In a year of uncertainty surrounding Medicaid, Aveanna Healthcare Holdings Inc. (NASDAQ: AVAH) has reached what CEO Jeff Shaner calls “Rate Clarity.”
Specifically, Aveanna achieved 11 state rate increases and two federal rate wins in 2025.
Shaner explained that the company is largely isolated from changes to Medicaid due to the population it serves.
“78% of our revenues are in our Private Mandatory Services (PDS) segment,” he said at the Jeffreys Global Healthcare Conference on Tuesday. “That segment is primarily our pediatric private obligation segment. It is much larger business segment within the PDS. It is a relatively protected class. Think of this group as incredibly vulnerable (children).
Federal and state level agencies, managed care organizations and commercial payers are all interested in investing in private, mandatory care for children, Shaner said.
Based in Atlanta, AveAnna Healthcare offers pediatric and adult health care services, including nursing, rehabilitation, labor nursing in schools, treatment services, and daily treatment centers for medically vulnerable and chronically ill children and adults, and home health services. The company has 327 locations in 34 states.
Serving medically vulnerable pediatric patients can result in significant cost savings, Shaner said.
“(Our PDS business) is functionally an ICU bed at home,” he said. “The difference between the acute care macros in medical care is about $6,000 a day for pediatric patients and about $600 a day in pediatric nursing at home, which means 10 times more savings.”
Aveanna also continues to see traction by leaning towards a long-term priority payment strategy. This approach allowed the company to navigate the lack of resources, particularly in terms of staffing.
“Essentially, our preferred payer strategy is leaning against payers who partner with us by assigning our capabilities to payers who value us,” Shaner says. “When I say value, I mean paying us at the market rate above, and engage with us with value-based bonuses and metrics. We can move the needle meaningfully for those payers.”
Currently, Aveanna has 25 preferred payers in the PDS segment, with 55% of the available volumes in the segment currently having preferred payers. The company's leaders believe this will continue to grow, reaching 75% to 80% over the next few years.
Shaner said establishing transparency with the preferred payer partners when it comes to staff wages has also benefited Aveanna.
“It's refreshing to be transparent with the payer's partner,” he said. “For many years, you've put everything behind a veil of secrets. If you tell the truth, tell them exactly what it takes to hire a nurse in that market, they get it. As long as you continue to take over more abilities, it's an advantage for both parties.”
The company saw a 6.9% increase in PDS volume in the second quarter.
“We will continue our ultra-growth model later this year until 2026,” said Matt Buckhalter, Aveanna's CFO and Chief Financial Officer.
