Aveanna CEO’s Formula For Growth: Transparency, Payer Partnerships And AI

The home-based care industry has spent the past year navigating significant regulatory uncertainty while also embracing a wave of innovation. Amid these shifts in 2025, Aveanna Healthcare Holdings (NASDAQ: AVAH) made a notable move with its $75 million acquisition of Thrive Skilled Pediatric Care, all while advancing its technology agenda and deepening its preferred payer relationships.

Looking to 2026, CEO Jeff Shaner is planning to come out of the gate running in terms of new acquisitions, specifically seeking companies like Thrive. Despite the substantial Medicaid cuts included in the One Big Beautiful Bill Act (OBBBA), Shaner believes there has never been a better moment to be a provider of home- and community-based services. His approach to growing this business centers on strengthening partnerships with payers.

A cornerstone of that payer strategy, Shaner said on the latest episode of HHCN+ TALKS, is transparency. Where companies once kept information, like wage data, close to the chest, Shaner has found that openly sharing these details helps demonstrate the value Aveanna delivers across its markets.

During the conversation, Shaner also shared his strategy for walking, not running, toward AI, his evolved perspective to the recently-announced Medicare home health payment rule and his top priorities for 2026.

A replay of that TALKS episode for HHCN+ members is below, along with a transcript of the conversation. The transcript is very lightly edited for style and clarity.

HHCN: Jeff, let’s start with, from your vantage point, what were the most significant trends that shaped home-based care in 2025? Hard to believe that it’s already almost over.

Shaner: We’re already to the holidays, as you and I discussed. Morgan, I think I start with, in almost any year, for the last 10 years, I probably start with the same thing, which is that the need to provide high-quality, cost-effective health care is paramount. We start with that basis, that at the end of the day, with government, payers, providers, patients, families, everyone wants to make it back home. Pediatric, adult, geriatric, they all want to make it back home in their health care journey. Anytime we’re talking to anyone, internally, externally, it’s like, remember, home care is the answer.

I’m going to keep saying that over and over again, because sometimes we get lost in the battles of what we’re in, but home care is still the answer. I start with that, looking back on the year, home care was the answer. It was still the answer, still the right place at the right time, providing the right level of care. For us in Aveanna, second, partnering with payers and government partners has been key to success. It has been key to helping make the wage dynamics, the labor dynamics better, not perfect, but better.

Continuing to lean into payers, and I know as providers, sometimes we struggle with, they’re not the evil empire that we want to make them out to be. They’re actually good human beings who are trying to solve problems just like we are. At the end of the day, everyone’s trying to lower the total cost of care. We are a solution as an industry and as a group of providers, so really focusing on not only providing great quality care and high quality, but also how do we reduce the total cost of care with our payers and showing the payers that, hey, we can do this together.

It’s been a weird rate year with the OBBBA, the Medicaid uncertainty, and then certainly the home health rule, which was an epic 100-day period of uncertainty that none of us wanted. I think it’ll be a year of a lot of looking back at rate and reimbursement and what did it mean for all of us. Then I think maybe from the exciting standpoint, I know we’ll get into this later, is really just the automation technology, AI. All of these things that are swirling around all of us as leaders, trying to figure out where they fit in our business today, where will they be tomorrow or next year, and also trying to remember that at the end of the day, we still have to provide great care, so not getting lost in some of the stuff that’s a buzzword. I think some part of all of that will be what we think of ’25 as we look back.

A lot that you hit on, we are going to dive into a little bit more. One notable deal, definitely one that I was excited to see and to cover this year, was Aveanna’s acquisition of Thrive Skilled Pediatric Care. Can you just give us an update on the integration efforts and how that deal’s gone?

Shaner: Yes. I look back and, by the way, fantastic company, fantastic deal for Aveanna. It really goes back to almost 25 years ago. I met Melinda Phillips in Charlotte, North Carolina, of all places. We were both young health care leaders in home health. We’ve known each other for over two and a half decades. We’ve both gone different paths and different routes. When Melinda and I talked about Thrive and talked about Aveanna, the things that just made innate sense were compassionate people, passionate about what we were doing, why we’re doing it, great mission-oriented company.

I knew if it had Melinda’s name on it was quality-oriented and they were doing things the right way. Those are the most important things that you take away from any acquisition. It’s not the sexiness of the technology, although some people may disagree with that, but it’s the quality of the human beings that are running the business and the type of beliefs that they believe in. That’s what we found in Thrive. As Melinda introduced us to her team, Steve Gyory, many other leaders in the company, we got to see a reflection of Melinda’s leadership and just the commitment they had to providing great care. Maybe they didn’t have all the scale and size and sophistication, but they provided great hands-on care in the home.

As we look back, we’re actually pretty close to finishing up the integration this month. Our goal is to put it to bed before the end of this year. It’s been a great integration. The teams have done an amazing job. Together, we’re really past the idea of two separate companies. At this point, we’re really one Aveanna, but we’re one Aveanna with great leaders. I mentioned Steve Gyory. Steve was the chief operations officer for Thrive, and he’s one of our senior leaders today. There are many other folks that have joined Aveanna, which is one of the cool things about Aveanna. Over the 10 years that I’ve been here, it’s hard to imagine it’s been 10 years; we’ve just picked up great people along the way.

As I look at our team today, you can trace people back to what acquisition or where they came from and they’ve made our company better and stronger. The key strategy things, obviously, New Mexico and Kansas were two great new states. The densification, I’m talking about our payer strategy, densification of caregiver capacity matters to us. It’s part of what we’re selling to our payers. Densifying Texas and Arizona, North Carolina, Georgia, that just made good sense. At the end of the day, what will make Thrive a great acquisition for us is the people and the fact that they have ended up making Aveanna stronger.

