UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, ~~2023~~2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-24260

AMEDISYS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware						11-3131700
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3854 American Way, Suite A, Baton Rouge, LA 70816

(Address of principal executive offices, including zip code)

(225) 292-2031 or (800) 467-2662

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

AMED

The NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, based on the last sale price as quoted by the NASDAQ Global Select Market on June 3028, ~~2023~~2024 (the last business day of the registrant’s most recently completed second fiscal quarter) was $23.60 billion. For purposes of this determination, shares beneficially owned by executive officers, directors and ten percent stockholders have been excluded, which does not constitute a determination that such persons are affiliates.

As of February 1621, ~~2024~~2025, the registrant had 3238,~~667~~368,~~631~~072 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for its ~~2024~~2025 Annual Meeting of Stockholders (the “~~2024~~2025 Proxy Statement”) are incorporated by reference into Part II – “Securities Authorized For Issuance Under Equity Compensation Plans” and Part III of this Form 10-K, or, in the event the registrant does not prepare and file such ~~2024~~2025 Proxy Statement, will be provided instead by an amendment to this report containing the applicable disclosures within 120 days after the end of the fiscal year covered by this report. With the exception of those portions which are specifically incorporated by reference in this report, any such Proxy Statement is not deemed to be filed or incorporated by reference as part of this report.

TABLE OF CONTENTS

SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS		1
PART I.
ITEM 1.	BUSINESS	2
ITEM 1A.	RISK FACTORS	1617
ITEM 1B.	UNRESOLVED STAFF COMMENTS	3539
ITEM 1C.	CYBERSECURITY	3539
ITEM 2.	PROPERTIES	3640
ITEM 3.	LEGAL PROCEEDINGS	3741
ITEM 4.	MINE SAFETY DISCLOSURES	3741
PART II.
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	3842
ITEM 6.	[RESERVED]	3943
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4044
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	6059
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	6160
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	~~104~~100
ITEM 9A.	CONTROLS AND PROCEDURES	~~104~~100
ITEM 9B.	OTHER INFORMATION	~~107~~103
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	~~107~~103
PART III.
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	~~107~~103
ITEM 11.	EXECUTIVE COMPENSATION	~~107~~103
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	~~107~~103
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	~~107~~103
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	~~107~~103
PART IV.
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	~~108~~104
ITEM 16.	FORM 10-K SUMMARY	~~108~~104
EXHIBIT INDEX		~~109~~105
SIGNATURES		~~115~~112

SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

When included in this Annual Report on Form 10-K, or in other documents that we file with the Securities and Exchange Commission (“SEC”) or in statements made by or on behalf of the Company, words like “believes,” “belief,” “expects,” “strategy,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “could,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to, the following: disruption from the proposed merger with UnitedHealth Group with patient, payor, provider, referral source, supplier or management and employee relationships; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with UnitedHealth Group or the inability to complete the proposed transaction on the anticipated terms ~~and~~or ~~timetable~~by the end of the Waiver Period (as defined in the Waiver (as defined below)); the risk that necessary regulatory approvals for the proposed merger with UnitedHealth Group are delayed, are not obtained or are obtained subject to conditions that are not anticipated; the failure of the conditions to the proposed merger to be satisfied; the costs related to the proposed transaction; the diversion of management time on merger-related issues; the risk that termination fees may be payable by the Company in the event that the merger agreement is terminated under certain circumstances; reputational risk related to the proposed merger; the risk of litigation or regulatory action related to the proposed merger, including among other things, the DOJ Action (as defined below); changes in Medicare and other medical payment levels; changes in payments and covered services by federal and state governments; future cost containment initiatives undertaken by third-party payors; changes in the episodic versus non-episodic mix of our payors, the case mix of our patients and payment methodologies; staffing shortages driven by the competitive labor market; our ability to attract and retain qualified personnel; competition in the healthcare industry; our ability to maintain or establish new patient referral sources; changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis; changes in estimates and judgments associated with critical accounting policies; our ability to consistently provide high-quality care; our ability to keep our patients and employees safe; our access to financing; our ability to meet debt service requirements and comply with covenants in debt agreements; business disruptions due to natural or man-made disasters, climate change or acts of terrorism, widespread protests or civil unrest; our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively; our ability to realize the anticipated benefits of acquisitions, investments and joint ventures; our ability to integrate, manage and keep our information systems secure; the impact of inflation; the impact of new or increased tariffs; uncertainty around, and disruption from, new and emerging technologies, including the adoption and utilization of artificial intelligence ("AI") and generative AI, and changes in laws or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control, and such other factors as discussed throughout Part I, Item 1A. "Risk Factors" of this Annual Report on Form 10-K.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking, and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as may be required by law. For a discussion of some of the factors discussed above as well as additional factors, see Part I, Item 1A, “Risk Factors” and Part II, Item 7, “Critical Accounting Estimates” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Unless otherwise provided, “Amedisys,” “we,” “us,” “our,” and “the Company” refer to Amedisys, Inc. and our consolidated subsidiaries, and when we refer to ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, we mean the twelve month period then ended December 31, unless otherwise provided.

A copy of this Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 as filed with the SEC, including all exhibits, is available on our internet website at http://www.amedisys.com on the “Investors” page under the “SEC Filings” link.

PART I

ITEM 1. BUSINESS

Overview

Amedisys, Inc. is a leading healthcare services company committed to helping our patients age in place by providing clinically excellent care and support in the home. Our operations involve ~~serving~~servicing patients ~~across the United States~~ through our three ~~operating~~reportable ~~divisions~~business segments: home health, hospice and high acuity care. We divested our personal care business on March 31, 2023. WeOur ~~deliver~~home ~~clinically~~health ~~distinct~~segment ~~care~~delivers ~~that~~a ~~best~~wide ~~suits~~range ~~our~~of ~~patients'~~services ~~needs,~~in ~~whether~~the ~~that~~homes isof ~~home-based~~individuals ~~recovery~~who ~~and~~may ~~rehabilitation~~be ~~after~~recovering from an ~~operation~~illness, or injury or surgery. Our hospice segment provides care that ~~empowers~~is ~~patients~~designed to ~~manage~~provide acomfort ~~chronic~~and ~~disease~~support ~~through~~for ~~our~~those ~~home~~who ~~health~~are ~~division,~~facing ~~hospice~~a ~~care~~terminal atillness. ~~the~~Our ~~end~~high ofacuity ~~life~~care orsegment ~~delivering~~delivers the essential elements of inpatient hospital, palliative and skilled nursing facility ("SNF") care to patients in their homes ~~through our high acuity care division~~.

We are among the largest providers of home health and hospice care in the United States, with approximately 19,000 employees in ~~521~~519 care centers in 3738 states within the United States and the District of Columbia. Our employees deliver the highest quality care performing more than 10.67 million visits for more than ~~469~~499,000 patients annually. Over 3,~~000~~300 hospitals and ~~110~~114,000 physicians nationwide have chosen us as a partner in post-acute care.

Due to the age demographics of our patient base, our services are primarily paid for by Medicare which has represented approximately 7370% to 7574% of our net service revenue over the last three years. We also remain focused on maintaining a profitable and strategically important managed care contract portfolio. We continuously work with our payors to structure innovative contracts which reward us for providing quality care to our patients.

Amedisys is headquartered in Baton Rouge, Louisiana, with an executive office in Nashville, Tennessee. Our common stock is currently traded on the NASDAQ Global Select Market under the trading symbol “AMED.” Founded and incorporated in Louisiana in 1982, Amedisys was reincorporated as a Delaware corporation prior to becoming a publicly traded company in August 1994.

Our strategy is to be the best choice for care wherever our patients call home. We accomplish this by providing clinically distinct care, being the employer of choice and delivering operational excellence and efficiency, which when combined, drive growth. Our mission is to provide best-in-class home health, hospice and high acuity care services allowing our patients to maintain a sense of independence, quality of life and dignity while delivering industry leading outcomes. We believe that our unwavering dedication to clinical quality and constant focus on both our patients and our employees differentiates us from our competitors.

Our Home Health Segment:

Our home health segment provides compassionate healthcare to help our patients recover from surgery or illness, live with chronic diseases and prevent avoidable hospital readmissions. Our home health footprint includes ~~346~~347 care centers located in 34 states within the United States and the District of Columbia. Within these care centers, we deploy our care teams which include skilled nurses who are trained, licensed and certified to administer medications, care for wounds, monitor vital signs and provide a wide range of other nursing services; rehabilitation therapists who specialize in physical, speech and occupational therapy; and social workers and aides who assist our patients with completing important personal tasks.

We take an empowering approach to helping our patients and their families understand their medical conditions, how to manage them and how to maximize the quality of their lives while living with a chronic disease or other health condition. Our clinicians are trained to understand the whole patient – not just their medical diagnosis.

Our commitment to clinical distinction is most evident in our clinical quality measures such as the Quality of Patient Care and Patient Satisfaction star ratings. In the Centers for Medicare and Medicaid Services (“CMS”) reports for the ~~April~~January ~~2024~~2025 ~~preview~~Final Release, the Quality of Patient Care star average across all Amedisys providers was 4.3518 with 9688% of our care centers rated at 4+ stars and 3611 care centers rated at 5 stars. Our Patient Satisfaction star average for the January ~~2024~~2025 ~~release~~Final Release was 34.~~61 (April 2024 preview data is not available for this metric)~~02. Our goal is to have all care centers achieve a 4.0 Quality of Patient Care star rating, and we have implemented targeted action plans to continue to improve the quality of care we deliver for our patients and further our culture of quality.

Our Hospice Segment:

Hospice care is designed to provide comfort and support for those who are dealing with a terminal illness. It is a benevolent form of care that promotes dignity and affirms quality of life for the patient, family members and other loved ones. Individuals with a terminal illness such as cancer, heart disease, pulmonary disease or Alzheimer’s may be eligible for hospice care if they have a life expectancy of six months or less. Our hospice care teams include nurse practitioners and other skilled nurses, social workers, aides, bereavement counselors and chaplains.

Our focus is on building and retaining an exceptional team, delivering the highest quality care and service to our patients and their families and establishing Amedisys as the preferred and preeminent hospice provider in each community we serve. In order to realize these goals, we invest in tailored training and development for our employees which has led to our team’s consistent achievement at or above the national average in family satisfaction results and quality scores, as well as the trust of the healthcare community.

Another element of our approach is our outreach strategy to more fully engage the entire community of eligible patients. These outreach efforts have built our hospice patient population to more accurately represent the causes of death in the communities we serve, with a specific focus on heart disease, lung disease and dementia in order to address the historical underrepresentation of non-cancer diagnoses. By working to accept every eligible patient who seeks end-of-life care, we fulfill our hospice mission and strengthen our standing in the community.

Our Personal Care Segment:

We divested our personal care business on March 31, 2023. Our personal care segment provided assistance with the essential activities of daily living. See Part II, Item 8, Note 5 – Mergers, Acquisitions and Dispositions for additional information.

Our High Acuity Care Segment:

The acquisition of Contessa Health ("Contessa") on August 1, 2021 established our high acuity care segment. Our high acuity care segment has the capability to deliver the essential elements of inpatient hospital, SNF care and palliative care to patients in their homes. In connection with the acquisition of Contessa, we obtained interests in a professional corporation that employs clinicians and several joint ventures with health system partners. Additionally, the acquisition provided the Company with an advanced claims ~~analytic~~analytics platform, network management and additional capabilities to enter into risk-based arrangements with managed care organizations.

Our joint venture partners in the high acuity care segment represent national and large regional healthcare systems, each of which view the ability to provide inpatient level care in patients’ homes as critical to relieving capacity constraints within their facilities, providing care in a more cost-effective setting and keeping patients engaged with their health system brand by providing a superior patient experience. The patients who utilize our home-based recovery services typically have one or more chronic conditions that have historically required frequent emergency department visits and inpatient hospital stays. Our patient satisfaction scores for these home-based programs have consistently exceeded 85%, and we have successfully reduced hospital and skilled nursing readmission rates compared to historical baselines for these episodes of care.

We provide management services to the joint ventures which include the development and implementation of clinical protocols to ensure the safe and efficient delivery of services in the home and high quality outcomes; an internally-developed technology platform that provides medical documentation, analytics and claims processing capabilities; provider network development services to ensure that all care resources are available to meet patient needs; and expertise in developing and negotiating contracts with third-party health insurance payors to provide reimbursement for services under risk-based arrangements. Our expertise and capabilities in these areas deliver value to both the health system and the health insurance payor and give us the opportunity for future expansion within the healthcare continuum for chronically ill patients, including palliative care services, especially as the U.S. population ages and consumer preferences continue to shift to home-based care. Our joint venture partnership model with leading healthcare systems and our relationships with health plan insurers facilitate our ability to take and manage additional risk for this patient population in value-based arrangements.

Our Personal Care Segment:

We divested our personal care business on March 31, 2023. Our personal care segment provided assistance with the essential activities of daily living. See Part II, Item 8, Note 4 – Mergers, Acquisitions and Dispositions for additional information.

Responding to the Changing Regulatory and Reimbursement Environment:

As the government continues to seek opportunities to refine payment models, we believe that our strategy of becoming a leader in providing a range of services across the at-home continuum positions us well for the future. Our ability to provide quality home health, hospice and high acuity care allows us to partner with health systems and managed care organizations to improve care coordination, reduce hospitalizations and lower costs.

Acquisitions:

On January 20, 2023, we acquired the regulatory assets of a home health provider in West Virginia.

Financial Information:

Financial information for our home health, hospice, high acuity care and personal care (divested on March 31, 2023) ~~and high acuity care~~ segments can be found in our consolidated financial statements included in this Annual Report on Form 10-K.

Amedisys and UnitedHealth Group Incorporated Merger

On June 26, 2023, Amedisys, UnitedHealth Group Incorporated, a Delaware corporation ("UnitedHealth Group"), and Aurora Holdings Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of UnitedHealth Group ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Amedisys (the "Merger") with Amedisys continuing as the surviving corporation and becoming a wholly owned subsidiary of UnitedHealth Group. See Part II, Item 8, Note 54 – Mergers, Acquisitions and Dispositions for additional information.

Human Capital

~~Our~~Being ~~employees~~an ~~are~~employer ~~critical~~of tochoice is one of our ~~vision~~strategic topillars. ~~lead~~We ~~the~~continue ~~future~~to offocus ~~healthcare~~on instrategies ~~the~~to ~~home.~~reduce ~~Taking~~turnover ~~care~~and ofmake ~~our~~Amedisys ~~people~~a isplace ~~our~~where ~~top~~clinicians ~~priority~~come and stay. Our future success is directly correlated with our ability to ~~continue to~~ attract, develop and retain the most qualified and passionate caregivers. Our ~~work is not just a job but a calling. Our~~ workforce strategy emanates from our core values of Service, Passion, Integrity, Respect, Innovation and Talent – SPIRIT. ~~We know that by taking great care of our people, they can continue to provide industry leading patient care.~~

AsWe are proud to have been named one of ~~February 16,~~the 2024, weMost ~~employed~~Responsible ~~approximately~~Companies 19by Newsweek. Additionally,~~000~~ ~~people~~92 ~~throughout~~of our home health and hospice care centers were recognized by Strategic Healthcare Programs ("SHP") for achieving either the ~~United~~highest ~~States.~~patient Wesatisfaction ~~also~~scores ~~utilize~~or ~~contract~~hospice ~~employees~~caregiver satisfaction scores for all eligible SHP clients in 2023 as reported by the ~~normal~~Home ~~course~~Health Care Consumer Assessment of ~~our~~Health ~~business~~Providers and Systems ("HHCAHPS") or Consumer Assessment of Healthcare Providers and Systems ("CAHPS").

~~Diversity~~As ~~and~~of ~~Inclusion:~~February 21, 2025, we employed approximately 19,000 people throughout the United States. We also utilize contract employees in the normal course of our business.

We endeavor to create a culture of caregiving where our employees feel as cared for every day as our patients. Success means all team members feel a sense of belonging, support and empowerment to be their best selves personally and professionally. We have committed to giving our employees a voice and have instituted numerous formal listening programs including pulse surveys, focus groups and town halls to routinely gather feedback from our employees and address any concerns. Our commitment to diversity and inclusion is also broadly reflected across our policies and people practices. In 2023, creating a sense of belonging was a critical tactic as part of our People Strategy, and the metrics indicating how our people rated their sense of belonging were part of our management team scorecard. Additionally, we have four Employee Resource Groups ("ERGs") which foster connection and community within our workforce: (1) Global Black Community, (2) LGBTQIA+, (3) disAbilities and (4) Military/Veterans. We are also committed to having a diverse Board of Directors. Women currently comprise over half of the directors on our Board.

Talent Acquisition, Retention and Development:

We strive to hire, develop and retain top talent. The core of our care delivery model is dependent upon attracting clinicians, predominately nurses ~~and therapists~~. We compete for talent by offering a great culture, an opportunity to provide the highest quality clinical care and competitive market-based compensation. Our compensation plans are designed to deliver a competitive base pay as well as attractive incentive opportunities, primarily for leadership positions, but also to reward quality care. We provide significant opportunities for development and continuing education as we know that career development is a key component of attracting and retaining top talent. We continually monitor and assess employee metrics on hiring, retention and terminations to gain a deep understanding of our workforce and drive continuous improvement.

The increased demand for clinicians has generated continuing pressure on the labor markets. Across the healthcare industry, the nurse workforce especially has become scarcer as demand for services outstrips supply. Clinicians have become harder to recruit and more costly to employ. Attracting the best people in healthcare and supporting our people with an unrivaled experience are key initiatives for the Company to ensure adequate clinical capacity for our patients.

Inclusion in the Workplace:

We endeavor to create a culture of caregiving where our employees feel as cared for every day as our patients. Success means all team members feel a sense of belonging, support and empowerment to be their best selves personally and professionally. We have committed to giving our employees a voice and have instituted numerous formal listening programs including pulse surveys, focus groups and town halls to routinely gather feedback from our employees and address any concerns. Our commitment to an inclusive workplace is also broadly reflected across our policies and people practices. Creating a sense of belonging is a critical tactic as part of our People Strategy, and the metrics indicating how our people rate their sense of belonging are part of our management team scorecard. Additionally, we have five Employee Resource Groups ("ERGs") which foster connection and community within our workforce.

Health and Safety:

The health and well-being of our employees is of utmost importance to us. We offer a comprehensive benefit package that provides employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs that support their physical and mental health by providing tools and resources to help them improve or maintain their health status.

Payment for Our Services

Our revenues are derived in large part from governmental third-party payors. Governmental payment programs are subject to statutory and regulatory changes, retroactive rate adjustments, administrative or executive orders and government funding restrictions, all of which may materially increase or decrease the rate of program payments to us for our services. It is possible that future budget cuts in Medicare and Medicaid may be enacted by Congress and implemented by CMS, and this may be especially true with a new administration. Therefore, we cannot assure you that payments from governmental or private payors will remain at levels comparable to present levels or will, in the future, be sufficient to cover the costs allocable to patients eligible for reimbursement pursuant to such programs. See Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations: Overview – The Centers for Medicare and Medicaid Services ("CMS") Payment Updates" for additional information on the most recent regulations from CMS.

Home Health Medicare

The Medicare home health benefit is available both for patients who need home care following discharge from a hospital and patients who suffer from chronic conditions that require ongoing, but intermittent, care.

As a condition of participation under Medicare, beneficiaries must be homebound (meaning that the beneficiary is unable to leave his/her home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services and receive treatment under a plan of care established and periodically reviewed by a physician.

Services under the Medicare home health benefit are bundled into 60-day episodes of care. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier. If a patient is still in treatment on the 60th day, a recertification assessment is undertaken to determine whether the patient needs additional care. If the patient’s physician determines that further care is necessary, another episode begins on the 61st day (regardless of whether a billable visit is rendered on that day) and ends 60 days later.

~~Effective January 1, 2020,~~ CMS ~~implemented~~reimbursement ais ~~revised~~based ~~case-mix~~on ~~adjustment methodology,~~ the Patient-Driven Groupings Model ("PDGM"). PDGM uses a 30-day period of care ~~rather than a 60-day episode of care~~ as the unit of payment. Under PDGM, each 60-day episode includes two 30-day periods of care. PDGM uses timing, admission source, functional impairment levels and principal and other diagnoses to case-mix adjust payments. The ~~table~~case-mix ~~below~~adjusted ~~includes~~payment for a 30-day period of care is subject to additional adjustments based on certain variables, including, but not limited to (a) an outlier payment if our patient's care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the ~~base~~number of visits provided was less than the established threshold, which ranges from two to six visits and varies for every case-mix group under PDGM; (c) a partial payment if a patient transferred to another provider or from another provider before completing the 30-day period of care; and (d) the applicable geographic wage index. Payments for routine and non-routine supplies are included in the 30-day payment ~~rates~~rate.

Period	Base 30-Day Payment
January 1, 2021 through December 31, 2021	$	1,901
January 1, 2022 through December 31, 2022	$	2,032
January 1, 2023 through December 31, 2023	$	2,011
January 1, 2024 through December 31, 2024	$	2,038

The table below includes the base 30-day payment rates.

On November 1, 2023, CMS issued the Home Health Final Rule for Medicare home health providers for calendar year 2024. CMS estimates that the final rule will result in a 0.8% increase in payments to home health providers. This increase is the result of a 3.0% payment update (3.3% market basket adjustment less a 0.3% productivity adjustment) and an increase of 0.4% for the update to the fixed-dollar loss ratio used in determining outlier payments offset by a permanent adjustment of -2.6% based on the difference between assumed and actual behavior changes resulting from the implementation of PDGM. The -2.6% permanent adjustment was derived from a -2.890% adjustment which was only applied to the 30-day payment rate and not the low utilization payment adjustment. The -2.890% is only half of the total proposed adjustment. The remaining adjustment is to be considered in future rulemaking. Based on our analysis of the final rule, we expect our impact to be in line with the 0.8% increase.


Period	Base 30-Day Payment
January 1, 2022 through December 31, 2022	$	2,032
January 1, 2023 through December 31, 2023	$	2,011
January 1, 2024 through December 31, 2024	$	2,038
January 1, 2025 through December 31, 2025	$	2,057

On November 1, 2024, CMS issued the Calendar Year ("CY") 2025 Final Rule for Medicare home health providers (the "2025 Home Health Final Rule"). CMS estimates that the 2025 Home Health Final Rule will result in a 0.5% increase in payments to home health providers. This increase is the result of a 2.7% payment update (3.2% market basket adjustment less a 0.5% productivity adjustment) offset by a decrease of 0.4% for the update to the fixed-dollar loss ratio used in determining outlier payments and a permanent adjustment of -1.8% based on the difference between assumed and actual behavior changes resulting from the implementation of PDGM. Based on our analysis of the 2025 Home Health Final Rule, we expect our impact to be in line with the 0.5% increase. In addition to permanent adjustments, CMS also has the discretion to make temporary adjustments through calendar year 2026; however, CMS has elected not to implement a temporary adjustment thus far. As stated in the CY 2025 Final Rule, the total temporary adjustment calculated for ~~calendar~~CY ~~year~~2020 ~~2024~~through CY 2023 is $4.5 billion. In future rule making, CMS will propose that the temporary adjustment dollar amount be converted to a factor that is applied to the base payment rate.

On July 5, 2023, the National Association for Home Care and Hospice ("NAHC"), the leading national home health trade association, filed suit against CMS in the United States District Court for the District of Columbia over the implementation of the payment cuts CMS made in the Calendar Year 2023 Home Health Final Rule effective January 1, 2023; that litigation remains pending.

PDGM uses timing, admission source, functional impairment levels and principal and other diagnoses to case-mix adjust payments. The case-mix adjusted payment for a 30-day period of care is subject to additional adjustments based on certain variables, including, but not limited to (a) an outlier payment if our patient's care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits provided was less than the established threshold, which ranges from two to six visits and varies for every case-mix group under PDGM; (c) a partial payment if a patient transferred to another provider or from another provider before completing the 30-day period of care; and (d) the applicable geographic wage index. Payments for routine and non-routine supplies are included in the 30-day payment rate.

As a Medicare provider, we are subject to periodic audits by the Medicare program, and that program has various rights and remedies against us if they assert that we have overcharged the program or failed to comply with program requirements. Home health providers are subject to pre- and post-payment reviews for compliance with Medicare coverage guidelines and medical necessity. Adjustments on this basis may include individual ~~claims~~claim adjustments or overpayment determinations based on an extrapolated sample of claims. Medical necessity reviews evaluate whether services are clinically appropriate in terms of frequency, type, extent, site and duration. Technical billing and documentation reviews focus on documentation of services. Medicare and other payors may reject or deny claims for payment if the underlying documentation does not support the medical necessity of services or fails to establish satisfaction of a coverage rule, such as if a provider is unable to perform periodic therapy assessments required by coverage criteria or cannot provide appropriate billing documentation, acceptable physician authorizations or face-to-face documentation.

Medicare can reopen previously filed and reviewed claims and deny coverage of the services and require us to repay any overcharges, as well as make deductions from future amounts due to us. In the ordinary course of business, we appeal the Medicare and Medicaid programs' denial of claims that we believe are inappropriate in an effort to recover the denied claims.

Home Health Non-Medicare

Payments from non-Medicare payors are either a percentage of Medicare rates, per-visit rates or case rates depending upon the terms and conditions established with such payors. Reimbursements from our non-Medicare payors that are based on Medicare rates are paid in a similar manner and subject to the same adjustments as discussed above for Medicare; however, these rates can vary based upon negotiated terms which generally range from 90% to 100% of Medicare rates. Approximately 30% of our managed care contract volume affords us the opportunity to receive additional payments if we achieve certain quality or process metrics as defined in each contract (e.g. star ratings and acute-care hospitalization rates).

Hospice Medicare

The Medicare hospice benefit is available when a physician and specific clinical findings support a diagnosis of a terminal condition where the patient has a terminal diagnosis of six months or less. Hospice care is evaluated in benefit periods: two 90-day benefit periods followed by an unlimited number of 60-day benefit periods. Payments are based on daily rates for each day a beneficiary is enrolled in the hospice benefit. Payments are made according to a fee schedule that has four different levels of care: routine home care, continuous home care, inpatient respite care and general inpatient care. The daily payment rates are intended to cover costs that hospices incur in furnishing services identified in patients' care plans, based on specific levels of care. Payments are adjusted by a wage index to reflect differences in health care labor costs across the country and are established annually through federal legislation.

On July 2830, ~~2023~~2024, CMS issued the final rule to update hospice payment rates and the wage index for fiscal year ~~2024~~2025, effective for services provided beginning October 1, ~~2023~~2024 (the "2025 Hospice Final Rule"). CMS estimates hospices serving Medicare beneficiaries will see a 32.19% increase in payments. This increase is the result of a 3.34% market basket adjustment as required under the Patient Protection and Affordable Health Care Act and the Health Care and Education Reconciliation Act ("PPACA") less a 0.25% productivity adjustment. Additionally, CMS increased the aggregate cap amount by 32.19% to $3334,~~494~~465. Based on our analysis of the ~~final~~2025 ~~rule~~Hospice Final Rule, we expect our impact to be in line with the 32.19% increase.

Medicare payments include two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, Medicare also reimburses for a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse or medical social worker for patients in a routine level of care.

Adjustments for eligibility and technical billing requirements may be made to Medicare ~~revenue~~claims based on the same claims processing reviews described above for home health services ~~when~~if we ~~find we~~ are unable to obtain appropriate billing documentation, authorizations or face-to-face documentation and other reasons unrelated to credit risk.

Two caps limit the amount of payment that any individual hospice provider number can receive in a single year. Generally, each hospice care center has its own provider number; however, where we have created branch care centers to help our parent care centers serve a geographic location, the parent and branch have the same provider number.

•Inpatient Cap: The inpatient cap limits the number of days of inpatient care an agency may provide to not more than 20 percent of its total patient care days. The daily Medicare payment rate for any inpatient days of service that exceed the cap is set at the routine home care rate, and the provider is required to reimburse Medicare for any amounts it receives in excess of the cap.

•Overall Payment Cap: The overall payment cap is an absolute dollar limit on the average annual payment per beneficiary a hospice agency can receive. This cap is calculated by the Medicare Administrative Contractor at the end of each hospice cap period to determine the maximum allowable payments per provider number.

We estimate our potential cap exposure using information available for both inpatient day limits as well as per beneficiary cap amounts. The total cap amount for each provider is calculated by multiplying the number of beneficiaries electing hospice care during the period by a statutory amount that is indexed for inflation.

Payment rates for hospice care, the hospice cap amount and the hospice wage index are updated annually according to Section 1814(i)(1)(C)(ii)(VII) of the Social Security Act ("SSA"), which requires CMS to use the inpatient hospital market basket, adjusted for multifactor productivity and other adjustments as specified in the SSA, to determine the hospice payment update percentage. The caps are subject to annual and retroactive adjustments, which can cause providers to be required to reimburse the Medicare program if such caps are exceeded. Our ability to stay within these caps depends on a number of factors, each determined on a provider number basis, including the average length of stay and mix in level of care.

Hospice Non-Medicare

Non-Medicare payors pay at rates that differ from established Medicare rates for hospice services, and are based on separate, negotiated agreements. We bill and are paid by these non-Medicare payors based on such negotiated agreements.

High Acuity Care

High acuity care payments are primarily derived from health insurance plans and health system partners. Contracts with health insurance plans provide for fixed payment rates for a 30-day or 60-day episode of care indexed to assigned patient diagnoses in return for our obligation to assume risk for the coordination and payment of required medical services necessary to treat the medical condition for which the patient was diagnosed in a home-based setting. Contracts with health system partners provide for payments on a per diem basis at the contracted rate for each day during the remainder of an inpatient acute stay serviced at the patient's home. Palliative care payments are derived from health insurance plans or grant programs on a per member per month ("PMPM") basis in return for managing care of patients engaged in home-based palliative programs for the duration of their engagement with the program. In addition, some health plan contracts recognize shared savings or losses for the engaged or attributed palliative care populations measured against a predetermined PMPM benchmark.

The contracted payment rates with health insurance plans and health system partners are developed by our medical economics team using historical claims and inpatient admission data provided by the respective health insurance plan or health system partner. The data includes medical costs incurred outside of a patient’s historical inpatient stay that may be expected to continue under our program and an estimate of the cost of the medical services under our program which will replace the patient’s inpatient hospital stay. We mitigate the risk of excessive program medical costs by ensuring that we enroll eligible members into the plan, by effectuating clinically effective plans of care and by ensuring that all covered services are related to the condition for which the patient was admitted to the program. Additionally, we have purchased episodic stop-loss insurance for certain payor contracts.

Controls Over Our Business System Infrastructure

We establish and maintain processes and controls over coding, clinical operations, billing, patient recertifications and compliance to help monitor and promote adherence with Medicare requirements.

•Coding – Specified international classification of disease ("ICD") diagnosis codes are assigned to each of our patients based on their ~~particular~~ health conditions (such as diabetes, coronary artery disease or congestive heart failure). Because coding regulations are complex and are subject to frequent change, we maintain controls surrounding our coding process. To reduce the associated risk of coding failures, we provide annual update training to clinical managers, as needed training to care center directors and clinical managers, and training during orientation for new employees to ensure accurate information is gathered and provided to our coding team. In addition, our electronic medical records system (Homecare Homebase) includes automated edits for home health and hospice based on pre-defined compliance metrics. For home health, we also provide monthly specialized coding education, obtain outside expert coding instruction, and have certified coders review all patient outcome and assessment information sets (“OASIS”) and assign the appropriate ICD code.

•Clinical Operations – We provide education on coverage criteria and conditions of participation and utilize outside expert regulatory services if necessary. Regulatory requirements allow patients to be eligible for home health care benefits if through a face-to-face visit with a physician or a qualified non-physician practitioner, they are considered homebound and it is determined that skilled nursing, physical therapy or speech therapy services are required. These clinical services may include: educating the patient about their disease, assessment and observation of disease status, delivery of clinical skills such as wound care, administration of injections or intravenous medications, management and evaluation of a patient’s plan of care, physical therapy services to assist patients with functional limitations and speech therapy services for speech or swallowing disorders. Patients eligible for hospice care are terminally ill (with a life expectancy of six months or less if the illness runs its normal course). Our hospice program provides care and

delivery of clinical skills such as wound care, administration of injections or intravenous medications, management and evaluation of a patient’s plan of care, physical therapy services to assist patients with functional limitations and speech therapy services for speech or swallowing disorders. Patients eligible for hospice care are terminally ill (with a life expectancy of six months or less if the illness runs its normal course). Our hospice program provides care and support to our terminally ill patients with a six-month prognosis and their families through services including medical care, counseling, spiritual care, pre-bereavement and bereavement support, volunteer support, medication management and needed equipment and supplies for the terminal illness and all related conditions. Our high acuity care clinical protocols include utilization of the Milliman Clinical Guidelines ("MCG") criteria to ensure that patients are eligible for inpatient level care, ~~in-person~~ evaluations by ~~hospital~~physicians/advanced practice providers (in-~~based~~person ~~physicians~~evaluations where required) to determine the patient's clinical eligibility for home- based inpatient care, social and behavioral assessments to determine safety of the patient's home setting and an informed consent requirement to ensure that the patient and caregivers are comfortable with the delivery of inpatient level care in the home.

•Billing – We maintain controls over our billing processes to help promote accurate and complete billing. Processes and controls have been implemented to ensure that prior to the submission of any bills, the visit/occurrence was completed, documented sufficiently by an appropriate clinician and/or provider, and that the billed claim complies with all regulatory and payor requirements. Examples of process monitoring controls include conducting ~~annual~~ billing compliance testing, user access reviews for billing systems and use of automated daily billing operational indicators. We take prompt corrective action with employees who knowingly fail to follow our billing policies and procedures.

•Patient Recertification – In order to be recertified for an additional home health episode of care, a patient must continue to meet qualifying criteria and have a continuing medical need that requires the skills of a nurse or therapist. Changes in the patient’s condition may require changes to the patient’s medical regimen or modified care protocols within the episode of care. The patient’s progress towards established goals is evaluated prior to recertification. As with the initial episode of care, a recertification requires orders from the patient’s physician. Before any employee recommends recertification to a physician, we conduct a care center level, multidisciplinary care team conference. Specific tools are used to ensure that the patient continues to meet coverage criteria prior to recertifying. Hospice recertification for additional benefit periods of care requires continued demonstration of a terminal prognosis as determined by the hospice physician in collaboration with the attending physician and the interdisciplinary care team.

•Compliance – We develop, implement and maintain ethics and compliance programs as a component of the centralized corporate services provided to our home health, hospice and high acuity-care service lines. Our ethics and compliance program includes a Code of Conduct for our employees, officers, directors, contractors and affiliates and a disclosure program for reporting regulatory or ethical concerns to our compliance team through a confidential hotline, which is augmented by exit surveys of departing employees. We promote a culture of compliance within our company through educational presentations, newsletters and persistent messaging from our senior leadership to our employees stressing the importance of strict compliance with legal requirements and company policies and procedures. Additionally, we have mandatory compliance training and testing for all new employees upon hire and annually for all staff thereafter. We also maintain a robust compliance audit program focusing on key risk areas.

Our Regulatory Environment

We are highly regulated by federal, state and local authorities. The healthcare industry is subject to numerous laws, regulations and rules including, among others, those related to licensure and accreditations, government healthcare participation requirements, ~~licensure and accreditations,~~ reimbursement for patient services, ~~health information privacy and security and~~ Medicare and Medicaid fraud and abuse prohibitions (including, but not limited to, federal statutes and regulations prohibiting kickbacks and other illegal inducements to potential referral sources, self-referrals by physicians and false claims submitted to federal health care programs) and health information privacy and security. Regulations and policies frequently change, and we monitor changes through our internal government affairs department, as well as multiple trade and governmental publications and associations.

Our home health and hospice subsidiaries are certified by CMS and therefore are subject to the rules and regulations of the Medicare system. Additionally, all of our business lines are subject to federal, state and local laws and regulations dealing with issues such as occupational safety, employment, medical leave, insurance, civil rights, discrimination, building codes, data privacy, data security and recordkeeping. We have set forth below a discussion of the regulations that we believe most significantly affect our businesses.

Licensure, Certificates of Need ("CON"), Permits of Approval ("POA") and Facility Need Review ("FNR")

Home health and hospice care centers operate under licenses granted by the health authorities of their respective states. Some states require health care providers (including hospice and home health agencies) to obtain prior state approval for the purchase, construction or expansion of health care locations, capital expenditures exceeding a prescribed amount or changes in services. Additionally, certain states, including a number in which we operate, carefully restrict new entrants into the market based on demographic and/or demonstrative usage of additional providers. These states limit the entry of new providers or services and the expansion of existing providers or services in their markets through a CON, POA or FNR process, which is periodically evaluated and updated as required by applicable state law. For those states that require a CON, POA or FNR, the provider must complete a separate application process establishing a location and must receive required approvals.

ToIn ~~the~~every ~~extent~~state where required, our care centers possess a license and/or a CON, POA, or FNR orissued ~~other~~by ~~similar~~the ~~approvals~~state ~~are~~health ~~required~~authority tothat ~~expand~~determines ~~our~~the ~~operations~~local service area for the home health or hospice care centers. Currently, ~~our~~state ~~expansion~~health ~~could~~authorities bein ~~adversely~~16 ~~affected~~states byand the ~~inability~~District toof ~~obtain~~Columbia ~~the~~require ~~necessary~~a ~~approvals~~CON or, ~~changes~~ in the ~~standards~~State ~~applicable~~of toArkansas, ~~those~~a ~~approvals~~POA, ~~and~~in ~~possible~~order ~~delays~~to establish and ~~expenses~~operate ~~associated~~a ~~with~~home ~~obtaining~~health ~~those~~care ~~approvals.~~center, Inand ~~some~~state ~~instances,~~health ~~other~~authorities ~~providers~~ in ~~the~~15 ~~market~~states ~~may~~and ~~file~~the ~~opposition~~District toof Columbia require a CON or, ~~POA~~in orthe ~~FNR~~State ~~application~~of Louisiana, ~~and~~a ~~this~~FNR, ~~could~~to ~~further~~operate ~~delay~~a anhospice ~~approval~~care center.

InTo ~~every~~the ~~state~~extent ~~where required, our care centers possess~~ a ~~license and/or a~~ CON, POA, or FNR ~~issued~~or byother ~~the~~similar ~~state~~approval ~~health~~is ~~authority~~required ~~that~~to ~~determines~~expand ~~the~~our ~~local service area for the home health or hospice care centers. Currently~~operations, ~~state~~our ~~health~~expansion ~~authorities~~could inbe 19adversely ~~states~~affected ~~and~~by the ~~District~~inability ofto ~~Columbia~~obtain ~~require~~the anecessary ~~CON or~~approvals, changes in the ~~State~~standards ofapplicable ~~Arkansas,~~to athose ~~POA,~~approvals inand ~~order~~possible todelays ~~establish~~ and ~~operate~~expenses aassociated ~~home~~with ~~health~~obtaining ~~care~~those ~~center,~~approvals. ~~and~~In ~~state~~some ~~health~~instances, ~~authorities~~other providers in ~~15 states and~~ the ~~District~~market ofmay ~~Columbia~~file ~~require~~opposition to a CON or, inPOA ~~the~~or ~~State~~FNR ~~of Louisiana~~application, aand ~~FNR,~~this tocould ~~operate~~further adelay ~~hospice~~an ~~care center~~approval.

We operate 233 home health care centers and 55 hospice care centers in the following CON/POA/FNR states as listed below.


State	Home Health	Hospice
Alabama	29	10
Arkansas (POA)	7	—
Florida	—	7
Georgia	56	—
Kentucky	17	—
Louisiana (FNR)	—	5
Maryland	9	3
Mississippi	8	—
New Jersey	2	—
New York	6	—
North Carolina	13	7
Rhode Island	1	2
South Carolina	26	—
Tennessee	45	15
Washington	2	—
West Virginia	11	6
Washington, DC	1	—
Total Care Centers in CON/POA/FNR States	233	55

Medicare Participation: Licensing, Certification and Accreditation

Our care centers must comply with regulations promulgated by the United States Department of Health and Human Services ("HHS") and CMS in order to participate in the Medicare program and receive Medicare payments. ~~Sections~~The ~~1861(o) and 1891 of the~~ SSA, 42establishes ~~CFR 484.1 et seq., establish~~ the conditions that a home health agency ("HHA") ~~must~~and ~~meet in order to participate in the Medicare program. Section 1861(dd) of the SSA, 42 CFR 418.1, et seq., establishes the conditions that~~ a hospice provider must meet in order to participate in the Medicare program. Among other things, these regulations, applicable to HHAs and hospices, respectively, known as conditions of participation and/or conditions of payment (“COPs”), relate to the type of facility, its personnel and its standards of medical care, as well as its compliance with federal, state and local laws and regulations. Additional COPs applicable to HHAs focus on the safe delivery of quality care provided to patients and the impact of that care on patient outcomes through the protection and promotion of patients' rights, care planning, delivery and coordination of services and streamlining of regulatory requirements.

