Healthcare

Addus Achieves Rate Increases In 2 States, Driving Positive Outlook

Reimbursement rate increases in key states led to a positive outlook from leaders at Addus HomeCare Corporation (Nasdaq: ADUS).

Two of the states where Addus operates, Texas and Illinois, have announced rate increases for personal care services. The Texas rate increase was effective on Oct. 1 of this year. The Illinois rate increase will be effective Jan. 1, 2026.

“We believe the Illinois and Texas rate increases, as well as favorable reimbursement support from many of the states in which we operate is due to the recognition of the value that personal care services provide to both state Medicaid programs and managed care partners through a reduction in the overall cost of care,” CEO Dirk Allison said on Tuesday during Addus’ third quarter earnings call.

Allison noted that the benefits associated with home-based care placed Addus in a favorable position amid changes to various state Medicaid programs.

Frisco, Texas-based Addus offers a variety of home-based care services, including personal care, hospice and home health. The company currently serves about 62,000 patients and consumers through 260 locations across 23 states.

In other states, the company continues to work to convince legislators of the importance of supporting home-based care services by implementing future rate increases, according to Allison.

The 2026 home health proposed payment rule was also top of mind for Addus leaders.

In June, the U.S. Centers for Medicare & Medicaid Services (CMS) released its proposal, which included a 6.4% aggregate cut to home health payments.

“As you would expect, there’s been a great deal of advocacy put forth by the home health industry working with CMS to possibly affect this potential rate reduction. While we do not have a finalized home health rate for 2026, we are hopeful that these efforts will have a positive impact on the final rate, which we expect to be published in the next few weeks,” Allison said.

In addition to rate increase wins, Addus’ strong hiring performance, especially in its personal care segment, was another Q3 highlight. The company achieved hires per business day of 113, a 6.6% increase over the previous quarter.

Allison also pointed out that clinical hiring has remained consistent with what the company has experienced over the past two years and has been stable, aside from a few challenging urban markets.

Addus also announced that it acquired the personal care operations of Alice, Texas-based Del Cielo Home Care Services on Oct. 1, 2025, for $7.4 million.

“This transaction continues our acquisition and development strategy of enhancing our geographic coverage and density in Texas,” Allison said. “Our team is excited about this acquisition, and I want to officially welcome the Del Cielo Home Care team to the Addus family. Going forward, our development team will continue to focus on both clinical and non-clinical acquisition opportunities to increase both the density and geographic coverage to our current states.”

In general, Allison expects that the proposed payment rule will delay “meaningful” home health acquisition opportunities, but he stated that Addus would evaluate smaller clinical transactions along with personal care service deals that fit the company’s overall strategy.

For Q3 2025, Addus’ net service revenues checked in at $362.3 million, a 25.0% increase compared with $289.8 million for Q3 2024.

“The third quarter marked another strong financial and operating performance for Addus in 2025, as we continue to deliver consistent organic growth and benefit from our recent acquisitions,” Addus Chief Financial Officer Brian Poff said during the call.

Poff credited Addus’ personal care services segment, which had 6.6% organic revenue growth, as a key driver of the company’s business.

“This growth trend has consistently tracked well above our normal expected range of 3% to 5% over the past several quarters, supported by strong hiring trends and favorable rate support for personal care services in some of our larger markets,” he said.

The post Addus Achieves Rate Increases In 2 States, Driving Positive Outlook appeared first on Home Health Care News.

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