I’m actually talking to Melinda this Friday about an endeavor she’s working on and some stuff she’s helping us with. It’s these relationships that, over 20 or 30 years, really matter. It’s ultimately what makes us a better company.

Awesome. Speaking of Melinda Phillips, Thrive‘s CEO, recently announced that she transitioned to work at Arya Health. What’s the approach to that leadership transition, and what can we expect to see in your approach to the leadership team there?

Shaner: I’m going to focus on Arya for a minute because we’re working with them on AI-type branch efficiencies and working on caregiver scheduling, the things that we’re experimenting with to try to understand what this future is. It’s a passion of Melinda’s. It was something that she was very passionate about at Thrive. She’s carried that forward. She and I catch up on Friday to talk about where that can go. Again, to me, that is part of this idea in the future that we’re going to have to do more with less, or at least more with equal, and in some cases more with less. How do you do that? You have to have some automation technology to do more with less.

We’ve certainly seen some of the wins in the RCM or billing collections today. Really, I’m excited about the forward-looking stuff, the stuff in the branch, the stuff where caregiver scheduling, caregiver engagement can be more automated. That’s part of what Melinda’s focused on right now, so I’m excited to be talking to her about that. Those things, I think, are going to be important for us as we think about ’26 and ’27.

Is less rate possible in all businesses? Yes, it is possible, or certainly ‘less more rate’, I guess, less incremental rate. We always say, let’s be more efficient. How do you do that? You can’t get people to work 200 hours a week. That’s not the answer. How do we help make our caregivers, our branch staff, our corporate staff more efficient with their time? Things like caregiver scheduling, engagement are, I think, on the cusp of helping us be able to do more with less.

I’m excited to talk more about AI later. I had a conversation earlier today with some home health leaders, and I asked if folks are tired of hearing about AI yet. They all said no. I think everyone’s still thinking this is the thing that seems like it’s going to move the needle.

Shaner: Yes. It is a buzz. It reminds me of 2000 when the computers were going to shut down in 2000. It is a buzz that you have to pick your spots. One thing we learned as leaders as you’ve been doing this for a long time, you can’t chase just buzzwords. You have to find things that work for your company at the time. I think what we’re trying to focus on is what things will make us stronger now? What things should we be leaning into for the future, but what things can truly make us better today? That’s important to decipher. We can’t do everything every day. We’ve got to pick things that can make us more efficient today.

Great. What other deals are on the horizon for Aveanna

Shaner: I think the way we think about it is more Thrive-like transactions, both in private duty services, private duty nursing, but also home health and hospice, and eventually, in our entry nutrition business. As we finish our modernization early into next year, we want to move back into the growth side of that business, but specifically home health. Now that we know the final rule gives us a little bit more certainty, we can lean deeper into that from a capital allocation. Think of Thrive-like transactions. That is what we’re working on right now.

I will tell you, we have a robust pipeline, and people say that all the time. I say, what does that mean? We’re actioning on potential deals as we speak. We want to start the year. We want to start early. We want to get off on a great start. As I said, we will be done with the Thrive integration over the next few weeks, and then really want to give our team a couple of weeks to relax over the holidays. We want to get out of the gates quick in ’26 and continue to scale.

We’re in 29 Medicaid states today in our PDS segment. We’d like to take that to the mid-30s and eventually to the low-40s. I don’t think we’ll ever be in 50 states for Medicaid. I don’t think that’s probably reality, but we’d like to continue to clip off a couple of states per year. I’ve said before, there are a couple of states like Ohio, West Virginia, Kentucky, Tennessee that are in that middle part of mid-America that’s important for us to fill in from our national payers.

Then we love home health. I’ve been doing home health since 1999. I’ve dedicated my life to home health and hospice. Home health multiples have been depressed because of the lack of rate in that space. Our home health team is doing a fantastic job. We’re growing double-digit organically right now. We’d like to grow our home health geography and continue to scale that. I think of one or two Thrive-like transactions per year, size and scale similar for the next couple of years. We’ve got the cash on hand and the capital to do it and can do it and continue to deliver our story.

Well, I’m excited to hear more in 2026. Then, in terms of growth opportunities, what are the greatest growth opportunities for Aveanna Even if you want to zoom out and talk about the home-based care sector in general, and let’s narrow it to 2026, maybe.

Shaner: Perfect. Again, I’m going to go back to that same basis of I don’t think it’s ever been a better time to be in home and community-based services. People say, you’re crazy, OBBBA has changed that. I don’t think it has. I think that the pressure on our federal and state governments to do more with less is going to continue to push institutional care, higher-cost care settings into home care. That’s us. That’s what we do every day. It’s what our industry does. Being prepared to execute on that strategy, I think, for our entire industry, not just Aveanna, is really important.

I would encourage people, if you’re not leaning into payers, if you’re not partnering with government, whether on the state or the federal basis, you need to. We have found, as you talk to governors or Medicaid directors, they’re incredibly open. Now, they will only tell you what they can tell you, but they’re open. They’re open to feedback. They’re open to telling you their struggles on an annual basis and what you can do to solve them. We find that to be very helpful, that our governors and their staffs and their chief of staffs and the Medicaid directors will tell you, this is the problem we’re trying to solve. How could you help it? Can you help it?

I think partnering, continuing to partner with, whether it’s Medicaid or Medicare, MCO or Medicare Advantage payers, leaning into them. Not everyone’s going to be your partner, but the growth opportunity is, at least to us, aligning your caregiver capacity to those people who have an interest in what you do. I think that’s going to continue to be the ’26 story. We’re going to stay focused on it.

