Enhave Inc. (NYSE: EHAB) management is tracking a variety of headwinds that could negatively impact home care providers, including the proposed 2026 Medicare payment rules, but the company has developed a plan to mitigate the growing challenges.
The company's leaders have focused on advanced episodic visit management strategies to offset rate disruptions.
“We have to be as efficient as possible to ensure we have the resources we need to strategically invest in people and technology, whether it's CMS pricing or the continued transition through Medicare Advantage,” President and CEO Barb Jacobsmeier said Thursday during the company's third-quarter earnings call. “Our cost structure is therefore critical to our future success.”
Dallas-based Enhave has 249 home health locations and 114 hospice locations in 34 states.
The company first piloted advanced episodic visit management in 11 branches in mid-August. Jacobsmeyer said early results are encouraging, citing a decline in total visits per episode in these regions.
The company added more branches to the pilot in October and plans to add more by the end of November.
“As we navigate a dynamic operating environment, we are confident Enhave, with its experienced leadership, talented team, and innovative technology, is best positioned in the industry to continue to manage challenges and grow market share,” Jacobsmeier said.
Enhave also continues to see positive momentum from its payer innovation strategy with continued improvement in total patient volume.
“Our size drives meaningful access to our payer members, and that access, combined with our high-quality outcomes, continues to position us well as we advance our payer strategy,” Jacobsmeyer said. “This was evidenced by another domestic payer agreement that was renegotiated in the third quarter. This was a renegotiation of one of our first payer innovation agreements.”
Enhave is also seeing success with new growth strategies. The company opened six stores in the third quarter, with a seventh opening in October. The company plans to open 10 stores this year through organic growth.
Like most home health companies, Enhave's biggest concern is the proposed payment rules for 2026, which have not yet been finalized.
“As we stated in our comment letter, the proposed cuts, if finalized, would exacerbate existing trends in reducing patient access to home health care,” Jacobsmeier said. “Home health care is the preferred and most cost-effective post-acute care option for patients, saving Medicare money. We urge CMS to rescind the temporary and permanent adjustments included in the proposed rule and ensure that appropriate access to home health care is restored.”
Still, Jacobsmeier emphasized that the company will continue to implement strategies to alleviate pricing challenges in 2026.
EnHavit leaders previously identified a silver lining in the proposed rules: an opportunity for new growth.
After setting a goal to improve the financial health of the business in 2025, Enhave reported record revenue and profitability in the third quarter.
Enhave's net service revenue for the third quarter was $263.6 million, an increase of 3.9% from $253.6 million in the same period last year.
“Our ability to deliver three consecutive quarters of growth and profitability amidst what remains a challenging operating environment highlights the consistency of our business execution and the flexibility of our model, despite the headwinds caused by payer disruption earlier in the quarter,” Ryan Solomon, Enhabit's chief financial officer, said on a conference call. “Our team overcame challenges and steadily built momentum throughout the quarter, securing growth and position and entering the fourth quarter poised to finish the year on a strong note.”