As part of ~~that~~the 2025 Home Health Final Rule, CMS is finalizing updates to the COPs applicable to home health agencies to reduce avoidable care delays by helping ensure that referring entities and prospective patients can select the most appropriate home health agency based on ~~patient~~their ~~outcomes~~care needs. CMS is finalizing a new standard that requires home health agencies to develop, implement and maintain, through an annual review, a patient acceptance-to-service policy that is applied consistently to each prospective patient referred for home health care. The policy must address, at a minimum, the ~~protection~~following ~~and~~criteria ~~promotion~~related to the home health agency’s capacity to provide patient care: (a) the anticipated needs of ~~patients'~~the ~~rights~~referred prospective patient, ~~care~~(b) ~~planning~~the home health agency’s caseload and case mix, ~~delivery~~(c) the home health agency’s staffing levels, and ~~coordination~~(d) the skills and competencies of the home health agency staff. Additionally, CMS is finalizing a rule that would require home health agencies to make available to the public accurate information regarding the services offered by the home health agency and ~~streamlining~~any service limitations related to types of ~~regulatory~~specialty ~~requirements~~services, service duration or service frequency. The home health agency must review this information as frequently as the services are changed, but no less often than annually.

In the 2025 Hospice Final Rule, CMS ~~has~~identified ~~adopted~~language ~~alternative~~discrepancies ~~sanction~~in ~~enforcement~~the ~~options~~existing ~~which~~requirements ~~allow~~for ~~CMS~~hospices ~~(i)~~as tothey ~~impose~~relate ~~temporary~~to ~~management,~~the ~~direct~~medical ~~plans~~director ofand ~~correction~~physician ordesignee ~~direct~~in ~~training~~the COPs and physician member of the interdisciplinary group (ii“IDG”) toin ~~impose~~the payment ~~suspensions~~requirements ~~and~~for ~~civil~~the ~~monetary~~certification ~~penalties~~of inthe ~~each~~terminal ~~case~~illness onand ~~providers~~the ~~out~~admission ofto ~~compliance~~hospice ~~with~~care. Therefore, to align the medical director COPs. ~~CMS~~and ~~engages~~the orhospice ~~has~~payment ~~engaged~~requirements afor ~~number~~both ofclarity ~~third-party~~and ~~contractors~~consistency, ~~including~~CMS ~~Recovery~~is ~~Audit~~finalizing ~~Contractors~~technical ~~(“RACs”),~~changes ~~Program~~to ~~Safeguard~~the ~~Contractors~~conditions ~~(“PSCs”),~~of ~~Zone~~participation ~~Program~~by ~~Integrity~~adding ~~Contractors~~the ~~(“ZPICs”),~~physician ~~Uniform~~member ~~Program~~of ~~Integrity~~the ~~Contractors~~hospice ~~("UPICs"),~~IDG ~~Medicaid~~as ~~Integrity~~an ~~Contractors~~individual ~~(“MICs”)~~who may review the clinical information for each patient and ~~Supplemental~~provide ~~Medical~~written ~~Review~~certification ~~Contractors~~that ~~(“SMRCs”),~~it tois ~~conduct~~anticipated ~~extensive~~that ~~reviews~~the ofpatient's ~~claims~~life ~~data~~expectancy ~~and~~is ~~state~~six ~~and~~months ~~federal~~or ~~government~~less, ~~health~~if ~~care~~the ~~program~~illness ~~laws~~runs ~~and~~its ~~regulations~~normal ~~applicable~~course. The finalized changes also include an update to ~~healthcare~~provisions ~~providers.~~regarding ~~These~~certification ~~audits~~and ~~evaluate~~admission ~~the~~to ~~appropriateness~~hospice ofcare ~~billings~~in ~~submitted~~the ~~for~~hospice payment. Inregulations ~~addition~~ to ~~identifying~~clarify ~~overpayments~~that, ~~audit~~if ~~contractors~~the ~~can~~medical ~~refer~~director ~~suspected~~is ~~violations~~unavailable, ofthe ~~law~~physician todesignee ~~government~~may ~~enforcement~~certify ~~authorities~~the terminal illness and determine admission to hospice.

CMS has adopted alternative sanction enforcement options which allow CMS (i) to impose temporary management, direct plans of correction or direct training and (ii) to impose payment suspensions and civil monetary penalties in each case on providers out of compliance with the COPs. CMS engages or has engaged a number of third-party contractors, including Recovery Audit Contractors (“RACs”), Program Safeguard Contractors (“PSCs”), Zone Program Integrity Contractors (“ZPICs”), Uniform Program Integrity Contractors ("UPICs"), Medicaid Integrity Contractors (“MICs”), Supplemental Medical Review Contractors (“SMRCs”) and Comprehensive Error Rate Testing Contractors ("CERTs"), to conduct extensive reviews of claims data and state and federal government health care program laws and regulations applicable to healthcare providers. These audits evaluate the appropriateness of billings submitted for payment. In addition to identifying overpayments, audit contractors can refer suspected violations of law to government enforcement authorities.

All providers are subject to compliance with various federal, state and local statutes and regulations in the United States and receive periodic inspection by state licensing agencies to review standards of medical care, equipment and safety. We have dedicated internal resources and utilize external parties when necessary to monitor and ensure compliance with the various applicable federal, state and local laws, rules and regulations, as well as requirements of applicable accrediting organizations.

If we fail to comply with applicable laws and regulations, we could be subjected to liabilities, including criminal penalties, civil penalties (including the loss of our licenses to operate one or more of our businesses) and/or exclusion of a facility from participation in the Medicare, Medicaid and other federal and state health care programs. If any of our facilities were to lose its accreditation or otherwise lose its certification under the Medicare and Medicaid programs, the facility would be unable to receive reimbursement from the Medicare and Medicaid programs and other payors until it gains recertification or accreditation. We believe our facilities are in substantial compliance with current applicable federal, state, local and independent review body regulations and standards. The requirements for licensure, certification and accreditation are subject to change and, in order to remain qualified, it may become necessary for us to make changes in our facilities, equipment, personnel and services in the future, which could have a material adverse impact on our operations.

Federal and State Anti-Fraud and Abuse Laws and Regulations

As a provider under the Medicare and Medicaid programs, we are subject to various anti-fraud and abuse laws, including the federal Anti-Kickback Statute, the Stark or Physician Self-Referral Law, the False Claims Act, Civil Monetary Penalties Law and various state anti-fraud and abuse laws. These laws govern any health care plans or programs that are funded by the United States government (other than certain federal employee health insurance benefits/programs), as well as certain state health care programs that receive federal funds, such as Medicaid. Our compliance and ethics program is designed to ensure Amedisys meets all applicable federal and state laws and regulations as well as industry standards.

Federal Anti-Kickback Statute ("AKS")

Subject to certain exceptions, the federal AKS prohibits any offer, payment, solicitation or receipt of any form of remuneration to induce or reward the referral of business payable under a government health care program or in return for the purchase, lease, order, arranging for, or recommendation of items or services covered under a government health care program. The law also forbids the offer or transfer of anything of value, including certain waivers of co-payment obligations and deductible amounts, to a beneficiary of Medicare or Medicaid that is likely to influence the beneficiary’s selection of health care providers, again, subject to certain safe harbor exceptions. Violations of the federal AKS can trigger the False Claims Act and Civil Monetary Penalties Law, potentially resulting in civil fines up to $27,018 for each violation, penalties of up to $120,816 (last updated 2023) plus three times the amount of the improper remuneration, imprisonment and potentially, exclusion from furnishing services under any government health care program. There are also criminal penalties under the AKS, and providers found to be in violation of the federal AKS can be excluded from participation in federal health care programs.

order, arranging for, or recommendation of items or services covered under a government health care program. The law also forbids the offer or transfer of anything of value, including certain waivers of co-payment obligations and deductible amounts, to a beneficiary of Medicare or Medicaid that is likely to influence the beneficiary’s selection of health care providers, again, subject to certain safe harbor exceptions. Violations of the federal AKS can trigger the False Claims Act and Civil Monetary Penalties Law, potentially resulting in civil fines up to $27,894 for each violation, penalties of up to $124,732 (last updated 2024) plus three times the amount of the improper remuneration, imprisonment and potentially, exclusion from furnishing services under any government health care program. There are also criminal penalties under the AKS, and providers found to be in violation of the federal AKS can be excluded from participation in federal health care programs.

Stark or Physician Self-Referral Law

The Stark Law, also known as the Physician Self-Referral Law, prohibits physicians from referring Medicare and Medicaid patients to entities for the provision of designated health services with which they or any of their immediate family members have a direct or indirect financial relationship, unless an exception to the law's prohibition is met. Sanctions for violating the Stark Law include penalties of up to $2930,~~899~~868 for each violation and up to $~~199~~205,~~338~~799 (last updated ~~2023~~2024) for schemes to circumvent the Stark Law restrictions. There are a number of exceptions to the self-referral prohibition, including employment contracts and leases, that may be used so long as the arrangement adheres to certain enumerated requirements. Violations of the Stark Law may also result in payment denials, False Claims Act scrutiny, additional civil monetary penalties and federal program exclusion.

The False Claims Act

The federal False Claims Act ("FCA") prohibits false claims or requests for payment for health care services. Under the FCA, the government may penalize any person who knowingly submits, or participates in submitting, claims for payment to the ~~Federal~~federal ~~Government~~government which are false or fraudulent, or which contain false or misleading information. Any person who knowingly makes or uses a false record or statement to avoid paying the ~~Federal~~federal ~~Government~~government, or knowingly conceals or avoids an obligation to pay money to the ~~Federal~~federal ~~Government~~government, may also be subject to fines under the FCA. Under the FCA, the term “person” means an individual, company or corporation. The term "knowingly" means the person (i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of the information.

The ~~Federal~~federal ~~Government~~government has used the FCA to prosecute Medicare and other governmental program fraud in areas such as violations of the federal Anti-Kickback Statute or the Stark Law, coding errors, billing for services not provided and submitting false cost reports. The FCA has also been used to prosecute people or entities that bill services at a higher reimbursement rate than is allowed and that bill for care that is not medically necessary. In addition to government enforcement, the FCA authorizes private citizens to bring qui tam or “whistleblower” lawsuits, greatly extending the practical reach of the FCA. The per-claim maximum penalty is $27,~~018~~894 (last updated ~~2023~~2024).

The Fraud Enforcement and Recovery Act of 2009 (“FERA”) amended the FCA with the intent of enhancing the powers of government enforcement authorities and whistleblowers to bring FCA cases. In particular, FERA attempts to clarify that liability may be established not only for false claims submitted directly to the government, but also for claims submitted to government contractors and grantees. FERA also seeks to clarify that liability exists for attempts to avoid repayment of overpayments, including improper retention of federal funds. FERA also included amendments to FCA procedures, expanding the government’s ability to use the Civil Investigative Demand process to investigate defendants, and permitting government complaints and intervention to relate back to the filing of the whistleblower’s original complaint. FERA is likely to increase both the volume and liability exposure of FCA cases brought against health care providers.

In the Patient Protection and Affordable Care Act (enacted in 2010), Congress enacted requirements related to identifying and returning overpayments made under Medicare and Medicaid. CMS finalized regulations regarding this so-called “60-day rule,” which requires providers to report and return Medicare and Medicaid overpayments within 60 days of identifying the overpayment. A provider who retains identified overpayments beyond 60 days may be liable under the FCA. ~~“Identification”~~Modifications ~~occurs~~to ~~when~~the a60-day ~~person~~rule ~~“has~~became effective on January 1, or2025. ~~should~~The ~~have~~updated ~~through~~rule makes three material changes: (1) the ~~exercise~~rule ofupdates ~~reasonable~~the ~~diligence,”~~standard for determining when an overpayment is “identified;” (2) the rule imposes the obligation to report and ~~quantified~~return overpayments, regardless of whether the precise amount ofis calculated; and (3) the rule suspends the obligation to report and return overpayments for up to 180 days if, after identifying an overpayment, the provider conducts a timely, good-faith investigation to determine whether related overpayments exist. The ~~final~~updated rule ~~also~~maintains ~~established~~the a six-year lookback period, meaning overpayments must be reported and returned if a person identifies the overpayment within six years of the date the overpayment was received. Providers must report and return overpayments even if they did not cause the overpayment.

In addition to the FCA, the ~~Federal~~federal ~~Government~~government may use several criminal statutes to prosecute the submission of false or fraudulent claims for payment to the ~~Federal~~federal ~~Government~~government. Many states have similar false claims statutes that impose liability for the types of acts prohibited by the False Claims Act. As part of the Deficit Reduction Act of 2005 (the “DRA”), Congress provides states an incentive to adopt state false claims acts consistent with the federal FCA. Additionally, the DRA requires providers who receive $5 million or more annually from Medicaid to include information on federal and state false claims acts, whistleblower protections and the providers’ own policies on detecting and preventing fraud in their written employee policies.

the types of acts prohibited by the False Claims Act. As part of the Deficit Reduction Act of 2005 (the “DRA”), Congress provides states an incentive to adopt state false claims acts consistent with the federal FCA. Additionally, the DRA requires providers who receive $5 million or more annually from Medicaid to include information on federal and state false claims acts, whistleblower protections and the providers’ own policies on detecting and preventing fraud in their written employee policies.

Civil Monetary Penalties Law

HHS may impose civil monetary penalties ("CMP") for a variety of civil offenses related to federal health care programs. They may be imposed upon any person or entity who presents, or causes to be presented, certain ineligible claims for medical items or services, for providing improper inducements to beneficiaries to obtain services, for payments to limit services to patients and for offenses related to relationships with excluded individuals, among other things.

11The penalty for knowing and willful solicitation, receipt, offer or payment of remuneration for referring an individual for a service or for purchasing, leasing or ordering an item to be paid for by a federal health care program increased from $120,816 to $124,732, and the CMP for beneficiary inducement increased from $24,164 to $24,947 per occurrence.

Maximum CMP amounts increased in 2023. For example, the penalty for knowing and willful solicitation, receipt, offer or payment of remuneration for referring an individual for a service or for purchasing, leasing or ordering an item to be paid for by a federal health care program increased from $112,131 to $120,816, and the CMP for beneficiary inducement increased from $22,427 to $24,164 per occurrence.

State Laws

In addition to federal laws, some states in which we operate generally have laws that prohibit kickbacks in exchange for referrals, certain direct or indirect payments or fee-splitting arrangements between health care providers, improper physician referrals, beneficiary inducements and false or improperly billed claims. The available guidance and enforcement activity associated with such state laws vary considerably but, in some cases, may be stricter than federal law.

Federal and State Privacy and Security Laws

The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") requires us to comply with standards for the ~~exchange~~use and disclosure of health information within our company and with third parties, such as payors, business associates and patients. These include standards for common health care transactions, such as claims information, plan eligibility and payment information, standards for the use of electronic signatures and unique identifiers for providers, employers, health plans and individuals as well as standards for privacy, security and breach notification and enforcement.

The HIPAA transaction regulations establish form, format and data content requirements for most electronic health care transactions, such as health care claims that are submitted electronically. The HIPAA privacy regulations establish comprehensive requirements relating to the use and disclosure of protected health information. The HIPAA security regulations establish minimum standards for the protection of protected health information that is stored or transmitted electronically. The HIPAA breach notification regulations establish the applicable requirements for notifying individuals, HHS and the media in the event of a data breach affecting protected health information. Violations of the privacy, security and breach notification regulations are punishable by civil and criminal penalties and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.

Currently, civil monetary penalties for HIPAA violations can range from $~~137~~141 per violation to a maximum fine of $2.~~067~~134 million for multiple violations of the same provision during a calendar year. To date, the largest penalty imposed by HHS following a data breach is $16 million. State attorneys general may also bring civil enforcement actions under HIPAA, and attorneys general are actively engaged in enforcement. These penalties could be in addition to other penalties assessed by a state for a breach which would be considered reportable under a particular state’s data breach notification laws.

Changes to HIPAA have stimulated increased enforcement activity and enhanced the potential that health care providers will be subject to financial penalties for violations of HIPAA. In addition, the Secretary of HHS is required to perform periodic audits to ensure covered entities (and their business associates, as that term is defined under HIPAA) comply with the applicable HIPAA requirements, increasing the likelihood that a HIPAA violation will result in an enforcement action.

In addition to the federal HIPAA regulations, most states also have laws that protect the confidentiality of health information and other personally identifiable information, and these laws may be broader in scope with respect to protected health information and other personal information than HIPAA. Some of these state laws grant individuals rights with respect to personal information. WeMany ~~may~~of bethem ~~required~~exempt toentities ~~expend~~that ~~significant~~are ~~resources~~subject to ~~comply~~HIPAA ~~with~~through ~~these~~entity-level ~~laws. Further~~exemptions, ~~all~~while 50others ~~states,~~only ~~the~~exempt ~~U.S.~~information ~~territories~~subject ~~and~~to ~~the~~HIPAA ~~District~~(e.g., ofprotected ~~Columbia~~health ~~have~~information ~~adopted~~("PHI")) ~~data~~while ~~breach~~still ~~notification~~maintaining ~~laws~~applicability ~~that~~over ~~impose,~~other inpersonal ~~varying~~information. ~~degrees,~~Several annew ~~obligation to notify affected persons and/or~~ state ~~regulators~~privacy inlaws ~~the~~went ~~event~~into ofeffect aon ~~data~~January ~~breach or compromise~~1, ~~including~~2025. ~~when~~We ~~their personal information has or~~ may ~~have~~be ~~been~~required ~~accessed~~to byexpend ansignificant ~~unauthorized~~resources ~~person.~~to ~~Some~~comply ~~state~~with ~~breach~~these ~~notification~~ laws. ~~may~~Further, ~~also~~all ~~impose~~50 ~~physical~~states, ~~and electronic security requirements regarding~~ the ~~safeguarding~~U.S. ofterritories ~~personal information, such as social security numbers~~ and ~~bank~~the ~~and~~District ~~credit card account numbers. Violation~~ of ~~state~~Columbia ~~privacy,~~have ~~security~~adopted ~~and~~data breach notification laws ~~can~~that ~~trigger significant monetary penalties. In addition~~impose, ~~certain~~in ~~states’~~varying ~~privacy~~degrees, ~~security~~an ~~and~~obligation ~~data breach laws, including, for example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, include private rights of action that may expose us~~ to ~~private~~notify ~~litigation~~affected ~~regarding~~persons ~~our privacy practices~~ and ~~significant damages awards~~ /or ~~settlements~~state ~~in civil litigation.~~

regulators in the event of a data breach or compromise, including when their personal information has or may have been accessed by an unauthorized person. Some state breach notification laws may also impose physical and electronic security requirements regarding the safeguarding of personal information, such as social security numbers and bank and credit card account numbers. Violation of state privacy, security and breach notification laws can trigger significant monetary penalties. In addition, certain states’ privacy, security and data breach laws, including, for example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act ("CCPA"), include private rights of action, in addition to any available common law theories, that may expose us to private litigation regarding our privacy practices and significant damages awards or settlements in civil litigation.

U.S. Food and Drug Administration ("FDA") Regulation

The FDA regulates medical device user facilities, which include home health care providers. FDA regulations require user facilities to report patient deaths and serious injuries to the FDA and/or the manufacturer of a device used by the facility if the device may have caused or contributed to the death or serious injury of any patient. FDA regulations also require user facilities to maintain files related to adverse events and to establish and implement appropriate procedures to ensure compliance with the above reporting and recordkeeping requirements. User facilities are subject to FDA inspection, and noncompliance with applicable requirements may result in warning letters or sanctions including civil monetary penalties, injunction, product seizure, criminal fines and/or imprisonment.

The Improving Medicare Post-Acute Care Transformation Act

In October 2014, the Improving Medicare Post-Acute Care Transformation Act (“IMPACT Act”) was signed into law requiring the reporting of standardized patient assessment data for quality improvement, payment and discharge planning purposes across the spectrum of post-acute care providers (“PACs”), including skilled nursing facilities and home health agencies. The IMPACT Act requires PACs to report: (1) standardized patient assessment data at admission and discharge; (2) quality measures, including functional status, skin integrity, medication reconciliation, incidence of major falls and patient preference regarding treatment and discharge; and (3) resource use measures, including Medicare spending per beneficiary, discharge to community and hospitalization rates of potentially preventable readmissions. Failure to report such data when required would subject a facility to a two percent reduction in market basket prices then in effect.

The IMPACT Act further requires HHS and the Medicare Payment Advisory Commission (“MedPAC”), a commission chartered by Congress to advise it on Medicare payment issues, to study alternative PAC payment models, including payment based upon individual patient characteristics and not care setting, with corresponding Congressional reports required based on such analysis. The IMPACT Act also includes provisions impacting Medicare-certified hospices, including: (1) increasing survey frequency for Medicare-certified hospices to once every 36 months; (2) imposing a medical review process for facilities with a high percentage of stays in excess of 180 days; and (3) updating the annual aggregate Medicare payment cap.

Review Choice Demonstration for Home Health Services ("RCD")

Effective June 1, 2024, CMS extended RCD for an additional five years. The demonstration will be continuing in the current demonstration states of Illinois, Ohio, Texas, North Carolina, Florida and Oklahoma. CMS' RCD ~~gives~~provided HHAs in the demonstration states with three options in the initial selection period: pre-claim review of all claims, post-payment review of all claims or minimal post-payment review with a 25% payment reduction for all home health services. As part of the extension, CMS is removing the option for minimal review with a 25% payment reduction from the initial choice selections. Under the pre-claim review and post-payment review options, provider claims are reviewed for every episode of care until the appropriate claim approval rate (90% based on a minimum of ten pre-claim requests or claims submitted) is reached. Further, once the appropriate claim approval rate is reached and maintained for six months, a provider can elect to opt out of pre-claim review or post-payment review of all claims and choose selective post-payment review, a spot check of a statistically valid random sample of claims determined by the Medicare Administrative Contractor ("MAC") to ensure continued compliance. Amedisys has elected the pre-claim review option. The demonstration initially applied to HHA providers in Florida, Illinois, North Carolina, Ohio and Texas, with the option to expand after five years to other states in the Medicare Administrative Contractor Jurisdiction M (Palmetto). CMS added Oklahoma to the demonstration effective December 31, 2023.

Targeted Probe and Educate Program ("TPE")

CMS' TPE program is designed to help reduce provider claim denials and educate providers on appropriate billing practices. Under the TPE program, MACs use data analysis to identify providers who have high claim error rates, unusual billing practices or provide services that have high national error rates. If a provider is selected for a TPE review by a MAC, the initial volume of claims reviewed is limited to 20 to 40 claims. If the provider is deemed compliant, it will not be reviewed on the particular topic for that review for one year; however, if errors are identified, the provider has 45 days to make changes and improvements. If a provider cannot correct the errors after the 45-day period, it will be referred to one-on-one education sessions. The TPE process can include up to three rounds of claims review, if necessary, with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action which may include 100% prepay review, extrapolation, referral to a Recovery Auditor and/or referral for revocation from the Medicare program.

Home Health Value-Based Purchasing

On January 1, 2016, CMS implemented Home Health Value-Based Purchasing ("HHVBP"). The HHVBP model was designed to give Medicare-certified home health agencies incentives or penalties in order to provide higher quality and more efficient care. In November 2021, CMS issued the Calendar Year 2022 Home Health Final Rule for Medicare home health providers which provided for the expansion of the HHVBP model to all 50 states beginning January 1, 2023 with calendar year 2023 being the first performance year and calendar year 2025 being the first payment year with a proposed maximum payment adjustment, up or down, of 5%.

which provided for the expansion of the HHVBP model to all 50 states beginning January 1, 2023 with calendar year 2023 being the first performance year and calendar year 2025 being the first payment year with a proposed maximum payment adjustment, up or down, of 5%.

HHAs receive adjustments to their Medicare fee-for-service payments based on their performance against a set of quality measures, relative to their peers’ performance. Performance on these quality measures in a specified year (performance year) impacts payment adjustments in a later year (payment year). Cohorts are determined based on each HHA’s unique beneficiary count in the prior calendar year. HHAs are assigned to either a nationwide larger-volume cohort or a nationwide smaller-volume cohort in order to group HHAs that are of similar size and are more likely to receive scores on the same set of measures for purposes of setting benchmarks and achievement thresholds and determining payment adjustments.

As set forth in the 2025 Home Health Final Rule, CMS is finalizing new measures and modifying one existing measure related to the social determinants of health category and updating the OASIS all payor data collection for HHVBP. The new measures, which involve living situations, food security and utilities, will begin in 2027.

Home Health Payment Reform

OnPDGM, ~~February~~which 9became effective on January 1, ~~2018~~2020, ~~Congress~~adjusts ~~passed~~payments ~~the~~to ~~Bipartisan~~home ~~Budget~~health ~~Act~~agencies ofbased ~~2018~~on ~~("BBA~~patient characteristics for 30-day periods of ~~2018"),~~care. ~~which~~While ~~provided~~the ~~for~~payment changes under PDGM were to be implemented in a ~~targeted~~budget ~~extension~~neutral ofmanner to the ~~home~~industry, ~~health~~the ~~rural~~ultimate ~~add-on~~impact ~~payment,~~varied aby ~~reduction~~provider ofbased ~~the~~on ~~2020~~factors ~~market~~including ~~basket~~patient ~~update~~mix and admission source. Additionally, ~~modification~~CMS ofmade ~~eligibility~~assumptions ~~documentation~~about ~~requirements~~behavior ~~and~~changes ~~reform~~that were expected to ~~the~~occur ~~Home~~as ~~Health~~a ~~Prospective~~result ~~Payment~~of ~~System~~the ~~("HHPPS")~~transition to PDGM. The ~~HHPPS~~behavior ~~reform~~change ~~included~~assumptions ~~the~~were ~~following~~finalized ~~parameters:~~in ~~for~~the ~~home~~Calendar ~~health~~Year ~~units~~2020 ofHome ~~service~~Health ~~beginning~~Final Rule released on ~~January~~October 131, ~~2020,~~2019 aand ~~30-day~~resulted ~~payment~~in ~~system~~a ~~was~~4.36% reduction to bereimbursement. ~~applied;~~The ~~the~~behavior ~~transition~~changes were related to ~~the~~coding ~~30-day~~practices, low utilization payment ~~system~~adjustment ~~was~~("LUPA") management and co-morbidities. CMS is required by law to beanalyze ~~budget~~data ~~neutral;~~for ~~and~~calendar ~~CMS~~years ~~was~~2020-2026, retrospectively, to ~~conduct~~determine atthe ~~least~~impact ~~one~~of ~~Technical~~the ~~Expert~~difference ~~Panel~~between ~~during~~assumed ~~2018,~~and ~~prior~~actual behavior changes and to make any ~~notice~~such ~~and~~payment ~~comment~~changes ~~rulemaking~~as ~~process,~~are ~~related~~necessary to ~~the~~offset ~~design~~or ofsupplement ~~any~~the ~~new~~adjustments ~~case-mix~~based ~~adjustment~~on ~~model~~anticipated behavior.

~~The~~On ~~Calendar~~October ~~Year~~31, ~~2019~~2022, ~~Home~~CMS ~~Health~~issued ~~Final Rule updated~~ the ~~Medicare~~CY ~~HHPPS~~2023 ~~and~~Final ~~finalized~~Rule ~~the~~for ~~implementation~~Medicare ofhome anhealth ~~alternative case-mix adjustment methodology~~providers, ~~PDGM,~~ which ~~became~~finalized ~~effective~~a onmethodology ~~January~~for 1,analyzing ~~2020.~~differences ~~PDGM~~between ~~adjusted~~assumed ~~payments~~and toactual ~~home~~behavior ~~health~~changes ~~agencies~~and ~~based~~determined onthat ~~patient~~a ~~characteristics~~permanent ~~for~~adjustment ~~30-day~~was ~~periods of care~~needed. ~~While~~The ~~the~~final ~~payment~~rule ~~changes~~included ~~were to be implemented in~~ a ~~budget~~-3.5% ~~neutral~~permanent ~~manner~~reduction to ~~the~~reimbursement ~~industry, the ultimate impact varied by provider~~ based on ~~factors~~the ~~including~~difference ~~patient~~between ~~mix~~assumed and ~~admission~~actual ~~source. Additionally, CMS made assumptions about~~ behavior changes ~~that~~resulting ~~were~~from ~~expected~~the toimplementation ~~occur as a result~~ of ~~the transition to~~ PDGM. The ~~behavior~~-3.5% ~~change~~permanent ~~assumptions~~adjustment ~~were~~was ~~finalized~~derived infrom ~~the Calendar Year 2020 Home Health Final Rule released on October 31, 2019 and resulted in~~ a 4-3.36925% ~~reduction~~adjustment towhich ~~reimbursement.~~was ~~The~~only ~~behavior~~applied ~~changes~~to ~~were~~the ~~related~~30-day topayment ~~coding~~rate ~~practices,~~and not the low utilization payment adjustment. ~~("LUPA")~~The ~~management and co~~-~~morbidities~~3.925% ~~CMS~~was isonly ~~required~~half ~~by law to analyze data for calendar years 2020-2026, retrospectively, to determine the impact~~ of the ~~difference~~total ~~between~~proposed ~~assumed~~adjustment. ~~and~~The ~~actual~~remaining ~~behavior~~adjustment ~~changes~~was ~~and~~ to ~~make~~be ~~any~~considered ~~such~~in ~~payment~~future ~~changes as are necessary to offset or supplement the adjustments based on anticipated behavior~~rulemaking.

On ~~October~~July 315, ~~2022~~2023, ~~CMS~~the ~~issued~~National ~~the~~Association for Home ~~Health~~Care ~~Final~~and ~~Rule~~Hospice ~~for~~("NAHC"), ~~Medicare~~the leading national home health ~~providers~~trade ~~for~~association, ~~calendar~~filed ~~year~~suit ~~2023,~~against ~~which~~CMS ~~finalized~~in athe ~~methodology~~United ~~for~~States ~~analyzing~~District ~~differences~~Court ~~between~~for ~~assumed~~the ~~and~~District ~~actual~~of ~~behavior~~Columbia ~~changes~~over ~~and~~the ~~determined~~implementation ~~that~~of athe ~~permanent~~payment ~~adjustment~~cuts ~~was~~CMS ~~needed.~~made ~~The~~in the CY 2023 Final Rule ~~included~~for aMedicare ~~-3.5%~~home ~~permanent~~health ~~reduction~~providers toeffective ~~reimbursement~~January ~~based~~1, on2023. ~~the~~The ~~difference~~primary ~~between~~claim ~~assumed~~in ~~and~~the ~~actual~~lawsuit ~~behavior~~is ~~changes~~that ~~resulting~~the ~~from~~methodology violated the ~~implementation~~plain language of ~~PDGM.~~the ~~The~~Medicare -3law.5% ~~permanent~~On ~~adjustment~~April ~~was~~26, ~~derived~~2024, ~~from~~the ~~a -3~~U.~~925%~~S. ~~adjustment~~District ~~which~~Court ~~was~~for ~~only applied to~~ the ~~30-day~~District ~~payment~~of ~~rate~~Columbia ~~and~~dismissed ~~not~~ the ~~low~~case, ~~utilization~~ruling ~~payment~~that ~~adjustment.~~NAHC ~~The~~skipped ~~-3.925%~~an ~~was~~agency ~~only~~review ~~half~~process ofprior ~~the~~to ~~total~~filing ~~proposed adjustment~~suit. ~~The~~NAHC ~~remaining~~is ~~adjustment~~considering ~~was~~an ~~to be considered in future rulemaking~~appeal.

On July 5, 2023, the National Association for Home Care and Hospice ("NAHC"), the leading national home health trade association, filed suit against CMS in the United States District Court for the District of Columbia over the implementation of the payment cuts in the Calendar Year 2023 Home Health Final Rule effective January 1, 2023; that litigation remains pending.

On November 1, 2023, CMS issued the Home Health Final Rule for Medicare home health providers for calendar year 2024. CMS estimates that the final rule will result in an 0.8% increase in payments to home health providers. This increase is the result of a 3.0% payment update (3.3% market basket adjustment less a 0.3% productivity adjustment) and an increase of 0.4% for the update to the fixed-dollar loss ratio used in determining outlier payments offset by a permanent adjustment of -2.6% based on the difference between assumed and actual behavior changes resulting from the implementation of PDGM. Similar to the 2023 permanent adjustment, the -2.6% permanent adjustment was derived from a -2.890% adjustment which was only applied to the 30-day payment rate and not the low utilization payment adjustment. The -2.890% was only half of the total proposed adjustment. The remaining adjustment is to be considered in future rulemaking. Based on our analysis of the final rule, we expect our impact to be in line with the 0.8% increase.

InOn ~~addition~~November to1, ~~permanent adjustments~~2023, CMS ~~also~~issued ~~has~~the CY 2024 Final Rule for Medicare home health providers. CMS estimated that the ~~discretion~~final rule would result in a 0.8% increase in payments to ~~make~~home ~~temporary~~health ~~adjustments~~providers. ~~through~~This ~~calendar~~increase ~~year~~was ~~2026;~~the ~~however,~~result ~~CMS~~of ~~has~~a ~~elected~~3.0% ~~not~~payment toupdate ~~implement~~(3.3% market basket adjustment less a ~~temporary~~0.3% productivity adjustment) and an increase of 0.4% for ~~calendar~~the ~~year~~update ~~2024~~to the fixed-dollar loss ratio used in determining outlier payments offset by a permanent adjustment of -2.6% based on the difference between assumed and actual behavior changes resulting from the implementation of PDGM. The -2.6% permanent adjustment was derived from a -2.890% adjustment which was only applied to the 30-day payment rate and not the low utilization payment adjustment. The -2.890% adjustment was only half of the total proposed adjustment. The remaining adjustment was to be considered in future rulemaking.

On November 1, 2024, CMS issued the CY 2025 Final Rule for Medicare home health providers. CMS estimates that the final rule will result in a 0.5% increase in payments to home health providers. This increase is the result of a 2.7% payment update (3.2% market basket adjustment less a 0.5% productivity adjustment) offset by a decrease of 0.4% for the update to the fixed-dollar loss ratio used in determining outlier payments and a permanent adjustment of -1.8% based on the difference between assumed and actual behavior changes resulting from the implementation of PDGM. Based on our analysis of the final rule, we expect our impact to be in line with the 0.5% increase.

In addition to permanent adjustments, CMS also has the discretion to make temporary adjustments through calendar year 2026; however, CMS has elected not to implement a temporary adjustment thus far. As stated in the CY 2025 Final Rule, the total temporary adjustment calculated for CY 2020 through CY 2023 is $4.5 billion. In future rule making, CMS will propose that the temporary adjustment dollar amount be converted to a factor that is applied to the base payment rate.

Environmental and Climate Change Matters

We are committed to transparency around our environmental footprint and climate-related risks and opportunities. We have adopted an integrated approach to address the impacts of climate change on our business, with cross-disciplinary teams responsible for managing climate-related activities, initiatives and policies. Strategies and progress toward our goals are reviewed with senior leadership and the Nominating and Corporate Governance Committee of our Board of Directors. Additional information about our environmental and climate activities can be found in our annual Environmental, Social and Governance Report, which is available on our website. Reference to our website does not constitute incorporation by reference of the information contained on the website and should not be considered part of this document. For more information regarding climate change and its possible adverse impact on us, see “Item 1A. Risk Factors — Risks Related to Our Operations — Our operations could be impacted by war, terrorism, natural or man-made disasters and climate change” in this Annual Report on Form 10-K.

Use of Artificial Intelligence

We are deploying innovative programs, such as artificial intelligence, including generative artificial intelligence and similar tools and technologies (collectively, “AI”), to improve or enhance patient workflows and predictive analytics. Any creation, use, or deployment of AI may subject us to additional risks under HIPAA and other health privacy laws and regulations. To the extent we use personally identifiable information to train AI, we are required to follow laws, regulations and contractual requirements on uses and disclosures of personally identifiable information, which may require us to obtain patient authorizations or to de-identify personally identifiable information. In addition, the Federal Trade Commission (“FTC”) has announced that they are taking a closer look at how AI is developed and used, including evaluating claims by companies regarding AI that could be false or misleading, to take appropriate steps to reduce biases. See “Item 1A. Risk Factors — Risks Related to Our Operations — We utilize artificial intelligence, which could expose us to liability or adversely affect our business, especially if we are unable to compete effectively with others in adopting artificial intelligence.”

Our Competitors

There are few barriers to entry in the home health and hospice jurisdictions that do not require a CON, POA or FNR. Our primary competition in these jurisdictions comes from local privately-owned, ~~and~~ publicly-owned and hospital-owned health care providers. We compete based on the quality of services, the availability of personnel, expertise of visiting staff and, in certain instances, on the price of our services. In addition, we compete with a number of non-profit organizations that finance acquisitions and capital expenditures on a tax-exempt basis or receive charitable contributions that are unavailable to us.

Available Information

Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website. In addition, we make available on the Investor Relations subpage of our website (under the link “SEC Filings”), free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as reasonably practicable after we electronically file or furnish such reports with the Securities and Exchange Commission ("SEC"). Further, copies of our Certificate of Incorporation and Bylaws, our Code of Ethical Business Conduct, our Corporate Governance Guidelines and the charters for the Audit, Compensation, Quality of Care, Compliance and Ethics and Nominating and Corporate Governance Committees of our Board are also available on the Investor Relations subpage of our website (under the link “Governance”). Reference to our website does not constitute incorporation by reference of the information contained on the website and should not be considered part of this document.

Our electronically filed reports can also be obtained on the SEC’s internet site at http://www.sec.gov.

1516

ITEM 1A. RISK FACTORS

The risks described below, and risks described elsewhere in this Form 10-K, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows and the actual outcome of matters as to which forward-looking statements are made in this Form 10-K. The risk factors described below and elsewhere in this Form 10-K are not the only risks faced by Amedisys. Our business and consolidated financial condition, results of operations and cash flows may also be materially adversely affected by factors that are not currently known to us, by factors that we currently consider immaterial or by factors that are not specific to us, such as general economic conditions.

If any of the following risks are actually realized, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected. In that case, the trading price of our common stock could decline.

You should refer to the explanation of the qualifications and limitations on forward-looking statements under “Special Caution Concerning Forward-Looking Statements.” All forward-looking statements made by us are qualified by the risk factors described below.

Risk Factor Summary

The following is a summary of the principal risks that could adversely affect our business, operations and financial results:

•The proposed Merger is subject to the satisfaction of certain closing conditions, including government consents and approvals, some or all of which may not be satisfied or completed ~~within~~by the ~~expected~~end ~~timeframe~~of the Waiver Period (as defined in the Waiver (as defined below)), if at all.

•We may not complete the proposed Merger ~~within~~by the ~~time~~end ~~frame~~of wethe ~~anticipate~~Waiver Period or at all, which could have an adverse effect on our business, financial results and/or operations.

•We ~~will~~are be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with employees, customers and other third-party business partners.

•In certain instances, the Merger Agreement requires us to pay a termination fee to UnitedHealth Group, which could affect the decisions of a third-party considering making an alternative acquisition proposal.

•We have incurred, and will continue to incur, direct and indirect costs as a result of the Merger.

•Litigation challenging the Merger Agreement may prevent the Merger from being consummated ~~within~~by the ~~expected~~end ~~timeframe~~of the Waiver Period or at all.

•Federal and state changes to reimbursement and other aspects of Medicare and Medicaid could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

•Future cost containment initiatives undertaken by private third-party payors may limit our future revenue and profitability.

•Possible changes in the case mix of patients, as well as payor mix and payment methodologies, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

•Our failure to negotiate favorable managed care contracts, or our loss of existing favorable managed care contracts, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

•Quality reporting requirements may negatively impact Medicare reimbursement.

•Value-based purchasing may negatively impact Medicare reimbursement.

•Any economic downturn, deepening of an economic downturn, continued deficit spending by the ~~Federal~~federal ~~Government~~government, reductions in government spending for healthcare programs or state budget pressures may result in a reduction in payments and covered services.

•A shortage of qualified ~~nursing staff and other~~ clinicians, such as ~~therapists~~nurses and ~~nurse practitioners~~therapists, could materially impact our ability to attract, train and retain qualified personnel and could increase operating costs.

•We may be more vulnerable to the effects of a public health emergency than other businesses due to the nature of our patient population and the physical proximity required by our operations, which could harm our business disproportionately to other businesses.

•Because we are limited in our ability to control rates received for our services, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected if we are not able to maintain or reduce our costs to provide such services.

•If we are unable to consistently provide high quality of care, our business will be adversely impacted.

•If we are unable to maintain relationships with existing patient referral sources, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

•Our industry is highly competitive, with few barriers to entry in certain states.

•The success of our high acuity care segment depends on our ability to enter into capitation and other forms of risk-based contracts with managed care health plans. If we are unsuccessful in obtaining these contracts or if we are unsuccessful in managing costs associated with risk-based contracts, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

•Our business depends on our information systems. A cyber-attack, security breach or our inability to effectively integrate, manage and keep our information systems secure and operational could disrupt our operations.

•Software outages or disruptions, including due to cyberattacks, defects or other unanticipated performance problems, could adversely affect our business, results of operations and financial condition.

•Our insurance liability coverage may not be sufficient for our business needs.

•We may be subject to substantial malpractice or other similar claims.

•If we are unable to maintain our corporate reputation, our business may suffer.

•A write off of a significant amount of intangible assets or long-lived assets could have a material adverse effect on our consolidated financial condition and results of operations.

•Our operations could be impacted by war, terrorism, natural or man-made disasters and climate change.

•Inflation in the economy and new or increased tariffs could negatively impact our business and results of operations.