You don’t have to leave the home to grow. I promise you that. We are well-positioned as an industry to grow our businesses and the core businesses that we do today. We’re going to continue to focus on pediatric, adult and geriatric growth in the home. We’re going to continue to lean into the partners who have partnered with us over the last few years. As we have heard, state governments are a little bit tighter on their budgets. We’re leaning in deeper into them on how we can help solve their issues and solve their problems. We think home care is the answer.

When you enter those conversations with state governments, what’s most important to bring to the table to have a really productive conversation there?

Shaner: What they want, we have found in the last few years, is transparency. It used to be in the old days, and again, I’ve been doing this for 26 years, you used to have the payer would only know the rate, you would only know the wage, and you would keep the two separate and secret. You’d never tell the payer what you were going to pay your staff. That day’s come and gone post-COVID. At this point, everyone in the market knows that clinicians are hard to get. They know that wages have gone up significantly post-COVID. We have found ourselves in a position where we can have very transparent conversations with both MCOs, partners, as well as state government and governors themselves.

What they want to hear is that if I’m going to give you an example, I’m going to give you $4 more an hour or $4 more a visit, what are you going to pay to the caregiver who lives in my state, the actual nurse, the therapist, the aide? Again, in the old days, you would hide that. Today, you would just tell them, go to Indeed, we’ll show you the postings. That transparency is scary at first, but honestly, it actually helps the conversation. It helps validate if you pay me $4 more an hour, I’m going to pay the nurse in this market $2.75, the $3.25 more. The amount that we’re keeping for overhead is very, very small. That transparency, we have found, really helps state governors.

We haven’t got there. I don’t think we’ve quite got there with CMS yet, but state by state, we have found that transparency really helps a decision maker make a decision. Two and three years later, we’ve had state legislatures, as we’ve gone back, after two or three years, they’ve given us maybe a 30% rate increase. When we’ve gone back, they’ve asked us to validate wages. Show us the wage growth over this three-year period. How much more did you pay your nurses in this example? That’s really cool that they remember, they care, and they’re tying that back.

Did you solve the equation? Did you take more, in this case, children, but adults and seniors, out of the hospital? Were you able to move the needle and lower total cost of care? Total cost of care is hard to figure out in a lot of scenarios, especially with state government, but the idea that you can show them some indicators of where you’re truly bending the curve, and most importantly, you’re paying their constituents more in wage, more in taxes, that’s a benefit to every governor in America.

That’s a really interesting answer. You mentioned progress with CMS. Let’s turn to the long-awaited final home health Medicare payment rule, which was announced on Black Friday, which is not when I was expecting it to come out. I don’t know if it was when you were expecting it. It included a 1.3% aggregate cut. What was your response when you first read the details?

Shaner: I’ve talked to almost every CEO in my peer group. I think we all had a very similar response, which was, at first, a huge breath of sigh of relief. As you think of all the responses we had laid out with the Alliance, Steve Landers and Scott Levy, we had laid out every scenario like, are we dead on arrival? Are we cheering? I think the very first response was we could breathe. That, okay, it’s not game over. The industry is not out of business. That 6.4% cut, the industry was effectively done. It’d be a desert of investment for the foreseeable future.

And then when you read into it, you realize that out of the thousands and thousands and thousands of comment letters, that CMS actually read the comment letters, and they talked about some of the things in the comment letters that they, A, did incorporate, and then other things that they did not incorporate. I thought that showed not only maturity, but just the willingness to listen and partner with this administration and this CMS team.

I think I was happy. I was pleased that they had not only that 6.4% gone to 1.3%, but some of the structural changes they made it to get there showed that they listened to the feedback, primarily that the Alliance and the rest of us had given. Then you sit back after the weekend, Black Friday weekend, and you realize it’s still a negative 1.3% reduction in reimbursement. As it settles into you, then you look over the last five years and you realize it’s still an aggregate, almost 20% break cut over five years. As much as we want to celebrate, you really can’t. We have to dig back in and just say our work’s not done.

Inflation’s been up over 30%, break cut almost 20%. The math doesn’t still work. It is better, but I think it still stops short of the industry being able to raise their hands and cheer. I will tell you, my peers have been fantastic. The leadership from this industry is better than I’ve ever seen it since the proposed rule came out, which if you remember, it was June 30th. It was the week before July 4th. CMS is enjoying our holidays here at our expense, but our peers, I’ve never seen our peers work as hard as they have worked with the Alliance.

It’s awesome to see the talent and the commitment of this group of CEOs and GA leaders and presidents and everyone, and nurses and therapists writing letters. It’s been inspiring to watch and be a part of a group response. I think this group feels with conviction, more so than I’ve seen in 15, 20 years, that the opportunity to go solve this long-term is here and now, that in 2026, we can’t let up one bit. We’ve got to partner with this CMS team, this administration, this Congress, and create some additional rate certainty for this specific industry for the next five-plus years.

I just think it would do such an amazing thing for investment, innovation, the things that really can’t happen when there’s uncertainty of are you going to be a viable business or not. I think now’s the time for us. I think this administration showed their hand in a good way, that they were willing to partner and listen. It’s up to us as an industry to take this and really solidify the next five to seven years of this industry where, yes, it may not be heyday times, but there is certainty in reimbursement. Each year, which allows companies to truly invest for the long-term. I know it’s a mixed bag answer, but the emotions went all the way around the circle that Friday night as we were all talking.

Yes, I think it’s a mixed bag situation, so that makes sense. What was it, well over 900,000 comments, so that was pretty wild to see from my end. Overall, it sounds like obviously a cut is a cut, but a good omen for the industry, would you say?

