With both Medicaid budgets and Medicare home health reimbursement rates under pressure, home-based care providers are facing intensifying financial headwinds.
Aveanna Healthcare (Nasdaq: AVAH) has countered those challenges, in part, through a series of Medicaid rate wins in 10 states and eight new private duty services (PDS) preferred payer agreements.
“As we reset our legislative goals for 2026, we’ll probably still set a goal of it being double-digit rate wins,” Aveanna CEO Jeff Shaner said on the company’s Q3 earnings call on Thursday. “We do expect those PDS rate wins to be generally smaller than they’ve been over the course of the last two and a half years. The great part is we’re prepared for that.”
Looking to 2026, Shaner anticipates that the company’s rate increases will be in the range of 2% to 3%. The company continues to execute its preferred payer strategy, aiming to notch more preferred payer partnerships in Q4.
Atlanta-based Aveanna Healthcare offers a 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.
Aveanna reported Q3 revenue of $621.9 million, a 22.2% increase year-over-year. Its private duty segment brought in approximately $514 million in revenue during the quarter, a 25.6% increase year-over-year.
The company “remains optimistic” about its ability to attract caregivers and meet demand for services when it obtains reimbursement rates that it finds acceptable, according to Chief Financial Officer Matt Buckhalter.
Aveanna’s home health and hospice segment brought in approximately $62.4 million, a 15.3% increase year-over-year. The company has specifically focused on forging relationships with payers that reimburse the company on an episodic basis.
“With episodic admissions well over 70% we have achieved our goal of right-sizing our margin profile and enhancing our clinical offerings,” Buckhalter said.
Aveanna leaders do not expect material impacts from the proposed 2026 Medicare rate cut to their business, though the company has opposed it and had “productive” conversations with legislators. Shaner said the company expects the final rule to be announced late next week or the following week and anticipates it will be “somewhere close to neutral to zero.”
Uncertainty regarding the final rule has caused many home health companies to pause their acquisition strategies, and Aveanna is no exception.
“We’ve not been in a position today where we’ve been ready to pull the trigger on a home health or hospice asset pending the final rule,” Shaner said. “For all of us, it’s just getting certainty. Just give us a certain answer that we can read into the future with this administration, and then we’re ready to go to work.”
The company is on target to complete the integration of its most recent acquisition, Thrive Skilled Pediatric Care, by the end of 2025, Shaner said. He reported that the company will likely complete more acquisitions like the Thrive deal in 2026 to grow its Medicaid business into more states.
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