•~~Our~~We ~~growth~~utilize ~~strategy~~artificial ~~depends on our ability to acquire additional care centers and integrate and operate these care centers effectively~~intelligence, ~~make~~which ~~investments~~could ~~and~~expose ~~enter~~us ~~into~~to ~~joint~~liability ~~ventures~~or ~~and~~adversely ~~other~~affect ~~strategic relationships. If~~ our ~~growth~~business, ~~strategy~~especially isif ~~unsuccessful or~~ we are ~~not~~unable ~~able~~ to ~~successfully~~compete ~~integrate~~effectively ~~newly~~with ~~acquired~~others ~~care~~in ~~centers~~adopting ~~into~~artificial ~~our existing operations, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected~~intelligence.

•Our long-term growth strategy depends on our ability to acquire additional care centers and integrate and operate these care centers effectively, make investments and enter into joint ventures and other strategic relationships. If our long-term growth strategy is unsuccessful or we are not able to successfully integrate newly acquired care centers into our existing operations, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

•The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us, and as a result, we may face unexpected liabilities.

•State efforts to regulate the establishment or expansion of health care providers could impair our ability to expand our operations.

•Federal regulation may impair our ability to consummate acquisitions or open new care centers.

•Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our business and consolidated financial condition, results of operations and cash flows.

•We are subject to extensive government regulation. Any changes to the laws and regulations governing our business, or to the interpretation and enforcement of those laws or regulations, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

•We face periodic and routine reviews, audits and investigations under our contracts with federal and state government agencies and private payors, and these audits could have adverse findings that may negatively impact our business.

•If a care center fails to comply with the conditions of participation in the Medicare program, that care center could be subjected to sanctions or terminated from the Medicare program.

•We are subject to federal and state laws that govern our financial relationships with physicians and other health care providers, including potential or current referral sources.

•The No Surprises Act and similar price transparency initiatives could impact our relationships with patients and insurers.

•Delays in payment may cause liquidity problems.

•Changes in units of payment for home health agencies could reduce our Medicare home health reimbursement levels.

•The volatility and disruption of the capital and credit markets and adverse changes in the United States and global economies could impact our ability to access both available and affordable financing, and without such financing, we may be unable to achieve our objectives for strategic acquisitions and internal growth.

•Our indebtedness could impact our financial condition and impair our ability to fulfill other obligations.

•The agreements governing our indebtedness contain various covenants that limit our discretion in the operation of our business, and our failure to satisfy requirements in these agreements could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

•The price of our common stock has been and may continue to be volatile, which could lead to securities litigation brought against us or cause investors to lose the value of their investment.

•Our Board of Directors may use anti-takeover provisions or issue stock to discourage a change of control.

•Our Bylaws designate the Court of Chancery of the State of Delaware or, if the Court of Chancery does not have jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us and our directors, officers, employees and stockholders.

Risks Related to the Proposed Merger with UnitedHealth Group Incorporated ("UnitedHealth Group")

The proposed Merger is subject to the satisfaction of certain closing conditions, including government consents and approvals, some or all of which may not be satisfied or completed ~~within~~by the ~~expected~~end ~~timeframe~~of the Waiver Period (as defined in the Waiver (as defined below)), if at all.

Completion of the Merger is subject to a number of closing conditions, including obtaining the approval of our stockholders, which approval was obtained on September 8, 2023, the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of the required state regulatory approvals, the absence of any law or order that has the effect of enjoining or otherwise prohibiting the completion of the Merger, and the expiration or termination of the waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated by the Merger Agreement under all applicable antitrust laws without the imposition by any governmental entity of any term, condition, obligation, requirement, limitation, prohibition, remedy, sanction or other action that has resulted in or would reasonably be expected to result in a Burdensome Condition (as defined in the Merger Agreement~~). We can provide no assurance that all required consents and approvals will be obtained or that all closing conditions will otherwise be satisfied (or waived~~, ~~if applicable), and, even if all required consents and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance~~ as tomodified ~~the~~by ~~terms, conditions and timing of such consents and approvals or~~ the timing of the completion of the Merger. Many of the conditions to completion of the Merger are not within our control, and we cannot predict when or if these conditions will be satisfied (or waived, if applicableWaiver). ~~Any adverse consequence of the pending Merger could be exacerbated by any delays in completion of the Merger or termination of the Merger Agreement.~~

Each party’s obligation to consummate the Merger is also subject to, among other conditions, the accuracy of the representations and warranties of the other party (subject to certain exceptions) and performance by each party of its respective obligations under the Merger Agreement, including an agreement by us to use our reasonable best efforts to carry on our business in all material respects in the ordinary course, consistent with past practice, and to preserve our business organization and relationships with customers, suppliers, licensors, licensees and other third parties, and to comply with certain operating covenants. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, (1i) by mutual written consent, (ii) if ~~our~~a ~~board~~governmental authority of ~~directors~~competent ~~makes~~jurisdiction anissues ~~Amedisys~~a ~~Recommendation~~final, ~~Change~~non-appealable order prohibiting the consummation of the Merger, (iii) if the Merger has not been successfully completed by the "outside date" (as defined in the Merger Agreement), oras modified by the Waiver (2as defined below)), byand ~~our~~(iv) ~~board~~following ofa ~~directors~~breach inby ~~order~~the ~~for~~other usparty toof ~~enter~~its ~~into~~representations aor ~~definitive~~warranties ~~agreement~~or ~~for~~covenants ancontained ~~alternative~~in ~~transaction~~the ~~with~~Merger aAgreement ~~third-party~~that ~~with~~would ~~respect~~result toin ana ~~unsolicited~~failure ~~Amedisys~~of ~~Superior~~a ~~Proposal~~condition ~~(as~~to ~~defined~~the inclosing of the Merger, ~~Agreement)~~subject to cure rights. As a result, we cannot assure you that the Merger will be completed, even though our stockholders approved the Merger, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or ~~within~~by the ~~expected~~end ~~time~~of ~~frame~~the Waiver Period.

~~We may not complete the proposed Merger within the time frame we anticipate or at all, which could have an adverse effect on our business, financial results and/or operations.~~19

~~The~~On ~~proposed~~November ~~Merger~~12, ~~may~~2024, ~~not~~the beU.S. ~~completed~~Department ~~within~~of ~~the~~Justice ~~expected~~("DOJ") ~~timeframe,~~and orcertain atother ~~all,~~parties ascommenced athe ~~result~~DOJ ofAction ~~various~~(as ~~factors~~defined ~~and~~below) ~~conditions,~~against ~~some~~Amedisys ofand ~~which~~UnitedHealth ~~may~~Group beto ~~beyond~~block ~~our~~the ~~control~~Merger. IfAmedisys continues to support UnitedHealth Group in working toward closing the Merger. isGiven ~~not~~the ~~completed~~uncertainty ~~for~~associated ~~any~~with ~~reason,~~the ~~our~~timing ~~stockholders~~and ~~will~~resolution ~~not~~of ~~receive~~the ~~any~~DOJ ~~payment~~Action ~~for~~and ~~their~~the ~~shares~~time ofnecessary ~~our~~to ~~common~~close ~~stock~~the intransactions ~~connection~~contemplated ~~with~~by the Merger. ~~Instead~~Agreement, we cannot predict when or if the conditions to the Merger will ~~remain~~be asatisfied. ~~public~~See ~~company~~Part I, ~~our~~Item ~~common~~1A. ~~stock~~“Risk ~~will~~Factors ~~continue~~– toWe bemay ~~listed~~not ~~and~~complete ~~traded~~the onproposed ~~The~~Merger ~~Nasdaq~~by ~~Global~~the ~~Select~~end ~~Market~~of the Waiver Period or at all, which could have an adverse effect on our business, financial results and/or ~~registered~~operations” ~~under~~for ~~the~~additional information.

18On December 26, 2024, the parties to the Merger Agreement entered into a waiver (the “Waiver”) pursuant to which, among other things, Amedisys and UnitedHealth Group each waived its right to terminate the Merger Agreement due to a failure of the Merger to have been consummated by the outside date until the earlier of (i) 5:00 p.m. (New York time) on the tenth business day following a final order (whether or not appealable) issued by the U.S. District Court for the District of Maryland with respect to the complaint filed by the DOJ and certain other parties regarding the Merger and the other transactions contemplated by the Merger Agreement that permanently prohibits the consummation of the Merger and (ii) 11:59 p.m. (New York time) on December 31, 2025.

~~Exchange~~We ~~Act,~~can provide no assurance that all required consents and weapprovals will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if all required toconsents ~~continue~~and approvals can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance as to ~~file~~the ~~periodic~~terms, ~~reports~~conditions ~~with~~and timing of such consents and approvals or the ~~SEC~~timing of the completion of the Merger. ~~Moreover,~~Many ~~our~~of ~~ongoing~~the ~~business~~conditions ~~may~~to becompletion ~~materially~~of ~~adversely~~the ~~affected~~Merger are not within our control, and we ~~would~~cannot predict when or if these conditions will be ~~subject~~satisfied to(or awaived, ~~number~~if applicable). Any adverse consequence of ~~risks,~~the ~~including~~pending Merger could be exacerbated by any delays in completion of the ~~following:~~Merger or termination of the Merger Agreement.

We may not complete the proposed Merger by the end of the Waiver Period or at all, which could have an adverse effect on our business, financial results and/or operations.

The proposed Merger may not be completed by the end of the Waiver Period or at all, as a result of various factors and conditions, some of which may be beyond our control. Given the uncertainty associated with the timing and the resolution of the DOJ Action and the time necessary to close the transactions contemplated by the Merger Agreement, we cannot predict when or if the conditions to the Merger will be satisfied. If the DOJ prevails to block the Merger, or if the Merger is not completed for any other reason, our stockholders will not receive any payment for their shares of our common stock in connection with the Merger. Instead, we will remain a public company, our common stock will continue to be listed and traded on The Nasdaq Global Select Market and registered under the Exchange Act, and we will be required to continue to file periodic reports with the SEC. Moreover, our ongoing business may be materially adversely affected, and we would be subject to a number of risks, including the following:

•we may experience negative reactions from the financial markets, including negative impacts on our stock price, and it is uncertain when, if ever, the price of our shares would return to the prices at which our shares currently trade;

•we may experience negative publicity, which could have an adverse effect on our ongoing operations including, but not limited to, retaining and attracting employees, customers, partners, suppliers and others with whom we do business;

•we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisory, printing and other professional services fees, which may relate to activities that we would not have undertaken other than in connection with the Merger;

•we may be required to pay a termination fee to UnitedHealth Group of $125,000,000, as required under the Merger Agreement under certain circumstances;

•we may be required to reimburse UnitedHealth Group for the $106,000,000 termination fee payment that UnitedHealth Group, on our behalf, paid to Option Care Health Inc. ("OPCH") in connection with the termination of the Agreement and Plan of Merger (the "OPCH Merger Agreement"), dated as of May 3, 2023, by and among Amedisys, OPCH and Uintah Merger Sub, Inc. ("OPCH Merger Sub") under certain circumstances set forth in the Merger Agreement (as modified by the Waiver);

•while the Merger Agreement is in effect, we are subject to restrictions on our business activities, including, among other things, restrictions on our ability to engage in certain kinds of material transactions that would reasonably be expected to materially delay or prevent the consummation of the transaction contemplated by the Merger Agreement, which could prevent us from pursuing strategic business opportunities, taking actions with respect to our business that we may consider advantageous and responding effectively and/or timely to competitive pressures and industry ~~developments, and may, as a result, materially adversely affect our business, results of operations and financial condition;~~

developments, and may, as a result, materially adversely affect our business, results of operations and financial condition;

•matters relating to the Merger require substantial commitments of time and resources by our management, which could result in the distraction of management from ongoing business operations and pursuing other opportunities that could have been beneficial to us; and

•we may commit significant time and resources to defending against the DOJ Action or other litigation related to the Merger.

If the Merger is not consummated, the risks described above may materialize, and they may have a material adverse effect on our business operations, financial results and stock price, particularly to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed.

We ~~will~~are be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with employees, customers and other third-party business partners.

Our efforts to complete the Merger could cause substantial disruptions in, and create uncertainty surrounding, our business, which may materially adversely affect our results of operations and our business. Uncertainty as to whether the Merger will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Merger is pending because employees may experience uncertainty about their roles following the Merger. As mentioned above, a substantial amount of our management’s and employees’ attention is being directed toward the completion of the Merger and thus is being diverted from our day-to-day operations. Uncertainty as to our future could adversely affect our business and our relationship with customers and potential customers. For example, customers, suppliers and other third parties may defer decisions concerning working with us or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our revenue, earnings and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Merger could be exacerbated by any continued delays in completion of the Merger or termination of the Merger Agreement.

In certain instances, the Merger Agreement requires us to pay a termination fee to UnitedHealth Group, which could affect the decisions of a third-party considering making an alternative acquisition proposal.

Under the terms of the Merger Agreement, we may be required to pay UnitedHealth Group a termination fee of $125,000,000 under specified conditions. Further, ~~including~~under inspecified ~~the~~circumstances ~~event~~set forth in the Merger Agreement is(as ~~terminated~~modified ~~due~~by tothe aWaiver), ~~recommendation~~we ~~change~~may bybe ~~our~~required ~~board~~to ofreimburse ~~directors,~~UnitedHealth Group for the $106,000,000 termination offee ~~the~~payment ~~Merger~~that ~~Agreement~~UnitedHealth byGroup, on our ~~board~~behalf, ofpaid ~~directors~~to OPCH in ~~order~~connection ~~for~~with usthe totermination ~~enter~~of ~~into~~the aOPCH ~~definitive~~Merger ~~agreement~~Agreement. ~~with~~These payments could affect the structure, pricing and terms proposed by a third-party ~~for~~seeking anto ~~alternative~~acquire ~~transaction~~or merge with ~~respect~~us toand ancould ~~unsolicited~~discourage ~~Amedisys~~a ~~Superior~~third-party ~~Proposal~~from ormaking ~~under~~a ~~certain~~competing ~~circumstances~~acquisition ~~where~~proposal, including a proposal ~~for~~that anwould ~~alternative~~be ~~transaction~~more ~~has~~favorable ~~been made~~ to usour ~~and,~~stockholders ~~within~~than 12the ~~months following~~ Merger.

termination, we enter into a definitive agreement providing for an alternative transaction or consummate an alternative transaction. Further, under specified circumstances, we may be required to reimburse UnitedHealth Group for the $106,000,000 termination fee payment that UnitedHealth Group, on our behalf, paid to OPCH in connection with the termination of the OPCH Merger Agreement. These payments could affect the structure, pricing and terms proposed by a third-party seeking to acquire or merge with us and could discourage a third-party from making a competing acquisition proposal, including a proposal that would be more favorable to our stockholders than the Merger.

We have incurred, and will continue to incur, direct and indirect costs as a result of the Merger.

We have incurred, and will continue to incur, significant costs and expenses, including regulatory costs, fees for professional services and other transaction costs in connection with the Merger, for which we will have received little or no benefit if the Merger is not completed. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses. Many of these fees and costs will be payable by us even if the Merger is not completed and may relate to activities that we would not have undertaken other than to complete the Merger.

Litigation challenging the Merger Agreement may prevent the Merger from being consummated ~~within~~by the ~~expected~~end ~~timeframe~~of the Waiver Period or at all.

Following the announcement of the Merger and the filing of the Definitive Proxy Statement, purported stockholders filed complaints and sent Amedisys demand letters alleging that the Definitive Proxy Statement omitted material information that rendered it misleading or incomplete in violation of federal securities laws and that the Amedisys Board breached their fiduciary duties. Certain of the complaints have sought, among other things, an injunction enjoining the consummation of the Merger unless and until certain additional information is disclosed to Amedisys stockholders, rescissory damages, an accounting to the plaintiff for all damages suffered as a result of Amedisys' and Amedisys' Board's alleged wrongdoing, costs of the action including plaintiffs' attorneys' fees and experts' fees, and other relief the court may deem just and proper. Amedisys also received a demand from a purported stockholder in connection with the Definitive Proxy Statement seeking to inspect certain Amedisys corporate books and records under Section 220 of the Delaware General Corporation Law. See the Company's Current Report on Form 8-K dated September 1, 2023 for additional information. Amedisys believes that the allegations in the ~~complaints, demand letters and Section 220 demand letters lack merit and that Amedisys' disclosures have at all times complied with the applicable laws.~~

Nevertheless, lawsuits may continue to be filed against us, our Board of Directors or other parties to the Merger Agreement, challenging the Merger or making other claims in connection therewith. Such lawsuits may be brought by our purported stockholders and may seek, among other things, to enjoin consummation of the Merger. One of the conditions to the consummation of the Merger is the absence of any order or law that has the effect of enjoining or otherwise prohibiting the consummation of the Merger. As such, if the plaintiffs in such lawsuits are successful in obtaining an injunction prohibiting the defendants from completing the Merger on the agreed upon terms, then such injunction may prevent the Merger from becoming effective, or from becoming effective within the expected timeframe.21

complaints, demand letters and Section 220 demand letters lack merit and that Amedisys' disclosures have at all times complied with the applicable laws.

On November 12, 2024, the DOJ and the attorneys general of the states of Maryland, Illinois, New Jersey and New York filed a lawsuit commencing litigation (the “DOJ Action”) against Amedisys and UnitedHealth Group in the U.S. District Court for the District of Maryland, alleging that the Merger, if consummated, would violate Section 7 of the Clayton Act and so should be enjoined and that Amedisys committed certain violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and requests civil penalties against Amedisys for alleged violations of Section 7A. We believe the plaintiffs’ claims are without merit and intend to vigorously defend against such claims. The DOJ Action remains pending. The U.S. District Court for the District of Maryland has tentatively set October 27, 2025 as the start date for the trial, but may reschedule the trial to begin later, on or about February 9, 2026. The U.S. District Court for the District of Maryland has stated that it will make a final determination as to the trial date in late August 2025.

Lawsuits may continue to be filed against us, our Board of Directors or other parties to the Merger Agreement, challenging the Merger or making other claims in connection therewith. Such lawsuits may be brought by our purported stockholders and may seek, among other things, to enjoin consummation of the Merger. One of the conditions to the consummation of the Merger is the absence of any order or law that has the effect of enjoining or otherwise prohibiting the consummation of the Merger. As such, if the plaintiffs in such lawsuits are successful in obtaining an injunction prohibiting the defendants from completing the Merger on the agreed upon terms, then such injunction may prevent the Merger from becoming effective, or from becoming effective by the end of the Waiver Period.

Risks Related to Reimbursement

Federal and state changes to reimbursement and other aspects of Medicare and Medicaid could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Our net service revenue is primarily derived from Medicare, which accounted for 7370%, 7473% and 7574% of our consolidated net service revenue during ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively. Payments received from Medicare are subject to changes made through federal legislation. When such changes are implemented, we must also modify our internal billing processes and procedures accordingly, which can require significant time and expense. These changes, as further detailed in Part I, Item 1, “Business: Payment for Our Services,” can include changes to base payments and adjustments for home health services, changes to cap limits and per diem rates for hospice services and changes to Medicare eligibility and documentation requirements or changes designed to restrict utilization. Any such changes, including retroactive adjustments, adopted in the future by CMS could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

~~Section~~The ~~6407 of the~~ Affordable Care Act~~, as implemented by 42 CFR § 424.22,~~ added Medicare requirements for face-to-face encounters to support claims for home health services. The requirements for face-to-face encounters continue to be one of the most complex issues in the industry and can be the source of claims denials if not fulfilled. ~~Section~~The ~~6407(d) of the~~ Affordable Care Act also provided that the requirements for face-to-face encounters in the provisions described above shall apply in the case of physicians making certifications for home health ~~services~~ under ~~title XIX of the Act (~~Medicaid) in the same manner and to the same extent as such requirements apply under ~~title XVIII (~~Medicare).

20There are continuing efforts to reform governmental health care programs that could result in major changes in the health care delivery and reimbursement system on a national and state level, including changes directly impacting the reimbursement systems for our home health and hospice care centers. The U.S. federal budget is subject to change, there is a new administration, and the Medicare program is frequently mentioned as a target for spending cuts. Within the Medicare program, the hospice benefit is often specifically targeted for cuts. The full impact on our business of any future cuts in Medicare or other programs is uncertain. Though we cannot predict what, if any, reform proposals will be adopted, health care reform and legislation may have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows through decreasing payments made for our services.

There are continuing efforts to reform governmental health care programs that could result in major changes in the health care delivery and reimbursement system on a national and state level, including changes directly impacting the reimbursement systems for our home health and hospice care centers. The U.S. federal budget is subject to change, and the Medicare program is frequently mentioned as a target for spending cuts. Within the Medicare program, the hospice benefit is often specifically targeted for cuts. The full impact on our business of any future cuts in Medicare or other programs is uncertain. Though we cannot predict what, if any, reform proposals will be adopted, health care reform and legislation may have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows through decreasing payments made for our services.

We could also be affected adversely by the continuing efforts of governmental payors to contain health care costs. We cannot assure you that reimbursement payments under governmental payor programs, including Medicare supplemental insurance policies, will remain at levels comparable to present levels or will be sufficient to cover the costs allocable to patients eligible for reimbursement pursuant to these programs. Any such changes could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Future cost containment initiatives undertaken by private third-party payors may limit our future revenue and profitability.

Our non-Medicare revenue and profitability are affected by continuing efforts of third-party payors to maintain or reduce costs of health care by lowering payment rates, narrowing the scope of covered services, increasing case management review of services and negotiating pricing. There can be no assurance that third-party payors will make timely payments for our services, and there is no assurance that we will continue to maintain our current payor or revenue mix. We are continuing our efforts to develop our non-Medicare sources of revenue. Any changes in payment levels from current or future third-party payors could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Possible changes in the case mix of patients, as well as payor mix and payment methodologies, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Our revenue is determined by a number of factors, including our mix of patients and the rates of payment among payors. Changes in the case mix of our patients, payment methodologies or the payor mix among Medicare, Medicaid and private payors could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Our failure to negotiate favorable managed care contracts, or our loss of existing favorable managed care contracts, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

One of our strategies is to diversify our payor sources by increasing the business we do with managed care companies. We strive to put in place favorable contracts with managed care payors; however, we may not be successful in these efforts. Additionally, there is a risk that the favorable managed care contracts that we put in place may be terminated. Managed care contracts typically permit the payor to terminate the contract without cause, on very short notice, typically 60 days, which can provide payors leverage to reduce volume or obtain favorable pricing. Our failure to negotiate and put in place favorable managed care contracts, or our failure to maintain in place favorable managed care contracts, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Quality reporting requirements may negatively impact Medicare reimbursement.

Hospice quality reporting was mandated by the ~~Patient Protection and Affordable Health Care Act and the Health Care and Education Reconciliation Act ("~~PPACA"), which directs the Secretary to establish quality reporting requirements for hospice programs. Failure to submit required quality data will result in a specified reduction to the market basket percentage increase for that fiscal year. This quality reporting program is currently “pay-for-reporting,” meaning it is the act of submitting data that determines compliance with program requirements.

OnBeginning ~~July 28, 2023, CMS issued a final rule (CMS-1787-F) which updated Medicare hospice payments and the aggregate cap amount for fiscal year 2024 (the "FY 2024 Hospice Final Rule")~~ in accordance with existing statutory and regulatory requirements. The FY 2024 Hospice Final Rule also finalized the codification of the Hospice Quality Reporting Program ("HQRP") data submission threshold policy adopted in the fiscal year ("FY") 2016 Hospice Final Rule at §418. Section 1814(i)(5)(A)(i) of the Act was amended to change the payment reduction for failing to meet hospice quality reporting requirements from 2 to 4 percentage points. Therefore, beginning in FY 2024 and for each subsequent year, hospices that fail to meet quality reporting requirements will receive a 4 percentage point reduction to the annual hospice payment update percentage increase for the year. ~~The~~For example, the FY 2024 rate for hospices that dodid not submit the required quality data would behave been updated to -0.9%, which is the FY 2024 hospice payment update percentage of 3.1% minus 4 percentage points.

21On July 30, 2024, CMS issued the 2025 Hospice Final Rule which provided updates to the Hospice Quality Reporting Program ("HQRP") for 2025. The rule finalizes two new process measures for the HQRP, timely follow-up for pain impact and timely follow-up for non-pain symptom impact, which are expected to begin in FY 2028. The reporting of these two measures would be through the new Hospice Outcomes and Patient Evaluation ("HOPE") instrument, described below. These process measures address hospice care delivery as they document whether a follow-up visit occurred within 48 hours of an initial assessment where there was an impact of moderate or severe symptoms with and without pain.

~~Section~~The ~~1895(b)(3)(B)(v)~~rule ofalso ~~the~~adopts ~~Social~~and ~~Security~~implements ~~Act requires~~ the ~~submission~~HOPE ofpatient-level ~~quality~~ data bycollection ~~home~~tool, ~~health~~beginning ~~agencies.~~with ~~Failure~~FY to2025. ~~submit~~HOPE ~~quality~~will collect data ~~will~~at ~~result~~multiple intime apoints 2%across ~~reduction~~the inhospice ~~the~~stay, ~~home~~including ~~health~~admission, ~~agency's~~the ~~annual~~HOPE ~~home~~Update ~~health~~Visit ~~payment~~(“HUV”) ~~update~~and ~~percentage~~discharge. ~~This~~Compared ~~pay-for-reporting~~to ~~requirement~~the ~~was~~Hospice ~~implemented~~Item onSet ~~January~~("HIS") 1,(which ~~2007.~~only Incollects ~~the~~data ~~Calendar~~at ~~Year~~hospice ~~2015~~admission ~~Home~~and ~~Health Final Rule~~discharge), ~~CMS~~HOPE ~~defined~~will aenable ~~more~~CMS ~~explicit~~to ~~“Pay~~gather patient-~~for-Reporting~~level ~~Performance~~data ~~Requirement”~~during bytheir ~~which~~hospice ~~provider~~stay ~~compliance~~to ~~with~~improve patient quality ~~reporting~~of ~~requirements can be measured~~care. In ~~the~~addition, ~~Calendar~~HOPE ~~Year~~includes ~~2016~~several ~~Home~~domains ~~Health~~that ~~Final~~are ~~Rule,~~new ~~CMS~~or ~~required~~expanded ~~home~~relative ~~health agencies~~ to ~~report~~HIS, ~~prescribed~~including: ~~quality~~sociodemographic ~~assessment~~(updated), ~~data~~diagnoses ~~for~~(expanded), asymptom ~~minimum~~impact ofassessment, ~~90%~~skin ofconditions ~~all~~and ~~patients~~imminent death.

In addition, this rule finalizes changes to the Hospice Consumer Assessment of Healthcare Providers and Surveys ("CAHPS") based on the results of a mode experiment conducted in 2021 and summarizes stakeholder input on potential data collection items related to four social determinants of health items relevant to the HQRP (housing instability, food insecurity, utilities and transportation challenges).

The Social Security Act requires the submission of quality data by home health agencies. Failure to submit quality data will result in a 2% reduction in the home health agency's annual home health payment update percentage. CMS has an explicit “Pay-

for-Reporting Performance Requirement” by which provider compliance with quality reporting requirements can be measured. CMS also requires home health agencies to report prescribed quality assessment data for a minimum of 90% of all patients.

The Improving Medicare Post-Acute Care Transformation Act of 2014 (the “IMPACT Act”) requires the submission of standardized data by home health agencies and other providers. Specifically, the IMPACT Act requires, among other significant activities, the reporting of standardized patient assessment data with regard to quality measures, resource use and other measures. Failure to report data as required will subject providers to a 2% reduction in market basket prices then in effect.

There can be no assurance that all of our agencies will continue to meet quality reporting requirements in the future which may result in one or more of our agencies seeing a reduction in its Medicare reimbursements. Regardless, we, like other healthcare providers, are likely to incur additional expenses in an effort to comply with additional and changing quality reporting requirements.

Value-based purchasing may negatively impact Medicare reimbursement.

Both government and private payors are increasingly looking to value-based purchasing to contain costs. Value-based purchasing focuses on quality of outcomes and efficiency of care, rather than quantity of care. ~~The first performance year of the expanded value-based purchasing model began on January 1, 2023, and the model has been expanded to all 50 states.~~ Under the expanded model, home health agencies receive adjustments to their Medicare fee-for-service payments based on their performance against a set of quality measures, relative to their peers' performance. Performance on these quality measures in a specified year (performance year) impacts payment adjustments in a later year (payment year). CMS may also create a similar plan for hospices in the future. Government and private payors’ implementation of value-based purchasing requirements could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. The Calendar Year 2024 Home Health Final Rule noted that agencies certified in the value-based purchasing model before January 1, 2022 will have a reduction or an increase to their Medicare payments by up to 5% based on their performance on specified quality measures, beginning in CY 2025.

Any economic downturn, deepening of an economic downturn, continued deficit spending by the ~~Federal~~federal ~~Government~~government, reductions in government spending for healthcare programs or state budget pressures may result in a reduction in payments and covered services.

Adverse developments in the United States could lead to a reduction in ~~Federal~~federal ~~Government~~government expenditures, including governmentally funded programs in which we participate, such as Medicare and Medicaid. In addition, if at any time the ~~Federal~~federal ~~Government~~government is not able to meet its debt payments unless the federal debt ceiling is raised, and legislation increasing the debt ceiling is not enacted, the ~~Federal~~federal ~~Government~~government may stop or delay making payments on its obligations, including funding for government programs in which we participate, such as Medicare and Medicaid. Failure of the government to make payments under these programs could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Further, any failure by the United States Congress to complete the federal budget process and fund government operations may result in a ~~Federal~~federal ~~Government~~government shutdown, potentially causing us to incur substantial costs without reimbursement under the Medicare program, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. As an example, the failure of the 2011 Joint Select Committee to meet its Deficit Reduction goal resulted in a reduction in Medicare home health and hospice payments of 2% beginning April 1, 2013 ("sequestration" - suspended from May 1, 2020 through March 31, 2022; reinstated at 1% for the period April 1, 2022 through June 30, 2022 and at 2% thereafter). Moreover, the new U.S. presidential administration has issued a number of executive orders intended to reduce government spending. New executive orders and legislation could change reimbursement methodologies and/or the number of individuals eligible for government healthcare programs.

Historically, state budget pressures have resulted in reductions in state spending. Given that Medicaid outlays are a significant component of state budgets, we can expect continuing cost containment pressures on Medicaid outlays for our services.

In addition, sustained unfavorable economic conditions may affect the number of patients enrolled in managed care programs and the profitability of managed care companies, which could result in reduced payment rates and could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

2224

Risks Related to our Operations

A shortage of qualified ~~nursing staff and other~~ clinicians, such as ~~therapists~~nurses and ~~nurse practitioners~~therapists, could materially impact our ability to attract, train and retain qualified personnel and could increase operating costs.

We compete for qualified personnel with other healthcare providers. Our ability to attract and retain clinicians depends on several factors, including our ability to provide these personnel with attractive assignments and competitive salaries and benefits. We cannot be assured we will succeed in any of these areas. In addition, there are shortages of qualified health care personnel in some of our markets. As a result, we may face higher costs of attracting clinicians and providing them with more attractive benefit packages than we originally anticipated, or we may have to utilize contract clinicians, both of which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. In addition, if we expand our operations into geographic areas where health care providers historically have been unionized, or if any of our care center employees become unionized, being subject to a collective bargaining agreement may have a negative impact on our ability to timely and successfully recruit qualified personnel and may increase our operating costs. In some circumstances, we may have to hire contract clinicians to fulfill staffing needs, which could increase the risk of an adverse patient event. Generally, if we are unable to attract and retain clinicians, the quality of our services may decline, and we could lose patients and referral sources, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

We may be more vulnerable to the effects of a public health emergency than other businesses due to the nature of our patient population and the physical proximity required by our operations, which could harm our business disproportionately to other businesses.

The majority of our patients are older individuals and/or individuals with complex medical challenges or multiple ongoing diseases, many of whom may be more vulnerable than the general public during a pandemic or in a public health emergency. Our employees are also at greater risk of contracting contagious diseases due to their increased exposure to vulnerable individuals. Our employees could also have difficulty attending to our patients if a program of social distancing or quarantine is instituted in response to a public health emergency. In addition, we may expand existing internal policies in a manner that may have a similar effect. If the virus that causes COVID-19 and its potentially more contagious variants cause an additional resurgence of infections of COVID-19, if new variants that are resistant to government approved COVID-19 vaccinations continue to emerge, or if an influenza or other pandemic were to occur, we could suffer significant losses to our patient population or a reduction in the availability of our employees and caregivers, and we could be required to hire replacements for affected workers at an inflated cost. Accordingly, public health emergencies could have a disproportionate material adverse effect on our financial condition, results of operations and cash flows.

Because we are limited in our ability to control rates received for our services, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected if we are not able to maintain or reduce our costs to provide such services.

As Medicare is our primary payor and rates are established through federal legislation, we have to manage our costs of providing care to achieve a desired level of profitability. Additionally, non-Medicare rates are difficult for us to negotiate as such payors are under pressure to reduce their own costs. As a result, we manage our costs in order to achieve a desired level of profitability, including, but not limited to, centralization of various processes, the use of technology and management of the number of employees utilized. If we are not able to continue to streamline our processes and reduce our costs, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

If we are unable to consistently provide high quality of care, our business will be adversely impacted.

Providing quality patient care is the cornerstone of our business. We believe that hospitals, physicians and other referral sources refer patients to us in large part because of our reputation for delivering quality care. Clinical quality has become increasingly important within our industry. Medicare imposes a financial penalty upon hospitals that have excessive rates of patient readmissions within 30 days from hospital discharge. We believe this regulation provides a competitive advantage to home health providers who can differentiate themselves based upon quality, particularly by ~~achieving~~lowering ~~low~~potentially ~~patient~~preventable ~~acute~~hospitalizations ~~care hospitalization readmission rates~~ and by implementing disease management programs designed to be responsive to the needs of patients served by referring hospitals. We are focused intently upon improving our patient outcomes, particularly our ~~patient~~potentially ~~acute~~preventable ~~care hospitalization readmission rates~~hospitalizations. If we should fail to attain our goals regarding ~~acute~~potentially ~~care~~preventable ~~hospitalization~~hospitalizations ~~readmission rates~~ and other quality metrics, we expect our ability to generate referrals would be adversely impacted, which could have a material adverse effect upon our business and consolidated financial condition, results of operations and cash flows.

23Additionally, Medicare has established consumer-facing websites, Home Health Compare and Hospice Compare, that present data regarding our performance on certain quality measures compared to state and national averages. Failure to achieve or

Additionally, Medicare has established consumer-facing websites, Home Health Compare and Hospice Compare, that present data regarding our performance on certain quality measures compared to state and national averages. Failure to achieve or exceed these averages may negatively affect our rates of reimbursement and our ability to generate referrals, which could have a material adverse effect upon our business and consolidated financial condition, results of operations and cash flows.25

exceed these averages may negatively affect our rates of reimbursement and our ability to generate referrals, which could have a material adverse effect upon our business and consolidated financial condition, results of operations and cash flows.

If we are unable to maintain relationships with existing patient referral sources, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

Our success depends on referrals from physicians, hospitals and other sources in the communities we serve and on our ability to maintain good relationships with existing referral sources. Our referral sources are not (and cannot be) contractually obligated to refer patients to us and may refer their patients to other providers. Our growth and profitability depend, in part, on our ability to establish and maintain close working relationships with these patient referral sources and to increase awareness and acceptance of the benefits of home health and hospice care by our referral sources and their patients. Our loss of, or failure to maintain, existing relationships or our failure to develop new referral relationships could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Our industry is highly competitive, with few barriers to entry in certain states.

There are few barriers to entry in home health and hospice markets that do not require a CON, POA or FNR. Our primary competition comes from local privately-owned, publicly-owned and hospital-owned health care providers. We compete based on the availability of personnel, the quality of services, expertise of visiting staff and, in certain instances, on the price of our services. In addition, we compete with a number of non-profit organizations and tax-supported governmental agencies that finance acquisitions and capital expenditures on a tax-exempt or tax-favorable basis or receive charitable contributions that are unavailable to us. Increased competition in the future may limit our ability to maintain or increase our market share.

Further, the introduction of new and enhanced service offerings by others, in combination with industry consolidation and the development of strategic relationships by our competitors (including mergers of competitors with each other and with insurers) could cause a decline in revenue or loss of market acceptance of our services or make our services less attractive.

Managed care organizations and other third-party payors continue to consolidate, which enhances their ability to influence the delivery of health care services. Consequently, the health care needs of patients in the United States are increasingly served by a smaller number of managed care organizations. These organizations generally enter into service agreements with a limited number of providers. Our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected if these organizations terminate us as a provider and/or engage our competitors as a preferred or exclusive provider. In addition, should private payors, including managed care payors, seek to negotiate additional discounted fee structures or the assumption by health care providers of all or a portion of the financial risk through prepaid capitation arrangements, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

If we are unable to react competitively to new developments, our operating results may suffer. State CON, POA or FNR laws often limit the ability of competitors to enter into a given market, are not uniform throughout the United States and are frequently the subject of efforts to limit or repeal such laws. If states remove existing CONs, POAs or FNRs, we could face increased competition in these states. There can be no assurances that other states will not seek to eliminate or limit their existing CON, POA or FNR programs, which could lead to increased competition in these states. Further, we cannot assure you that we will be able to compete successfully against current or future competitors, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

The success of our high acuity care segment depends on our ability to enter into capitation and other forms of risk-based contracts with managed care health plans. If we are unsuccessful in obtaining these contracts or if we are unsuccessful in managing costs associated with risk-based contracts, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

Our acquisition of Contessa not only established the foundation for our high acuity care segment, but it also added key infrastructure to enable us to more quickly and effectively enter into risk-based contracts with managed care health plans. Should our high acuity care joint venture partnerships not deliver sufficient perceived value to managed care health plans, those health plans may limit or forego opportunities to partner with us in expanded risk-based contracts. Additionally, assuming risk from managed care health plans requires that the appropriate clinical and operating protocols be in place to actuarially assess eligible members and determine historical baseline healthcare expenditures, enroll eligible members into the program, effectuate a clinically effective plan of care to treat those patients primarily in a home-based setting and coordinate care throughout various phases of the member’s treatment including ~~proactive primary care and~~ palliative care services. Should we be ineffective in identifying and enrolling members into the program or should the clinical treatment plans we implement for enrolled members not result in reduced healthcare costs during the period in which those members are enrolled, we could incur significant additional costs

2426

~~enrolled members not result in reduced healthcare costs during the period in which those members are enrolled, we could incur significant additional costs~~ under these contracts that exceed the revenues we receive. These negative outcomes could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Our business depends on our information systems. A cyber-attack, security breach or our inability to effectively integrate, manage and keep our information systems secure and operational could disrupt our operations.

AsIn ageneral, ~~healthcare~~all ~~provider~~information systems, weincluding ~~face~~those ~~increased~~we ~~legal~~host ~~and~~or ~~regulatory~~have ~~compliance~~hosted ~~risk~~by inthird ~~the~~parties, ~~event~~are ofvulnerable ato ~~cyber-attack.~~damage ~~Healthcare~~or ~~providers~~interruption ~~and~~from ~~health~~fire, ~~insurance~~flood, ~~plans~~power ~~must~~loss, ~~comply~~telecommunications ~~with~~failure, ~~the~~human ~~HIPAA~~error, ~~regulations~~malicious ~~regarding~~acts, ~~the~~break-ins ~~privacy~~ and ~~security~~other ofintentional ~~protected~~or ~~health~~unintentional ~~information~~events. ~~The~~Our ~~HIPAA~~business ~~regulations~~is ~~impose~~also ~~significant~~at ~~requirements~~risk onfrom ~~providers~~and ~~with regard to how such protected health information~~ may be ~~used~~materially ~~and~~impacted ~~disclosed. Further, the regulations include extensive~~ and/or ~~complex~~disrupted ~~requirements~~by ~~for~~information ~~providers~~security toincidents, ~~establish~~such ~~reasonable~~as ~~and~~ransomware, ~~appropriate~~malware, ~~administrative~~viruses, ~~technical and physical safeguards to ensure the confidentiality~~phishing, ~~integrity~~social engineering and ~~availability~~other ofsecurity ~~protected health information~~events. ~~Even~~Such ~~when~~incidents ~~providers~~can ~~establish~~range ~~reasonable~~from ~~and~~individual ~~appropriate~~attempts ~~administrative,~~to ~~technical~~gain ~~and~~unauthorized ~~physical~~access ~~safeguards, it is difficult~~ to ~~fully protect~~ information technology systems ~~from~~to amore ~~breach~~sophisticated or security ~~incident~~threats. InThese ~~the~~events ~~event~~can ~~the~~also ~~provider~~result ~~experiences~~from ainternal ~~"breach" and protected health information is compromised~~compromises, ~~providers~~such ~~are~~as ~~obligated~~human ~~under~~error ~~HIPAA~~or toa ~~notify~~rogue ~~individuals,~~employee ~~the~~or ~~government~~contractor, and incan ~~the~~occur ~~event~~on ~~the~~our ~~breach~~systems ~~involves 500~~ or ~~more~~on ~~individuals,~~ the ~~media.~~systems ~~HIPAA directs the Secretary~~ of ~~HHS~~our topartners ~~provide for periodic audits to ensure covered entities (~~and ~~their~~subcontractors. ~~business associates~~Additionally, asour ~~that~~current ~~term~~information issystems ~~defined under HIPAA) comply with the applicable HIPAA requirements. Entities within the U.S. that~~ are ~~found~~subject to beother innon-environmental ~~violation~~risks, ofincluding ~~HIPAA~~technological ~~may~~obsolescence, bein ~~subject~~some ~~to significant civil~~instances, ~~criminal~~which ~~and~~may ~~administrative~~create ~~fines~~increased ~~and~~security ~~penalties~~ and/or ~~additional~~operational ~~reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance~~risk.