Shaner: Compared to what we were staring down, it was an ability to breathe that weekend and know that we were going to be in the business of providing care on January 1st. There were days that we weren’t certain about that. There were days that I think all of us were truly staring down that this industry could effectively be eliminated because of the enormity of the cuts.

What I’m most proud about is we have a motivated leadership team in this industry, all railing around the Alliance and using our voices and our influence to really drive what is needed, which is create a stable marketplace where great providers can access – By the way, to do that, we have to attack fraud, waste, and abuse, that there’s a fraud, waste, and abuse issue that CMS wants to attack. We, the industry, can be a part of that solution. We want to be a part of that solution. I think there are real tangible to-dos in ’26 as a leadership group that we can do that make the industry stronger, better, and allows the great providers to thrive.

For Aveanna specifically, what’s your strategy for dealing with the rate cut and any other changes in the rule?

Shaner: It’s a smaller part of our business. As you know, it’s about 10% of our business. We’re growing at a double-digit pace today in this current rate environment. We are a net TPS winner. The TPS score is we will be a net winner next year. We will receive additional reimbursement because of that. We did benefit from the hospice rate lift as well. Net-net for us, we’re going to be fine. I recognize that’s 10% of our business where my peers are staring down 100% of their business, so it’s all relative. We don’t change care around reimbursement.

We provide great care, episodic care. We average 4.3 stars in our home health agencies. We’ve got great five-star ratings. Our clinical outcomes are off the charts. We wouldn’t change care patterns because it was a 2% rate increase or a 2% rate decrease. It is, you’ve been doing this business long enough, you realize you just do the right thing. Do the right thing for your patients, do the right thing for your caregivers, and good things happen. We’re going to thrive because we’re a great provider of home health and hospice. We also want to grow. I say the one thing that this final rule did is it gave us certainty and the ability to invest and grow, both organically and inorganically, in the home health space.

Perfect. Let’s turn to some of the other segments of your business. In April, you told HHCN that Aveanna’s greatest inherent risk lies in Medicaid uncertainty. Has that level of uncertainty changed since you last spoke with us earlier this year?

Shaner: God, April, that was the last time we talked? We’ve got to do this more often.

We’ve got to do this more often, for sure. We’ll set up monthly coffee chats.

Shaner: I love coffee, Starbucks, I’m good to go. Yes, so pre-OBBBA, our state partners were just uncertain of anything. They could not make decisions fundamentally about the future because it was a bunch of saber-rattling, and they didn’t know the outcome. As the rule has settled in – Let me back up. The great thing about Medicaid is it’s 50 different states. They all operate 50 different ways. It’s frustrating at times, but it is actually the great thing about Medicaid.

The difficulty in this is they are now implementing OBBBA 50 different ways because of how they generate their revenues, because of the programs that they’ve adopted and how they’ve grown their programs. It’s hard to take one state and extrapolate across anything in Medicaid. You truly have to look at each one of your Medicaid states, which we have. What we’re hearing is, since the rule has settled in, is certainly more pressure.

Certainly, now they know the short-term. I would say most states know the next ’25 through maybe ’27. There’s additional upside from ’27 out through ’30-plus that I think states are still trying to understand what that will mean to them on an individual basis. We are seeing states be like, we have less total dollars to spend on a go-forward basis.

The great part about private duty nursing is, which is the core of our businesses, it’s such a protected class of patients, but it’s also such a high-cost acute care setting compared to home. It’s $5,000 to $7,000 a day in the hospital. It’s $500 to $700 a day at home. State governments get that, and they need that to work for their budget to be met. The areas where we’ve seen some temporary rate decreases, I think we called out North Carolina and Colorado, those were necessary to balance our budget, the Medicaid budget within the year. In both cases, they gave a rate increase and then had to temporarily freeze it and take it back. Again, it shows maybe each state’s still trying to digest how to swallow this.

I think the way we’re thinking of it, big picture, is the last three and a half years have been a significant rate resetting to significantly reset wages. That’s transpired. In our 29 states, 28 of the 29 states now work with the reimbursement rate and wage rate, works where you can hire nurses in the home. The one state where it doesn’t work is California, where we’ve not had a rate increase in seven years. The wage dynamics are completely out of balance with the rate. That won’t change until we can get California to do a significant investment in home-based nursing. The other states are pretty well balanced right now.

’26 and ’27 most likely are going to be, we call it muted or moderate-type rate increases. There may be some rate decreases, too. There’ll be, we think, very specific things like holiday, overtime shifts only. It’ll be areas where the state’s able to say, hey, we’re struggling on filling weekend shifts at home. Those would be the kind of rate things I think we see, or 1% or 2% rate on the Medicaid side. I don’t think we’ll see a lot of 20%, 30%, 40% rate increases for the next year or two until things settle in.

How do you handle growth, if any, in some of the states that are more unbalanced, like California, you were talking about?

Shaner: California’s the tough one. California, it’s crazy because you would think California is cutting edge in so many ways. It’s still primarily a Medicaid state, so the majority of our revenue in California still comes through Medicaid, Medi-Cal. We’ve had great dialogue with our peers in the market with Governor Newsom and his current head of HHS, his former head of HHS. We just haven’t been able to get it high enough on their radar screen to get it over the finish line.

The really sad part is the families in California who need this care because they just can’t get it, especially in the higher dollar market like LA and San Francisco, San Jose. It’s almost impossible to hire a nurse because the nurse’s base wage rate is higher than the Medi-Cal rate. You have families that end up quitting their jobs, staying at home, taking care of their children 24 hours a day. You’ve got families that stay in the hospital months longer.

The study that we did, we did a study with some of our peers in the market. It showed that California is wasting between $350 and $400 million a year by not putting a PDN rating increase in place and having that much over-utilization in the hospitals. If you talk to the hospital case managers, they don’t want these kids there. They want the kids to go home. They want them where they need to be. It’s a difficult place to be.

