With both Medicaid budgets and Medicare home health reimbursement rates under pressure, home health providers are facing increasing financial headwinds.
Avianna Healthcare (Nasdaq: AVAH) has partially countered these challenges through a series of Medicaid rate wins in 10 states and eight new private practice services (PDS) preferred payer agreements.
“As we reset our legal goals for 2026, we will probably continue to set a goal of earning double-digit interest rates,” Aviana CEO Jeff Shaner said during the company's third-quarter earnings call on Thursday. “We expect these PDS rate gains to be smaller across the board compared to the past two-and-a-half years. The great thing is we're ready for that.”
Looking ahead to 2026, Shaner expects the company's rate hikes to be in the 2% to 3% range. The company continues to execute on its preferred payer strategy and aims to acquire additional preferred payer partnerships in the fourth quarter.
Atlanta-based Avianna Healthcare provides a wide range of pediatric and adult health care services, including nursing, rehabilitation, occupational nursing in schools, therapy services, day treatment centers for medically fragile and chronically ill children and adults, and home health and hospice services. The company operates in 38 states.
Avianna reported third-quarter revenue of $621.9 million, an increase of 22.2% year-over-year. The company's private operations segment generated approximately $514 million in revenue during the quarter, an increase of 25.6% from the same period last year.
Chief Financial Officer Matt Buckhalter said the company “remains optimistic” that if it can achieve acceptable reimbursement rates, it will be able to attract caregivers and meet demand for its services.
Aveanna's home health and hospice segment brought in approximately $62.4 million, an increase of 15.3% year over year. The company is particularly focused on building relationships with payers who repay the company on a contingent basis.
“We achieved our goals of setting our margin profile well and strengthening our clinical services, with transient hospitalization rates well above 70%,” Buckhalter said.
Aveanna executives do not expect the proposed 2026 Medicare rate cut to have a material impact on their business, but the company opposes it and has had “productive” conversations with lawmakers. Shaner said he expects the final rule to be released late next week or the week after, and expects it to be at a “neutral level near zero.”
Uncertainty surrounding the final rule has caused many home health companies to pause their acquisition strategies, and Aveanna is no exception.
“We are not currently in a position where we are ready to pull the trigger on home health and hospice assets until we have a final rule,” Shaner said. “It's a growing certainty for all of us. If you give us a solid answer that tells us what the future holds for this administration, then we're ready to get to work.”
Shaner said the company is on track to complete the integration of recently acquired Thrive Skilled Pediatric Care by the end of 2025. He reported that the company is likely to complete further acquisitions, such as the Thrive deal, in 2026 to expand its Medicaid operations into more states.