In addition to federal regulators, state attorneys general are also enforcing proactive security protocols and reporting requirements relating to information security breaches. All 50 states and the U.S. territories have breach notification laws; some of these laws also include proactive data security requirements. In addition to state laws regarding confidentiality of medical information, several states expanded state privacy laws regarding personal information which is more broadly defined than medical information.

Our networks, systems and devices store sensitive information, including intellectual property, proprietary business information and personal information of our patients, partners and employees. We have installed a number of protective technology systems and devices on our network, systems and point of care tablets in an attempt to prevent unauthorized access to information created, received, transmitted and maintained by us. However, healthcare companies are routinely targeted by threat actors, and no level of security can guarantee that cybersecurity incidents will not occur. In the event of a sophisticated ransomware attack, malware, viruses, phishing or social engineering, our technology may fail to adequately secure the protected health information and personal information we create, receive, transmit and maintain in our databases. In such circumstances, we may be held liable to our patients and regulators, which could result in fines, litigation or adverse publicity that could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Even if we are not held liable, any resulting negative publicity could harm our business and distract the attention of management.

~~Our~~As ~~business~~a ~~depends~~healthcare ~~on effective~~provider, ~~secure~~we face increased legal and ~~operational~~regulatory ~~information~~compliance ~~systems~~risk ~~that~~in ~~include~~the ~~systems~~event ~~provided~~of bya orcyberattack. ~~hosted~~Healthcare byproviders ~~external~~and ~~contractors,~~health ~~partners~~insurance plans must comply with the Health Insurance Portability and ~~other~~Accountability ~~service~~Act ~~providers.~~of ~~For~~1996 ~~example,~~("HIPAA") ~~our~~regulations ~~care~~regarding ~~centers~~the ~~depend~~privacy ~~upon~~and ~~our~~security of protected health information. ~~systems~~The ~~and~~HIPAA ~~software~~regulations ~~for~~impose ~~patient~~significant ~~care,~~requirements ~~accounting,~~on ~~billing,~~providers ~~collections,~~with ~~risk~~regard ~~management,~~to ~~quality~~how ~~assurance,~~such ~~human~~protected ~~resources~~health information may be used and disclosed. Further, ~~payroll~~the regulations include extensive and ~~other~~complex ~~information~~requirements ~~considered~~for providers to beestablish ~~sensitive~~reasonable and~~/or~~ ~~confidential~~appropriate administrative, ~~including~~technical and physical safeguards to ensure the confidentiality, integrity and availability of protected health information. ~~These~~HIPAA ~~third-party~~directs ~~vendors~~the orSecretary ~~"business~~of ~~associates",~~the inUnited ~~the~~States ~~event~~Department ~~the~~of ~~vendor~~Health ~~creates,~~and ~~receives,~~Human ~~transmits~~Services or("HHS") ~~maintains~~to ~~protected~~provide ~~health~~for ~~information~~periodic onaudits ~~our~~to ~~behalf~~ensure covered entities (and their business associates, ~~are~~as ~~required~~that toterm is defined under HIPAA) comply with ~~substantially~~ the ~~same~~applicable HIPAA requirements. asEntities within the ~~healthcare provider~~U.S. ~~This~~that isare ~~accomplished~~found ~~through~~to ~~the~~be ~~use~~in violation of ~~"Business~~HIPAA ~~Associate~~may ~~Agreements"~~be ~~with~~subject ~~vendors.~~to ~~However~~significant civil, ~~third-~~criminal and ~~fourth-party~~administrative ~~security~~fines ~~incidents~~and penalties and/or ~~supply-chain~~additional ~~cyber~~reporting ~~attacks~~and ~~have~~oversight ~~been~~obligations ~~increasingly~~if ~~common,~~required ~~and~~to ~~there~~enter isinto noa ~~way~~resolution ~~for~~agreement anand ~~organization~~corrective action plan with HHS to ~~ensure~~settle ~~that~~allegations ~~such~~of ~~incidents~~HIPAA non-compliance. Even when providers establish reasonable and ~~attacks~~appropriate doadministrative, ~~not~~technical ~~occur.~~and ~~The~~physical ~~occurrence~~safeguards, ofit ~~any~~is difficult to fully protect information ~~system~~systems ~~failure,~~from a breach or security incident,. orIn the event a ~~vendor's~~provider experiences a "breach" ofand protected health information is compromised, the ~~Business~~provider ~~Associate~~is ~~Agreement~~obligated ~~could~~under ~~result~~HIPAA into ~~interruptions~~notify individuals, ~~delays~~the government, ~~breaches~~and ofin ~~protected~~the ~~health~~event ~~information~~the ~~and~~breach ~~personal~~involves ~~information~~500 or more individuals, ~~loss~~the ormedia. ~~corruption~~There ofare ~~data~~significant costs associated with a breach, including investigation costs, remediation and ~~cessations~~mitigation orcosts, ~~interruptions~~notification incosts, attorney fees, litigation and the ~~availability~~potential offor ~~these~~reputational ~~systems~~harm and ~~the~~lost ~~information~~revenues ~~they~~due ~~create,~~to ~~receive,~~a ~~transmit~~loss orin ~~maintain~~confidence in the provider. ~~Any~~We ofcannot predict the costs to comply with these ~~events~~laws or ~~circumstances,~~the ~~among~~costs ~~others~~associated with a potential breach of protected health information, which could have ana material adverse effect on our business and consolidated financial condition, results of operations and cash flows, and ~~they could harm~~ our business reputation.

In ~~general,~~addition ~~all~~to ~~information~~federal ~~systems~~regulators, ~~including~~state ~~those~~attorneys wegeneral ~~host~~are oralso ~~have~~enforcing ~~hosted~~proactive bysecurity ~~third~~protocols ~~parties,~~and ~~are~~reporting ~~vulnerable~~requirements relating to ~~damage~~information orsecurity ~~interruption~~breaches. ~~from~~All ~~fire,~~50 ~~flood~~states, ~~power~~the ~~loss,~~District ~~telecommunications~~of ~~failure~~Columbia, ~~human~~and ~~error,~~the ~~malicious~~U.S. ~~acts,~~territories ~~break-ins~~have ~~and~~breach ~~other~~notification ~~intentional~~laws; orsome ~~unintentional~~of ~~events.~~these ~~Our~~laws ~~business is~~ also atinclude ~~risk~~proactive ~~from~~data ~~and~~security ~~may~~requirements. beIn ~~materially~~addition ~~impacted~~to ~~and/or~~state ~~disrupted~~laws byregarding ~~information~~confidentiality ~~security~~of ~~incidents~~medical information, ~~such~~several asstates ~~ransomware,~~expanded ~~malware,~~state ~~viruses,~~privacy ~~phishing,~~laws ~~social~~regarding ~~engineering~~personal ~~and~~information ~~other~~which ~~security~~is ~~events.~~more ~~Such~~broadly ~~incidents~~defined ~~can~~than ~~range~~medical ~~from~~information. ~~individual~~Some ~~attempts~~of tothese ~~gain~~laws ~~unauthorized~~exempt ~~access~~entities tothat ~~information~~are ~~technology~~subject ~~systems~~ to ~~more~~HIPAA, ~~sophisticated~~while ~~security~~others ~~threats.~~only ~~These~~exempt ~~events~~medical ~~can~~information ~~also~~covered ~~result~~by ~~from internal compromises~~HIPAA, ~~such~~but asretain ~~human~~applicability ~~error~~over orother apersonal ~~rogue employee~~ information.

25As cyber threats continue to evolve, we may be required to expend significant capital and other resources to protect against the threat of security breaches or to mitigate and alleviate problems caused by security incidents, including unauthorized access to protected health information and personal information stored in our information systems and the introduction of computer viruses or other malicious software programs to our systems. If we don't expend capital and other resources to continually enhance our security systems, our security measures may be inadequate to prevent security breaches, and our business operations and reputation could be materially adversely affected by federal and state fines and penalties, legal claims or proceedings, cancellation of contracts and loss of patients if security breaches are not prevented.

or contractor, and can occur on our systems or on the systems of our partners and subcontractors. Additionally, our current information systems are subject to other non-environmental risks, including technological obsolescence, in some instances, which may create increased security and/or operational risk.27

Our business depends on effective, secure and operational information systems that include systems provided by or hosted by external contractors, partners and other service providers. For example, our care centers depend upon information systems and software hosted by third-party vendors for patient care, accounting, billing, collections, risk management, quality assurance, human resources, payroll and other information considered to be sensitive and/or confidential, including protected health information. These third-party vendors or business associates, in the event the vendor creates, receives, transmits or maintains protected health information on our behalf, are required to comply with substantially the same HIPAA requirements as the healthcare provider. This is accomplished through the use of "Business Associate Agreements" with vendors. However, third- and fourth-party security incidents and supply-chain cyber-attacks have been increasingly common, and there is no way for an organization to ensure that such incidents and attacks do not occur. The occurrence of any information system failure, breach or security incident, or a vendor's breach of the Business Associate Agreement could result in interruptions, delays, breaches of protected health information and personal information, loss or corruption of data and cessations or interruptions in the availability of these systems and the information they create, receive, transmit or maintain. An extended service outage affecting these or other vendors, particularly where such vendor is the single source from which we obtain the services, could have a material adverse effect on our business or results of operations. For example, in February 2024, UnitedHealth Group announced a cyber-attack on the information technology systems of its subsidiary, Change Healthcare, one of the largest providers of healthcare payment systems in the United States. The Change Healthcare cybersecurity incident did not impact our day-to-day operations and did not have a material adverse effect on our business; however, we were delayed in submitting patient claims to certain non-Medicare payors. There was minimal impact to our Medicare claim submissions as we were able to quickly redirect our Medicare claims to an alternative clearinghouse. The delays in submitting non-Medicare claims resulted in a reduction of our operating cash flow and an estimated increase to our accounts receivable of approximately $60 million during the three month-period ended March 31, 2024. Future such events or circumstances, among others, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows, and they could harm our business reputation.

If we are subject to cyberattacks or security breaches in the future, this could result in harm to patients; business interruptions and delays; the loss, misappropriation, corruption or unauthorized access of data; litigation and potential liability under privacy, security and consumer protection laws or other applicable laws; reputational damage and federal and state governmental inquiries. Any such problems or failures and the costs incurred in correcting any such problems or failures could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Further, to the extent our external information technology contractors or other service providers have their own cyber-attack, security event or information technology failure, become insolvent or fail to support the software or systems we have licensed from them, our operations could be materially adversely affected. A failure to restore our information systems after the occurrence of any of these events could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Because of the protected health information we store and transmit, loss of electronically stored information for any reason could expose us to risk of regulatory action and litigation and possible liability and loss.

Problems with, or the failure of, our technology and systems or any system upgrades or programming changes associated with such technology and systems could have a material adverse effect on our operations, patient care, data capture and integrity, medical documentation, billing, collections, assessment of internal controls and management and reporting capabilities. If we experience a reduction in the performance, reliability or availability of our information systems, our operations and ability to produce timely and accurate reports could be materially adversely affected.

Our information systems and applications also require continual maintenance, upgrading and enhancement to meet our operational and security needs. Our acquisition activity requires transitions and integration of various information systems. We regularly upgrade and expand our information systems’ capabilities. If we experience difficulties with the transition and integration of information systems or are unable to implement, maintain or expand our systems properly, we could suffer from, among other things, operational disruptions, regulatory investigations or audits and increases in administrative expenses.

As cyber threats continue to evolve, we may be required to expend significant capital and other resources to protect against the threat of security breaches or to mitigate and alleviate problems caused by security incidents, including unauthorized access to protected health information and personal information stored in our information systems and the introduction of computer viruses or other malicious software programs to our systems. If we don't expend capital and other resources to continually enhance our security systems, our security measures may be inadequate to prevent security breaches, and our business operations and reputation could be materially adversely affected by federal and state fines and penalties, legal claims or proceedings, cancellation of contracts and loss of patients if security breaches are not prevented. The healthcare industry is currently a target for cyber criminals and is therefore experiencing increased scrutiny from federal and state regulators with respect to compliance with regulations designed to safeguard protected health information and mitigate cyber-attacks. There are significant costs associated with a breach, including investigation costs, remediation and mitigation costs, notification costs, attorney fees, litigation and the potential for reputational harm and lost revenues due to a loss in confidence in the provider. We cannot predict the costs to comply with these laws or the costs associated with a potential breach of protected health information, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows, and our business reputation.

If we are subject to cyber-attacks or security breaches in the future, this could result in harm to patients; business interruptions and delays; the loss, misappropriation, corruption or unauthorized access of data; litigation and potential liability under privacy, security and consumer protection laws or other applicable laws; reputational damage and federal and state governmental inquiries. Any such problems or failures and the costs incurred in correcting any such problems or failures could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Further, to the extent our external information technology contractors or other service providers have their own cyber-attack, security event or information technology failure, become insolvent or fail to support the software or systems we have licensed from them, our operations could be materially adversely affected. A failure to restore our information systems after the occurrence of any of these events could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Because of the protected health information we store and transmit, loss of electronically stored information for any reason could expose us to risk of regulatory action and litigation and possible liability and loss.

We believe we have all the necessary licenses from third parties to use technology and software that we do not own. A third-party could, however, allege that we are infringing its rights, which may deter our ability to obtain licenses on commercially reasonable terms from the third-party, if at all, or cause the third-party to commence litigation against us. In addition, we may find it necessary to initiate litigation to protect our trade secrets, to enforce our intellectual property rights and to determine the scope and validity of any proprietary rights of others. Any such litigation, or the failure to obtain any necessary licenses or other rights, could materially and adversely affect our business.

Software outages or disruptions, including due to cyberattacks, defects or other unanticipated performance problems, could adversely affect our business, results of operations and financial condition.

We rely on software and technology platforms from third parties to automate and streamline certain administrative processes and to support caregiver optimization. For example, we use Homecare Homebase software solutions in our home health and hospice segments for electronic medical recordkeeping, coding, scheduling patient visits, documentation review, payroll and billing. If any of these software or technology applications become unavailable for an extended period of time, due to a cyber breach, extended outages, interruptions, defects or errors, or because they are no longer available on commercially reasonable terms, or if any of these applications experience data loss, we will need to implement contingency plans accordingly, which could increase our expenses, delay or impair our aforementioned administrative processes, distract our management from ongoing business operations, and may impact our ability to bill for and seek reimbursement for our services, all of which could have an adverse effect on our business, financial condition, results of operations, and cash flows.

Our insurance liability coverage may not be sufficient for our business needs.

As a result of operating in the home health industry, our business entails an inherent risk of claims, losses and potential lawsuits alleging incidents involving our employees that may occur in a patient’s home. We maintain professional liability insurance to provide coverage to us and our subsidiaries against these risks. However, we cannot assure you claims will not be made in the future in excess of the limits of our insurance, nor can we assure you that any such claims, if successful and in excess of such limits, will not have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows or result in increased premiums or other insurance-related costs. In some states, state law may prohibit or limit insurance coverage for the risk of punitive damages arising from professional liability and general liability claims and/or litigation. As a result, we may be liable for punitive damage awards in these states that either are not covered or are in excess of our insurance policy limits. Our insurance coverage also includes fire, property damage, cyber security and general liability with varying limits. We cannot assure you that the insurance we maintain will satisfy claims made against us or that insurance coverage will continue to be available to us at commercially reasonable rates, in adequate amounts or on satisfactory terms. Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business.

property damage, cyber security and general liability with varying limits. We cannot assure you that the insurance we maintain will satisfy claims made against us or that insurance coverage will continue to be available to us at commercially reasonable rates, in adequate amounts or on satisfactory terms. Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business.

We may be subject to substantial malpractice or other similar claims.

As of February 1621, ~~2024~~2025, we have approximately 19,000 employees (11,~~600~~800 home health, 6,~~000~~100 hospice, 200 high acuity care and ~~1,000~~900 corporate employees). In addition, we employ direct care workers on a contractual basis to support our existing workforce. Due to the nature of our business, we, through our employees and caregivers who provide services on our behalf, may be the subject of medical malpractice claims. A court could find these individuals should be considered our agents, and, as a result, we could be held liable for their acts or omissions. We cannot predict the effect that any claims of this nature, regardless of their ultimate outcome, could have on our business or reputation or on our ability to attract and retain patients and employees. While we maintain malpractice liability coverage that we believe is appropriate given the nature and breadth of our operations, any claims against us in excess of insurance limits, or multiple claims requiring us to pay deductibles, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

If we are unable to maintain our corporate reputation, our business may suffer.

Our success depends on our ability to maintain our corporate reputation, including our reputation for providing quality patient care and for compliance with Medicare requirements and the other laws to which we are subject. Adverse publicity surrounding any aspect of our business, including the death or disability of any of our patients due to our failure to provide proper care, or due to any failure on our part to comply with Medicare requirements, HIPAA requirements or other laws to which we are subject, could negatively affect our Company’s overall reputation and the willingness of referral sources to refer patients to us. Further, the poor performance, reputation or negative conduct of competitors may have spillover effects that adversely affect the industry and our brand.

A write off of a significant amount of intangible assets or long-lived assets could have a material adverse effect on our consolidated financial condition and results of operations.

A significant and sustained decline in our stock price and market capitalization, a significant decline in our expected future cash flows, a significant adverse change in the business climate or slower growth rates could result in the need to perform an impairment analysis under Accounting Standards Codification (“ASC”) Topic 350 “Intangibles – Goodwill and Other” in future periods in addition to our annual impairment test. If we were to conclude that a write down of goodwill is necessary, then we would record the appropriate charge, which could result in material charges that are adverse to our consolidated financial condition and results of operations. See Part II, Item 8, Note 65 – Goodwill and Other Intangible Assets, Net to our consolidated financial statements for additional information.

Because we have grown in part through acquisitions, goodwill and other acquired intangible assets represent a substantial portion of our assets. Goodwill was $1.2 billion as of December 31, 2023, and if we make additional acquisitions, it is likely that we will record additional goodwill and intangible assets in our consolidated financial statements. We also have long-lived assets consisting of property and equipment, operating lease right of use assets and other identifiable intangible assets of $233.5 million as of December 31, 2023, which we review on a periodic basis as well as when events or circumstances indicate that the carrying amount of an asset may not be recoverable. If a determination that a significant impairment in value of our unamortized intangible assets or long-lived assets occurs, such determination could require us to write off a substantial portion of our assets. A write off of these assets could have a material adverse effect on our consolidated financial condition and results of operations.29

Because we have grown in part through acquisitions, goodwill and other acquired intangible assets represent a substantial portion of our assets. Goodwill was $1.2 billion as of December 31, 2024, and if we make additional acquisitions, it is likely that we will record additional goodwill and intangible assets in our consolidated financial statements. We also have long-lived assets consisting of property and equipment, operating lease right of use assets and other identifiable intangible assets of $204.8 million as of December 31, 2024, which we review on a periodic basis as well as when events or circumstances indicate that the carrying amount of an asset may not be recoverable. If a determination that a significant impairment in value of our unamortized intangible assets or long-lived assets occurs, such determination could require us to write off a substantial portion of our assets. A write off of these assets could have a material adverse effect on our consolidated financial condition and results of operations.

Our operations could be impacted by war, terrorism, natural or man-made disasters and climate change.

The Company's business may be adversely affected by instability, disruption or destruction in a geographic region in which it operates, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, climate change, natural or man-made disasters and extreme weather conditions, such as hurricanes, tornadoes, wildfires, earthquakes, floods and severe snow and ice storms. Any such event in the markets in which we operate could not only impact the day-to-day operations of our care centers but could also disrupt our relationships with patients, employees and referral sources located in the affected areas and, in the case of our corporate office, our ability to provide administrative support services, including payroll, billing and collection services. In addition, any episode of care that is not completed due to such an event will generally result in lower revenue for the episode. Our corporate office and a number of our care centers are located in the southeastern United States and the Gulf Coast Region, increasing our exposure to hurricanes and flooding. Moreover, global climate change could increase the intensity of individual hurricanes or the number of hurricanes that occur each year. Even if our facilities are not directly damaged, we may experience considerable disruptions in our operations due to property damage or electrical outages experienced in storm-affected areas by our care givers, payors, vendors and others. Additionally, long-term adverse weather conditions, whether caused by global climate change or otherwise, could cause an outmigration of people from the communities where our care centers are located. If any of the circumstances described above occur, there could be a harmful effect on our business and our results of operations could be adversely affected.

27Further, the ongoing Russia-Ukraine conflict has created extreme volatility in the global financial markets and is expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. Any such volatility or disruptions or similar disruptions caused by the Israel-Hamas War may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy resulting from the conflict in Ukraine, the Middle East or any other geopolitical tensions.

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We have begun utilizing artificial intelligence, including generative artificial intelligence and similar tools and technologies (collectively, “AI”) in connection with our business to improve or enhance patient workflows and predictive analytics. There are significant risks involved in using AI, and no assurance can be provided that our use of AI will enhance our services, produce the intended results or keep pace with our competitors. For example, AI algorithms may be flawed, insufficient, of poor quality, rely upon inaccurate data, reflect unwanted forms of bias, or contain other errors or inadequacies, any of which may not be easily detectable; AI has been known to produce false or “hallucinatory” inferences or outputs; our use of AI can present ethical issues and may subject us to new or heightened legal, regulatory, ethical or other challenges; and inappropriate or controversial data practices by developers and end-users, unauthorized data disclosure or other factors adversely affecting public opinion of AI, could impair the acceptance of AI solutions, including those incorporated in our services.

If the AI tools that we use are deficient, inaccurate or controversial, we could incur operational inefficiencies, competitive harm, legal liability, brand or reputational harm or other adverse impacts on our business and financial results. The accuracy of the results of our use of AI depends on our ability to train our employees, consultants or other service providers on the technology we are using and to make adjustments to the algorithms as needed based on periodic quality assessments of the information received or outputs produced. AI tools may lack transparency and explainability, making it difficult to fully understand how AI systems arrive at certain decisions or outcomes. This lack of clarity may hinder our ability to provide sufficient explanations to regulators, patients and other stakeholders, which could lead to increased scrutiny, regulatory fines or legal challenges. As AI decisions are integrated into business processes, the inability to clearly articulate how those decisions are made may undermine confidence in the AI systems, reduce trust in our services, and create compliance risks. In addition, lack of transparency may make it more difficult to defend disputes or legal actions. As AI regulation evolves to demand more explainability and transparency, failure to meet these expectations could result in adverse impacts on our operations, financial performance and reputation.

If we do not have sufficient rights to use the data or other material or content on which the AI tools we use rely, we also may incur liability through the violation of applicable laws and regulations, third-party intellectual property, data privacy or other rights, or contracts to which we are a party. If we fail to successfully integrate AI into our business processes or if we fail to keep pace with rapidly evolving AI technological developments, we may face a competitive disadvantage. In addition, AI regulation is rapidly evolving worldwide as legislators and regulators increasingly focus on these powerful emerging technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and security, consumer protection, competition and equal opportunity laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations. AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their platform moderation, data privacy and security laws and regulations to AI or are considering general legal frameworks for AI. For example, California passed the Generative Artificial Intelligence Training Data Transparency Act, Colorado passed the Colorado Artificial Intelligence Act, and Utah passed the Utah Artificial Intelligence Policy Act, all of which will have implications on the ways that businesses can use AI technologies. In addition, the FTC has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI/machine learning where they allege the company has violated privacy and consumer protection laws. We may not be able to anticipate how to respond to these rapidly evolving frameworks, and we may need to expend resources to adjust our operations or offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions. If we cannot use AI/machine learning or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage. Furthermore, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI.

Risks Related to our Growth Strategies

Our long-term growth strategy depends on our ability to acquire additional care centers and integrate and operate these care centers effectively, make investments and enter into joint ventures and other strategic relationships. If our long-term growth strategy is unsuccessful or we are not able to successfully integrate newly acquired care centers into our existing operations, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

We may not be able to fully integrate the operations of our acquired businesses with our current business structure in an efficient and cost-effective manner. Acquisitions, investments, joint ventures or strategic relationships involve significant risks and uncertainties, including:

•Difficulties in recouping partial episode payments and other types of misdirected payments for services from the previous owners in an acquisition;

•Difficulties integrating acquired personnel and business practices into our business;

•The potential loss of key employees, referral sources or patients of acquired care centers;

•The delay in payments associated with change in ownership, control and the internal processes of the Medicare Administrative Contractors;

•The assumption of liabilities and exposure to unforeseen liabilities of acquired care centers;

•The incurrence or assumption of significant debt, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense and diminish our future access to the capital markets;

•Diverging interests from those of our joint venture partners or other strategic partners - we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, exposing us to additional risk;

•Variability in operating results which could cause our financial results to differ from our own expectations or the investment community’s expectations in any given period, or over the long-term; and

•Pre-closing and post-closing earnings charges which could adversely impact operating results in any given period.

As a result of our acquisitions and investments, we have recorded significant goodwill and other assets on our balance sheet. If we are not able to realize the value of these assets, or if the fair value of our investments declines, we may be required to record impairment charges which could have a material adverse effect on our consolidated financial condition and results of operations.

Further, the financial benefits we expect to realize from many of our acquisitions are largely dependent upon our ability to improve clinical performance, overcome regulatory deficiencies, improve the reputation of the acquired business in the community and control costs. As we expand our markets, our growth could strain our resources, including our management, information and accounting systems, regulatory compliance, logistics and other internal controls. The failure to accomplish any of these objectives, to effectively integrate any of these businesses or to maintain a sufficient level of resources to match our growth could have material adverse effects on our business and consolidated financial condition, results of operations and cash flows.

information and accounting systems, regulatory compliance, logistics and other internal controls. The failure to accomplish any of these objectives, to effectively integrate any of these businesses or to maintain a sufficient level of resources to match our growth could have material adverse effects on our business and consolidated financial condition, results of operations and cash flows.

The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us, and as a result, we may face unexpected liabilities.

Certain of the acquisition agreements by which we have acquired companies require the former owners to indemnify us against certain liabilities related to the operation of the acquired company before we acquired it. In most of these agreements, however, the liability of the former owners is limited, and certain former owners may be unable to meet their indemnification responsibilities. We cannot assure you that these indemnification provisions will protect us fully or at all, and as a result, we may face unexpected liabilities that could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

State efforts to regulate the establishment or expansion of health care providers could impair our ability to expand our operations.

Some states require health care providers (including skilled nursing facilities, hospice care centers, home health care centers and assisted living facilities) to obtain prior approval, known as a CON, POA or FNR, in order to commence operations (see Part I, Item 1, “Our Regulatory Environment” for additional information on CONs, POAs and FNRs). If we are not able to obtain such approvals, our ability to expand our operations could be impaired, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Additionally, a growing number of states have enacted mini-Hart-Scott-Rodino ("mini-HSR") laws that require state approval of transactions involving certain health care entities. States with mini-HSR laws include California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont and Washington.

Federal regulation may impair our ability to consummate acquisitions or open new care centers.

Changes in federal laws or regulations may materially adversely impact our ability to acquire care centers or open new start-up care centers. For example, the Social Security Act provides the Secretary with the authority to impose temporary moratoria on the enrollment of new Medicare providers, if deemed necessary to combat fraud, waste or abuse under government programs. While there are no active Medicare moratoria, there can be no assurance that CMS will not adopt a moratorium on new providers in the future. Additionally, in 2010, CMS implemented and amended a regulation known as the “36 Month Rule” that is applicable to home health and hospice care center acquisitions. Subject to certain exceptions, the 36 Month Rule prohibits buyers of certain home health and hospice care centers, those that either enrolled in Medicare or underwent a change in majority ownership fewer than 36 months prior to the acquisition, from assuming the Medicare billing privileges of the acquired care center. The 36 Month Rule may restrict bona fide transactions and potentially block new investments in home health and hospice agencies. These changes in federal laws and regulations, and similar future changes, may further increase competition for acquisition targets and could have a material detrimental impact on our acquisition strategy. Further, some states have enacted laws requiring merging parties in healthcare-related transactions to notify state agencies and observe waiting periods (e.g., from 30 days to, in some cases, months) prior to closing.

Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our business and consolidated financial condition, results of operations and cash flows.

We continually assess the strategic fit of our existing businesses and may divest, spin-off or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment. These transactions pose risks and challenges that could negatively impact our business and results of operations. For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms, within our anticipated timeframe or at all, and even after reaching a definitive agreement to sell or dispose a business, the sale is typically subject to satisfaction of pre-closing conditions which may not become satisfied. In addition, divestitures or other dispositions may dilute our earnings per share, have other adverse tax, financial and accounting impacts and distract management, and disputes may arise with buyers. In addition, we may retain responsibility for and/or agree to indemnify buyers against some known and unknown contingent liabilities related to certain businesses or assets we sell or dispose. Any of these conditions or liabilities may negatively impact our results of operations and cash flows.

Risks Related to Laws and Government Regulations

We are subject to extensive government regulation. Any changes to the laws and regulations governing our business, or to the interpretation and enforcement of those laws or regulations, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Our industry is subject to extensive federal and state laws and regulations. See Part I, Item 1, “Our Regulatory Environment” for additional information on such laws and regulations. Federal and state laws and regulations impact how we conduct our business, the services we offer and our interactions with patients, our employees and the public and impose certain requirements on us related to:

business, the services we offer and our interactions with patients, our employees and the public and impose certain requirements on us related to:

•licensure and certification;

•adequacy and quality of health care services;

•qualifications of health care and support personnel;

•quality and safety of medical equipment;

•confidentiality, maintenance and security associated with medical records and claims processing;

•relationships with physicians and other referral sources;

•operating policies and procedures;

•emergency preparedness risk assessments and policies and procedures;

•policies and procedures regarding employee relations;

•addition of facilities and services;

•billing for services;

•utilization of services;

•documentation required for billing and patient care; and

•reporting and maintaining records regarding adverse events.

These laws and regulations, and their interpretations, are subject to change. The new U.S. presidential administration has issued a number of executive orders intended to reduce government spending, among other regulatory changes. There is a substantial lack of clarity regarding the likelihood, timing and details of potential changes or reforms by the new administration and the U.S. Congress. Changes in existing laws and regulations, or their interpretations, or the enactment of new laws or regulations could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows by:

•increasing our administrative and other costs;

•increasing or decreasing mandated services;

•causing us to abandon business opportunities we might have otherwise pursued;

•decreasing utilization of services;

•forcing us to restructure our relationships with referral sources and providers; or

•requiring us to implement additional or different programs and systems.

Additionally, we are subject to various routine and non-routine reviews, audits and investigations by the Medicare and Medicaid programs and other federal and state governmental agencies, which have various rights and remedies against us if they establish that we have overcharged the programs or failed to comply with program requirements. We are also subject to potential lawsuits under the federal False Claims Act and other federal and state whistleblower statutes designed to combat fraud and abuse in our industry. Violation of the laws governing our operations or changes in interpretations of those laws could result in the imposition of fines, civil or criminal penalties, the termination of our rights to participate in federal and state-sponsored programs and/or the suspension or revocation of our licenses. If we become subject to material fines or if other sanctions or other corrective actions are imposed on us, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

We face periodic and routine reviews, audits and investigations under our contracts with federal and state government agencies and private payors, and these audits could have adverse findings that may negatively impact our business.

As a result of our participation in the Medicare and Medicaid programs, we are subject to various governmental reviews, audits and investigations to verify our compliance with these programs and applicable laws and regulations. We also are subject to audits under various federal and state government programs in which third-party firms engaged by CMS, including Recovery Audit Contractors (“RACs”), Zone Program Integrity Contractors (“ZPICs”), Uniform Program Integrity Contractors ("UPICs"), Program Safeguard Contractors (“PSCs”), Medicaid Integrity Contractors (“MICs”), Supplemental Medical Review Contractors (“SMRCs”), Comprehensive Error Rate Testing Contractors ("CERTs") and the Office of the Inspector General ("OIG"), conduct extensive reviews of claims data and medical and other records to identify potential improper payments under the Medicare program. Additionally, private pay sources reserve the right to conduct audits. If billing errors are identified in the sample of reviewed claims, the billing error can be extrapolated to all claims filed which could result in a larger overpayment than originally identified in the sample of reviewed claims. Our costs to respond to and defend reviews, audits and investigations may be significant and could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Moreover, an adverse review, audit or investigation could result in:

extrapolated to all claims filed which could result in a larger overpayment than originally identified in the sample of reviewed claims. Our costs to respond to and defend reviews, audits and investigations may be significant and could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Moreover, an adverse review, audit or investigation could result in:

•required refunding or retroactive adjustment of amounts we have been paid pursuant to the federal or state programs or from private payors;

•state or federal agencies imposing fines, penalties and other sanctions on us;

•loss of our right to participate in the Medicare program, state programs or one or more private payor networks; or

•damage to our business and reputation in various markets.

These results could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

If a care center fails to comply with the conditions of participation in the Medicare program, that care center could be subjected to sanctions or terminated from the Medicare program.

Each of our care centers must comply with required conditions of participation in the Medicare program. If we fail to meet the conditions of participation at a care center, we may receive a notice of deficiency from the applicable state surveyor. If that care center then fails to institute an acceptable plan of correction to remediate the deficiency within the correction period provided by the state surveyor, that care center could be terminated from the Medicare program or subjected to alternative sanctions. CMS may impose temporary management, direct a plan of correction, direct training or impose payment suspensions and civil monetary penalties, in each case, upon providers who fail to comply with the conditions of participation. Termination of one or more of our care centers from the Medicare program for failure to satisfy the program’s conditions of participation or the imposition of alternative sanctions could disrupt operations, require significant attention by management or have a material adverse effect on our business and reputation and consolidated financial condition, results of operations and cash flows.

by the state surveyor, that care center could be terminated from the Medicare program or subjected to alternative sanctions. CMS may impose temporary management, direct a plan of correction, direct training or impose payment suspensions and civil monetary penalties, in each case, upon providers who fail to comply with the conditions of participation. Termination of one or more of our care centers from the Medicare program for failure to satisfy the program’s conditions of participation or the imposition of alternative sanctions could disrupt operations, require significant attention by management or have a material adverse effect on our business and reputation and consolidated financial condition, results of operations and cash flows.

We are subject to federal and state laws that govern our financial relationships with physicians and other health care providers, including potential or current referral sources.

As stated in Part I, Item 1, "Our Regulatory Environment" of– ~~this document pertaining to~~ Federal and State Anti-Fraud and Abuse Laws and Regulations", we are required to comply with various federal anti-fraud and abuse laws, including the federal Anti-Kickback Statute, the Stark or Physician Self-Referral Law, the False Claims Act and Civil Monetary Penalties Law, as well as state laws and regulations.

Although we believe we have structured our relationships with physicians and other actual or potential referral sources to comply with these laws where applicable, the laws are complex, and the Stark Law contains a number of strict liability provisions under which noa ~~intent~~violation tocan ~~violate~~be ~~the~~found ~~law~~even isif ~~required~~there ~~for~~was ano ~~violation~~intent to beviolate ~~found~~the law. It is possible that courts or regulatory agencies may interpret state and federal anti-kickback laws and/or the Stark Law and similar state laws regulating relationships between health care providers and physicians in ways that will adversely implicate our practices or that isolated instances of noncompliance may occur. Violations of federal or state anti-kickback laws or the Stark Law could lead to criminal or civil fines or other sanctions, including repayment of federal health care program payments related to these arrangements, denials of government program reimbursement or even exclusion from participation in governmental health care programs, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. It is possible that a claim that results from a kickback or is made in violation of the Stark Law also may render it false or fraudulent, creating further potential liability under the federal False Claims Act, discussed above.

The No Surprises Act and similar price transparency initiatives could impact our relationships with patients and insurers.

Effective January 1, 2022, the No Surprises Act, ~~enacted as part of the Consolidated Appropriations Act, 2021,~~ creates price transparency requirements, including (i) requiring providers to send to patients or their health plan a good faith estimate of the expected charges and diagnostic codes prior to furnishing scheduled items or services and (ii) prohibiting providers from charging patients an amount beyond the in-network cost sharing amount for services rendered by out-of -network providers, subject to limited exceptions. Price transparency initiatives such as the No Surprises Act may impact our ability to obtain or maintain favorable contract terms and may impact our competitive position and our relationships with patients and insurers.

Risks Related to Liquidity

Delays in payment may cause liquidity problems.

Our business is characterized by delays from the time we provide services to the time we receive payment for these services. Timing delays in billings and collections may cause working capital shortages. Working capital management, including prompt and diligent billing and collection, is an important factor in achieving our financial results and maintaining liquidity. It is possible that delays in obtaining documentation support, ~~such~~information astechnology ~~physician orders,~~ system problems or outages, or Medicare or other payor issues or industry trends may extend our collection period, which may materially adversely affect our working capital, and our working capital management procedures may not successfully mitigate this risk.

OnIn ~~May~~February 292024, ~~2018,~~UnitedHealth ~~CMS~~Group ~~issued~~announced a ~~notice~~cyberattack ~~indicating~~on the information technology systems of its ~~intention~~subsidiary, toChange ~~re-launch~~Healthcare, aone ~~home~~of ~~health~~the ~~agency~~largest ~~pre-claim~~providers ~~review~~of ~~demonstration~~healthcare ~~project.~~payment ~~Now~~systems ~~called~~in the ~~Review~~United ~~Choice~~States. ~~Demonstration~~The ~~for~~Change ~~Home~~Healthcare ~~Health~~cybersecurity ~~Services~~incident ~~("RCD")~~did ~~and~~not ~~fully~~impact ~~implemented~~our inday-to-day ~~six~~operations; ~~states (Florida~~however, ~~Illinois,~~we ~~North~~were ~~Carolina,~~delayed ~~Ohio,~~in ~~Texas~~submitting ~~and~~patient ~~Oklahoma),~~claims ~~RCD~~to ~~gives~~certain ~~home~~non-Medicare ~~health~~payors. ~~agencies~~There ~~three~~was ~~initial~~minimal ~~options:~~impact ~~pre-~~to our Medicare claim ~~review~~submissions ofas ~~all~~we ~~claims,~~were ~~post-payment~~able ~~review~~to ofquickly ~~all~~redirect our Medicare claims orto ~~minimal~~an ~~post~~alternative clearinghouse. The delays in submitting non-~~payment~~Medicare ~~review~~claims ~~with~~resulted in a ~~25%~~reduction ~~payment~~of ~~reduction~~our ~~for~~operating ~~all~~cash ~~home~~flow ~~health~~and ~~services.~~an ~~Reduced~~estimated ~~review~~increase ~~options~~to ~~are~~our ~~available~~accounts ~~for~~receivable ~~home~~of ~~health~~approximately ~~agencies~~$60 ~~that~~million ~~demonstrate~~during ~~compliance~~the three month-period ended March 31, 2024. Any similar events or circumstances, among others, could have an adverse effect on our business and consolidated financial condition, results of operations and cash flows.

CMS has also implemented the Targeted Probe and Educate ("TPE") program for home health and hospice providers to help reduce provider claim denials and educate providers on appropriate billing practices. Under the TPE program, Medicare Administrative Contractors ("MACs") use data analysis to identify providers who have high claim error rates, unusual billing practices or provide services that have high national error rates. If a provider is selected for a TPE review by a MAC, the initial volume of claims reviewed is limited to 20 to 40 claims and can include up to three rounds of claims review, if necessary, with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action which may include 100% prepay review, extrapolation, referral to a Recovery Auditor and/or referral for revocation from the Medicare program. Providers will not be under TPE review and RCD at the same time. Providers currently on TPE review will be removed prior to CMS implementing RCD in that particular state.35

~~Compliance~~Effective ~~with~~June ~~the~~1, 2024, CMS extended RCD for an additional five years. The demonstration will be continuing in the current demonstration states of Illinois, Ohio, Texas, North Carolina, Florida and ~~TPE~~Oklahoma. CMS' RCD provided HHAs in the demonstration states with three options in the initial selection period: pre-claim review of all claims, post-payment review of all claims or minimal post-payment review with a 25% payment reduction for all home health services. As part of the extension, CMS is removing the option for a 25% payment reduction from the initial choice selections. Reduced review options are available for home health agencies that demonstrate compliance. Compliance with the RCD processes has resulted in increased administrative costs and delays in reimbursement for services in the states subject to RCD ~~and TPE~~ review. These delays could materially adversely affect our working capital.

CMS has also implemented the Targeted Probe and Educate ("TPE") program for home health and hospice providers to help reduce provider claim denials and educate providers on appropriate billing practices. Under the TPE program, Medicare Administrative Contractors ("MACs") use data analysis to identify providers who have high claim error rates, unusual billing practices or provide services that have high national error rates. If a provider is selected for a TPE review by a MAC, the initial volume of claims reviewed is limited to 20 to 40 claims and can include up to three rounds of claims review, if necessary, with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action which may include 100% prepay review, extrapolation, referral to a Recovery Auditor and/or referral for revocation from the Medicare program. Compliance with the TPE processes has resulted in increased administrative costs and delays in reimbursement for services. These delays could materially adversely affect our working capital.

Additionally, our hospice operations may experience payment delays when attempting to collect funds from state Medicaid programs in certain instances. Delays in receiving payments from these programs may also materially adversely affect our working capital.

Changes in units of payment for home health agencies could reduce our Medicare home health reimbursement levels.