We’ve learned over time, don’t leave a state because the rate doesn’t work. Time will fix this. Time and energy and effort fixes it. In most states, that’s played true to us. We believe deeply in these families, as I know our peers do too. We’re not going to abandon them. We’re going to stay focused on achieving an outcome that allows us to hire nurses and allows us to staff cases. It’s sad because it’s about a $65 or $70 million decision for the state of California. That sounds like a lot, but in California, that’s pretty small. If they invested that with a CMS match, we could save them hundreds of millions of dollars as an industry, and most importantly, we could help families be families again.

The strategy there, it sounds like it comes down a good bit to advocacy.

Shaner: It is. You get to be willing to do studies and you’ve got to be willing to partner. Again, sometimes it takes years. I think in California, most times it takes between a year and two years on a state basis to appropriately drive a rate through. You’re using similar strategies in almost every state. California, this will have taken us and our peers almost five years. It was unfortunate. Again, we stay at the table. We love our families. We love what we do. Eventually, you will win out over time, but you just got to stay committed to it.

Playing the long game. Let’s return to technology. We hit on this a little bit earlier. I want to talk about the role of technology in the broader industry, but actually, I’d love to start first with a little more narrow of a focus because I know you’re excited about the role of AI, which we were talking about earlier. How is Aveanna adapting to the growing role of AI? What’s your AI strategy?

Shaner: I love it. I’m going to sound like I’m really smart here, but I’m not. I’m just a home care operator trying to figure out AI. I’ll start with this. RCM, we call billing collections RCM. RCM automation is probably the most mature AI and automation documented track record of success. As you think of Aveanna, and by the way, you think any company, you should be leaning into AI at this point in your billing collections. It’s incredibly efficient. It takes time and money to set up, but it’s incredibly efficient.

We’re in year three of AI-type automation in our back office billing collections. We’re starting to look at it through the authorization process and how we document authorizations, too. We’re moving it forward now, back on the front end of billing. That’s probably the most mature place where we’ve been a few years in. By the way, it’s getting better and better every day and more and more efficient.

We’re still headcount neutral, if you will, so we’ve not had any massive reduction of headcount. We’ve been able to grow revenue hundreds of millions of dollars over the last two years and not add additional headcount in billing collections. I’ll take Thrive. We’re able to integrate Thrive and not add additional billing collections headcount. That’s primarily because of the use of AI partners and AI technology. I think that’s the one that I could tell you is the furthest along. If you’re not doing it today, I would encourage you to reach out to your peers. There are tons of companies who can help you do this. It’s relatively low risk, high reward. It’s one of the things I think you could say that, check, this is straightforward.

The area that I’m probably most excited with, and I mentioned earlier, I’m talking to Melinda and working with Melinda and some other folks, is really caregiver scheduling and engagement. That is the idea that caregivers live 24 hours a day in their ecosystem. We want to be engaging with them 24 hours a day. Most of our office staff works 8 to 12 or 14 hours on a normal 24-hour clock, so there’s this period of time where engagement goes quiet or dark, where AI can be a constant engagement tool between us and the caregiver to better understand their wants, wishes, needs.

Because people call off every day in our business, or someone gets in a car wreck, someone has a sick child, that idea of refilling the schedule is one of the main to-dos every day in every one of our branches. The idea of having artificial intelligence help us with that and field shifts without a human being interacting with a human being is really exciting to us. We’re exploring that, piloting that right now. It is a part of our 2026 AI plan. We think that is one of the most exciting areas of AI in the short term.

Then there’s that intermittent piece between caregiver engagement, which is forward-looking to me, RCM collections, which is kind of back of the house, which is really the branch. In our business, it’s one of the few businesses where you can’t set up a hub in one state and service the entire state from one hub. You have to have branches in every single one of your different provider numbers and licenses. Helping those branches become more efficient in the back office, between scheduling and the caregiver actually going on a shift or to a home, and the idea of billing collections and payroll and all the stuff that happens in the back office, that’s an area, to us at Aveanna, that we can be meaningfully more efficient over the next few years.

Again, I don’t think we’ll solve the majority of that in ’26. These are things that you’ve got to be willing to spend six, nine, 12, 15 months leaning into. It’s not cheap. It’s tens of hundreds of thousands of dollars of potential investments to learn, but I do think over time, over a couple of years, we’ll find that the back office can become meaningfully more efficient and we can scale our business with the same amount of people, which I think will be critically important over the next couple of years.

Those are some areas that we’re focused on. Again, I don’t want to be first. Sometimes being first is not great. I definitely don’t want to be last. Somewhere in the middle of not first but not last is, I think, where you want to be as it takes hold in our industry and in our everyday life. Many of our caregivers tell us, don’t call me, text me, or message me, which is telling you that people have moved to a different medium of communication. Anyways, I think caregivers, scheduling, engagement, is probably the area I would say in 2026 that we’re most excited about what it means for Aveanna.

If you can go into a little more detail, you talked about the pilots. What level do you start at when you are trying something out?

Shaner: I think it all depends where, like if it’s the RCM or if it’s caregiver scheduling. I think the most important part is to understand how you do the process today, which is always where AI or technology starts, which is, what do you do today? How do you do it? Why do you do it that way today? Almost always, it starts with an inflection of what are you doing internally?

One of the things that I’m really proud of, our chief operating officer, Kristy Rohwedder, and Shane Brinkerhoff, president for home health and hospice, the two of them, over the last three years, have standardized every single branch in our business, which is almost 400 branches across 30 states. To implement technology automation or AI, you have to do things the same way everywhere or redundantly over time.

