, and they become profitable for us.

And at the same time, let’s look at the longer-term solution, which is honestly, we need to move towards an episodic type rate that is more comparable to Medicare fee-for-service. So we’ve had some good traction with the MA plans, both on the near-term solution, but then also on that longer-term solution in investigating and looking at episodic because I think they realized this isn’t — I think we’re kind of reaching a point where if they want to have the coverage that they need, they’re going to have to adjust rates. Also, I think they’re looking for we’d like to partner with people that we can look at potential value-based types of arrangements. So I think that bodes well for us, particularly where we have the personal care footprint that complements the home health footprint to be able to do something creative on the rate side.

Matt Larew: Okay. And then following up on some of the investments you made in terms of candidate tracking and both to engage the potential higher than decreased time to hire. Is there anything you can maybe quantify for us in terms of how that’s improved the metrics you track on the hiring side? And then referenced rolling it out to all your sites in €˜23. So maybe where that roll out today? And what’s kind of the course of rollout over €˜23, just so we could think about how that might continue to improve throughout the year.

Brad Bickham: Yes. So on the candidate tracking system, we initiated it first with our clinical side, lower volume just to make sure we get kind of address any issues or bugs in the system. That was successful earlier this past year by about midyear. We then piloted at several of our personal care sites actually kind of split it out a couple of locations in each region. And I wanted to spend some time there because if you look at just volume of hiring that we do on the personal care side is significant. So we wanted to make sure that the system was working as planned. And so we’ve had those rollouts have been successful. We’re now ready to take it to the rest of the personal care locations, which we’ll do over the next probably 2 quarters to get all of the regions on the new candidate tracking system.

It’s pretty intuitive. It takes a little bit of training but pretty straightforward. But what we’ve seen is, one, increase in candidate flow to start with, but we’ve also seen that reduction from the time that someone submits an application to their actual hiring. And it’s been — depending on whether it’s a clinical services or PCS, we’ve seen anywhere from 1 or 2 days savings to versus really on the PCS side, where we’ve seen probably 4 to 5 days acceleration of that process.

Operator: The next question comes from Joanna Gajuk with Bank of America.

Joanna Gajuk: I’m sorry if you mentioned this earlier, but actually, I just want to follow-up on the last commentary did you give some stats in terms of your net hires in your personal care, how things are trending in Q4 and into Q1?