Effective January 1, 2020, CMS implemented a revised case-mix adjustment methodology, the Patient-Driven Groupings Model ("PDGM"). Although this payment change was to be implemented in an overall budget neutral manner, the ultimate impact varied by provider based on factors including patient mix and admission source. Additionally, CMS made assumptions about behavior changes which resulted in a 4.36% reduction to reimbursement. Accordingly, the adoption of PDGM has had a negative impact on our Medicare revenue per episode ~~in 2020~~. Additionally, in the Calendar Year 2023, 2024 and ~~2024~~2025 Home Health Final Rules, CMS finalized permanent reductions in reimbursement totaling -3.5%, ~~and~~ -2.6% and -1.8%, respectively, based on the difference between assumed and actual behavioral changes resulting from the implementation of PDGM. ~~The~~In addition to the permanent adjustments, ~~were~~CMS ~~only~~also ~~half~~has of the ~~behavioral~~discretion to make temporary adjustments ~~initially~~through ~~proposed.~~calendar year 2026; however, CMS ~~had~~has ~~concerns~~elected ~~about~~not ~~implementing~~to ~~the~~implement ~~full~~a ~~adjustments~~temporary ~~given~~adjustment thus far. As stated in the ~~impact~~CY ~~such~~2025 aFinal ~~large~~Rule, ~~decrease~~the ~~would~~total ~~have~~temporary onadjustment ~~providers.~~calculated ~~CMS~~for ~~will~~CY ~~consider~~2020 ~~the~~through ~~remaining~~CY ~~adjustments~~2023 inis ~~future~~$4.5 ~~rulemaking~~billion. In ~~addition~~future torule ~~the permanent adjustments~~making, CMS ~~also~~will ~~has~~propose that the ~~discretion~~temporary adjustment dollar amount be converted to ~~make~~a ~~temporary~~factor ~~adjustments~~that ~~through~~is ~~Calendar~~applied ~~Year~~to ~~2026~~the base payment rate. Payment updates could continue to negatively impact our rates of reimbursement in future years and have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. See Part I, Item 1, “Our Regulatory Environment – Home Health Payment Reform” for additional information.

The volatility and disruption of the capital and credit markets and adverse changes in the United States and global economies could impact our ability to access both available and affordable financing, and without such financing, we may be unable to achieve our objectives for strategic acquisitions and internal growth.

While we intend to finance strategic acquisitions and internal growth with cash flows from operations and borrowings under our revolving credit facility, we may require sources of capital in addition to those presently available to us. Uncertainty in the capital and credit markets may impact our ability to access capital on terms acceptable to us (i.e. at attractive/affordable rates) or at all, and this may result in our inability to achieve present objectives for strategic acquisitions and internal growth. Further, in the event we need additional funds and are unable to raise the necessary funds on acceptable terms, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.

Our indebtedness could impact our financial condition and impair our ability to fulfill other obligations.

As of December 31, ~~2023~~2024, we had total outstanding indebtedness, excluding finance leases, of approximately $~~371~~349.94 million. Our level of indebtedness could have a material adverse effect on our business and consolidated financial position, results of operations and cash flows and could impair our ability to fulfill other obligations in several ways, including:

•it could require us to dedicate a portion of our cash flow from operations to payments on our indebtedness, which could reduce the availability of cash flow to fund acquisitions, start-ups, working capital, capital expenditures and other general corporate purposes;

•it could limit our ability to borrow money or sell stock for working capital, capital expenditures, debt service requirements and other purposes;

•it could limit our flexibility in planning for, and reacting to, changes in our industry or business;

•it could make us more vulnerable to unfavorable economic or business conditions; and

•it could limit our ability to make acquisitions or take advantage of other business opportunities.

In the event we incur additional indebtedness, the risks described above could increase.

The agreements governing our indebtedness contain various covenants that limit our discretion in the operation of our business, and our failure to satisfy requirements in these agreements could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

The agreements governing our indebtedness (the “Debt Agreements”) contain certain obligations, including restrictive covenants that require us to comply with or maintain certain financial covenants and ratios and restrict our ability to:

•incur additional debt;

•redeem or repurchase stock, pay dividends or make other distributions;

•make certain investments;

•create liens;

•enter into transactions with affiliates;

•make acquisitions;

•enter into joint ventures;

•merge or consolidate;

•invest in foreign subsidiaries;

•amend acquisition documents;

•enter into certain swap agreements;

•make certain restricted payments;

•transfer, sell or leaseback assets; and

•make fundamental changes in our corporate existence and principal business.

Our Debt Agreements also limit our ability to reinvest the net cash proceeds from asset sales or subordinated debt issuances in certain circumstances. For example, in the event we or any of our subsidiaries receive more than $5 million in net cash proceeds from an asset sale, disposition or involuntary disposition, our Debt Agreements require us to prepay our term loan facility and revolving credit facility with all of such net cash proceeds, unless we elect to reinvest the net cash proceeds in fixed or capital assets related to our business.

In addition, events beyond our control could affect our ability to comply with the Debt Agreements. Any failure by us to comply with or maintain all applicable financial covenants and ratios and to comply with all other applicable covenants could result in an event of default with respect to the Debt Agreements. If we are unable to obtain a waiver from our lenders in the event of any non-compliance, our lenders could accelerate the maturity of any outstanding indebtedness and terminate the commitments to make further extensions of credit (including our ability to borrow under our revolving credit facility). Any failure to comply with these covenants could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.

Risks Related to Ownership of Our Common Stock

The price of our common stock has been and may continue to be volatile, which could lead to securities litigation brought against us or cause investors to lose the value of their investment.

The price at which our common stock trades has experienced significant volatility in prior years and may continue to be volatile. Various factors have impacted, and may continue to impact, the price of our common stock, including among others:

•variances in our quarterly financial results compared to research analyst expectations;

•changes in financial estimates and recommendations by securities analysts;

•changes in our estimates, guidance or business plans;

•changes in management;

•changes or proposed changes in health care laws or regulations or enforcement of these laws and regulations, or announcements relating to these matters;

•changes in the Medicare, Medicaid and private insurance payment rates for home health and hospice;

•the operating and stock price performance of other comparable companies;

•announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

•general economic and stock market conditions; or

•other factors described in this "Risk Factors" section and elsewhere in this Annual Report on Form 10-K.

Additionally, if the proposed merger with UnitedHealth Group is not completed ~~within~~by the ~~expected~~end ~~timeframe~~of the Waiver Period, or at all, we may experience negative reactions from the financial markets, including negative impacts on our stock price, and it is uncertain when, if ever, the price of our shares would return to the prices at which our shares currently trade.

The stock market in general, and the NASDAQ Global Select Market (“NASDAQ”) in particular, has experienced price and volume fluctuations that we believe have often been unrelated or disproportionate to the operating performance of health care provider companies. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance. As a result, investors may not be able to sell their common stock at or above the purchase price. In addition, securities class-action cases have often been brought against companies following periods of volatility in the market price of their securities. Such litigation, if instituted against us, could result in substantial costs and a diversion of management's attention and resources.

The activities of short sellers could reduce the price or prevent increases in the price of our common stock. “Short sale” is defined as the sale of stock by an investor that the investor does not own. Typically, investors who sell short believe the price of the stock will fall, and anticipate selling shares at a higher price than the purchase price at which they will buy the stock. As of December 31, ~~2023~~2024, investors held a short position of approximately 2.93 million shares of our common stock which represented 97% of our outstanding common stock. The anticipated downward pressure on our stock price due to actual or anticipated sales of our stock by some institutions or individuals who engage in short sales of our common stock could cause our stock price to decline.

Our Board of Directors may use anti-takeover provisions or issue stock to discourage a change of control.

We are party to the Merger Agreement with UnitedHealth Group, which will result in a change in control of Amedisys, if completed. As such, the below anti-takeover provisions are inapplicable to the proposed Merger.

Our certificate of incorporation currently authorizes us to issue up to 60,000,000 shares of common stock and 5,000,000 shares of undesignated preferred stock. Our Board of Directors may cause us to issue additional stock to discourage an attempt to obtain control of our company. For example, shares of stock could be sold to purchasers who might support our Board of Directors in a control contest or to dilute the voting or other rights of a person seeking to obtain control. In addition, our Board of Directors could cause us to issue preferred stock entitling holders to vote separately on any proposed transaction, convert preferred stock into common stock, demand redemption at a specified price in connection with a change in control or exercise other rights designed to impede a takeover.

The issuance of additional shares may, among other things, dilute the earnings and equity per share of our common stock and the voting rights of common stockholders.

34We have implemented other anti-takeover provisions or provisions that could have an anti-takeover effect, including advance notice requirements for director nominations and stockholder proposals, no cumulative voting for directors, requirements that director vacancies are filled by remaining directors (including vacancies resulting from removal) and that the number of directors is fixed by the Board of Directors as well as the ability for the Board of Directors to increase or decrease the size of the Board of Directors without stockholder approval (within the range set forth in our Certificate of Incorporation and Bylaws). These provisions, and others that our Board of Directors may adopt hereafter, may discourage offers to acquire us and may permit our Board of Directors to choose not to entertain offers to purchase us, even if such offers include a substantial premium

We have implemented other anti-takeover provisions or provisions that could have an anti-takeover effect, including advance notice requirements for director nominations and stockholder proposals, no cumulative voting for directors, requirements that director vacancies are filled by remaining directors (including vacancies resulting from removal) and that the number of directors is fixed by the Board of Directors as well as the ability for the Board of Directors to increase or decrease the size of the Board of Directors without stockholder approval (within the range set forth in our Certificate of Incorporation and Bylaws). These provisions, and others that our Board of Directors may adopt hereafter, may discourage offers to acquire us and may permit our Board of Directors to choose not to entertain offers to purchase us, even if such offers include a substantial premium to the market price of our stock. Therefore, our stockholders may be deprived of opportunities to profit from a change of control.38

to the market price of our stock. Therefore, our stockholders may be deprived of opportunities to profit from a change of control.

Our Bylaws designate the Court of Chancery of the State of Delaware or, if the Court of Chancery does not have jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us and our directors, officers, employees and stockholders.

Our Bylaws provide that unless we otherwise consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware or, if the Court of Chancery does not have jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of us, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our Certificate of Incorporation or Bylaws or any action asserting a claim governed by the internal affairs doctrine. This provision would not apply to claims brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any other claim for which the federal courts have exclusive jurisdiction.

In addition, our Bylaws provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”), unless we consent in writing to the selection of an alternative forum.

These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors, officers, employees and agents.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Amedisys recognizes the importance of assessing, identifying and managing material risks associated with cybersecurity threats, as such term is defined by the SEC in Item 106(a) of Regulation S-K. These risks include, among other things, operational disruption, intellectual property theft, fraud, extortion, harm to employees or patients, violation of privacy or security laws and other litigation and legal risk. Amedisys has implemented various cybersecurity related processes, technologies and controls to enhance our efforts to assess, identify and manage such material risks.

Amedisys deploys a range of tools and services, including regular network and endpoint monitoring, and vulnerability assessments and penetration testing, to ~~inform~~mitigate our ~~leadership team of~~ cybersecurity-based risks. In addition, we schedule tabletop exercises with management and other employees to ~~test~~evaluate our cyber incident response plans. Amedisys has also received HITRUST certification for our internally developed applications which allows us to baseline our program to industry standards and best practices.

Our cybersecurity program includes controls designed to identify, protect against, detect, respond to and recover from cybersecurity incidents (as such term is defined in Item 106(a) of Regulation S-K) and to provide for the availability of critical data and systems to maintain regulatory compliance. These controls include the following activities:

•Closely monitoring emerging data protection laws and implementing needed changes to our processes ~~in order~~ to ~~comply.~~maintain compliance;

•Conducting annual cybersecurity management and incident training for all employees of the organization.;

•Requiring employees and third parties who provide services on our behalf to treat customer information and data with care.;

35•Leveraging the HITRUST incident handling framework to help us identify, protect, detect, respond and recover when there is an actual or potential cybersecurity incident; and

•~~Leveraging~~Carrying ~~the~~information ~~HITRUST~~security ~~incident~~risk ~~handling~~insurance ~~framework~~that toprovides ~~help~~protection usagainst ~~identify,~~the ~~protect,~~potential ~~detect~~losses arising from a cybersecurity incident, ~~respond~~although ~~and~~our ~~recover~~insurance ~~when~~coverage ~~there~~may isbe aninsufficient ~~actual~~to orcover ~~potential~~all losses from a cybersecurity incident or our insurer may deny coverage for a claim.

~~•Carrying information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident.~~39

Additionally, Amedisys performs periodic internal and third-party assessments to ~~test~~evaluate our cybersecurity controls and regularly evaluates our policies and procedures surrounding our handling and control of personal data and the systems we have in place to help protect us from cybersecurity threats or personal data breaches.

Amedisys has established a cybersecurity risk management process that includes internal reporting of significant cybersecurity risk to our Enterprise Risk Management Committee (“ERMC”) on a quarterly basis. In addition, our incident response plan includes processes to triage, assess severity, escalate, contain, and investigate and remediate ~~the~~an incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage. These processes are assessed annually for effectiveness during our penetration testing.

Our risk management processes also address cybersecurity threat risks associated with our use of third-party service providers, including those in our supply chain or those who have access to our customer and employee data or our systems. In addition, cybersecurity considerations affect the selection and oversight of our third-party service providers. Amedisys performs diligence on third parties that have access to our systems, data or that have facilities that house such systems or data and monitors cybersecurity threat risks identified through such diligence.

We face ~~a number of~~ cybersecurity risks in connection with our business (see Part I, Item 1A. “Risk Factors – Risks Related to our Operations – Our business depends on our information systems. A cyber-attack, security breach or our inability to effectively integrate, manage and keep our information systems secure and operational could disrupt our operations.”). Although such risks have not materially impacted our business strategy, results of operations or financial condition to date, we have experienced threats to and breaches of our data and systems, including malware and computer virus attacks, and future such events or circumstances could have a material adverse effect on our business and consolidated financial condition, results of operations or cash flows.

The Audit Committee of the Board of Directors oversees our cybersecurity risk exposures and the steps taken by management to monitor and mitigate cybersecurity risks. OnThe anAudit ~~annual~~Committee ~~basis,~~receives ~~management~~updates ~~provides~~from ~~the~~management ~~Audit~~on ~~Committee~~a ~~with~~regular anbasis ~~overview~~ of our cybersecurity threat risk management and strategy covering topics such as data security posture, results from third-party assessments, progress towards pre-determined risk mitigation related goals, our incident response plan and cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks. The Audit Committee also receives materials, including a cybersecurity briefing, indicating current and emerging cybersecurity threat risks and describing the Company’s ability to mitigate those risks.

The members of management who are responsible for assessing and managing cyber risk are the Acting Chief Information Security Officer and the Acting Chief Information Officer of the Company who, combined, have over 30 years of experience in managing cybersecurity. Our Acting Chief Information Security Officer is responsible for our cybersecurity risk management program and reports directly to the Acting Chief Information Officer. The Acting Chief Information Officer is a member of the ERMC and accountable for informing and updating the ERMC on cybersecurity risk management. The ERMC has ultimate responsibility for the risk management of cyber risk and is informed about and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents in addition to the Company's cyber incident response and reporting processes.

ITEM 2. PROPERTIES

Our executive office is located in Nashville, Tennessee in a leased property consisting of 810,~~784~~943 square feet; our corporate headquarters is located in Baton Rouge, Louisiana in a leased property consisting of 95,657 square feet. We believe we have adequate space to accommodate our corporate staff located in these locations for the foreseeable future.

3640

In addition to our executive office and corporate headquarters, we also lease facilities for our home health and hospice care centers and our high acuity care joint ventures. Generally, our leases have an initial term of five years, but range from one to ten years. Most of our leases also contain early termination options and renewal options. The following table shows the location of our ~~346~~347 Medicare-certified home health care centers, ~~165~~164 Medicare-certified hospice care centers and 118 admitting high acuity care ~~markets~~joint ventures at December 31, ~~2023~~2024:

State	Home Health	Hospice	High Acuity Care	State	Home Health	Hospice	High Acuity Care
Alabama	29	10	—	Nebraska	1	7	—
Arizona	3	1	1—	New Hampshire	3	3	—
Arkansas	7	—	1	New Jersey	2	7	—
California	4	1	—	New York	6	—	1
Connecticut	1	1	—	North Carolina	13	7	—
Delaware	2	2	—	Ohio	4	5	—
Florida	15	7	—	Oklahoma	7	1	—
Georgia	56	9	—	Oregon	3	1	—
Illinois	2	—	—	Pennsylvania	9	20	2
Indiana	5	5	—	Rhode Island	1	2	—
Iowa	—	1	—	South Carolina	26	8	1
Kansas	1	1	—	South Dakota	—	1
Kentucky	17	—	—	Tennessee	45	15	—
Louisiana	8	5	—	Texas	16	12	1—
Maine	3	4	—	Virginia	1415	5	—
Maryland	9	3	—	Washington	2	—	1
Massachusetts	6	10	—	West Virginia	11	6	—
Michigan	—	—	1	Wisconsin	—	32	21
Mississippi	8	—	—	Washington, D.C.	1	—	—
Missouri	6	2	—	Total	~~346~~347	~~165~~164	118

ITEM 3. LEGAL PROCEEDINGS

See Part II, Item 8, Note 124 – Mergers, Acquisitions and Dispositions and Note 11 – Commitments and Contingencies for information concerning our legal proceedings. See also Part I, Item 1A. "Risk Factors – Litigation challenging the Merger Agreement may prevent the Merger from being consummated by the end of the Waiver Period or at all."

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information and Holders

Our common stock trades on the NASDAQ Global Select Market under the trading symbol “AMED.” As of February 1621, ~~2024~~2025, there were approximately ~~458~~444 holders of record of our common stock. This number of holders of record does not represent the actual number of beneficial owners of our common stock because shares are frequently held in “street name” by securities dealers and others for the benefit of individual owners who have the right to vote their shares.

Dividend Policy

We have not declared or paid any cash dividends on our common stock or any other of our securities and do not expect to pay cash dividends for the foreseeable future. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. Future decisions concerning the payment of dividends will depend upon our results of operations, financial condition, capital expenditure plans and debt service requirements, as well as such other factors that our Board of Directors, in its sole discretion, may consider relevant. In addition, our outstanding indebtedness restricts, and we anticipate any additional future indebtedness may restrict, our ability to pay cash dividends; provided, however, that we may pay dividends (i) payable solely in our equity securities or (ii) cash dividends if (1) no default or event of default under the Third Amended Credit Agreement shall have occurred and be continuing at the time of such dividend or would result therefrom, and (2) we demonstrate that, upon giving pro forma effect to such dividend, our consolidated leverage ratio (as defined in the Third Amended Credit Agreement) is less than 2.75 to 1.0.

Purchases of Equity Securities

The following table provides information with respect to purchases made by us of shares of our common stock during each of the months during the three-month period ended December 31, ~~2023~~2024. The amounts below only relate to employee stock activity as the Merger Agreement limits the Company's ability to repurchase shares of common stock prior to the completion of the Merger, subject to certain exceptions.

Period	(a)Total Numberof Shares (or Units)Purchased		(b)Average PricePaid per Share (or Unit)		(c)Total Number ofShares (or Units)Purchased as Part ofPublicly AnnouncedPlans or Programs	(d) Maximum Number (orApproximate DollarValue) of Shares (orUnits) That May Yet BePurchased Under thePlans or Programs
October 1, 2023 to October 31, 2023	509		$	92.74	—	$	100,000,000
October 1, 2024 to October 31, 2024	—		$	—	—	$	—
November 1, 2023 to November 30, 2023	—		—		—	100,000,000
November 1, 2024 to November 30, 2024	—		—		—	—
December 1, 2023 to December 31, 2023	31,084		95.41		—	100,000,000
December 1, 2024 to December 31, 2024	15,371		90.29		—	—
	31,593	(1)	$	95.37	—	$	100,000,000	(2)
	15,371	(1)	$	90.29	—	$	—

(1)Includes shares of common stock surrendered to us by certain employees to satisfy tax withholding ~~and/or strike price~~ obligations in connection with the vesting of ~~non-vested~~restricted stock ~~and~~units ~~the exercise of stock options previously~~ awarded to such employees under our 2018 Omnibus Incentive Compensation Plan. Also includes 785 net shares that were returned to the Company in December 2024 by a former executive officer of the Company pursuant to an agreement between such former executive officer and the Company which required shares (for which vesting was accelerated to mitigate impacts that could arise under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended) to be returned to the Company if the executive officer voluntarily resigned employment with the Company prior to the original vesting date of the award.

(2)Represents amounts remaining as of December 31, 2023 under the $100 million 2023 Repurchase Program, which was authorized by our Board of Directors on February 2, 2023 and expired on December 31, 2023. 42

Stock Performance Graph

The Performance Graph below compares the cumulative total stockholder return on our common stock, $0.001 par value per share, for the five-year period ended December 31, ~~2023~~2024 with the cumulative total return on the NASDAQ composite index and an industry peer group over the same period (assuming the investment of $100 in our common stock, the NASDAQ composite index and the industry peer group on December 31, ~~2018~~2019 and the reinvestment of dividends). The peer group we selected is comprised of: Addus Homecare Corporation ("ADUS"), Chemed Corporation ("CHE"), Encompass Health Corporation ("EHC") and National Healthcare Corporation (“NHC”). The cumulative total stockholder return on the following graph is historical and is not necessarily indicative of future stock price performance. No cash dividends have been paid on our common stock.

	12/31/2018		12/31/2019		12/31/2020		12/31/2021		12/31/2022		12/31/2023
	12/31/2019		12/31/2020		12/31/2021		12/31/2022		12/31/2023		12/31/2024
Amedisys, Inc.	$	100.00	$	~~142~~175.5373	$	~~250~~96.4798	$	~~138~~50.2305	$	7156.3395	$	8154.1739
NASDAQ Composite	$	100.00	$	~~136~~144.6992	$	~~198~~177.1006	$	~~242~~119.0345	$	~~163~~172.2877	$	~~236~~223.1787
Peer Group	$	100.00	$	~~132~~117.9192	$	~~156~~107.7319	$	~~142~~111.4639	$	~~148~~127.0554	$	~~169~~145.5264

This stock performance information is “furnished” and shall not be deemed to be “soliciting material” or subject to Regulation 14A under the Exchange Act, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date of this report and irrespective of any general incorporation by reference language in any such filing, except to the extent we specifically incorporate the information by reference.

ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our results of operations and financial condition for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022. This discussion should be read in conjunction with our audited financial statements included in Item 8, "Financial Statements and Supplementary Data” and Part I, Item 1, “Business” of this Annual Report on Form 10-K. The following analysis contains forward-looking statements about our future revenues, operating results and expectations. See “Special Caution Concerning Forward-Looking Statements” for a discussion of the risks, assumptions and uncertainties affecting these statements as well as Part I, Item 1A. “Risk Factors.”

For a discussion of a comparison of the years ended December 31, ~~2022~~2023 and December 31, ~~2021~~2022, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023, filed with the Securities and Exchange Commission on February 1622, ~~2023~~2024.

Overview

We are a provider of high-quality in-home healthcare and related services to the chronic, co-morbid, aging American population, with approximately 7370%, 7473% and 7574% of our consolidated net service revenue derived from Medicare for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively.

Our operations involve servicing patients through our three reportable business segments: home health, hospice and high acuity care. We divested our personal care business on March 31, 2023. Our home health segment delivers a wide range of services in the homes of individuals who may be recovering from an illness, injury or surgery. Our hospice segment provides care that is designed to provide comfort and support for those who are facing a terminal illness. Our high acuity care segment delivers the essential elements of inpatient hospital, palliative and skilled nursing facility ("SNF") care to patients in their homes. As of December 31, ~~2023~~2024, we owned and operated ~~346~~347 Medicare-certified home health care centers, ~~165~~164 Medicare-certified hospice care centers and 108 admitting high acuity care joint ventures in 3738 states within the United States and the District of Columbia.

Care Centers Summary (Includes Unconsolidated Joint Ventures)

	Home Health	Hospice	Personal Care	High Acuity Care ~~(1)~~
At December 31, 2020	320	180	14	—
Acquisitions/Expansions/De novos	11	1	—	7
Closed/Consolidated	—	(6)	—	—
At December 31, 2021	331	175	14	7
Acquisitions/Expansions/De novos	27	—	—	2
Closed/Consolidated	(11)	(11)	(1)	(1)
At December 31, 2022	347	164	13	8
Acquisitions/Expansions/De novos	2	1	—	2
Closed/Consolidated	(3)	—	(13)	—
At December 31, 2023	346	165	—	10
Acquisitions/Expansions/De novos	1	—	—	—
Closed/Consolidated	—	(1)	—	(2)
At December 31, 2024	347	164	—	8

(1)As of December 31, 2023, we have 10 admitting high acuity care joint ventures, which operate in 11 markets.

Proposed Merger

On June 26, 2023, Amedisys, UnitedHealth Group Incorporated, a Delaware corporation ("UnitedHealth Group"), and Aurora Holdings Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of UnitedHealth Group ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Amedisys with Amedisys continuing as the surviving corporation and becoming a wholly owned subsidiary of UnitedHealth Group (the “Merger”).

~~Subject~~On toNovember ~~the~~12, ~~terms and conditions set forth in the Merger Agreement~~2024, at the ~~effective~~U.S. ~~time~~Department of ~~the~~Justice ~~Merger~~ (~~the "Effective Time"~~“DOJ”), byand ~~virtue~~certain ofother ~~the~~parties ~~Merger:~~commenced ~~(i)~~litigation ~~each share of Amedisys common stock~~ (the “~~Amedisys~~DOJ ~~Common Stock~~Action”) ~~held~~against ~~in treasury by~~ Amedisys orand ~~owned by~~ UnitedHealth Group orto ~~Merger~~block ~~Sub~~the orMerger. ~~any~~Amedisys ofcontinues ~~their~~to ~~respective~~support ~~subsidiaries,~~UnitedHealth Group in ~~each~~working ~~case,~~toward ~~immediately~~closing ~~prior to~~ the ~~Effective Time will be cancelled (collectively, “cancelled shares”) without consideration; and (ii) each share of~~ Merger.

4044

~~Amedisys~~On ~~Common~~December ~~Stock~~26, ~~other~~2024, ~~than~~each ~~any~~of ~~cancelled~~the ~~shares~~parties to the Merger Agreement entered into a waiver (the “Waiver”) pursuant to which, ~~issued~~among other things, Amedisys and ~~outstanding~~UnitedHealth ~~immediately~~Group ~~prior~~each waived its right to terminate the ~~Effective~~Merger ~~Time~~Agreement due to a failure of the Merger to have been consummated by the outside date (as defined in the Merger Agreement) until the earlier of (i) 5:00 p.m. (New York time) on the tenth business day following a final order (whether or not appealable) issued by the U.S. District Court for the District of Maryland with respect to the complaint filed by the DOJ and certain other parties regarding the Merger and the other transactions contemplated by the Merger Agreement that permanently prohibits the consummation of the Merger and (ii) 11:59 p.m. (New York time) on December 31, 2025 (the “Waiver Period”). The Waiver also contains waivers by the parties thereto such that, (i) the Regulatory Break Fee (as defined in the Merger Agreement) under the Merger Agreement will be ~~converted~~$275,000,000, ~~into~~which may escalate up to $325,000,000 for the ~~right~~failure to ~~receive~~meet ~~$101~~certain ~~per~~timing ~~share~~milestones related to divesting certain assets to gain approval; (ii) the revenue-related aspect of the definition of “Burdensome Condition” (as defined in ~~cash,~~the ~~without~~Merger ~~interest~~Agreement) is increased, ~~less~~(iii) ~~any~~Amedisys ~~applicable~~may ~~withholding~~take ~~taxes~~certain actions that would otherwise be prohibited by interim operating covenants contained in the Merger Agreement and (iv) certain closing conditions relating to government approvals are no longer conditions to the consummation of the Merger.

~~The~~Subject ~~Merger is subject~~ to athe ~~number~~terms ofand conditions toset ~~closing~~forth ~~as specified~~ in the Merger Agreement~~. These closing conditions include~~, ~~among~~as ~~others,~~modified ~~(i) approval~~ by ~~Amedisys~~the ~~stockholders~~Waiver, at the ~~Amedisys~~effective ~~Stockholders~~time ~~Meeting (as defined in the Merger Agreement)~~ of the ~~proposal to adopt the~~ Merger ~~Agreement, which approval was obtained on September 8, 2023;~~ (~~ii)~~ the ~~expiration~~"Effective orTime"), ~~termination~~by virtue of the ~~applicable~~Merger: ~~waiting period~~ (~~and any extension thereof~~i) ~~under~~each ~~the~~share ~~Hart-Scott-Rodino Antitrust Improvements Act~~ of ~~1976,~~Amedisys ascommon ~~amended;~~stock (~~iii)~~“Amedisys ~~the~~Common ~~receipt of the required state regulatory approvals; (iv~~Stock”) ~~the~~held ~~absence~~in oftreasury ~~any~~by ~~law~~Amedisys or ~~order~~owned ~~that~~by ~~has~~UnitedHealth ~~the~~Group ~~effect of enjoining~~ or ~~otherwise prohibiting the completion of the~~ Merger; ~~and~~Sub ~~(v) the expiration~~ or ~~early~~any ~~termination~~ of ~~the~~their ~~waiting~~respective ~~period~~subsidiaries, ~~(and~~in ~~any~~each ~~extension~~case, ~~thereof)~~immediately ~~applicable~~prior to the ~~consummation~~Effective ofTime ~~the~~will ~~transactions~~be ~~contemplated~~cancelled by(collectively, ~~the~~“cancelled ~~Merger~~shares”) ~~Agreement under all applicable antitrust laws~~ without ~~the~~consideration; ~~imposition~~and by(ii) ~~any~~each ~~governmental~~share ~~entity~~ of ~~any~~Amedisys ~~term,~~Common ~~condition~~Stock, ~~obligation,~~other ~~requirement,~~than ~~limitation,~~any ~~prohibition,~~cancelled ~~remedy~~shares, ~~sanction~~issued orand ~~other~~outstanding ~~action~~immediately ~~that~~prior ~~has resulted in or would reasonably be expected~~ to ~~result in a Burdensome Condition (as defined in~~ the ~~Merger~~Effective ~~Agreement).~~Time ~~Due to these conditions and other contingencies, there can be no assurance that the Merger~~ will be ~~successfully~~converted ~~completed.~~into ~~During~~ the ~~periods~~right ~~prior~~ to ~~and~~receive ~~including~~$101 ~~the~~per ~~date~~share ofin ~~the closing of the Merger~~cash, wewithout ~~expect to incur significant additional merger-related expenses. See Part I~~interest, ~~Item~~less ~~1A.~~any ~~“Risk~~applicable ~~Factors.”~~withholding taxes.

On June 28, 2024, Amedisys, UnitedHealth Group and certain of their respective subsidiaries entered into an agreement (the "VCG Purchase Agreement") relating to the sale of certain Amedisys home health care centers and certain UnitedHealth Group care centers to VCG Luna, LLC ("VCG Luna"), an affiliate of VitalCaring Group. On January 3, 2025, UnitedHealth Group delivered a notice (the "Termination Notice") to VCG Luna terminating the VCG Purchase Agreement, following which, on January 8, 2025, UnitedHealth Group and VCG Luna entered into an agreement which provides for, among other things, the mutual release by the parties thereto of all claims against the other parties to the VCG Purchase Agreement that relate to the VCG Purchase Agreement.

The Merger is subject to a number of conditions to closing as specified in the Merger Agreement, as modified by the Waiver. These closing conditions include, among others, (i) approval by Amedisys stockholders at the Amedisys Stockholders Meeting (as defined in the Merger Agreement) of the proposal to adopt the Merger Agreement, which approval was obtained on September 8, 2023; (ii) the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iii) the receipt of the required state regulatory approvals; (iv) the absence of any law or order that has the effect of enjoining or otherwise prohibiting the completion of the Merger; and (v) the expiration or early termination of the waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated by the Merger Agreement under all applicable antitrust laws without the imposition by any governmental entity of any term, condition, obligation, requirement, limitation, prohibition, remedy, sanction or other action that has resulted in or would reasonably be expected to result in a Burdensome Condition (as defined in the Merger Agreement, as modified by the Waiver).

Due to these conditions, events and other contingencies, there can be no assurance that the Merger will be successfully completed. During the periods prior to and including the date of the closing of the Merger, we expect to incur significant additional merger-related expenses. See Part I, Item 1A. “Risk Factors” for additional information on risks related to the proposed merger.

Termination of Option Care Heath, Inc. ("OPCH") Merger Agreement

As previously disclosed in Amedisys’ Current Report on Form 8-K filed with the SEC on May 3, 2023 and its Quarterly Report on Form 10-Q filed with the SEC on May 4, 2023, Amedisys entered into an Agreement and Plan of Merger on May 3, 2023 (the “OPCH Merger Agreement”) with OPCH, a Delaware corporation, and Uintah Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of OPCH (“OPCH Merger Sub”). On June 26, 2023, Amedisys, OPCH and OPCH Merger Sub entered into the Termination Agreement (the “Termination Agreement”), pursuant to which the parties thereto agreed to terminate the OPCH Merger Agreement and grant mutual releases by the parties of all claims against the other parties based upon, arising from, in connection with or relating to the OPCH Merger Agreement. Pursuant to the terms of the Termination Agreement, each of the termination of the OPCH Merger Agreement and the mutual releases provided for in the Termination Agreement would become effective upon receipt by OPCH of a $106,000,000 termination fee payable by, or on behalf of, Amedisys within 24 hours of the execution of the Termination Agreement (i.e., before the market open on June 27, 2023). On June 26, 2023, following the execution of the Termination Agreement, UnitedHealth Group, on behalf of Amedisys, delivered funds to OPCH in an amount equal to $106,000,000, representing the termination fee payable to OPCH under the OPCH Merger Agreement and the Termination Agreement, satisfying the condition precedent to the effectiveness of the termination of the OPCH Merger Agreement and the releases contained in the Termination Agreement. If the Merger Agreement is terminated under certain specified circumstances, Amedisys may be required to reimburse UnitedHealth Group for the $106,000,000 termination fee that UnitedHealth Group, on Amedisys’ behalf, paid to OPCH in addition to the $125,000,000 termination fee payable by Amedisys to UnitedHealth Group upon termination of the Merger Agreement. The $106,000,000 termination fee was recorded to other income (expense) within our consolidated statement of operations with a corresponding liability to termination fee paid by UnitedHealth Group within our consolidated balance sheet during the year ended December 31, 2023.

~~Executive Leadership~~45

Onfunds ~~March~~to ~~13,~~OPCH ~~2023~~in an amount equal to $106,000,000, ~~our~~representing ~~Board~~the oftermination ~~Directors~~fee ~~named~~payable ~~Richard~~to ~~Ashworth~~OPCH asunder the ~~Company’s~~OPCH ~~President~~Merger Agreement and ~~Chief~~the ~~Executive~~Termination ~~Officer~~Agreement, satisfying the condition precedent to the effectiveness of the termination of the OPCH Merger Agreement and ~~elected~~the Mrreleases contained in the Termination Agreement. ~~Ashworth~~If the Merger Agreement is terminated under certain specified circumstance set forth in the Merger Agreement (as amodified ~~director~~by the Waiver), ~~all~~Amedisys ~~effective~~may ~~April~~be 10required to reimburse UnitedHealth Group for the $106,000,000 ~~2023.~~termination ~~Paul~~fee B.that ~~Kusserow~~UnitedHealth ~~ceased~~Group, ~~serving~~on asAmedisys' ~~Chief~~behalf, ~~Executive~~paid ~~Officer~~to ~~effective~~OPCH, ~~April~~which 10may be in addition to the $125,000,000 termination fee payable by Amedisys to UnitedHealth Group in the event the Merger Agreement is terminated under certain specified circumstances. During the year ended December 31, 2023, ~~but~~the ~~continues~~$106,000,000 termination fee was recorded to ~~serve~~other asincome ~~Chairman~~(expense) within our consolidated statement of ~~the~~operations ~~Board~~with a corresponding liability to termination fee paid by UnitedHealth Group within our consolidated balance sheet.

Personal Care Divestiture

On February 10, 2023, we signed a definitive agreement to sell our personal care business (excluding the Florida operations, which were closed during the three-month period ended March 31, 2023). The divestiture closed on March 31, 2023. We received net proceeds of $47.8 million and recognized a loss of $2.2 million in connection with the divestiture which was recorded to miscellaneous, net within other income (expense) in our consolidated statement of operations.

~~2023~~2024 Developments

•Maintained the highest Quality of Patient Care star rating in the home health industry of 4.3518 with 9688% of our care centers at 4+ Stars

•Outperformed the industry on all Hospice Item Set ("HIS") measures

•~~Released~~Performed ~~our~~more ~~second~~than ~~annual~~10.7 ~~Environmental,~~million ~~Social~~visits ~~and~~for ~~Governance~~more ~~("ESG")~~than ~~Report~~499,000 patients

•~~Performed~~Reduced ~~more~~voluntary ~~than~~turnover ~~10.6~~to ~~million visits~~18%

•Expanded our usage and relationship with Medalogix, a predictive data and analytics company, helping to further optimize our current business and positioning us to work more closely with Medicare Advantage payors

•~~Entered~~Generated ~~into~~$222 amillion ~~new~~in ~~risk-based~~cash ~~palliative~~flow ~~care~~from ~~contract with BlueCross BlueShield of Tennessee~~operations

•Generated $137 million in cash flow from operations

•Continued to execute on a clinical optimization plan to gain efficiencies and clinical capacity

~~2024~~•Significantly ~~Strategy~~grew home health and high acuity care admissions and grew hospice average daily census for the first time since 2020

~~•Further advance our industry leading Quality of Patient Care star scores in home health and drive best-in-class hospice quality as measured by the Hospice Care Index~~46

~~•Continue~~2025 toStrategy: ~~better~~Provide the ~~communities~~highest ~~and~~quality ~~patients~~care weto ~~serve~~as bymany ~~further~~patients ~~incorporating~~as ~~ESG~~possible ~~practices~~in ~~into~~the ~~our~~most ~~business~~efficient ~~operations~~way.

~~•Advance~~Specifically, ~~our~~we ~~culture and sense of belonging through diversity and inclusion initiatives~~will:

•~~Build~~Advance aour ~~learning~~industry ~~culture~~leading ~~through~~Quality ~~world~~of Patient Care star scores in home health and drive best-in-class ~~leadership~~hospice ~~development~~quality as measured by the Hospice Care Index

•~~Reduce~~Continue ~~turnover~~to infocus ~~all~~on ~~roles,~~initiatives ~~especially~~to ~~focused~~hire, ontrain ~~critical~~and ~~clinician~~retain ~~positions~~clinicians

•~~Consistently~~Reduce ~~grow~~clinical ~~all~~turnover ~~lines~~to ofmaximize ~~business~~capacity ~~organically~~ and ~~inorganically~~productivity

•~~Expand~~Build ~~our~~a ~~high~~learning ~~acuity~~culture ~~care~~through ~~line~~best-in-class ofleadership ~~business via new joint venture partnerships, vendor models and palliative care relationships~~development

•~~Continue~~Grow toall ~~execute~~lines of business organically with a focus on ~~initiatives~~taking toshare ~~hire~~in a declining home health fee for service market, growing both admissions and ~~retain~~average ~~clinicians~~daily census in hospice and same store growth in high acuity care

•Continue to implement reorganization initiatives to increase efficiency ~~in our operating model~~

Financial Performance

On a consolidated basis, operating income decreased $2462 million on a $13112 million (5%) increase in net service revenue. ~~Significant~~We ~~drivers~~grew revenue across all three of ~~the~~our current operating segments as we grew our admissions in both our home health and high acuity care segments, and our hospice segment grew average daily census and benefited from a positive Medicare reimbursement update. Our personal care segment, which was sold on March 31, 2023, contributed $2415 million in net service revenue in 2023. The decrease in our operating income ~~were~~is due primarily to a $30 million increase in merger-related expenses, ~~higher~~and ~~incentive~~a ~~compensation~~$48 ~~costs~~million ~~and~~impairment ~~the~~in ~~return~~our ofhigh ~~sequestration~~acuity care segment. ~~Additionally,~~Other items impacting our performance were continued wage inflation, rising health insurance costs and a continuation of the shift in our home health volumes from episodic to non-episodic payors ~~negatively impacted performance~~.

Our home health segment was positively impacted by total volume growth, an increase in our non-Medicare revenue per visit resulting from rate increases and improvements in clinician utilization. These items were partially offset by a shift in our payor mix and labor pressures.

Our hospice segment experienced a decline in our average daily census, which is the main driver of hospice revenue, primarily due to a decline in hospice admissions as well as prior year care center closures.

We completed the sale of our personal care business on March 31, 2023.

Our high acuity care segment results reflect growth in our home recovery care services offset by investments in resources to support the first performance year of our new risk-based palliative care contract as well as future palliative care arrangements.

Economic and Industry Factors

Our segments operate in a highly fragmented and highly competitive industry. The degree of competitiveness for our home health and hospice care centers varies based upon whether our care centers operate in states that require a certificate of need ("CON"), permit of approval ("POA") or facility needs review ("FNR"). In such states, expansion by existing providers or entry into the market by new providers is permitted only where the determination is made by state health authorities that a given amount of unmet healthcare need exists. Currently, 67% and 3334% of our home health and hospice care centers, respectively, operate in CON, POA or FNR states.

As the ~~Federal~~federal government continues to debate a reduction in expenditures and a reform of the Medicare system, our industry continues to face reimbursement pressures. These reform efforts could result in major changes in the ~~health~~healthcare ~~care~~ delivery and reimbursement system on a national and state level, including changes directly impacting the reimbursement systems for our home health and hospice care centers.