There are nuances in every state. When it’s negative 10 degrees in Minnesota, they come to work differently than when it’s 100 degrees in Arizona. There are regional differences in our business, but you have to have a standardized approach to job functions, job titles, job performance. Kristy and Shane have done that for us. We’re finishing that in our MedSolutions. Becky’s doing that right now in our MedSolutions business.

Once you have a standardized product, a standardized process, then you can take these ideas of AI or automation, and you can actually apply them across, now, 50 locations, 100 locations, five states. Whereas before, we struggled a lot with just, even forget AI, just automation, because you’d go to state six, and the state six would say, we do it differently than the other five states. I think that’s probably part of the annoying but necessary work you got to do upfront is you got to get to where, I don’t care if you have two or three branches, you got to do things the same way, with the same job titles, with the same training, with the same approach, or similar, it doesn’t have to be the exact same, so that when you bring automation or AI in, you can apply it across a broader market.

I say all that to state, that’s the work we’ve been doing, is really laying the foundation. I’ll go to our RCM. As we began to use what’s called bot billing or agent billing, where you still had to do it the same way across the platform. We probably spent the first year, back in ’23 into ’24, just getting our processes and billing collections, absolutely, every time, the exact same, by payer, so that we could be able to implement that to a bot or agent-type billing. Again, I applied that forward to, as caregivers scheduling our office automation, you still have to have that backbone or basis to stand on. That’s probably the hardest part, because we all want change, but many of us don’t like to actually do change.

Is that your advice for other providers, to get your house in order and then look at making those bigger investments?

Shaner: I would. I’m not a proponent of, go dive into AI, go invest in Nvidia. I’m a proponent of, crawl before you walk, walk before you run. Don’t ignore it. Don’t keep your eyes closed and say, this is not going to happen to me. Almost always, your own shop is what you’ve got to find. I thought you said it very well. Make sure your shop is as clean as you can get.

There’s no perfect. We know that, but make sure the redundancies that need to be in place, that if you have five locations, when you hire an executive director in each one of the five locations, it’s the exact same training, the exact same orientation, the exact same standard operating procedures, and you could take one and move them around, in theory, and it would be the similar management of the business, your back office systems, EMR systems need to be as well as they can be from a process standpoint, but yes, I would say my advice is get your house in order, get ready, and then again, I would never say to someone, go dive in head first. I don’t think you’ll find that to be very rewarding. I think I would tell you we’re probably walking, not crawling, but we’re not running yet. We are moving down a path.

Each year, our key strategies are one or two. They’re very defined. Automation AI is one of our five strategies for ’26. We’re writing those right now. We will have a defined Aveanna AI strategy and automation strategy, and we’re going to pick one or two things. You and I have talked about both of them already. We’re going to keep it very focused because we have found at Aveanna, when you define a very tight set of priorities, you can execute them and do a good job. When you try to solve world peace every year, most likely, you never quite get there.

I think this is interesting because I feel like so much of the time I’m talking about, and these are the questions I’m asking, of which AI are you using and where are you going to use it, and then maybe less about, have you prepared to implement it? I’m really glad you’re talking about this. Then, zooming out to the broader industry, what role will technology and data play in the home-based care industry as I think there continues to be various pressures and tailwinds?

Shaner: Some of the peers that we use with systems won’t love this answer, and I apologize to them in advance. No one partner can solve all your problems, so just chalk that up. I’ve not met that partner yet. I’ve met a lot of them who’ve sold me on that, but never met the partner who could solve all your problems. Start with that you’re going to have to figure out what are your priorities. What are your one, two, or three priorities as an organization? What do you absolutely believe you can do well? Then you’ll have no problem finding plenty of people who want to help you in those areas.

Then, I’ve always found reaching out to my peers, asking them, hey, how was your experience with so-and-so? How did they help you? What did you learn from it? That’s how we rolled out Homecare Homebase. We reached out to our peers, talked to them first before we ever went to Homecare Homebase, and similar things, Brighttree and other systems, Workday is a great example. You want to talk to your peers, what worked, what didn’t work.

If I go back to macro to your question, I think some of the biggest issues still are data, like massive amounts of data in health care. There’s probably more data in health care than anywhere but maybe banking. We’ve got tons of data, but it doesn’t end up in the hands of the person who can make the decision to intervene and care at the right time. It’s getting that data to that nurse or that therapist or that executive director or that clinical liaison or whoever the person in the home is, that organizes the data in such a way that says, we think there’s a risk with this patient in the immediate term.

I think of Shane Berkoff and I were talking this week, and I use like Muse, which is now part of Metalogix, which is now called something different. Tom Maxwell years ago said, I want to know in the last five days of hospice care that nurses are in the home. If it’s my grandmother, I’m quoting Tom Maxwell, now, if you know Tom, you can smile at this. He was like, I want to know that the nurse is in the home. Well, they figured out a way through AI and data to identify up to 98.7% of the time they can tell you in the last five and 10 days of life when a patient’s going to expire. Therefore, you can intervene and put nursing in the home.

That’s, to me, a perfect example of what AI and automation can help our industry, with, which is help our caregivers sift through all this information and data and medications and alert them to a risk. Now, a human being still has to do something, right? A nurse still has to intervene, a therapist, but help us get the noise away from us and all this data points and hone in on the one or two things that can actually intervene and stop a hospitalization before it happens, stop a bad outcome before it happens. To me, that, to me, is exciting.

I don’t think we’ve solved that Rubik’s Cube as an industry. Actually, I know we haven’t, but the ability for AI and data and automation to help our teams be more efficient in the information process, Morgan, I think is one of the most exciting things of the next, this’ll probably be after I’m retired, but the next three, five, seven, 10 years. I think that it’s incredibly exciting to think that the alert could be so specific to a nurse telling him or her the likelihood of this outcome is incredibly high because of this algorithm and you need to intervene right now. You need contact with a doctor. You need to intervene. That, to me, is what home care is heading towards and one day will be.

Jeff, you’ve previously told HHCN that you would like to better balance the company’s geriatric division and for that segment to grow to be 30%, I believe is the number of the company’s revenue. How are you executing on that goal and is your timeline, I think it was three to five years, is that still on track?

Shaner: I’m going to remember when I talk to you that you remember dates and times and things I say, so duly noted. You’re not going to get this again. We believe deeply in home health and hospice and we believe deeply in the impact it makes. It is an important part of our growth story. Shane, who runs that business for us, has done an amazing job turning this business around for us. We’re in a position today where, I say this proudly, we believe we provide the best care in home health and hospice of any company. I know my peers say the same thing. We want to scale this business.

I would tell you, until we had the final home health rule, we were cautious about doing so and cautious about writing millions of dollars of checks into acquiring a business. It is on our strategic plan, as I talked about in 2026, is to scale this business. Today, we’re a regional provider of home health and hospice in about 15 states, primarily in the Midwest and the Southeast. We’d like to geographically connect those two, which leaves a lot of states to fill in. We’re looking for Thrive-like acquisitions. We have the capital structure to scale at this point.

Matt Buckhalter and Debbie Stewart did a fantastic job with our capital structure back in September. We’ve got great certainty now. We’re generating free cash flow. We can go out and do material deals. There aren’t many buyers left in home health right now. That may change after the final home health rule, but there’s just not many buyers. There’s probably less than five people who are growing home health and actually buying home health and we’re one of them. We want to scale this business.

It’ll take us time to get to a billion dollars. It’ll take us years, but when we think of where we want to be in home health and hospice, today, we’re $260 or $270 million annualized. We’d like to be four or five times that size over the next three to five years. Yes, we’re going to continue that story. We’d like to balance the size of the Medicaid, Medicare part of our portfolio long-term. Will it ever be larger than Medicaid? I’m not sure. Medicaid will probably continue to grow to $2 billion or $3 billion in revenue on an annual basis. We’d like to get home health and hospice in a place where it’s meaningful, 25%, 30%, 35%. Now I know that you remember these things I say, so I’m going to have to fulfill this commitment you and I just made.

It’s a pact. So much has happened in 2025. I love to follow up and I really appreciate you outlining that. Excited to see what happens there. Let’s turn now to talk a little more about reimbursement. The shift to value-based care continues to be a major theme in the industry. How is Aveanna approaching alternative payment models today and how has that differed from how you’ve done it in years past?

Shaner: Huge proponent of value-based care. Not as a replacement for fee-for-service, but as an addition to and benefit of. I don’t ever look at value-based care as don’t pay us an hourly or a per visit rate, but I look at it as the relationship is now right-sized because you pay us an appropriate rate and we provide an appropriate wage. That’s where it starts. Then when you put a value-based agreement on top of a payer-provider relationship, it just solidifies both of you, aligns both of you to the same outcomes, which is improving quality and reducing cost of care. That’s it. It’s that straightforward.

We see it predominantly on our pediatric side of our business. Our payers really do like the value-based agreements. Again, they’re tying us to a total cost of care metric and they’re tying us to a clinical outcome metric as well as other things like the amount of shifts we fill and the fill rate. Also, on our geriatric side, a little bit slower. It’s a little bit slower. It’s harder for some Medicare Advantage payers to get there. I think TPS is a great example of CMS is paying value-based payments now and you’re either a winner or a loser. There’s nowhere in between.

You have to raise your star ratings. You have to raise your quality ratings to get more money. It’s a great way to offset the rate issue we talked about earlier. If you’re a positive 2% value-based payer right now, a recipient, you’re probably getting a positive 2026 final home health rule, but you’ve earned it. You’ve actually earned it. It’s huge to us. It’s always a follower to us, not a leader. We start with reimbursement rate and wage. That’s always the first for us. Then we follow quickly with, we would like to talk through value-based bonuses and you holding us accountable for doing what we told you we would do, and I think that’s the cool thing about value-based agreements is it actually holds you accountable longer term.

I mean, this is now quarter, semi-annual, annual lookbacks, and it holds your feet to the fire. We have nine value-based agreements in our private duty services business. We’re not earning 100% of the opportunity, but we’re earning more than 50%, and we’re growing in that relationship. As I tell my team, talk to my team, and share feedback with them, it’s the best thing we have going with that payer because they can look at those metrics and know, I spent $4 million more with Aveanna last year, and I saved $14 million. That outcome is critically important for a payer-provider relationship. I’m a firm believer. It’s less to me about the total dollars per agreement, just the fact that you have the agreement to me says you’ve solidified your partnership with that payer.

That’s really interesting. You said nine agreements with that business. What would you like to see that number be in, say, three years?

Shaner: To me, it goes in correlation with the 30 preferred payers we have. It’s always a lag. It’s a lagging indicator that’s following it. I’d like that to be roughly half of our preferred payers because it tells me we’re catching up. It takes us about a year to a year and a half after signing a preferred payer agreement to get the value-based agreement added. It’s a different team within the payer. You have to coordinate the two teams together, the network management with the value-based. You’ve got to get them communicating. It just takes more time.