42The healthcare industry is highly dependent on labor in order to provide necessary clinical services. Our ability to grow and our financial results have been impacted by clinician labor shortages and rising labor costs. We expect these issues to continue as labor shortages, wage inflation and health insurance costs remain a challenge for the industry.

Wages and other expenses increase during periods of inflation and when labor shortages occur in the marketplace. The impact of inflation on the Company is primarily in the area of labor costs, supply costs, fuel costs and mileage reimbursements. The healthcare industry is labor intensive. We have experienced, and expect to continue to experience, increases in wage costs. In addition, increases in healthcare costs are typically higher than inflation and impact our costs under our employee benefit plans.

The Centers for Medicare and Medicaid Services ("CMS") Payment Updates

Hospice

On July 2830, ~~2023~~2024, CMS issued the final rule to update hospice payment rates and the wage index for fiscal year ~~2024~~2025, effective for services provided beginning October 1, ~~2023~~2024. CMS estimates hospices serving Medicare beneficiaries will see a 32.19% increase in payments. This increase is the result of a 3.34% market basket adjustment as required under the Patient Protection and Affordable Healthcare Act and the Health Care and Education Reconciliation Act ("PPACA") less a 0.25% productivity adjustment. Additionally, CMS increased the aggregate cap amount by 32.19% to $3334,~~494~~465. Based on our analysis of the final rule, we expect our impact to be in line with the 32.19% increase.

Home Health

On November 1, ~~2023~~2024, CMS issued the Calendar Year ~~2024~~("CY") 2025 Final Rule for Medicare home health providers. CMS estimates that the final rule will result in ana 0.85% increase in payments to home health providers. This increase is the result of a 32.07% payment update (3.32% market basket adjustment less a 0.35% productivity adjustment) ~~and~~offset anby ~~increase~~a decrease of 0.4% for the update to the fixed-dollar loss ratio used in determining outlier payments ~~offset~~and by a permanent adjustment of -21.68% based on the difference between assumed and actual behavior changes resulting from the implementation of ~~PDGM. The -2.6% permanent adjustment was derived from a -2.890% adjustment which was only applied to~~ the 30Patient-~~day~~Driven ~~payment~~Groupings ~~rate~~Model ~~and not the low utilization payment adjustment~~("PDGM"). ~~The -2.890% is only half of the total proposed adjustment. The remaining adjustment is to be considered in future rulemaking.~~ Based on our analysis of the final rule, we expect our impact to be in line with the 0.85% increase.

The following payment adjustments are effective for each of the years indicated based on CMS' final rules:

In addition to permanent adjustments, CMS also has discretion to make temporary adjustments through calendar year 2026; however, CMS has elected not to implement a temporary adjustment for calendar year 2024.


	Home Health						Hospice
	2025		2024		2023		2025(1)		2024		2023
Market Basket Update	3.2	%	3.3	%	4.1	%	3.4	%	3.3	%	4.1	%
Productivity Adjustment	(0.5)		(0.3)		(0.1)		(0.5)		(0.2)		(0.3)
Behavioral Adjustment	(1.8)		(2.6)		(3.5)		—		—		—
Fixed-Dollar Loss Ratio Adjustment	(0.4)		0.4		0.2		—		—		—
Estimated Industry Impact	0.5	%	0.8	%	0.7	%	2.9	%	3.1	%	3.8	%
Estimated Company-Specific Impact(2)	0.5	%	0.8	%	—	%	2.9	%	3.1	%	3.8	%

~~On July 5, 2023, the National Association for Home Care and Hospice~~ (~~"NAHC"~~1), ~~the~~Effective ~~leading national home health trade association, filed suit against CMS in the United States District Court~~ for ~~the~~services ~~District~~provided offrom ~~Columbia over the implementation of the payment cuts CMS made in the CY 2023 Final Rule effective January~~ October 1, ~~2023;~~2024 ~~that~~to ~~litigation~~September 30, ~~remains pending~~2025.

~~The~~(2) ~~following~~Our company-specific impact of the home health final rule could differ depending on differences in the wage index, our patient case mix and other factors, such as low utilization payment adjustments ~~are~~("LUPAs") ~~effective~~or ~~for~~outliers. ~~each~~Our company-specific impact of the ~~years~~hospice ~~indicated~~final rule could differ based on ~~CMS'~~our ~~final~~mix ~~rules:~~of patients and differences in the wage index.

	Home Health						Hospice
	2024		2023		2022		2024(1)		2023		2022
Market Basket Update	3.3	%	4.1	%	3.1	%	3.3	%	4.1	%	2.7	%
Rural Add-On Adjustment	—		—		(0.1)		—		—		—
Productivity Adjustment	(0.3)		(0.1)		(0.5)		(0.2)		(0.3)		(0.7)
Behavioral Adjustment	(2.6)		(3.5)		—		—		—		—
Fixed-Dollar Loss Ratio Adjustment	0.4		0.2		0.7		—		—		—
Estimated Industry Impact	0.8	%	0.7	%	3.2	%	3.1	%	3.8	%	2.0	%
Estimated Company-Specific Impact(2)	0.8	%	—	%	3.2	%	3.1	%	3.8	%	2.0	%

(1)Effective for services provided from October 1, 2023 to September 30, 2024.

(2)Our company-specific impact of the home health final rule could differ depending on differences in the wage index, our patient case mix and other factors, such as low utilization payment adjustments ("LUPAs") or outliers, which are described in more detail under Critical Accounting Estimates below. Our company-specific impact of the hospice final rule could differ based on our mix of patients and differences in the wage index.

Sequestration

In March 2020, Congress passed the bipartisan Coronavirus Aid, Relief and Economic Security Act ("CARES Act") which provided for the suspension of the 2% reduction of Medicare claim reimbursements ("sequestration") for the period May 1, 2020 through December 31, 2020. During 2020 and 2021, Congress passed additional COVID-19 relief legislation which extended the 2% suspension of sequestration through March 31, 2022; sequestration was reinstated as a 1% reduction to Medicare claim reimbursements for the period April 1, 2022 through June 30, 2022 and was fully reinstated as a 2% reduction to Medicare claim reimbursements effective July 1, 2022. The reinstatement of sequestration has resulted in a reduction of our net service revenue.

Governmental Inquiries and Investigations and Other Litigation

~~See~~On ~~Item~~November 812, ~~Note~~2024, 12the –DOJ ~~Commitments~~and certain other parties commenced the DOJ Action against Amedisys and ~~Contingencies~~UnitedHealth toGroup ~~our~~alleging ~~consolidated~~that ~~financial~~the ~~statements~~Merger, ~~for~~if aconsummated, ~~discussion~~would violate Section 7 of the Clayton Act and ~~updates~~so ~~regarding~~should ~~legal~~be ~~proceedings~~enjoined. Additionally, the DOJ Action alleges that the Company committed certain violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and ~~investigations~~requests wecivil penalties against the Company for alleged violation of Section 7A. We believe the plaintiffs' claims are ~~involved~~without inmerit and intend to vigorously defend against such claims. NoThe ~~assurances~~DOJ ~~can~~Action beremains ~~given~~pending. The U.S. District Court for the District of Maryland has tentatively set October 27, 2025 as tothe start date for the ~~timing~~trial, but may reschedule the trial to begin later, on or ~~outcome~~about February 9, 2026. The U.S. District Court for the District of ~~these~~Maryland ~~items~~has stated that it will make a final determination as to the trial date in late August 2025. See Part I, Item 1A. "Risk Factors – Litigation challenging the Merger Agreement may prevent the Merger from being consummated by the end of the Waiver Period or at all" for additional information.

See also Item 8, Note 11 – Commitments and Contingencies to our consolidated financial statements for a discussion of and updates regarding additional legal proceedings and investigations we are involved in. No assurances can be given as to the timing or outcome of these items.

Results of Operations

Consolidated

The following table summarizes our consolidated results of operations (amounts in millions):

	For the Years Ended December 31,
	2023			2022			2021
	2024			2023			2022
Net service revenue	$	2,~~236~~348.43		$	2,~~223~~236.24		$	2,~~214~~223.12
Other operating income	—			—			13.3
Cost of service, inclusive of depreciation	1,330.6			1,245.5			1,260.4
Cost of service, inclusive of depreciation	1,245.5			1,260.4			1,233.4
Gross margin	1,017.7			990.9			962.8
Gross margin	990.9			962.8			994.0
% of net service revenue	43.3		%	44.3		%	43.3		%
% of net service revenue	44.3		%	43.3		%	44.9		%
General and administrative expenses	856.8			816.8			754.1
General and administrative expenses	816.8			754.1			711.2
% of net service revenue	36.5		%	36.5		%	33.9		%
% of net service revenue	36.5		%	33.9		%	32.1		%
Depreciation and amortization	18.0			17.7			24.9
Depreciation and amortization	17.7			24.9			30.9
Impairment	48.4			—			3.0
Investment impairment	—			3.0			—
Operating income	94.5			156.4			180.8
Operating income	156.4			180.8			251.9
Total other expense, net	(8.3)			(116.8)			(20.5)
Total other (expense) income, net	(116.8)			(20.5)			28.3
Income tax expense	(48.1)			(50.6)			(42.5)
Income tax expense	(50.6)			(42.5)			(70.1)
Effective income tax rate	55.7		%	127.7		%	26.5		%
Effective income tax rate	127.7		%	26.5		%	25.0		%
Net income (loss)	38.1			(10.9)			117.7
Net (loss) income	(10.9)			117.7			210.2
Net loss attributable to noncontrolling interests	5.1			1.2			0.9
Net loss (income) attributable to noncontrolling interests	1.2			0.9			(1.1)
Net income (loss) attributable to Amedisys, Inc.	$	43.2		$	(9.7)		$	118.6
Net (loss) income attributable to Amedisys, Inc.	$	(9.7)		$	118.6		$	209.1

Year Ended December 31, ~~2023~~2024 Compared to the Year Ended December 31, ~~2022~~2023

On a consolidated basis, our operating income decreased $2462 million on a $13112 million increase in net service revenue. Our year-over-year results were impacted by an increase in our merger-related expenses totaling $3730 million, ~~higher~~a ~~incentive compensation costs totaling~~ $2748 million ~~(resulting~~impairment ~~primarily from the reversal of incentive plan accruals and lower field incentive payouts in the prior year due to under-performance and incremental expenses~~ associated with our ~~CEO~~high ~~transition),~~acuity ~~the~~care ~~return~~segment ~~of sequestration (prior year included a benefit of $13 million associated with the suspension of sequestration), the acquisitions of Evolution~~ and ~~AssistedCare on April 1, 2022 (which combined contributed $10 million in incremental revenue and an operating loss of $1 million to~~ the ~~current year), the~~ divestiture of our personal care line of business (which contributed ~~an incremental~~ $4615 million in net service revenue and $42 million in operating income in the prior year),. aExcluding $3these ~~million~~items, ~~impairment~~our ~~charge~~operating ~~recorded~~income inincreased ~~the~~$18 ~~prior~~million ~~year~~on ina ~~connection~~$127 ~~with~~million ~~the~~increase ~~wind~~in ~~down~~net ofservice ~~operations~~revenue ofdue ~~one~~to ofrate ~~our~~increases ~~high acuity care joint ventures~~ and ahome $9health ~~million~~volume ~~reduction~~growth, topartially ~~net~~offset ~~service~~by ~~revenue~~planned inwage ~~the~~increases, ~~prior~~wage ~~year~~inflation, ~~related~~a toshift in our ~~Infinity~~home ~~ZPIC~~health ~~audits~~payor ~~(see~~mix, ~~Note~~investments 12in –hospice ~~Commitments~~clinical ~~and~~staffing, ~~Contingencies~~an toincrease in our ~~consolidated~~health ~~financial~~insurance ~~statements~~costs ~~for~~and ~~additional~~an ~~information~~increase ~~regarding~~in ~~the~~our ~~Infinity~~general ~~ZPIC~~and ~~audits).~~administrative expenses.

~~Excluding~~Our ~~these items, our~~ operating ~~income~~results ~~increased~~reflect ~~$46 million on~~ a $5340 million increase in ~~net~~our ~~service~~general ~~revenue~~and ~~due~~administrative expenses compared to the ~~hospice~~prior ~~rate~~year. Excluding the increase, ~~home~~in ~~health~~our ~~volume~~merger-related ~~growth~~expenses ($30 million) and ~~non-Medicare~~the ~~rate~~general ~~increases,~~and ~~savings~~administrative ~~associated~~expenses ~~with~~of ~~clinical~~our ~~optimization~~personal ~~and~~care ~~reorganization~~line ~~initiatives,~~of ~~improvements~~business ($2 million in ~~clinician~~the ~~utilization~~prior year), ~~lower~~our ~~COVID-related~~general ~~costs~~ and ~~lower~~administrative ~~depreciation~~expenses ~~and~~increased ~~amortization~~$12 ~~partially~~million ~~offset~~due byto ~~lower~~planned ~~hospice~~wage ~~average~~increases, ~~daily~~higher ~~census,~~incentive acompensation ~~shift~~costs inand ~~our~~higher ~~home~~legal ~~health~~and ~~payor~~information ~~mix,~~technology ~~planned~~fees. ~~wage~~These ~~increases,~~items ~~wage~~were ~~inflation~~partially offset by lower acquisition and anintegration ~~increase~~costs inand ~~our~~lower ~~general~~costs/savings associated with clinical optimization and ~~administrative~~reorganization ~~expenses~~initiatives.

~~Our~~Total ~~operating~~other ~~results reflect a $63 million increase in our general and administrative expenses compared to the prior year. Excluding our merger-related expenses ($37 million)~~expense, ~~the~~net ~~impact~~includes of the ~~higher~~following ~~incentive~~items ~~compensation costs described above~~ (~~$26~~amounts ~~million) and incremental expenses related to our acquisitions~~ in ~~the current year ($3 million~~millions) and our personal care line of business in the prior year ($7 million), our general and administrative expenses increased $4 million (1%) primarily due to planned wage increases, higher insurance-related costs, recruiting fees and information technology fees, a favorable legal settlement recognized in the prior year and a change in the presentation of gains on the sale of fleet vehicles which are reflected :


	For the Years Ended December 31,
	2024		2023		2022
Interest income	$	8.1	$	3.3	$	0.2
Interest expense	(30.8)		(31.3)		(22.2)
Equity in earnings (loss) from equity method investments	6.3		10.8		(0.1)
Merger termination fee	—		(106.0)		—
Miscellaneous, net	8.1		6.5		1.6
Total other expense, net	$	(8.3)	$	(116.8)	$	(20.5)

inThe ~~other~~merger ~~income~~termination ~~(expense)~~fee ~~within~~represents ~~our~~the ~~consolidated~~fee ~~statement~~associated ofwith ~~operations~~Amedisys' astermination of ~~January~~the 1,OPCH ~~2023~~Merger ~~due~~Agreement. toThe fee was paid by UnitedHealth Group on Amedisys' behalf during the ~~modification~~year ofended ~~our~~December ~~fleet~~31, ~~leases~~2023. ~~These~~Amedisys ~~items~~may ~~were~~be ~~partially~~required ~~offset~~to byreimburse ~~lower~~UnitedHealth ~~acquisition~~Group ~~and~~for ~~integration~~the ~~costs,~~termination ~~lower~~fee ~~staffing~~payment ~~levels,~~under ~~savings~~certain ~~associated~~circumstances ~~with~~(see ~~clinical~~Item ~~optimization~~8, ~~and~~Note ~~reorganization~~4 ~~initiatives~~– Mergers, ~~lower~~Acquisitions ~~travel~~and ~~spend~~Dispositions ~~and~~to ~~severance~~our ~~costs~~consolidated ~~incurred~~financial instatements ~~the~~for ~~prior~~additional ~~year~~information).

~~Total other expense includes the following items (amounts in millions):~~49

	For the Years EndedDecember 31,
	2023		2022
Interest income	$	3.3	$	0.2
Interest expense	(31.3)		(22.2)
Equity in earnings (loss) from equity method investments	10.8		(0.1)
Merger termination fee	(106.0)		—
Miscellaneous, net	6.5		1.6
Total other expense	$	(116.8)	$	(20.5)

The merger termination fee represents the fee associated with Amedisys' termination of the OPCH Merger Agreement. The fee was paid by UnitedHealth Group on Amedisys' behalf. Amedisys may be required to reimburse UnitedHealth Group for the termination fee payment under certain circumstances (see Note 5 – Mergers, Acquisitions and Dispositions to our consolidated financial statements for additional information).

Home Health Segment

The following table summarizes our home health segment results of operations:

	For the Years Ended December 31,
	2023			2022			2021
	2024			2023			2022
Financial Information (in millions)(6):
Financial Information (in millions):
Medicare	$	~~874~~856.24		$	~~896~~874.52		$	~~914~~896.5
Non-Medicare	~~529~~634.41			~~465~~529.24			~~439~~465.32
Net service revenue	1,~~403~~490.65			1,~~361~~403.76			1,~~353~~361.87
Other operating income	—			—			7.3
Cost of service, inclusive of depreciation	874.9			801.1			773.9
Cost of service, inclusive of depreciation	801.1			773.9			756.6
Gross margin	615.6			602.5			587.8
Gross margin	602.5			587.8			604.5
General and administrative expenses	372.2			363.5			351.1
General and administrative expenses	363.5			351.1			328.5
Depreciation and amortization	7.8			6.0			4.0
Depreciation and amortization	6.0			4.0			4.3
Operating income	$	235.6		$	233.0		$	232.7
Operating income	$	233.0		$	232.7		$	271.7
Same Store Growth(1):
Medicare revenue	(32		%)	(53		%)	8(5		%)
Non-Medicare revenue	1320		%	213		%	92		%
Total admissions	611		%	36		%	63		%
Total volume(2)	48		%	—4		%	5—		%
Key Statistical Data - Total(3)(6):
Key Statistical Data - Total(3):
Admissions	~~399~~441,~~752~~945			~~376,~~399,752			~~353~~376,~~075~~399
Recertifications	~~179~~184,~~719~~613			~~178~~179,~~445~~719			~~183~~178,~~134~~445
Total volume	~~579~~626,~~471~~558			~~554~~579,~~844~~471			~~536~~554,~~209~~844
Medicare completed episodes	~~295~~289,~~017~~289			~~305~~295,~~455~~017			~~311~~305,~~531~~455
Average Medicare revenue per completed episode(4)	$	23,~~998~~021		$	32,~~013~~998		$	23,~~959~~013
Medicare visits per completed episode(5)	12.40			12.94			1312.9
Visiting clinician cost per visit	$	~~103~~108.3101		$	~~100~~103.0331		$	93100.4403
Clinical manager cost per visit	1112.5841			11.1958			911.7519
Total cost per visit	$	~~114~~120.8942		$	~~111~~114.2289		$	~~103~~111.1922
Visits	67,~~972~~265,~~929~~742			6,~~958~~972,~~541~~929			76,~~331~~958,~~935~~541

(1)Same store information represents the percent change in our Medicare, Non-Medicare and Total revenue, admissions or volume for the period as a percent of the Medicare, Non-Medicare and Total revenue, admissions or volume of the prior period. Same store is defined as care centers that we have operated for at least the last twelve months and startups that are an expansion of a same store care center.

(2)Total volume includes all admissions and recertifications.

(3)Total includes acquisitions, start-ups and de novos.

(4)Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care. Average Medicare revenue per completed episode reflects the suspension of sequestration for the period May 1, 2020 through March 31, 2022 and the reinstatement of sequestration at 1% effective April 1, 2022 and at 2% effective July 1, 2022.

(5)Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

~~(6)Prior~~Year ~~years~~Ended ~~have~~December 31, ~~been~~2024 ~~recast~~Compared to ~~conform~~the toYear ~~the~~Ended ~~current~~December 31, ~~year~~2023 ~~presentation.~~

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

Operating Results

~~On March 23~~Overall, ~~2022,~~our weoperating ~~entered~~income ~~into~~increased a$3 ~~transaction~~million ~~with~~on ~~one~~an of$87 ~~our~~million ~~high~~increase ~~acuity care health system partners~~ in ~~which~~net ~~our~~service ~~health~~revenue. ~~system~~Volume ~~partner~~growth ~~contributed~~and ~~its~~rate ~~home~~increases, ~~health~~which ~~operations~~are tothe ~~one~~main drivers of our ~~existing~~revenue ~~high~~growth, ~~acuity~~were ~~care~~partially ~~joint~~offset ~~ventures.~~by ~~The~~a ~~home~~shift ~~health operations were reflected~~ in our ~~high~~payor ~~acuity~~mix, ~~care~~planned ~~segment~~wage ~~during 2022. Effective January 1~~increases, ~~2023,~~an ~~the~~increase ~~operating~~in ~~results~~new ofhire ~~this~~pay, ~~home~~wage ~~health~~inflation ~~care~~and ~~center~~higher ~~are included within our home~~ health ~~segment.~~insurance ~~Prior periods have been recast to conform to the current year presentation~~costs.

Overall, our operating income remained flat on a $42 million increase in net service revenue. Our year over year results were impacted by higher incentive compensation costs totaling $8 million resulting primarily from the reversal of incentive plan accruals and lower field incentive payouts in the prior year due to under-performance, the April 1, 2022 acquisitions of Evolution and AssistedCare (which combined contributed $10 million in incremental net service revenue and an operating loss of $1 million to the current year), a prior year benefit of $7 million in connection with the suspension of sequestration and a $9 million reduction to net service revenue recorded in the prior year related to our Infinity ZPIC audits discussed above. 50

Excluding these items, our operating income increased $7 million on a $30 million increase in net service revenue. Our operating income was positively impacted by same store total volume growth, non-Medicare rate increases and improvement in our operating performance driven by improvements in clinician utilization. These items were partially offset by a shift in our payor mix, planned wage increases, wage inflation, an increase in depreciation and amortization and higher general and administrative expenses.

Net Service Revenue

~~Excluding~~Our ~~our acquisitions, the sequestration benefit recognized in the prior year and the Infinity ZPIC audits discussed above, our~~ net service revenue increased $3087 million ~~due~~as toa 4%result ~~same~~of ~~store~~ total volume growth ~~and~~of an8% ~~increase~~(admissions ingrowth ~~our~~was ~~non-Medicare~~11%) ~~revenue~~and ~~per visit resulting from~~ rate increases ~~partially~~(both ~~offset~~Medicare byand aper ~~shift in our payor mix~~visit). ~~Our volumes continue to be impacted by staffing shortages driven by the competitive labor market.~~

Cost of Service, Inclusive of Depreciation

~~Overall,~~Our ~~our total~~ cost of service ~~increased~~consists 4%of ~~primarily~~costs ~~due~~associated towith adirect 3%clinician ~~increase~~care in the homes of our ~~total~~patients as well as the cost ~~per~~of ~~visit~~clinical ~~resulting~~managers ~~from~~who ~~planned~~monitor ~~wage~~the ~~increases,~~overall andelivery ~~increase~~of incare ~~new~~and ~~hire~~certified ~~pay~~coders. Overall, ~~wage~~our ~~inflation~~total ~~and~~cost ~~visit~~of ~~mix~~service ~~partially~~increased ~~offset~~9% bydue ~~lower~~to ~~COVID-19~~a ~~costs.~~5% ~~Our~~increase in our total cost per visit and a 4% increase in total visits year over year. ~~were~~The ~~relatively~~5% ~~flat~~increase asin ~~increases~~our intotal ~~visits~~cost ~~driven~~per byvisit ~~growth~~is inprimarily ~~volumes~~due ~~were~~to ~~partially~~planned ~~offset~~wage byincreases, ~~improvements~~an increase in ~~clinician~~new ~~utilization~~hire ~~evidenced~~pay, bywage ainflation ~~decline~~and ofan ~~0.5~~increase ~~visits~~in ~~per~~health ~~Medicare~~insurance ~~completed episode~~costs.

General and Administrative Expenses

Our general and administrative expenses increased $129 million. ~~Excluding~~due ~~our~~to ~~acquisitions~~planned ~~($3~~wage ~~million)~~increases, ~~and the impact of the~~ higher incentive compensation costs ~~described above ($6 million), our general~~ and ~~administrative expenses increased $3 million primarily due to planned wage increases,~~ higher information technology fees ~~and higher insurance-related costs~~ partially offset by ~~lower staffing levels,~~ savings associated with clinical optimization and reorganization initiatives~~, lower travel spend and higher severance costs incurred in the prior year~~.

Hospice Segment

The following table summarizes our hospice segment results of operations:

	For the Years Ended December 31,
	2023			2022			2021
	2024			2023			2022
Financial Information (in millions):
Medicare	$	~~754~~783.09		$	~~744~~754.10		$	~~750~~744.1
Non-Medicare	4441.89			4344.78			4143.7
Net service revenue	~~798~~825.8			~~787~~798.8			~~791~~787.8
Other operating income	—			—			6.0
Cost of service, inclusive of depreciation	429.7			412.2			426.5
Cost of service, inclusive of depreciation	412.2			426.5			425.2
Gross margin	396.1			386.6			361.3
Gross margin	386.6			361.3			372.6
General and administrative expenses	197.1			193.1			203.3
General and administrative expenses	193.1			203.3			198.4
Depreciation and amortization	3.1			3.0			2.3
Depreciation and amortization	3.0			2.3			2.7
Operating income	$	195.9		$	190.5		$	155.7
Operating income	$	190.5		$	155.7		$	171.5
Same Store Growth(1):
Medicare revenue	14		%	(1		%)	—(1		%)
Hospice admissions	(52		%)	(15		%)	2(1		%)
Average daily census	(1—		%)	(1		%)	(41		%)
Key Statistical Data - Total(2):
Hospice admissions	4948,~~587~~426			5249,~~656~~587			5352,~~507~~656
Average daily census	12,~~863~~916			1312,~~091~~863			13,~~271~~091
Revenue per day, net	$	~~170~~174.1468		$	~~164~~170.8814		$	~~163~~164.4788
Cost of service per day	$	8790.8090		$	8987.2680		$	8789.7726
Average discharge length of stay	9394			9193			9491

(1)Same store information represents the percent change in our Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare revenue, Hospice admissions or average daily census of the prior period. Same store is defined as care centers that we have operated for at least the last twelve months and startups that are an expansion of a same store care center.

(2)Total includes acquisitions and de novos.

~~Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022~~ 51

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

Operating Results

Overall, our operating income increased $355 million on ana $1127 million increase in net service revenue. ~~Our~~due ~~year over year results were impacted by a prior year benefit of $6 million related~~ to the ~~suspension~~increases ofin ~~sequestration~~reimbursement ~~and~~effective ~~higher~~October ~~incentive~~1, ~~compensation~~2023 ~~costs totaling $2 million resulting primarily from the reversal of incentive plan accruals~~ and ~~lower field incentive payouts in the prior year due to under-performance. Excluding these items~~2024, ~~our~~an ~~operating income increased $43 million on a $17 million~~ increase in ~~net~~our ~~service~~average ~~revenue~~daily ~~primarily~~census ~~due to the increases in reimbursement effective October 1, 2022~~ and ~~2023,~~ savings associated with clinical optimization and reorganization initiatives, ~~lower~~which ~~staffing~~were ~~levels~~partially ~~and~~offset aby ~~decrease~~planned inwage ~~our~~increases, ~~general~~wage ~~and~~inflation, ~~administrative~~investments ~~expenses.~~in ~~These~~hospice ~~items~~clinical ~~were~~staffing ~~partially~~and ~~offset~~an byincrease ~~a decline~~ in our ~~hospice~~health ~~average~~insurance ~~daily census, planned wage increases and wage inflation~~costs.

Net Service Revenue

~~Excluding~~Our ~~the sequestration benefit recognized in the prior year, our~~ net service revenue increased $1727 million asdue to the increases in reimbursement effective October 1, ~~2022~~2023 and ~~2023~~2024, ~~were~~one ~~partially~~additional ~~offset~~calendar byday ~~a decline~~ in ~~our~~2024 ~~average~~and ~~daily~~an ~~census~~increase ~~resulting from a decline~~ in our ~~hospice~~average ~~admissions~~daily ~~as well as care center closures~~census.

Cost of Service, Inclusive of Depreciation

Our hospice cost of service ~~decreased~~increased 34% primarily due to a 24% ~~decrease~~increase in our cost of service per day ~~and a 2% decline in our total average daily census~~. The 2%increase ~~decrease~~ in our cost of service per day is due to ~~savings~~planned ~~associated~~wage ~~with clinical optimization and reorganization initiatives~~increases, ~~lower~~wage ~~staffing levels~~inflation, ~~lower~~investments ~~utilization~~in ofhospice ~~contractors~~clinical ~~to supplement our~~ staffing ~~levels, lower COVID-19 costs~~ and aan ~~new~~increase ~~pharmacy~~in ~~contract~~our ~~effective~~health ~~during~~insurance ~~the three-month period ended June 30, 2023~~costs. These items were partially offset by ~~planned~~savings ~~wage~~associated ~~increases~~with clinical optimization and ~~wage~~reorganization ~~inflation~~initiatives and lower contractor utilization.

General and Administrative Expenses

Our general and administrative expenses ~~decreased~~increased $104 million. ~~Excluding~~primarily ~~the~~due ~~impact~~to ofplanned ~~the~~wage increases and higher incentive compensation costs ~~described~~partially ~~above,~~offset ~~our~~by ~~general~~savings ~~and~~associated ~~administrative~~with ~~expenses~~clinical ~~decreased~~optimization ~~$8 million primarily due to reductions in staffing levels~~ and ~~lower~~reorganization ~~travel spend partially offset by planned wage increases~~initiatives.

Personal Care Segment

The following table summarizes our personal care segment results of operations:

	For the Years Ended December 31,
	2023		2022		2021
Financial Information (in millions):
Medicare	$	—	$	—	$	—
Non-Medicare	15.0		61.4		65.0
Net service revenue	15.0		61.4		65.0
Cost of service, inclusive of depreciation	11.1		46.7		49.1
Gross margin	3.9		14.7		15.9
General and administrative expenses	2.3		9.2		11.2
Depreciation and amortization	—		0.1		0.2
Operating income	$	1.6	$	5.4	$	4.5
Key Statistical Data - Total:
Billable hours	440,464		1,851,563		2,275,511
Clients served	7,892		10,448		12,074
Shifts	191,379		791,596		974,409
Revenue per hour	$	33.97	$	33.15	$	28.54
Revenue per shift	$	78.19	$	77.55	$	66.66
Hours per shift	2.3		2.3		2.3

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

We completed the sale of our personal care business on March 31, 2023.

High Acuity Care Segment

The following table summarizes our high acuity care segment results of operations:

	For the Years Ended December 31,
	2023		2022		2021(2)
	2024		2023		2022
Financial Information (in millions)(1):
Financial Information (in millions):
Medicare	$	—	$	—	$	—
Non-Medicare	1932.0		1219.30		312.53
Net service revenue	1932.0		1219.30		312.53
Cost of service, inclusive of depreciation	2126.10		1321.31		213.53
Gross margin	(26.1)0		(12.01)		(1.0)
General and administrative expenses	2022.47		1920.74		619.67
Depreciation and amortization	3.14		3.31		13.3
Investment impairment	—		3.0		—
Impairment	48.4		—		3.0
Operating loss	$	(2568.65)	$	(2725.06)	$	(627.90)
Key Statistical Data - Total:
Full risk admissions	~~648~~761		~~448~~648		~~107~~448
Limited risk admissions	12,~~804~~612		1,~~142~~804		~~413~~1,142
Total admissions	23,~~452~~373		12,~~590~~452		~~520~~1,590
Full risk revenue per episode	$	10,~~565~~470	$	1110,~~273~~565	$	1011,~~457~~273
Limited risk revenue per episode	$	6,~~187~~685	$	56,~~553~~187	$	5,~~693~~553
Number of admitting joint ventures	108		810		78

~~(1) Prior years have been recast to conform to the current year presentation.~~52

50Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

(2) Acquired Contessa Health on August 1, 2021.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

Operating Results

InOur operating loss increased $43 million on a $13 million increase in net service revenue which is inclusive of a $48 million non-cash impairment charge recorded during 2024 in connection with our ~~reorganization~~annual ~~initiatives~~goodwill and other intangibles impairment analysis (see Item 8, weNote ~~transitioned~~2 ~~corporate~~– ~~functions~~Summary ~~that~~of ~~were~~Significant ~~previously~~Accounting ~~included~~Policies, ~~within~~"Goodwill ~~our~~and ~~high~~Other ~~acuity~~Intangible ~~care~~Assets" ~~segment~~and toNote ~~the~~5 ~~corporate~~– ~~support~~Goodwill ~~function~~and ~~effective~~Other ~~January~~Intangible 1Assets, ~~2023~~Net to our consolidated financial statements for additional information). ~~Additionally~~Excluding the $48 million impairment, weour ~~moved~~operating ~~the~~loss ~~home~~decreased ~~health~~$6 ~~operations~~million ofon ~~one~~a of$13 ~~our~~million ~~high~~increase ~~acuity~~in ~~care~~net ~~joint~~service ~~ventures~~revenue. toOur year over year results were impacted by growth in our home ~~health~~recovery ~~segment~~care ~~effective~~services, ~~January~~savings 1,generated ~~2023.~~on ~~Prior~~the ~~periods~~first ~~have~~performance ~~been~~year ~~recast~~of toour ~~conform~~risk-based topalliative care contract and the ~~current~~reversal of incentive compensation costs in prior year ~~presentation~~($1 million favorable impact on prior year general and administrative expenses).

Our year over year results reflect growth in our home recovery care services which was offset by an increase in our cost of service resulting from investments in resources to support the first performance year of our new risk-based palliative care contract as well as future palliative care arrangements. Additionally, prior year results include an impairment charge recorded in connection with the wind down of the operations of one of our joint ventures.

We expect our high acuity care segment to continue to generate operating losses; however, we also expect improvement as we leverage our operating structure through growth in current and future joint ventures and expansion of palliative care at home arrangements.

Net Service Revenue

Our net service revenue increased as a result of growth in our home recovery care services. ~~Our~~and ~~high~~savings ~~acuity~~generated ~~care segment provides home recovery care services for high acuity patients~~ on ~~either~~the afirst ~~full~~performance ~~risk~~year orof ~~limited~~our risk-based ~~basis,~~palliative ~~each~~care ~~with different reimbursement arrangements~~contract. ~~Full~~Our ~~risk~~high ~~admissions~~acuity ~~are~~care ~~admissions~~segment ~~for~~achieved ~~which~~its wehighest ~~assume~~total ~~the financial risk for all related healthcare services during a 30-day or 60-day episodic period in exchange for a fixed contracted bundled rate. Limited risk~~ admissions ~~are~~volume ~~admissions~~since ~~for~~inception ~~which we assume the risk for certain healthcare services~~ during ~~the remainder of an inpatient acute stay serviced at the patient's home in exchange for a contracted per diem payment~~2024.

Cost of Service, Inclusive of Depreciation

Our cost of service consists primarily of medical costs associated with direct clinician care provided to our patients during the applicable episode period, costs associated with our virtual care unit ~~(“VCU”),~~ which enables us to provide monitoring services and facilitates virtual patient rounding visits via telehealth and costs associated with resources to support our ~~new~~ risk-based palliative care at home contract as well as other palliative care arrangements. The increase in cost of service over prior year is ~~primarily~~ related to growth in ~~our home recovery care services and investments in resources to support our palliative care programs~~volume.

General and Administrative Expenses

Our general and administrative expenses, which primarily consist of salaries, benefits and ~~benefits~~incentive compensation costs, increased ~~approximately~~ $12 million. Weprimarily ~~have~~due ~~made significant investments~~ to ~~build~~planned ~~the~~wage ~~clinical,~~increases ~~operational~~ and ~~technological~~higher ~~infrastructure~~incentive ~~necessary~~compensation tocosts ~~support~~resulting ~~the~~largely ~~development~~from ~~and~~the ~~future~~reversal ~~growth~~ of ~~home~~incentive ~~recovery~~compensation ~~care~~costs ~~and~~in ~~palliative~~prior ~~care programs on a national scale~~year.

Personal Care Segment

The following table summarizes our personal care segment results of operations:


	For the Years Ended December 31,
	2024		2023		2022
Financial Information (in millions):
Medicare	$	—	$	—	$	—
Non-Medicare	—		15.0		61.4
Net service revenue	—		15.0		61.4
Cost of service, inclusive of depreciation	—		11.1		46.7
Gross margin	—		3.9		14.7
General and administrative expenses	—		2.3		9.2
Depreciation and amortization	—		—		0.1
Operating income	$	—	$	1.6	$	5.4
Key Statistical Data - Total:
Billable hours	—		440,464		1,851,563
Clients served	—		7,892		10,448
Shifts	—		191,379		791,596
Revenue per hour	$	—	$	33.97	$	33.15
Revenue per shift	$	—	$	78.19	$	77.55
Hours per shift	—		2.3		2.3

Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

We completed the sale of our personal care business on March 31, 2023.

Corporate

The following table summarizes our corporate results of operations:

	For the Years Ended December 31,
	2023		2022		2021
	2024		2023		2022
Financial Information (in millions)(1):
Financial Information (in millions):
General and administrative expenses	$	~~237~~264.58	$	~~170~~237.85	$	~~166~~170.58
Depreciation and amortization	53.67		155.26		2215.42
Total operating expenses	$	~~243~~268.15	$	~~186~~243.01	$	~~188~~186.90

(1) Prior years have been recast to conform to the current year presentation.

Corporate expenses consist of costs related to our executive management and corporate and administrative support functions, primarily information services, accounting, finance, billing and collections, legal, compliance, risk management, procurement, marketing, clinical administration, training, human resources and administration.

Year Ended December 31, ~~2023~~2024 Compared to the Year Ended December 31, ~~2022~~2023

InCorporate ~~connection~~general ~~with~~and ~~our~~administrative ~~reorganization~~expenses ~~initiatives~~increased $27 million year over year, wewhich ~~transitioned~~is ~~corporate~~inclusive ~~functions~~of ~~that~~an ~~were~~increase ~~previously~~in ~~included~~merger-related ~~within~~expenses totaling $30 million. Excluding these costs, our ~~high~~corporate ~~acuity~~general ~~care~~and ~~segment~~administrative expenses decreased $3 million primarily due to ~~the~~lower ~~corporate~~acquisition ~~support~~and ~~function~~integration ~~effective~~costs ~~January~~and 1,lower ~~2023~~costs associated with clinical optimization and reorganization initiatives. ~~Prior~~These ~~periods~~items ~~have~~were ~~been~~partially ~~recast~~offset toby ~~conform~~planned towage ~~the~~increases, ~~current~~higher ~~year~~incentive ~~presentation~~compensation costs and higher legal and information technology fees.

Corporate ~~general~~depreciation and ~~administrative~~amortization ~~expenses~~decreased ~~increased approximately~~ $672 million ~~during the~~ year ~~ended~~over December 31, 2023, which is inclusive of merger-related expenses totaling $37 million and higher incentive compensation costs totaling $18 million resulting primarily from the reversal of incentive plan accruals in the prior year due to under-performance and incremental expenses associated with our CEO transition. Excluding these costs, our corporate general and administrative expenses increased $12 million primarily due to planned wage increases, higher recruiting fees and information technology fees, costs associated with our clinical optimization and reorganization initiatives, a ~~favorable~~reduction ~~legal settlement recognized~~ in ~~the~~amortization ~~prior~~expense ~~year~~related ~~and~~to anon-compete ~~change~~agreements inthat ~~the~~were ~~presentation~~fully ofamortized ~~gains on the sale of fleet vehicles which are reflected in other income (expense) within our consolidated statement of operations~~ as of ~~January~~December 131, 2023 ~~due to the modification of our fleet leases~~. ~~These items were partially offset by lower acquisition and integration costs and severance costs incurred in the prior year.~~

Corporate depreciation and amortization decreased $10 million during the year ended December 31, 2023 due to a reduction in amortization expense related to acquired names and non-compete agreements that were fully amortized as of December 31, 2022.54

Liquidity and Capital Resources

Cash Flows

The following table summarizes our cash flows for the periods indicated (amounts in millions):

	For the Years Ended December 31,
	2023		2022		2021
	2024		2023		2022
Cash provided by operating activities	$	~~137~~221.27	$	~~133~~137.32	$	~~188~~133.93
Cash provided by (used in) investing activities	35.1		(94.5)		(281.6)
Cash (used in) provided by investing activities	(8.4)		35.1		(94.5)
Cash (used in) provided by financing activities	(87.5)		(30.4)		55.1
Cash used in financing activities	(48.9)		(87.5)		(30.4)
Net increase (decrease) in cash, cash equivalents and restricted cash	84.7		8.4		(37.6)
Net increase in cash, cash equivalents and restricted cash	164.4		84.7		8.4
Cash, cash equivalents and restricted cash at beginning of period	54138.19		4554.81		8345.48
Cash, cash equivalents and restricted cash at end of period	$	~~138~~303.92	$	54138.19	$	4554.81

Cash provided by operating activities for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022 has provided sufficient liquidity to fund our operations and finance our capital expenditures, both routine and non-routine. Changes in our cash provided by operating activities during the past three years were primarily the result of fluctuations in our net income, primarily driven by merger-related costs as well as the ~~collections~~timing of the collection of our accounts receivable and the ~~timing~~ of ~~payments~~payment of accounts payable and accrued expenses. Cash provided by operating activities increased $384.95 million during ~~2023~~2024 ~~compared to 2022~~ primarily due to ~~the~~a ~~timing~~reduction ofin ~~the~~unbilled ~~payment~~receivables ofwhich ~~accrued~~resulted ~~expenses and a change~~ in ~~the~~higher ~~presentation~~collections of ~~payments~~accounts ~~associated~~receivable ~~with~~as ~~our~~well ~~fleet~~as ~~vehicles due to~~ the ~~modification~~timing of ~~our fleet leases effective January 1, 2023 (financing activity in~~ the ~~current year versus operating activity in the prior year). These items were partially offset by the~~ payment of ~~merger-related~~accounts ~~expenses~~payable and anaccrued ~~increase in days revenue outstanding~~expenses. Cash provided by operating activities ~~decreased~~increased $553.69 million during ~~2022~~2023 compared to ~~2021~~2022 primarily due to the ~~payment~~timing of athe ~~full~~payment ~~year~~ of ~~operating~~accrued expenses ~~for~~and ~~our~~a ~~high~~change ~~acuity~~in ~~care~~the ~~segment~~presentation ~~compared~~of topayments ~~only~~associated ~~five~~with ~~months~~our infleet ~~the~~vehicles ~~prior~~due ~~year,~~to the ~~repayment~~modification of ~~$38.0 million in connection with~~ our ~~Infinity~~fleet ~~ZPIC~~leases ~~audits~~effective ~~(see~~January ~~Item 8~~1, ~~Note~~2023 12(financing –activity ~~Commitments~~in ~~and~~2023 ~~Contingencies~~versus tooperating ~~our~~activity ~~consolidated~~in ~~financial~~2022). ~~statements~~These ~~for~~items ~~additional~~were ~~information),~~partially ~~lower~~offset ~~collections~~by ~~due to~~ the ~~reinstatement~~payment of ~~sequestration~~merger-related expenses and an increase in days revenue outstanding.