They want to make sure they’re not going to be burned. They’re not going to not get a better outcome and pay more dollars. I do find that over time, they like it because they feel like, from the payer standpoint, they feel like they’ve got you hooked and connected to the things that are important to them. I think as 30 preferred payers for us grows in ’26 and ’27, one day I’d like us to be 50-plus preferred payers in that business. That will include more states than where we are today. I’d like us to have 20, 25, or 30 value-based agreements as a company. I think that would solidify to me that we’ve got the right relationships. Some of those are going to be the same national payer over multiple states, which is pretty cool that we’ve had a couple of our payers call us and sponsor us into other states with them because they were pleased with the job that we’ve done in a different state.

Is that part of the growth strategy, based on payer relationships?

Shaner: It is. It is. It’s part of why we’re filling in some of those last states is our payers are meaningful in those states. I talked to a couple of the CEOs from the MCO payers early on, two, three years ago, and they said to me, go prove your worth at individual states. When you’re doing a good job, we will hear about it, which was a great way for us to go prove our worth. Yes, for us to win, payers need to win. For us to win on the back of payers and vice versa doesn’t work. As an industry, we’ve learned that for decades.

I also think if you’re willing to shift your mentality a little bit, think a little bit more like a payer, understand what things are they focused on, what things are they concerned with. Again, you can’t please everyone, but you can only align. You’ve fixed capacity with your caregivers. You have to align those caregivers with people who are good partners. That’s the hardest part of our job, but when you do so, as they grow, you grow. That’s, to me, the win-win.

Awesome. I want to try to squeeze in two more questions. You were talking about caregivers. Let’s talk about workforce issues. What are we going to see in 2026 in terms of workforce issues? Then what’s your strategy for that perpetual concern?

Shaner: I think people get ad nauseam. The one thing that we don’t control at Aveanna is inflation or wage rates. We just don’t. We spent 20 years worrying about it. Then one day after COVID, I just realized that’s no longer discussion at Aveanna. I care about inflation, but I don’t control it. Don’t try to worry about something that you don’t control. If I could give a pep talk to my CEOs, just don’t. That’s not what you should be worried about. You control rate, and you control where your caregiver goes. Your branch directs where they go. Those are the things you can control. Control those controllables.

That’s where I think we have focused over the last two and a half years and been so successful. What we will continue to focus on in 2026 and 2027 is continue to make sure that our caregiver capacity is aligned with our payers, partners, and our patients and their needs, and just make sure that we know where they’re going, why they’re going there, the output that they’re generating by being there, and be incredibly efficient with where their time, energy, and effort is going.

The larger we get, the more scale we get, the more we can keep caregivers in a tighter geography in our geriatric part of our business. It does benefit our pediatric business as well, similarly. We worry about those things more than, hey, what’s going to happen in this market? We just don’t control that. We really try to focus on, do we know where our caregivers are aligned in that market? Are we able to hire caregivers for that payer in that market? That’s what we focus on.

I take people back to, we’re three years into our preferred payer. 2025, we’ll close out our third year of our preferred payer and government fair strategy. It’s not new anymore. The very first preferred payer, if you were to talk to that payer today, they would tell you that Aveanna has roughly half of their business in said market. We’re three years in, and we’ve gotten to half of their business. They may not want us to have 100% of their business, but they certainly want us to have more than half. It just tells you how long the lifecycle of these relationships are.

Hey, we’re three years of hard work. We’ve grown every year with them, and still, we’re only half the way there, or maybe two-thirds of the way there. It just tells you that the opportunity to continue to lean into your payer partners is crucial. I’ll go back to that transparency comment I made earlier. The more transparent you’re willing to be with them, the better the outcome that we have found is. When you can truly explain to them what you’re going to pay a nurse or a therapist in that market to reduce the total cost of care, they can wrap their minds around why they’re paying you what you’re asking. That’s how we’re going to continue to approach labor, is not to worry about things we can’t control, but really align our focus and our efforts around where is our capacity going, who is it aligned with, and is it a fair rate-wage dynamic?

Fantastic. I’m going to make you end on a broad question, which I think sometimes can be the hardest one. Let’s go. How would you describe your strategy for Aveanna heading into 2026?

Shaner: Oh, this is going to be fun. First, nothing radical. Just do the same things we’re doing today. Just do them better and more efficient. I think continue to do the things that we’ve done well over the last three years. Lean into our preferred payers, government partners. Optimize that care delivery. We were just talking about optimize the care delivery. Make sure that we’re meeting the needs of our patients. Continue to strengthen our branches, our business through automation and AI. Grow through M&A. I mean, grow through M&A is going to be important to us.

Then I think, most importantly, is engage. Continue to engage your employees and leaders. Tomorrow, we have our final all-company call at Aveanna. It’s our fourth call this year. We’ll have 3,000 people on the call. We’re having fun with our teams. We’re sharing feedback. We’re sharing each business with the other. We’ve truly engaged this workforce at Aveanna where they’re having fun. They’re asking me fun questions. They’re putting my feet to the fire test. We are having fun again as an organization. We are enjoying the business again. That’s not easy. I mean, you have to work hard because the business is a tough business. I think doing the things that have made us successful over the three years and doing them a little bit more efficient, a little bit more effective over the next couple of years is going to be important. Celebrating with your teams, having fun with your coworkers and your peers, enjoying the moments and times you have together, and continuing to be a compassionate, passionate, driven company who focuses on a mission is always the right thing to do.

What a fantastic note to end on. I feel very festive, too, with that celebration and having fun. Thank you, Jeff, so much for being here today. I’ve loved this chat. Really appreciate all these insights. Thank you to everyone who tuned in today. If you’re watching this on demand, thank you for watching. If you’re watching this live, reminder that the recording and transcript will be available on HHCN’s website, so keep an eye out for that. Otherwise, Jeff, thanks again.

Shaner: Thanks, Morgan. Happy holidays to you and to everyone else. Thanks so much for your time.

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