Our investing activities primarily consist of the purchase of property and equipment and technology assets, investments and acquisitions/divestitures. Cash used in investing activities totaled $8.4 million during 2024 and was primarily related to the purchase of property and equipment and technology assets as well as investments in joint ventures. Cash provided by investing activities totaled $35.1 million during 2023 and was related to the divestiture of our personal care line of business partially offset by the purchase of software licenses and property and equipment. Cash used in investing activities totaled $94.5 million during 2022 and was primarily related to acquisition spend and investments.

52Our financing activities primarily consist of borrowings under our term loan and/or revolving credit facility, repayments of borrowings, the remittance of taxes associated with shares withheld on non-cash compensation, proceeds related to the exercise of stock options, proceeds related to the purchase of stock under our employee stock purchase plan and our purchase of company stock under our stock repurchase programs. Cash used in financing activities totaled $48.9 million during 2024 and was primarily related to the repayment of borrowings and the remittance of taxes associated with shares withheld on non-cash compensation. Cash used in financing activities totaled $87.5 million during 2023 and $30.4 million during 2022. The $57.1 million change is primarily due to the repayment of borrowings. Net proceeds from the divestiture of our personal care line of business were used to pay down a portion of our outstanding term loan balance during 2023.

Our financing activities primarily consist of borrowings under our term loan and/or revolving credit facility, repayments of borrowings, the remittance of taxes associated with shares withheld on non-cash compensation, proceeds related to the exercise of stock options, proceeds related to the purchase of stock under our employee stock purchase plan and our purchase of company stock under our stock repurchase programs. Cash used in financing activities totaled $87.5 million during 2023 and $30.4 million during 2022. The $57.1 million change is primarily due to the repayment of borrowings. Net proceeds from the divestiture of our personal care line of business were used to pay down a portion of our outstanding term loan balance during 2023. Cash used in financing activities totaled $30.4 million during 2022; cash provided by financing activities totaled $55.1 million during 2021. The $85.5 million change is primarily due to borrowings to fund acquisitions in 2021.

Liquidity

Typically, our principal source of liquidity is the collection of our patient accounts receivable, primarily through the Medicare program. In addition to our collection of patient accounts receivable, from time to time, we can and do obtain additional sources of liquidity by the incurrence of additional indebtedness.

~~During~~Prior ~~2023~~to February 2024, wethe ~~invested~~Company ~~$12.7 million~~exclusively inutilized ~~capital~~Change ~~expenditures~~Healthcare, ~~and~~a ~~technology~~subsidiary ~~assets~~of asUnitedHealth ~~compared~~Group, to ~~$7.2 million~~submit patient claims to Medicare and $6all other payors for reimbursement.~~7 million~~ ~~during~~On ~~2022~~February ~~and~~22, ~~2021~~2024, ~~respectively~~UnitedHealth Group announced that on February 21, 2024, Change Healthcare’s information technology systems were impacted by a cybersecurity incident. ~~Our~~The ~~capital~~Change ~~expenditures~~Healthcare cybersecurity incident did not impact our day-to-day operations; however, we were delayed in submitting patient claims to certain non-Medicare payors which resulted in a reduction in our operating cash flow and ~~investments~~an increase in ~~technology~~our ~~assets~~accounts ~~for~~receivable ~~2024~~during ~~are~~the ~~expected~~first and second quarters. There was minimal impact to beour ~~approximately~~Medicare ~~$6.0~~claim ~~million~~submissions as we were able to $8quickly redirect our Medicare claims to an alternative clearinghouse.~~0 million~~ As of September 30, ~~excluding~~2024, we had resolved the ~~impact~~buildup ofin ~~any~~accounts ~~future~~receivable ~~acquisitions~~resulting from the Change Healthcare outage.

~~As of December 31, 2023, we had $126.5 million in cash and cash equivalents and $518.9 million in availability under our $550.0 million Revolving Credit Facility.~~55

During 2024, we invested $7.4 million in capital expenditures and technology assets as compared to $12.7 million and $7.2 million during 2023 and 2022, respectively. Our capital expenditures and investments in technology assets for 2025 are expected to be approximately $4.0 million to $6.0 million.

As of December 31, 2024, we had $303.2 million in cash and cash equivalents and $511.2 million in availability under our $550.0 million Revolving Credit Facility.

Based on our operating forecasts and our debt service requirements, we believe we will have sufficient liquidity to fund our operations, capital requirements and debt service requirements for the next twelve months and beyond.

Outstanding Patient Accounts Receivable

Our patient accounts receivable ~~increased~~decreased $1617.63 million from December 31, ~~2022 primarily due to an increase in days revenue outstanding~~2023. Our days revenue outstanding, net at December 31, ~~2023~~2024 was 4743.70 days which is ana ~~increase~~decrease of 14.67 days from December 31, ~~2022~~2023. Our cash collection as a percentage of revenue was ~~100~~101% and ~~101~~100% for the twelve-month periods ended December 31, ~~2023~~2024 and ~~2022~~2023, respectively.

Our patient accounts receivable includes unbilled receivables which are aged based upon the initial service date. We monitor unbilled receivables on a care center by care center basis to ensure that all efforts are made to bill claims within timely filing deadlines. Our unbilled patient accounts receivable may be impacted by pre-claim reviews ~~required by the Medicare Administrative Contractors~~ in the ~~six~~ Review Choice Demonstration states, orreviews under the Targeted Probe and Educate program, voluntary pre-bill edits and reviews, efforts to secure needed documentation to bill (orders, consents, etc.), integrations of ~~recent~~ acquisitions, changes of ownership and any regulatory and procedural updates impacting claim submission. The timely filing deadline for Medicare is one year from the date of the last billable service in the 30-day billing period and varies by state for Medicaid-~~reimburseable~~reimbursable services and among insurance companies and other private payors.

The following schedules detail our patient accounts receivable, by payor class, aged based upon initial date of service (amounts in millions, except days revenue outstanding):


	0-90		91-180		181-365		Over 365		Total
At December 31, 2024:
Medicare patient accounts receivable	$	178.6	$	9.7	$	0.9	$	—	$	189.2
Other patient accounts receivable:
Medicaid	19.9		2.0		0.9		—		22.8
Private	76.3		7.0		0.8		—		84.1
Total	$	96.2	$	9.0	$	1.7	$	—	$	106.9
Total patient accounts receivable									$	296.1
Days revenue outstanding(1)									43.0


	0-90		91-180		181-365		Over 365		Total
At December 31, 2023:
Medicare patient accounts receivable	$	190.3	$	16.1	$	6.4	$	1.9	$	214.7
Other patient accounts receivable:
Medicaid	17.8		1.4		0.5		—		19.7
Private	67.4		6.6		5.0		—		79.0
Total	$	85.2	$	8.0	$	5.5	$	—	$	98.7
Total patient accounts receivable									$	313.4
Days revenue outstanding(1)									47.7

	0-90		91-180		181-365		Over 365		Total
At December 31, 2022:
Medicare patient accounts receivable	$	179.9	$	11.4	$	5.1	$	0.1	$	196.5
Other patient accounts receivable:
Medicaid	16.3		1.4		0.7		—		18.4
Private	67.5		8.7		5.7		—		81.9
Total	$	83.8	$	10.1	$	6.4	$	—	$	100.3
Total patient accounts receivable									$	296.8
Days revenue outstanding(1)									46.1

(1)Our calculation of days revenue outstanding is derived by dividing our ending patient accounts receivable at December 31, 2024 and 2023 by our average daily net service revenue for the three-month periods ended December 31, 2024 and 2023, respectively.

(1)Our calculation of days revenue outstanding is derived by dividing our ending patient accounts receivable at December 31, 2023 and 2022 by our average daily net service revenue for the three-month periods ended December 31, 2023 and 2022, respectively.56

Indebtedness

~~Second~~Third ~~Amendment~~Amended ~~to the~~ Credit Agreement

OnOur ~~July 30, 2021, we entered into the Second Amendment to our~~ Credit Agreement ~~(as~~provides ~~amended by the Second Amendment, the "Second Amended Credit Agreement"). The Second Amended Credit Agreement provided~~ for a senior secured credit facility in an initial aggregate principal amount of up to $1.0 billion, which ~~included~~includes a $550.0 million Revolving Credit Facility and a term loan facility with a principal amount of up to $450.0 million (the "Amended Term Loan Facility" and collectively with the Revolving Credit Facility, the "Amended Credit Facility"). On March 10, 2023, we entered into the Third Amendment to our Credit Agreement (as amended by the Third Amendment, the "Third Amended Credit Agreement") which (i) formally replaced the use of the London Interbank Offered Rate ("LIBOR") with the Secured Overnight Financing Rate ("SOFR") for interest rate pricing and (ii) allowed for the disposition of our personal care business. In accordance with the requirements under the Third Amended Credit Agreement, net proceeds received from the divestiture of our personal care line of business were used to prepay a portion of our Amended Term Loan Facility during the year ended December 31, 2023.

~~Third~~The ~~Amendment~~loans issued under the Amended Credit Facility bear interest on a per annum basis, at our election, at either: (i) the Base Rate plus the Applicable Rate or (ii) the Term SOFR plus the Applicable Rate. The “Base Rate” means a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 0.50% per annum, (b) the prime rate of interest established by the Administrative Agent, and (c) the Term SOFR plus 1% per annum. The “Term SOFR” means the quoted rate per annum equal to the SOFR for an interest period of one or three months (as selected by us) plus the SOFR adjustment of 0.10%. The final maturity date of the Amended Credit ~~Agreement~~Facility is July 30, 2026.

OnOur ~~March~~weighted ~~10,~~average ~~2023,~~interest werate ~~entered~~for ~~into~~borrowings ~~the~~under ~~Third~~our ~~Amendment~~Amended toTerm ~~our~~Loan ~~Credit~~Facility ~~Agreement~~was ~~(as~~7.0% ~~amended~~for by the ~~Third~~year ~~Amendment~~ended December 31, 2024 and 6.8% for the ~~"Third~~year ~~Amended~~ended ~~Credit~~December 31, ~~Agreement")~~2023. ~~The~~As ~~Third~~of ~~Amended~~December ~~Credit~~31, ~~Agreement~~2024 ~~(i)~~and ~~formally~~2023, ~~replaced~~we ~~the~~had ~~use~~no ofoutstanding ~~the~~borrowings ~~London~~under ~~Interbank~~our ~~Offered~~$550.0 ~~Rate~~million ~~("LIBOR")~~Revolving ~~with~~Credit ~~the~~Facility. ~~Secured~~Our ~~Overnight~~weighted ~~Financing~~average ~~Rate~~interest ~~("SOFR")~~rate for ~~interest~~borrowings ~~rate~~under ~~pricing~~our ~~and~~$550.0 ~~(ii)~~million ~~allowed~~Revolving Credit Facility was 6.2% for the ~~disposition~~year ofended ~~our~~December ~~personal~~31, ~~care business~~2023.

~~The~~As ~~loans~~of ~~issued~~December 31, ~~under the Amended Credit Facility bear interest on a per annum basis~~2024, at our ~~election,~~availability atunder ~~either:~~our ~~(i)~~$550.0 ~~the~~million ~~Base~~Revolving ~~Rate~~Credit ~~plus~~Facility ~~the~~was ~~Applicable Rate or (ii) the Term SOFR plus the Applicable Rate~~$511.2 ~~The~~million ~~“Base~~as ~~Rate”~~we ~~means~~have ano ~~fluctuating~~outstanding ~~rate~~borrowings ~~per~~and ~~annum equal to the highest of (a) the federal funds rate plus 0~~$38.~~50%~~8 ~~per~~million ~~annum,~~outstanding ~~(b)~~in ~~the~~letters ~~prime rate~~ of ~~interest established by the Administrative Agent, and (c) the Term SOFR plus 1% per annum~~credit. ~~The~~We ~~“Term~~are ~~SOFR”~~in ~~means~~compliance ~~the~~with ~~quoted~~our ~~rate~~covenants ~~per~~under ~~annum equal to~~ the ~~SOFR~~Third ~~for~~Amended anCredit ~~interest~~Agreement ~~period~~as of ~~one~~December or31, ~~three months (as selected by us) plus the SOFR adjustment of 0~~2024.~~10%.~~

InSee ~~accordance~~Item ~~with the requirements under our Third Amended Credit Agreement~~8, ~~net~~Note ~~proceeds~~8 ~~received~~– ~~from~~Long ~~the~~Term ~~divestiture~~Obligations ofto our ~~personal~~consolidated ~~care~~financial ~~line~~statements offor ~~business~~additional ~~were~~details ~~used~~on ~~to prepay a portion of~~ our ~~Amended~~outstanding ~~Term~~long-term ~~Loan Facility during the year ended December 31, 2023~~obligations.

Our weighted average interest rate for borrowings under our Amended Term Loan Facility was 6.8% for the year ended December 31, 2023 and 3.2% for the year ended December 31, 2022. As of December 31, 2023, we had no outstanding borrowings under our $550.0 million Revolving Credit Facility. Our weighted average interest rate for borrowings under our $550.0 million Revolving Credit Facility was 6.2% for the year ended December 31, 2023 and 3.4% for the year ended December 31, 2022.

As of December 31, 2023, our consolidated leverage ratio was 2.3, our consolidated interest coverage ratio was 4.9, and we are in compliance with our covenants under the Third Amended Credit Agreement.

As of December 31, 2023, our availability under our $550.0 million Revolving Credit Facility was $518.9 million as we have no outstanding borrowings and $31.1 million outstanding in letters of credit.

See Item 8, Note 9 – Long Term Obligations to our consolidated financial statements for additional details on our outstanding long-term obligations.

Stock Repurchase Programs

On ~~December~~August 232, ~~2020~~2021, ~~we announced that~~ our Board of Directors authorized a ~~stock~~share repurchase program, under which we could repurchase up to $100 million of our outstanding common stock through December 31, ~~2021~~2022 (the "~~2021~~2022 Share Repurchase Program"). Pursuant to this program, we repurchased ~~446~~150,~~832~~000 shares of our common stock at a weighted average price of $~~223~~115.4964 per share and a total cost of approximately $~~100~~ 17 million during the year ended December 31, ~~2021~~2022. The repurchased shares were classified as treasury shares. The ~~2021~~2022 Share Repurchase Program expired on December 31, ~~2021~~2022.

On August 2, 2021, our Board of Directors authorized a share repurchase program, under which we could repurchase up to $100 million of our outstanding common stock through December 31, 2022 to commence upon the completion of the Company's 2021 Share Repurchase Program (the "2022 Share Repurchase Program"). Pursuant to this program, we repurchased 150,000 shares of our common stock at a weighted average price of $115.64 per share and a total cost of approximately $17 million during the year ended December 31, 2022. The repurchased shares were classified as treasury shares. The 2022 Share Repurchase Program expired on December 31, 2022.

On February 2, 2023, our Board of Directors authorized a share repurchase program, under which we could repurchase up to $100 million of our outstanding common stock through December 31, 2023 (the "2023 Share Repurchase Program"). We did not repurchase any shares under the 2023 Share Repurchase Program as the Merger Agreement limited our ability to repurchase shares of our common stock prior to the completion of the Merger, subject to certain exceptions. The 2023 Share Repurchase Program expired on December 31, 2023.

Under the terms of the ~~2021,~~ 2022 and 2023 Share Repurchase Programs, we were allowed to repurchase shares from time to time through open market purchases, unsolicited or solicited privately negotiated transactions, an accelerated stock repurchase program, and/or a trading plan in compliance with Exchange Act Rule 10b5-1. The timing and the amount of the repurchases were determined by management based on a number of factors, including but not limited to share price, trading volume and general market conditions, as well as on working capital requirements, general business conditions and other factors. Effective January 1, 2023, repurchases became subject to a 1% excise tax under the Inflation Reduction Act.

Contractual Obligations

Our future contractual obligations at December 31, ~~2023~~2024 were as follows (amounts in millions):

	Payments Due by Period
	Total		Less than1 Year		2-3Years		4-5Years		After5 Years
Long-term obligations	$	~~371~~349.94	$	22.5	$	~~349~~326.49	$	—	$	—
Interest on long-term obligations (1)	7331.23		2920.72		4311.51		—		—
Finance leases	2832.91		1316.83		1213.96		12.81		0.41
Operating leases	89.04		2629.32		4244.23		1915.43		10.16
Purchase obligations (2)	65.87		54.63		1.24		—		—
	$	~~569~~507.89	$	9792.95	$	~~449~~397.23	$	2117.24	$	10.57

(1)Interest on debt with variable rates was calculated using the current rate for that particular debt instrument at December 31, ~~2023~~2024.

(2)Purchase obligations are primarily related to information technology contracts and software licenses as well as potential penalties associated with the early termination of certain contracts.

Inflation

Our operations have been materially impacted by the current inflationary environment as we have experienced ~~higher~~inflation ~~labor costs and increases~~ in ~~supply~~our ~~costs,~~labor ~~fuel~~ costs and ~~mileage~~healthcare ~~reimbursements~~costs. We expect inflation to continue to impact our operations in ~~2024~~2025. As of December 31, ~~2023~~2024, the impacts of inflation on our results of operations have been partially mitigated by rate increases, ~~improvements in clinician utilization~~ and ~~reductions in staffing levels and clinical optimization and~~ reorganization initiatives. No assurance can be given as to our ability to offset the impacts of inflation in the future.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, collectability of accounts receivable, reserves related to insurance and litigation, business combinations, goodwill, intangible assets, income taxes and contingencies. We base these estimates on our historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results experienced may vary materially and adversely from our estimates. To the extent there are material differences between our estimates and the actual results, our future results of operations may be affected.

We believe the following critical accounting policies represent our most significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

WeNet ~~account~~service ~~for~~revenues ~~service~~are ~~revenue~~derived from ~~contracts~~home ~~with customers in accordance with Accounting Standards Codification ("ASC") 606~~health, ~~Revenue~~hospice ~~from~~and ~~Contracts~~high ~~with~~acuity ~~Customers,~~care ~~and~~services asprovided ~~such,~~to wepatients. We recognize ~~service~~ revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. Our ~~cost~~performance obligation is the delivery of ~~obtaining~~patient ~~contracts~~care isservices ~~not~~in ~~material~~accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.

Revenues are recognized as performance obligations are satisfied, which varies based on the nature of the services provided. Our performance obligation is the delivery of patient care services in accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.

Our performance obligations relate to contracts with a duration of less than one year; therefore, we have elected to apply the optional exemption provided by ASC 606 and are not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.

We determine the transaction price based on gross charges for services provided, reduced by estimates for contractual and non-contractual revenue adjustments. Contractual revenue adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third-party payors and others for services provided. Non-contractual revenue adjustments include discounts provided to self-pay, uninsured patients or other payors, adjustments resulting from audits and payment reviews and adjustments arising from our inability to obtain appropriate billing documentation, authorizations or face-to-face documentation. Subsequent changes to the estimate of the transaction price are recorded as adjustments to net service revenue in the period of change.

Non-contractual revenue adjustments are recorded for self-pay, uninsured patients and other payors by major payor class based on our historical collection experience, aged accounts receivable by payor and current industry conditions. The non-contractual revenue adjustments represent the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. We assess our ability to collect for the healthcare services provided at the time of patient admission based on our verification of the patient's insurance coverage under Medicare, Medicaid, and other commercial or managed care insurance programs.

We determine our estimates for non-contractual revenue adjustments related to audits and payment reviews based on our historical experience and success rates in the claim appeals and adjudication process.

We determine our estimates for non-contractual revenue adjustments related to our inability to obtain appropriate billing documentation, authorizations or face-to-face documentation based on our historical collection experience.

Home Health Revenue Recognition

Medicare Revenue

All Medicare contracts are required to have a signed plan of care which represents a single performance obligation, comprised of the delivery of a series of distinct services that are substantially similar and have a similar pattern of transfer to the customer. Accordingly, we account for the series of services ("episode") as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier, with multiple continuous episodes allowed. Each 60-day episode includes two 30-day periods of care.

Net service revenue is recorded based on the established Federal Medicare home health payment rate for a 30-day period of care. ASC 606 notes that if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. We have elected to apply the "right to invoice" practical expedient, and therefore, our revenue recognition is based on the reimbursement we are entitled to for each 30-day period of care. We utilize our historical average length of stay for each 30-day period of care as the measure of progress towards the satisfaction of our performance obligation.

The Patient-Driven Groupings Model ("PDGM") uses timing, admission source, functional impairment levels and principal and other diagnoses to case-mix adjust payments. The case-mix adjusted payment for a 30-day period of care is subject to additional adjustments based on certain variables, including, but not limited to (a) an outlier payment if our patient's care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits provided was less than the established threshold, which ranges from two to six visits and varies for every case-mix group; (c) a partial payment if a patient is transferred to another provider or from another provider before completing the 30-day period of care; and (d) the applicable geographic wage index. Payments for routine and non-routine supplies are included in the 30-day payment rate.

Medicare can also make various adjustments to payments received if we are unable to produce appropriate billing documentation or acceptable authorizations. We estimate the impact of such adjustments based on our historical collection experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered to revenue with a corresponding reduction to patient accounts receivable.

Amounts due from Medicare include variable consideration for retroactive revenue adjustments due to settlements of audits and payment reviews. We determine our estimates for non-contractual revenue adjustments related to audits and payment reviews based on our historical experience and success rates in the claim appeals and adjudication process.

The Medicare home health benefit requires that beneficiaries be homebound (meaning that the beneficiary is unable to leave his/her home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services and receive treatment under a plan of care established and periodically reviewed by a physician.

Effective January 1, 2022, the Centers for Medicare and Medicaid Services ("CMS") implemented a new notice of admission ("NOA") process. The NOA process requires a one-time submission for each patient that establishes the home health period of care and covers all contiguous 30-day periods of care until the patient is discharged from home health services. If the NOA is not submitted timely, a payment reduction is applied equal to 1/30 of the 30-day payment rate for each day from the start of care date until the date the NOA is submitted.

Non-Medicare Revenue

Payments from non-Medicare payors are either a percentage of Medicare rates, per-visit rates or case rates depending upon the terms and conditions established with such payors. Approximately 30% of our managed care contract volume affords us the opportunity to receive additional payments if we achieve certain quality or process metrics as defined in each contract (e.g. star ratings and acute-care hospitalization rates). We record revenue associated with these metrics at the time the amounts are probable and estimable.

Episodic-based Revenue. We recognize revenue in a similar manner as we recognize Medicare revenue for amounts that are paid by other insurance carriers, including Medicare Advantage programs; however, these amounts can vary based upon the negotiated terms, the majority of which range from 90% to 100% of Medicare rates.

Non-episodic based Revenue. For our per visit contracts, gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established or estimated per-visit rates. For our case rate contracts, gross revenue is recorded over our historical average length of stay using the established case rate for each admission. Contractual revenue adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third parties and others for services provided and are deducted from gross revenue to determine net service revenue. We also make non-contractual revenue adjustments to non-episodic revenue based on our historical experience to reflect the estimated transaction price. We receive a minimal amount of our net service revenue from patients who are either self-insured or are obligated for an insurance co-payment.

Under our case rate contracts, we may receive reimbursement before all services are rendered. Any cash received that exceeds the associated revenue earned is recorded to deferred revenue in accrued expenses within our consolidated balance sheets.

Hospice Revenue Recognition

Hospice Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounted for 97% of our total Medicare hospice service revenue for each of 2023, 2022 and 2021, respectively. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse or medical social worker for patients in a routine level of care.

The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.

We make adjustments to Medicare revenue for non-contractual revenue adjustments, which include our inability to obtain appropriate billing documentation or acceptable authorizations and other reasons unrelated to credit risk. We estimate the impact of these non-contractual revenue adjustments based on our historical collection experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record it during the period services are rendered.

Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in accrued expenses within our consolidated balance sheets. Providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of December 31, 2023, we have recorded $2.3 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2017 through September 30, 2024. As of December 31, 2022, we had recorded $4.3 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2016 through September 30, 2023.

Hospice Non-Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established rates or estimated per day rates, as applicable. Contractual revenue adjustments are recorded for the difference between our standard rates and the contractual rates to be realized from patients, third-party payors and others for services provided and are deducted from gross revenue to determine our net service revenue. We also make non-contractual adjustments to non-Medicare revenue based on our historical experience to reflect the estimated transaction price.

~~Personal~~See ~~Care~~Item ~~Revenue~~8, ~~Recognition~~Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements for a complete discussion of our revenue recognition policies.

Personal Care Revenue

For the periods prior to the divestiture of our personal care line of business on March 31, 2023, we generated net service revenues by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that was either contractual or fixed by legislation. Net service revenue was recognized at the time services were rendered based on gross charges for the services provided, reduced by estimates for contractual and non-contractual revenue adjustments. We received payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors included the following elder service agencies: Aging Services Access Points ("ASAPs"), Senior Care Options ("SCOs"), Program of All-Inclusive Care for the Elderly ("PACE") and the Veterans Administration ("VA").

High Acuity Care Revenue Recognition

High Acuity Care Revenue

Our revenues are primarily derived from contracts with (1) health insurance plans for the coordination and provision of home recovery care services to clinically-eligible patients who are enrolled members in those insurance plans and (2) health system partners for the coordination and provision of home recovery care services to clinically-eligible patients who are discharged early from a health system facility to complete their inpatient stay at home.

Under our health insurance plan contracts, we provide home recovery care services, which include hospital-equivalent ("H@H") and skilled nursing facility ("SNF") equivalent services ("SNF@H"), for high acuity care patients on a full risk basis whereby we assume the financial risk for the coordination and payment of all hospital or SNF replacement medical services necessary to treat the medical condition for which the patient was diagnosed in a home-based setting for a 30-day (H@H) or 60-day (SNF@H) episode of care in exchange for a fixed contracted bundled rate. For H@H programs, the fixed rate is based on the assigned diagnosis related group ("DRG") and the 30-day post-discharge related spend. For SNF@H programs, the fixed rate is based on the 60-day post-discharge related spend. Our performance obligation is the coordination and provision of patient care in accordance with physicians’ orders over either a 30-day or 60-day episode of care. The majority of our care coordination services and direct patient care is provided in the first five to seven days of the episode period (the "acute phase"). Monitoring services and follow-up direct patient care, as deemed necessary by the treating physician, are provided throughout the remainder of the episode. Since the majority of our services are provided during the acute phase, we recognize net service revenue over the acute phase based on gross charges for the services provided per the applicable managed care contract rates, reduced by estimates for revenue adjustments.

Under our contracts with health system partners, we provide home recovery care services for high acuity patients on a limited risk basis whereby we assume the risk for certain healthcare services during the remainder of an inpatient acute stay serviced at the patient’s home (completing H@H - "CH@H") in exchange for a contracted per diem rate. The performance obligation is the coordination and provision of required medical services, as determined by the treating physician, for each day the patient receives inpatient-equivalent care at home. As such, net service revenue is recognized as services are administered and as our performance obligations are satisfied on a per diem basis, reduced by estimates for revenue adjustments.

We recognize adjustments to revenue during the period in which changes to estimates of assigned patient diagnoses or episode terminations become known, in accordance with the applicable managed care contracts. For certain health insurance plans, revenue is reduced by amounts owed by enrollees to healthcare providers under deductible, coinsurance or copay provisions of health insurance plan policies, since those amounts are repaid to the health insurance plans by us as part of a retrospective reconciliation process.

Goodwill and Other Intangible Assets

AsWe ofevaluate ~~December 31, 2023, we had a~~ goodwill ~~balance~~and ofother ~~$1,244.7~~intangible ~~million.~~assets ~~Goodwill~~for ~~represents~~impairment ~~the~~as ~~amount~~ of ~~the~~October ~~purchase~~31st ~~price in excess~~ of ~~the~~each ~~fair values assigned to the underlying identifiable net assets of acquired businesses~~year. ~~Goodwill is not amortized, but is subject to an annual impairment test.~~ Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit and/or intangible asset below its carrying amount. These events or circumstances include, but are not limited to, a significant adverse change in the business environment, regulatory environment or legal factors, or a substantial decline in the market capitalization of our stock.

U.S. GAAP allows for annual impairment testing to be done on a qualitative basis first to determine if it is more likely than not that the fair value of a reporting unit and/or intangible asset exceeds its carrying value. The qualitative assessment includes an evaluation of relevant events and circumstances including, but not limited to, financial performance, market conditions and share price. If, based on the qualitative assessment, it is determined that it is ~~not~~ more likely than not that the fair value of the reporting ~~units~~unit ~~exceeds~~and/or intangible asset is less than its carrying value, then a quantitative analysis is performed to determine the fair value. ~~During~~A ~~2023~~quantitative assessment includes the use of various valuation techniques, weincluding ~~performed~~the aincome approach and the market approach, and requires us to make estimates and assumptions surrounding projected revenues and costs, growth rates and discount rates.

59During 2024, we performed a qualitative assessment to determine if it was more likely than not that the fair values of our reporting units were less than their carrying values. Based on this assessment, we concluded that the goodwill associated with our home health and hospice reporting units was not considered at risk of impairment as of October 31, 2024. In addition to the qualitative assessment, we also performed a quantitative analysis using an income approach for our high acuity care reporting unit due to delays in achieving our long-term projections established as of the August 2021 acquisition date. Based on this analysis, we concluded that the carrying value of the goodwill associated with our high acuity care reporting unit exceeded its fair value as of October 31, 2024. As a result, we recorded a non-cash impairment charge of $30.8 million during the three-month period ended December 31, 2024. Additionally, we allocated a portion of the goodwill impairment to noncontrolling interests and recorded an adjustment totaling $5.9 million to reduce the carrying value of the noncontrolling interests. The remaining carrying value of the goodwill associated with our high acuity care reporting unit is $200.3 million as of December 31, 2024.

During 2024, we performed a qualitative assessment of our indefinite-lived intangible assets to determine if it was more likely than not that the fair ~~value~~values of any of our ~~reporting~~indefinite-lived ~~units~~intangible ~~were~~assets would be less than their carrying ~~values by evaluating relevant events and circumstances including financial performance, market conditions and share price~~amounts. Based on this assessment, we concluded that the ~~goodwill~~indefinite-lived intangible assets associated with our home health and hospice reporting units ~~was~~were not considered at risk of impairment as of October 31, ~~2023~~2024. In addition to the qualitative assessment, we also performed a quantitative analysis using anthe ~~income~~relief ~~approach~~from royalty method for the indefinite-lived intangible assets (acquired names) associated with our high acuity care reporting unit due to delays in achieving our long-term projections established as of the August 2021 acquisition date. ~~This~~Based ~~quantitative~~on this analysis, ~~required~~we usconcluded tothat ~~make~~the ~~estimates~~carrying ~~and~~value ~~assumptions~~of ~~surrounding~~the ~~projected~~indefinite-lived ~~revenues~~intangible ~~and~~assets ~~costs~~(acquired names) associated with our high acuity care reporting unit exceeded their fair values as of October 31, ~~growth~~2024. ~~rates~~As ~~and~~a ~~discount~~result, ~~rates~~we recorded a non-cash impairment charge of $17.6 ~~Based~~million onduring ~~this~~the ~~analysis~~three-month period ended December 31, we2024. ~~concluded~~The ~~that~~remaining carrying value of the ~~goodwill~~indefinite-lived assets (acquired names) associated with our high acuity care reporting unit ~~was~~is ~~not~~$10.7 ~~impaired~~million as of ~~October~~December 31, ~~2023~~2024.

AsThe results of ~~December~~the ~~31,~~quantitative ~~2023,~~analysis weare ~~had~~sensitive anto ~~other~~changes ~~intangible~~in ~~assets~~key ~~balance~~assumptions ofrelated ~~$102.7~~to ~~million.~~our ~~Intangible~~high ~~assets~~acuity ~~consist~~care ofreporting ~~certificates~~unit, ofsuch ~~need,~~as ~~licenses~~revenue growth, ~~acquired~~discount ~~names~~rates, ~~non-compete~~labor ~~agreements~~costs and ~~technology.~~delays Asin ~~of December 31, 2023,~~ our ~~non-compete~~ability ~~agreements and amortizable acquired names were fully amortized. We amortize non-compete agreements and acquired names that we do not intend~~ to ~~use~~enter ~~indefinitely~~into onjoint aventures ~~straight-line~~or ~~basis~~other ~~over~~arrangements ~~their~~with ~~estimated~~health ~~useful~~system ~~lives,~~partners ~~which are generally two to three years for non-compete agreements~~ and uphealth ~~to three years for acquired names. We amortize technology over its estimated useful service life~~plans, which iscould ~~generally~~negatively upimpact to seven years. Our indefinite-lived intangible assets are reviewed for impairment annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. We performed a qualitative assessment of our ~~indefinite-lived~~forecasted ~~intangible~~cash ~~assets~~flows ~~during 2023~~ and ~~determined~~result ~~that~~in ~~there~~an ~~have~~impairment ~~been~~charge ~~no material developments, events, changes~~ in ~~operating~~future performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our indefinite-lived intangible assets would be less than their carrying amountsperiods.

See Item 8, Note 2 – Summary of Significant Accounting Policies, "Goodwill and Other Intangible Assets" and Note 5 – Goodwill and Other Intangible Assets, Net to our consolidated financial statements for additional information.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from fluctuations in interest rates. Our Term Loan and Revolving Credit Facility carry a floating interest rate which is tied to the Secured Overnight Financing Rate ("SOFR") and the Prime Rate, and therefore, our consolidated statements of operations and our consolidated statements of cash flows are exposed to changes in interest rates. As of December 31, ~~2023~~2024, the total amount of outstanding debt subject to interest rate fluctuations was $~~371~~349.94 million. A 1.0% interest rate change would cause interest expense to change by approximately $3.75 million annually, assuming the Company makes no principal repayments.

6059

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Amedisys, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Amedisys, Inc. and subsidiaries (the Company) as of December 31, ~~2023~~2024 and ~~2022~~2023, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, ~~2023~~2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2023~~2024 and ~~2022~~2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, ~~2023~~2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, ~~2023~~2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 2227, ~~2024~~2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audit~~audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audit~~audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our ~~audit~~audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our ~~audit~~audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our ~~audit~~audits ~~provides~~provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

6160

Evaluation of the non-contractual revenue adjustment estimates for Home Health

As discussed in Note 2 to the consolidated financial statements, the Company determines the transaction price for revenue contracts based on gross charges for services provided, reduced by estimates for contractual and non-contractual revenue adjustments. Non-contractual revenue adjustments include discounts provided to self-pay, uninsured patients or other payors, adjustments resulting from payment reviews and adjustments arising from the Company’s inability to obtain appropriate billing documentation, authorizations or face-to-face documentation. Non-contractual revenue adjustments are recorded based on the Company’s historical collection experience, aged accounts receivable by payor and current industry conditions. The non-contractual revenue adjustments represent the difference between amounts billed and amounts the Company expects to collect based on its collection history with similar payors.

We identified the evaluation of the non-contractual revenue adjustment estimates noted above for the ~~Home~~home ~~Health~~health segment as a critical audit matter. Subjective auditor judgment was required to evaluate the historical collection experience used by the Company when developing the non-contractual revenue adjustment estimate. Specifically, the significant judgments related to evaluating the relevance of historical collection experience to the determination of the estimate, which included evaluation of current business and industry conditions, and trends.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s home health revenue process, including controls over the significant judgments for estimating non-contractual revenue adjustments noted above. We assessed the outcome of the estimation of non-contractual revenue adjustments in the prior period to identify circumstances or conditions that are relevant to the determination of the current year estimate. To assess the current year method and the relevance of the historical collection experience, we tested a sample of accounts receivable that were written off in the current year. In addition, we also evaluated current business and economic conditions and trends relevant to the estimation of non-contractual revenue adjustments.

Goodwill impairment ~~assessment~~ of the ~~high~~High ~~acuity~~Acuity ~~care~~Care reporting unit

As discussed in Notes 2 and 65 to the consolidated financial statements, the goodwill balance as of December 31, ~~2023~~2024, was $1,~~244~~213.79 million, of which $~~231~~200.13 million related to the high acuity care reporting unit. The Company performs goodwill impairment testing on an annual basis as of October 31, and whenever events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value. As of October 31, ~~2023~~2024, the Company performed a quantitative assessment of its high acuity care reporting unit using an income approach. Based on management’s projections, the carrying amounts of the high acuity care reporting unit exceeded its fair value, and management recorded a non-cash impairment charge of $30.8 million.

We identified the assessment of the fair value of the high acuity care reporting unit used in the goodwill impairment test as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate certain assumptions used to develop the fair value of the high acuity care reporting unit. Specifically, the revenue growth rate and discount rate assumptions were challenging to evaluate as they were based on subjective determinations of future market and economic conditions. Minor changes in these key assumptions could have had a significant effect on the Company's assessment of the fair value of the high acuity care reporting unit. Additionally, the audit effort associated with the discount rate required the involvement of professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the goodwill impairment process. This included controls relating to the determination of the revenue growth rates and discount rate used in the goodwill impairment test. We evaluated the reasonableness of the Company’s projected revenue growth rates by comparing them to industry and third-party data. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the discount rate used by the Company by independently developing a range of discount rates using publicly available market data for comparable companies and comparing the fair value of the high acuity care reporting unit developed using the independently developed range of discount rates and the Company's cash flow forecasts to the Company's fair value estimate.

/s/ KPMG LLP

We have served as the Company's auditor since 2002.

Baton Rouge, Louisiana

February 2227, ~~2024~~2025

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

	As of December 31,
	2023		2022
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	~~126~~303,~~450~~242	$	40126,~~540~~450
Restricted cash	~~12,413~~—		1312,~~593~~413
Patient accounts receivable	~~313~~296,~~373~~075		~~296~~313,~~785~~373
Prepaid expenses	1413,~~639~~072		1114,~~628~~639
Other current assets	3019,~~060~~694		2630,~~415~~060
Total current assets	~~496~~632,~~935~~083		~~388~~496,~~961~~935
Property and equipment, net of accumulated depreciation of $92,422 and $101,364	41,845		16,026
Property and equipment, net of accumulated depreciation of $100,890 and $92,422	42,108		41,845
Operating lease right of use assets	8881,~~939~~500		~~102~~88,~~856~~939
Goodwill	1,~~244~~213,~~679~~888		1,~~287~~244,~~399~~679
Intangible assets, net of accumulated amortization of $14,008 and $14,604	102,675		101,167
Intangible assets, net of accumulated amortization of $18,787 and $14,008	81,155		102,675
Other assets	8587,~~097~~980		7985,~~836~~097
Total assets	$	2,~~060~~138,~~170~~714	$	12,~~976~~060,~~245~~170
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2839,~~237~~956	$	4328,~~735~~237
Payroll and employee benefits	~~136~~151,~~835~~995		~~125~~136,~~387~~835
Accrued expenses	~~140~~152,~~049~~564		~~137~~140,~~390~~049
Termination fee paid by UnitedHealth Group	106,000		—106,000
Current portion of long-term obligations	3637,~~314~~968		1536,~~496~~314
Current portion of operating lease liabilities	2625,~~286~~909		3326,~~521~~286
Total current liabilities	~~473~~514,~~721~~392		~~355~~473,~~529~~721
Long-term obligations, less current portion	~~361~~339,~~862~~313		~~419~~361,~~420~~862
Operating lease liabilities, less current portion	6256,~~751~~111		6962,~~504~~751
Deferred income tax liabilities	4048,~~635~~051		2040,~~411~~635
Other long-term obligations	~~1,418~~882		41,~~808~~418
Total liabilities	~~940~~958,~~387~~749		~~869~~940,~~672~~387
Commitments and Contingencies – Note 12
Commitments and Contingencies – Note 11
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding	—		—
Common stock, $0.001 par value, 60,000,000 shares authorized; 38,131,478 and 37,891,186 shares issued; and 32,667,631 and 32,511,465 shares outstanding	38		38
Common stock, $0.001 par value, 60,000,000 shares authorized; 38,307,521 and 38,131,478 shares issued; and 32,776,148 and 32,667,631 shares outstanding	38		38
Additional paid-in capital	~~787~~818,~~177~~201		~~755~~787,~~063~~177
Treasury stock at cost, 5,463,847 and 5,379,721 shares of common stock	(468,626)		(461,200)
Treasury stock at cost, 5,531,373 and 5,463,847 shares of common stock	(474,854)		(468,626)
Retained earnings	~~747~~791,~~925~~156		~~757~~747,~~672~~925
Total Amedisys, Inc. stockholders’ equity	1,~~066~~134,~~514~~541		1,~~051~~066,~~573~~514
Noncontrolling interests	5345,~~269~~424		5553,~~000~~269
Total equity	1,~~119~~179,~~783~~965		1,~~106~~119,~~573~~783
Total liabilities and equity	$	2,~~060~~138,~~170~~714	$	12,~~976~~060,~~245~~170

The accompanying notes are an integral part of these consolidated financial statements.

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

	For the Years Ended December 31,
	2023		2022		2021
	2024		2023		2022
Net service revenue	$	2,~~236~~348,~~382~~324	$	2,~~223~~236,~~199~~382	$	2,~~214~~223,~~112~~199
Other operating income	—		—		13,300
Operating expenses:
Cost of service, inclusive of depreciation	1,~~245~~330,~~509~~647		1,~~260~~245,~~425~~509		1,~~233~~260,~~356~~425
General and administrative expenses:
Salaries and benefits	~~516~~529,~~049~~748		~~508~~516,~~791~~049		~~474~~508,~~718~~791
Non-cash compensation	2629,~~082~~028		1626,~~560~~082		2316,~~809~~560
Merger-related expenses	3666,~~672~~638		—36,672		—
Depreciation and amortization	17,~~747~~997		2417,~~935~~747		3024,~~901~~935
Investment impairment	—		3,009		—
Impairment	48,391		—		3,009
Other	~~237~~231,~~929~~337		~~228~~237,~~707~~929		~~212~~228,~~713~~707
Total operating expenses	2,~~079~~253,~~988~~786		2,~~042~~079,~~427~~988		12,~~975~~042,~~497~~427
Operating income	~~156~~94,~~394~~538		~~180~~156,~~772~~394		~~251~~180,~~915~~772
Other income (expense):
Interest income	38,~~270~~110		~~178~~3,270		49178
Interest expense	(3130,~~274~~764)		(2231,~~228~~274)		(922,~~525~~228)
Equity in earnings (loss) from equity method investments	106,~~760~~267		~~(45)~~10,760		~~4,949~~(45)
Merger termination fee	~~(106,000)~~—		—(106,000)		—
Gain on equity method investments	—		—		31,098
Miscellaneous, net	8,065		6,473		1,567
Miscellaneous, net	6,473		1,567		1,745
Total other expense, net	(8,322)		(116,771)		(20,528)
Total other (expense) income, net	(116,771)		(20,528)		28,316
Income before income taxes	86,216		39,623		160,244
Income before income taxes	39,623		160,244		280,231
Income tax expense	(48,054)		(50,559)		(42,545)
Income tax expense	(50,559)		(42,545)		(70,065)
Net income (loss)	38,162		(10,936)		117,699
Net (loss) income	(10,936)		117,699		210,166
Net loss attributable to noncontrolling interests	5,069		1,189		910
Net loss (income) attributable to noncontrolling interests	1,189		910		(1,094)
Net income (loss) attributable to Amedisys, Inc.	$	43,231	$	(9,747)	$	118,609
Net (loss) income attributable to Amedisys, Inc.	$	(9,747)	$	118,609	$	209,072
Basic earnings per common share:
Net (loss) income attributable to Amedisys, Inc. common stockholders	$	(0.30)	$	3.65	$	6.41
Net income (loss) attributable to Amedisys, Inc. common stockholders	$	1.32	$	(0.30)	$	3.65
Weighted average shares outstanding	32,~~599~~718		32,~~517~~599		32,~~642~~517
Diluted earnings per common share:
Net (loss) income attributable to Amedisys, Inc. common stockholders	$	(0.30)	$	3.63	$	6.34
Net income (loss) attributable to Amedisys, Inc. common stockholders	$	1.31	$	(0.30)	$	3.63
Weighted average shares outstanding	3233,~~599~~051		32,~~653~~599		32,~~972~~653

The accompanying notes are an integral part of these consolidated financial statements.

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

	For the Years Ended December 31,
	2023		2022		2021
	2024		2023		2022
Net (loss) income	$	(10,936)	$	117,699	$	210,166
Net income (loss)	$	38,162	$	(10,936)	$	117,699
Other comprehensive income	—		—		—
Comprehensive (loss) income	(10,936)		117,699		210,166
Comprehensive income (loss)	38,162		(10,936)		117,699
Comprehensive loss (income) attributable to non-controlling interests	1,189		910		(1,094)
Comprehensive loss attributable to non-controlling interests	5,069		1,189		910
Comprehensive (loss) income attributable to Amedisys, Inc.	$	(9,747)	$	118,609	$	209,072
Comprehensive income (loss) attributable to Amedisys, Inc.	$	43,231	$	(9,747)	$	118,609

The accompanying notes are an integral part of these consolidated financial statements.

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands, except common stock shares)

	Total		Common Stock			AdditionalPaid-inCapital		TreasuryStock		RetainedEarnings		NoncontrollingInterests
			Shares	Amount
Balance, December 31, 2020	$	810,741	37,470,212	$	38	$	698,287	$	(319,092)	$	429,991	$	1,517
Balance, December 31, 2021	$	976,323	37,674,868	$	38	$	728,118	$	(435,868)	$	639,063	$	44,972
Issuance of stock – employee stock purchase plan	3,968		20,823	—		3,968		—		—		—
Issuance/(cancellation) of non-vested stock	—		151,365	—		—		—		—		—
Exercise of stock options	2,054		32,468	—		2,054		—		—		—
Non-cash compensation	23,809		—	—		23,809		—		—		—
Surrendered shares	(16,898)		—	—		—		(16,898)		—		—
Shares repurchased	(99,878)		—	—		—		(99,878)		—		—
Noncontrolling interest contributions	250		—	—		—		—		—		250
Noncontrolling interest distributions	(1,747)		—	—		—		—		—		(1,747)
Acquired noncontrolling interest	43,858		—	—		—		—		—		43,858
Net income	210,166		—	—		—		—		209,072		1,094
Balance, December 31, 2021	976,323		37,674,868	38		728,118		(435,868)		639,063		44,972
Issuance of stock – employee stock purchase plan	3,848		36,206	—		3,848		—		—		—
Issuance/(cancellation) of non-vested stock	—		142,477	—		—		—		—		—
Exercise of stock options	2,304		37,635	—		2,304		—		—		—
Non-cash compensation	16,560		—	—		16,560		—		—		—
Surrendered shares	(7,981)		—	—		—		(7,981)		—		—
Shares repurchased	(17,351)		—	—		—		(17,351)		—		—
Noncontrolling interest contributions	12,401		—	—		—		—		—		12,401
Noncontrolling interest distributions	(1,561)		—	—		—		—		—		(1,561)
Sale of noncontrolling interest	4,331		—	—		4,233		—		—		98
Net income	117,699		—	—		—		—		118,609		(910)
Net income (loss)	117,699		—	—		—		—		118,609		(910)
Balance, December 31, 2022	1,106,573		37,891,186	38		755,063		(461,200)		757,672		55,000
Issuance of stock – employee stock purchase plan	2,602		37,408	—		2,602		—		—		—
Issuance/(cancellation) of non-vested stock	—		189,951	—		—		—		—		—
Exercise of stock options	100		12,933	—		100		—		—		—
Non-cash compensation	29,024		—	—		29,024		—		—		—
Surrendered shares	(6,529)		—	—		897		(7,426)		—		—
Purchase of noncontrolling interest	(630)		—	—		(509)		—		—		(121)
Noncontrolling interest contributions	1,452		—	—		—		—		—		1,452
Noncontrolling interest distributions	(1,873)		—	—		—		—		—		(1,873)
Net loss	(10,936)		—	—		—		—		(9,747)		(1,189)
Balance, December 31, 2023	$1,119,783	~~1,119,783~~	38,131,478	$38	38	$787,177	~~787,177~~	$(468,626)	~~(468,626)~~	$747,925	~~747,925~~	$53,269	~~53,269~~
Issuance/(cancellation) of non-vested stock	—		171,752	—		—		—		—		—
Exercise of stock options	309		4,291	—		309		—		—		—
Non-cash compensation	30,639		—	—		30,715		(76)		—		—
Surrendered shares	(6,152)		—	—		—		(6,152)		—		—
Noncontrolling interest contributions	2,212		—	—		—		—		—		2,212
Noncontrolling interest distributions	(3,362)		—	—		—		—		—		(3,362)
Gain on deconsolidation of joint venture	(1,626)		—	—		—		—		—		(1,626)
Net income (loss)	38,162		—	—		—		—		43,231		(5,069)
Balance, December 31, 2024	$	1,179,965	38,307,521	$	38	$	818,201	$	(474,854)	$	791,156	$	45,424

The accompanying notes are an integral part of these consolidated financial statements.

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Years Ended December 31,
	2023		2022		2021
	2024		2023		2022
Cash Flows from Operating Activities:
Net (loss) income	$	(10,936)	$	117,699	$	210,166
Net income (loss)	$	38,162	$	(10,936)	$	117,699
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (inclusive of depreciation included in cost of service)	2326,~~847~~039		2423,~~935~~847		3024,~~901~~935
Non-cash compensation	2930,~~024~~639		1629,~~560~~024		2316,~~809~~560
Amortization and impairment of operating lease right of use assets	3334,~~996~~422		4633,~~029~~996		4046,~~364~~029
Loss (gain) on disposal of property and equipment	319		519		(124)
(Gain) loss on disposal of property and equipment	(28)		319		519
Gain on equity method investments	—		—		(31,098)
Gain on deconsolidation of joint venture	(1,626)		—		—
Deferred income taxes	207,~~655~~416		2320,~~377~~655		4423,~~582~~377
Loss on personal care divestiture	~~2,186~~—		—2,186		—
Merger termination fee	~~106,000~~—		—106,000		—
Equity in (earnings) loss from equity method investments	(106,~~760~~267)		45(10,760)		~~(4,949)~~45
Amortization of deferred debt issuance costs	991		991		~~917~~991
Return on equity method investments	53,~~073~~631		5,~~163~~073		5,~~343~~163
Investment impairment	—		3,009		—
Impairment	48,391		—		3,009
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable	~~(26~~16,~~727)~~477		(1426,~~230~~727)		(1814,~~030~~230)
Other current assets	(611,~~638)~~700		(36,~~525~~638)		(123,~~202~~525)
Operating lease right of use assets	(34,~~786~~196)		(3,~~242~~786)		(3,~~060~~242)
Other assets	~~189~~744		~~438~~189		~~(1,017)~~438
Accounts payable	~~(15~~12,~~816)~~210		4(15,~~894~~816)		(4,~~353)~~894
Accrued expenses	2333,~~694~~066		~~(39~~23,~~382)~~694		(2639,~~915~~382)
Other long-term obligations	(~~3,390~~536)		(83,~~822~~390)		(288,~~796~~822)
Operating lease liabilities	(3029,~~733~~570)		(4130,~~175~~733)		(3641,~~645~~175)
Net cash provided by operating activities	~~137~~221,~~188~~665		~~133~~137,~~283~~188		~~188~~133,~~893~~283
Cash Flows from Investing Activities:
Proceeds from the sale of deferred compensation plan assets	5455		~~252~~54		~~135~~252
Proceeds from the sale of property and equipment	~~136~~—		66136		~~144~~66
Purchases of property and equipment	(56,~~620~~550)		(65,~~165~~620)		(6,~~302~~165)
Investments in technology assets	(~~7,093~~823)		(17,~~050~~093)		(~~419~~1,050)
Investment in equity method investee	—(1,046)		~~(637)~~—		(~~200~~637)
Purchase of cost method investment	—		~~(15,000)~~—		(515,000)
Return of investment	~~150~~—		—150		—
Proceeds from personal care divestiture	~~47,787~~—		—47,787		—
Acquisitions of businesses, net of cash acquired	~~(350)~~—		(~~71,952~~350)		(~~269~~71,~~965~~952)
Net cash provided by (used in) investing activities	35,064		(94,486)		(281,607)
Net cash (used in) provided by investing activities	(8,364)		35,064		(94,486)
Cash Flows from Financing Activities:
Proceeds from issuance of stock upon exercise of stock options	~~100~~309		~~2,304~~100		2,~~054~~304
Proceeds from issuance of stock to employee stock purchase plan	~~2,602~~—		32,~~848~~602		3,~~968~~848
Shares withheld to pay taxes on non-cash compensation	(6,~~529~~152)		(76,~~981~~529)		(167,~~898~~981)
Noncontrolling interest contributions	12,~~452~~212		31,~~501~~452		~~250~~3,501
Noncontrolling interest distributions	(13,~~873~~362)		(1,~~561~~873)		(1,~~747~~561)
Proceeds from sale of noncontrolling interest	—		~~5,817~~—		—5,817
Purchase of noncontrolling interest	~~(800)~~—		—(800)		—
Proceeds from borrowings under term loan	—		—		290,312
Proceeds from borrowings under revolving line of credit	—		23,000		534,500
Proceeds from borrowings under revolving line of credit	23,000		534,500		500,700
Repayments of borrowings under revolving line of credit	—		(23,000)		(534,500)
Repayments of borrowings under revolving line of credit	(23,000)		(534,500)		(551,700)
Principal payments of long-term obligations	(37,357)		(76,013)		(13,296)
Principal payments of long-term obligations	(76,013)		(13,296)		(9,143)
Purchase of company stock	—		—		(17,351)
Debt issuance costs	—		—		(2,792)
Payment of accrued contingent consideration	(4,572)		(6,461)		(5,714)
Provider relief fund advance	—		—		(60,000)
Net cash used in financing activities	(48,922)		(87,522)		(30,433)
Purchase of company stock	—		(17,351)		(99,878)
Net increase in cash, cash equivalents and restricted cash	164,379		84,730		8,364
Payment of accrued contingent consideration	(6,461)		(5,714)		—
Cash, cash equivalents and restricted cash at beginning of period	138,863		54,133		45,769
Net cash (used in) provided by financing activities	(87,522)		(30,433)		55,126
Cash, cash equivalents and restricted cash at end of period	$	303,242	$	138,863	$	54,133
Net increase (decrease) in cash, cash equivalents and restricted cash	84,730		8,364		(37,588)
Cash, cash equivalents and restricted cash at beginning of period	54,133		45,769		83,357
Cash, cash equivalents and restricted cash at end of period	$	138,863	$	54,133	$	45,769

	For the Years Ended December 31,
	2023		2022		2021
	2024		2023		2022
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	29,~~766~~989	$	1429,~~939~~766	$	514,~~291~~939
Cash paid for Infinity ZPIC interest	$	—	$	~~12,755~~—	$	—12,755
Cash paid for income taxes, net of refunds received	$	2940,~~127~~095	$	2429,~~013~~127	$	3424,~~097~~013
Supplemental Disclosures of Non-Cash Activity:
Accrued contingent consideration	$	—	$	~~19,195~~—	$	—19,195
Noncontrolling interest contribution	$	—	$	~~8,900~~—	$	—8,900

The accompanying notes are an integral part of these consolidated financial statements.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS

Amedisys, Inc., a Delaware corporation (together with its consolidated subsidiaries, referred to herein as “Amedisys,” “we,” “us,” or “our”), is a multi-state provider of home health, hospice and high acuity care services with approximately 7370%, 7473% and 7574% of our consolidated net service revenue derived from Medicare for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively. As of December 31, ~~2023~~2024, we owned and operated ~~346~~347 Medicare-certified home health care centers, ~~165~~164 Medicare-certified hospice care centers and 108 admitting high acuity care joint ventures in 3738 states within the United States and the District of Columbia. We divested our personal care business on March 31, 2023.

Amedisys and UnitedHealth Group Incorporated Merger

On June 26, 2023, Amedisys, UnitedHealth Group Incorporated, a Delaware corporation ("UnitedHealth Group"), and Aurora Holdings Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of UnitedHealth Group ("Merger Sub"), entered into an Agreement and Plan of Merger, pursuant to which Merger Sub will merge with and into Amedisys with Amedisys continuing as the surviving corporation and becoming a wholly owned subsidiary of UnitedHealth Group. See Note 54 – Mergers, Acquisitions and Dispositions for additional information.

Recently Adopted Accounting Pronouncements

During ~~2021~~2024, the Company adopted Accounting Standards Update ("ASU") ~~2020~~2023-1007, ~~Codification~~Segment ~~Improvements,~~Reporting ~~which~~(Topic ~~included~~280): ~~minor~~Improvements ~~technical corrections and clarifications~~ to ~~improve~~Reportable ~~consistency~~Segment ~~and~~Disclosures, ~~clarify~~which ~~the~~is ~~application~~intended ~~of various provisions of the codification by amending the codification~~ to ~~include~~improve ~~all~~reportable ~~disclosure~~segment ~~guidance in the appropriate~~ disclosure ~~sections and by amending and adding new headings~~requirements, ~~cross~~primarily ~~referencing~~through toenhanced ~~other~~disclosures ~~guidance~~about ~~and~~significant ~~refining~~segment ~~or correcting terminology~~expenses. ~~Our adoption of this standard did not have a material effect on our consolidated financial statements.~~

During 2021, the Company adopted ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, which was intended to increase transparency around financial reporting regarding government assistance by requiring disclosure of information about (1) the types of government assistance received, (2) an entity's accounting for the government assistance received and (3) the effect of the assistance on an entity's financial statements. The ASU was effective for annual periods beginning after December 15, 2021, with early adoption permitted. See Note 4 – Novel Coronavirus Pandemic ("COVID-19") for the disclosures associated with this standard.

Recently Issued Accounting Pronouncements

In ~~December~~November ~~2023~~2024, the Financial Accounting Standards Board ("FASB") issued ASU ~~2023~~2024-0903, Income ~~Taxes~~Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses, which isin intended to improve ~~income~~the ~~tax~~ disclosures ~~by requiring disaggregated information~~ about a ~~reporting~~public business entity's ~~effective~~expenses ~~tax~~and ~~rate~~address ~~reconciliation~~requests ~~and~~from investors for more detailed information onabout ~~income~~the ~~taxes~~types ~~paid~~of expenses in commonly presented expense captions. The guidance is effective for annual periods beginning after December 15, ~~2024~~2026 on either a prospective or retrospective basis, with early adoption permitted. We are currently evaluating the impact the adoption of this ASU may have on our financial reporting.

In ~~November~~December 2023, the FASB issued ASU 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, which is intended to improve ~~reportable~~income ~~segment~~tax ~~disclosure~~disclosures ~~requirements,~~by ~~primarily~~requiring ~~through~~disaggregated ~~enhanced~~information ~~disclosures~~ about ~~significant~~a ~~segment~~reporting ~~expenses.~~entity's ~~The guidance is~~ effective ~~for~~tax ~~fiscal~~rate ~~years~~reconciliation ~~beginning after December 15, 2023,~~ and ~~interim~~information ~~periods~~on ~~within~~income ~~fiscal~~taxes ~~years beginning after December 15, 2024, with early adoption permitted~~paid. The guidance is toeffective befor ~~applied~~annual ~~retrospectively to all prior~~ periods ~~presented~~beginning inafter ~~the~~December ~~financial~~15, ~~statements~~2024 ~~based~~ on ~~the~~a ~~significant~~prospective ~~expense~~basis, ~~categories~~with ~~identified~~early ~~and disclosed in the period of~~ adoption permitted. We are currently evaluating the impact the adoption of this ASU may have on our financial reporting.

In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Topic 805): Recognition and Initial Measurement, which requires that a joint venture initially measure all contributions received upon its formation at fair value. The guidance is effective for joint ventures with a formation date on or after January 1, 2025 on a prospective basis. ~~We are currently evaluating the impact the adoption of this ASU may have on our financial reporting.~~

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. Generally Accepted Accounting Principles ("U.S. GAAP") to contract modifications and hedging relationships that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued, subject to meeting certain criteria. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which adds implementation guidance to ASU 2020-04 to clarify certain optional expedients in Topic 848. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and may generally be applied prospectively through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. These standards did not have an effect on our consolidated financial statements.

Use of Estimates

Our accounting and reporting policies conform with U.S. GAAP. In preparing the consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and accompanying notes. The Company's critical accounting estimates include revenue recognition and testing for the impairment of goodwill and other intangible assets. Actual results could materially differ from those estimates.

Principles of Consolidation

These consolidated financial statements include the accounts of Amedisys, Inc. and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in our accompanying consolidated financial statements, and business combinations accounted for as purchases have been included in our consolidated financial statements from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth in Note 3 – Investments.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

We account for service revenue from contracts with customers in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, and as such, we recognize service revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. Our cost of obtaining contracts is not material.

Non-contractual revenue adjustments are recorded for self-pay, uninsured patients and other payors by major payor class based on our historical collection experience, aged accounts receivable by payor and current industry conditions. The non-contractual revenue adjustments represent the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. We assess our ability to collect for the healthcare services provided at the time of patient admission based on our verification of the patient's insurance coverage under Medicare, Medicaid and other commercial or managed care insurance programs.

Amounts due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), include variable consideration for retroactive revenue adjustments due to settlements of audits and payment reviews. We determine our estimates for non-contractual revenue adjustments related to audits and payment reviews based on our historical experience and success rates in the claim appeals and adjudication process.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

~~based~~Net onservice ~~our~~revenue ~~verification~~by payor class as a percentage of ~~the~~total ~~patient's~~net ~~insurance~~service ~~coverage~~revenue ~~under~~for ~~Medicare~~each of our operating segments, ~~Medicaid~~which ~~and~~are ~~other~~described ~~commercial~~in orNote ~~managed~~14 ~~care~~– ~~insurance~~Segment ~~programs.~~Information is as follows:


	As of December 31,
	2024		2023		2022
Home Health:
Medicare	37	%	39	%	40	%
Non-Medicare - Episodic-based	8	%	8	%	8	%
Non-Medicare - Non-episodic based	19	%	15	%	13	%
Hospice:
Medicare	33	%	34	%	33	%
Non-Medicare	2	%	2	%	2	%
High Acuity Care	1	%	1	%	1	%
Personal Care (1)	—	%	1	%	3	%
	100	%	100	%	100	%

Net service revenue by payor class as a percentage of total net service revenue for each of our operating segments as described in Note 15 – Segment Information is as follows:

	As of December 31,
	2023		2022		2021
Home Health:
Medicare	39	%	40	%	41	%
Non-Medicare - Episodic-based	8	%	8	%	8	%
Non-Medicare - Non-episodic based	15	%	13	%	12	%
Hospice:
Medicare	34	%	33	%	34	%
Non-Medicare	2	%	2	%	2	%
Personal Care (1)	1	%	3	%	3	%
High Acuity Care (2)	1	%	1	%	—	%
	100	%	100	%	100	%

(1) We divested our personal care business on March 31, 2023.

(2) We acquired Contessa Health on August 1, 2021.

Home Health Revenue Recognition

Medicare Revenue

The notice of admission ("NOA") process implemented by the Centers for Medicare and Medicaid Services ("CMS") requires a one-time submission for each patient that establishes the home health period of care and covers all contiguous 30-day periods of care until the patient is discharged from home health services. If the NOA is not submitted timely, a payment reduction is applied equal to 1/30 of the 30-day payment rate for each day from the start of care date until the date the NOA is submitted.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

Non-Medicare Revenue

Payments from non-Medicare payors are either a percentage of Medicare rates, per-visit rates or case rates depending upon the terms and conditions established with such payors. Approximately 30% of our managed care contract volume affords us the opportunity to receive additional payments if we achieve certain quality or process metrics as defined in each contract (e.g. star ratings and acute-care hospitalization rates). We record revenue associated with these metrics at the time the amounts are probable and estimable.

Hospice Revenue Recognition

Hospice Medicare Revenue

Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounted for 97% of our total Medicare hospice service revenue for each of ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse or medical social worker for patients in a routine level of care.

The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.

Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in accrued expenses within our consolidated balance sheets. Providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of December 31, 2024, we have recorded $1.3 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended September 30, 2018 through September 30, 2025. As of December 31, 2023, we had recorded $2.3 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended September 30, 2017 through September 30, 2024.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

Hospice Non-Medicare Revenue

Personal Care Revenue Recognition

Personal Care Revenue

High Acuity Care Revenue Recognition

High Acuity Care Revenue

Our revenues are primarily derived from contracts with ~~(1)~~ health insurance plans for the coordination and provision of home recovery care services to clinically-eligible patients who are enrolled members in those insurance plans, ~~and~~contracts ~~(2)~~with health system partners for the coordination and provision of home recovery care services to clinically-eligible patients who are discharged early from a health system facility to complete their inpatient stay at home and contracts to provide palliative care at home services to clinically-eligible patients.

Personal Care Revenue Recognition

Personal Care Revenue

For the periods prior to the divestiture of our personal care line of business on March 31, 2023, we generated net service revenue by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that was either contractual or fixed by legislation. Net service revenue was recognized at the time services were rendered based on gross charges for the services provided, reduced by estimates for contractual and non-contractual revenue adjustments. We received payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors included the following elder service agencies: Aging Services Access Points ("ASAPs"), Senior Care Options ("SCOs"), Program of All-Inclusive Care for the Elderly ("PACE") and the Veterans Administration ("VA").

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

Government Grants

We account for government grants in accordance with ASC 832, Government Assistance, by applying the grant model in accordance with International Accounting Standard ("IAS") 20, Accounting for Government Grants and Disclosure of Government Assistance, and as such, we recognize grant income on a systematic basis in line with the recognition of expenses or the loss of revenues for which the grants are intended to compensate. We recognize grants once both of the following conditions are met: (1) we are able to comply with the relevant conditions of the grant and (2) the grant will be received. See Note 4 – Novel Coronavirus Pandemic ("COVID-19") for additional information on our accounting for government funds received under the Coronavirus Aid, Relief and Economic Security Act ("CARES Act").

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include money market funds, certificates of deposit and all highly liquid debt instruments with maturities of three months or less when purchased. The Company maintains cash with commercial banks, which are insured by the Federal Deposit Insurance Corporation ("FDIC"). At various times, the Company has deposits in these financial institutions in excess of the amount insured by the FDIC. The Company has not experienced any losses related to these balances and believes its credit risk to be minimal. The carrying amounts of our cash and cash equivalents approximate their fair values, which are primarily based on Level 1 inputs.

Restricted cash includes cash ~~and cash equivalents~~ that ~~are~~is not available for ordinary business use. As of December 31, 2023 ~~and 2022~~, we had $12.4 million ~~and $13.6 million, respectively,~~ classified as restricted cash related to funds placed into escrow accounts in connection with the indemnity, closing payment and other provisions within the purchase agreements of our ~~acquisitions~~Evolution Health LLC ("Evolution") acquisition and ~~divestitures~~our personal care line of business divestiture. During 2024, all funds held in escrow related to the personal care line of business divestiture were released to Amedisys, and all funds held in escrow related to the Evolution acquisition were released either to third parties or to Amedisys. See Note 54 – Mergers, Acquisitions and Dispositions for additional information.

The following table summarizes the balances related to our cash, cash equivalents and restricted cash (amounts in millions):

	As of December 31,
	2023		2022
	2024		2023
Cash and cash equivalents	$	~~126~~303.52	$	40126.5
Restricted cash	~~12.4~~—		1312.64
Cash, cash equivalents and restricted cash	$	~~138~~303.92	$	54138.19

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Patient Accounts Receivable

We report accounts receivable from services rendered at their estimated transaction price, which includes contractual and non-contractual revenue adjustments based on the amounts expected to be due from payors. Our patient accounts receivable are uncollateralized and consist of amounts due from Medicare, Medicaid, other third-party payors and patients. Our non-Medicare third-party payor base is comprised of a diverse group of payors that are geographically dispersed across the country. As of December 31, ~~2023~~2024, there is noone ~~single~~ payor, other than Medicare, that accounts for more than 10% of our total outstanding patient receivables (approximately 12%). Thus, we believe there are no other significant concentrations of receivables that would subject us to any significant credit risk in the collection of our patient accounts receivable. We write off accounts on a monthly basis once we have exhausted our collection efforts and deem an account to be uncollectible. We believe the collectability risk associated with our Medicare accounts, which represented 6964% and 6769% of our net patient accounts receivable at December 31, ~~2023~~2024 and ~~2022~~2023, respectively, is limited due to our historical collection rate of over 99% from Medicare and the fact that Medicare is a U.S. government payor.

We do not believe there are any significant concentrations of revenues from any payor that would subject us to any significant credit risk in the collection of our accounts receivable.

Prior to February 2024, the Company exclusively utilized Change Healthcare, a subsidiary of UnitedHealth Group, to submit patient claims to Medicare and all other payors for reimbursement. On February 22, 2024, UnitedHealth Group announced that on February 21, 2024, Change Healthcare’s information technology systems were impacted by a cybersecurity incident. The Change Healthcare cybersecurity incident did not impact our day-to-day operations; however, we were delayed in submitting patient claims to certain non-Medicare payors which resulted in a reduction in our operating cash flow and an increase in our accounts receivable during the first and second quarters. There was minimal impact to our Medicare claim submissions as we were able to quickly redirect our Medicare claims to an alternative clearinghouse. As of September 30, 2024, we had resolved the buildup in accounts receivable resulting from the Change Healthcare outage.

Medicare Home Health

For our home health patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare following the end of each 30-day period of care or upon discharge, if earlier, for the services provided to the patient.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Medicare Hospice

For our hospice patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare on a monthly basis for the services provided to the patient.

Non-Medicare Home Health, Hospice, ~~Personal Care~~ and High Acuity Care

For our non-Medicare patients, our pre-billing process primarily begins with verifying a patient’s eligibility for services with the applicable payor. Once the patient has been confirmed for eligibility, we will provide services to the patient and bill the applicable payor. Our review and evaluation of non-Medicare accounts receivable includes a detailed review of outstanding balances and special consideration to concentrations of receivables from particular payors or groups of payors with similar characteristics that would subject us to any significant credit risk.

Property and Equipment

Property and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets or life of the lease, if shorter. Additionally, we have internally developed computer software for our own use. Additions and improvements (including interest costs for construction of qualifying long-lived assets) are capitalized. Maintenance and repair expenses are charged to expense as incurred. The cost of property and equipment sold or disposed of and the related accumulated depreciation are eliminated from the property and equipment and related accumulated depreciation accounts within our consolidated balance sheet, and any gain or loss is credited or charged to other income (expense) within our consolidated statement of operations.

We assess the impairment of a long-lived asset group whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include but are not limited to the following:

•A significant change in the extent or manner in which the long-lived asset group is being used.

•A significant change in the business climate that could affect the value of the long-lived asset group.

•A significant change in the market value of the assets included in the asset group.

If we determine that the carrying value of long-lived assets may not be recoverable, we compare the carrying value of the asset group to the undiscounted cash flows expected to be generated by the asset group. If the carrying value exceeds the undiscounted cash flows, an impairment charge is indicated. An impairment charge is recognized to the extent that the carrying value of the asset group exceeds its fair value.

We generally provide for depreciation over the following estimated useful service lives.


			Years
Leasehold improvements			Lesser of lease term or expected useful life
Equipment and furniture			3 to 7
Leased fleet vehicles and copiers			Lesser of lease term or expected useful life
Computer software			2 to 7

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

~~undiscounted~~The ~~cash~~following ~~flows,~~table ansummarizes ~~impairment~~the ~~charge~~balances isrelated ~~indicated. An impairment charge is recognized~~ to ~~the~~our ~~extent~~property ~~that~~and ~~the~~equipment ~~carrying~~for ~~value~~2024 ofand ~~the~~2023 ~~asset~~(amounts ~~group~~in ~~exceeds its fair value.~~millions):

We generally provide for depreciation over the following estimated useful service lives.


	As of December 31,
	2024		2023
Leasehold improvements	$	13.4	$	11.0
Equipment and furniture	38.7		40.0
Leased fleet vehicles and copiers	51.0		39.8
Computer software	39.9		43.4
	143.0		134.2
Less: Accumulated depreciation	(100.9)		(92.4)
	$	42.1	$	41.8

			Years
Buildings			39
Leasehold improvements			Lesser of lease term or expected useful life
Equipment and furniture			3 to 7
Vehicles			5
Computer software			2 to 7
Leased copiers			Lesser of lease term or expected useful life
Leased fleet			Lesser of lease term or expected useful life

Depreciation expense for 2024, 2023 and 2022 was $21.3 million, $18.2 million and $11.5 million, respectively.

The following table summarizes the balances related to our property and equipment for 2023 and 2022 (amounts in millions):

	As of December 31,
	2023		2022
Buildings and leasehold improvements	$	11.0	$	9.7
Equipment and furniture	40.0		56.9
Finance leases	39.8		4.1
Computer software	43.4		46.7
	134.2		117.4
Less: Accumulated depreciation	(92.4)		(101.4)
	$	41.8	$	16.0

Depreciation expense for 2023, 2022 and 2021 was $18.2 million, $11.5 million and $12.1 million, respectively.

Business Combinations

We account for acquisitions using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Acquisitions are accounted for as purchases and are included in our consolidated financial statements from their respective acquisition dates. Assets acquired, liabilities assumed and noncontrolling interests, if any, are measured at fair value on the acquisition date using the appropriate valuation method. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets. In determining the fair value of identifiable intangible assets and any noncontrolling interests, we use various valuation techniques including the income approach, the cost approach and the market approach. These valuation methods require us to make estimates and assumptions surrounding projected revenues and costs, growth rates and discount rates.

Goodwill and Other Intangible Assets

As of December 31, ~~2023~~2024, we had a goodwill balance of $1,~~244~~213.79 million. Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. These events or circumstances include, but are not limited to, a significant adverse change in the business environment, regulatory environment or legal factors or a substantial decline in the market capitalization of our stock.

Each of our operating segments described in Note 1514 – Segment Information is considered to represent an individual reporting unit for goodwill impairment testing purposes. We consider each of our home health care centers to constitute an individual business for which discrete financial information is available. However, since these care centers have substantially similar operating and economic characteristics and resource allocations and since significant investment decisions concerning these businesses are centralized and the benefits broadly distributed, we have aggregated these care centers and deemed them to constitute a single reporting unit. We have applied this same aggregation principle to our hospice care centers and ~~high acuity care joint ventures and have also~~ deemed ~~each of~~ them to be a single reporting unit.

As of December 31, 2024, we had an other intangible assets balance of $81.2 million. Intangible assets consist of certificates of need, licenses, acquired names, non-compete agreements and technology. As of December 31, 2024, our non-compete agreements and amortizable acquired names were fully amortized. We amortize non-compete agreements and acquired names that we do not intend to use indefinitely on a straight-line basis over their estimated useful lives, which are generally two to three years for non-compete agreements and up to three years for acquired names. We amortize technology over its estimated useful service life, which is generally up to seven years. Our indefinite-lived intangible assets are reviewed for impairment annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

During 2023, we performed a qualitative assessment to determine if it was more likely than not that the fair value of our reporting units were less than their carrying values by evaluating relevant events and circumstances including financial performance, market conditions and share price. Based on this assessment, we concluded that the goodwill associated with our home health and hospice reporting units was not considered at risk of impairment as of October 31, 2023. In addition to the qualitative assessment, we also performed a quantitative analysis using an income approach for our high acuity care reporting unit due to delays in achieving our long-term projections established as of the August 2021 acquisition date. This quantitative analysis required us to make estimates and assumptions surrounding projected revenues and costs, growth rates and discount rates. Based on this analysis, we concluded that the goodwill associated with our high acuity care reporting unit was not impaired as of October 31, 2023.

As of December 31, 2023, we had an other intangible assets balance of $102.7 million. Intangible assets consist of certificates of need, licenses, acquired names, non-compete agreements and technology. As of December 31, 2023, our non-compete agreements and amortizable acquired names were fully amortized. We amortize non-compete agreements and acquired names that we do not intend to use indefinitely on a straight-line basis over their estimated useful lives, which are generally two to three years for non-compete agreements and up to three years for acquired names. We amortize technology over its estimated useful service life, which is generally up to seven years. Our indefinite-lived intangible assets are reviewed for impairment annually or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. We performed a qualitative assessment of our indefinite-lived intangible assets during 2023 and determined that there have been no material developments, events, changes in operating performance or other circumstances that would cause management to believe it is more likely than not that the fair value of any of our indefinite-lived intangible assets would be less than their carrying amounts.

Debt Issuance Costs

We amortize deferred debt issuance costs related to our long-term obligations over the term of the obligation through interest expense, unless the debt is extinguished, in which case unamortized balances are immediately expensed. The unamortized debt issuance costs of $21.6 million at December 31, ~~2023~~2024 will be amortized over a weighted-average amortization period of 21.6 years.

Fair Value of Financial Instruments

The following details our financial instruments where the carrying value and the fair value differ (amounts in millions):

Fair Value at Reporting Date Using

Financial Instrument

Carrying Value as ofDecember 31, ~~2023~~2024

Quoted Prices in ActiveMarkets for IdenticalItems(Level 1)

Significant OtherObservable Inputs(Level 2)

SignificantUnobservable Inputs(Level 3)

Long-term obligations

~~371~~349.94

—

~~360~~350.62

—

The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels of inputs are as follows:

•Level 1 – Quoted prices in active markets for identical assets and liabilities.

•Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Our deferred compensation plan assets are recorded at fair value and are considered a level 2 measurement. For our other financial instruments, including our cash and cash equivalents, patient accounts receivable, accounts payable, payroll and employee benefits and accrued expenses, we estimate the carrying amounts approximate fair value.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Income Taxes

We use the asset and liability approach for measuring deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates. Our deferred tax calculation requires us to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when we believe it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect of a change in tax rate is recognized as income or expense in the period that includes the enactment date.

Management regularly assesses the ability to realize deferred tax assets based upon the weight of available evidence, including such factors as the recent earnings history and expected future taxable income. In the event future taxable income is below management’s estimates or is generated in tax jurisdictions different than projected, we could be required to increase the valuation allowance for deferred tax assets. This would result in an increase in our effective tax rate.

Share-Based Compensation

We record all share-based compensation as expense in the financial statements measured at the fair value of the award. We recognize compensation cost on a straight-line basis over the requisite service period for each separately vesting portion of the award. Share-based compensation expense for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022 was $2930.06 million, $1629.60 million and $2316.86 million, respectively, and the total income tax benefit recognized for these expenses was $78.50 million, $47.35 million and $64.03 million, respectively, prior to the application of the income tax compensation rules under Internal Revenue Code section 162(m) ("162(m)"). As of December 31, ~~2023~~2024, the income tax benefit recognized for the three-year period was reduced by a cumulative $23.76 million, pursuant to 162(m).

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

Weighted-Average Shares Outstanding

Net income (loss) ~~income~~ per share attributable to Amedisys, Inc. common stockholders, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The following table sets forth, for the periods indicated, shares used in our computation of weighted-average shares outstanding, which are used to calculate our basic and diluted net income (loss) ~~income~~ attributable to Amedisys, Inc. common stockholders (amounts in thousands):

For the Years Ended December 31,

2023

2022

2021

2024

2023

2022

Weighted average number of shares outstanding – basic

32,~~599~~718

32,~~517~~599

32,~~642~~517

Effect of dilutive securities:

Stock options

—10

39—

~~122~~39

Non-vested stock and stock units

—323

97—

~~208~~97

Weighted average number of shares outstanding – diluted

3233,~~599~~051

32,~~653~~599

32,~~972~~653

Anti-dilutive securities

~~619~~288

~~303~~619

~~114~~303

Advertising Costs

We expense advertising costs as incurred. Advertising expense for ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022 was $7.24 million, $7.32 million and $7.43 million, respectively.

3. INVESTMENTS

We consolidate investments when the entity is a variable interest entity ("VIE") and we are the primary beneficiary or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third-party equity interests in our consolidated joint ventures are reflected as noncontrolling interests in our consolidated financial statements.

We account for investments in entities in which we have the ability to exercise significant influence under the equity method if we hold 50% or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary. The book value of investments that we account for under the equity method of accounting totaled $4649.18 million and $4046.51 million as of December 31, ~~2023~~2024 and ~~2022~~2023, respectively, and is reflected in other assets within our consolidated balance sheets.

We account for investments in entities in which we have less than 20% ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee. During 2022, we made a $15.0 million investment in a home health benefit manager, which is accounted for under the cost method. The book value of investments that we account for under the cost method of accounting was $20.0 million as of December 31, 2024 and 2023 and is reflected in other assets within our consolidated balance sheets.

Our high acuity care segment includes interests in several joint ventures with health system partners and a professional corporation that employs clinicians. Each of these entities meets the criteria to be classified as a VIE. We have management agreements in place whereby we manage the entities and run the day-to-day operations. As such, we possess the power to direct the activities that most significantly impact the economic performance of the VIEs. The significant activities include, but are not limited to, negotiating provider and payor contracts, establishing patient care policies and protocols, making employment and compensation decisions, developing the operating and capital budgets, performing marketing activities and providing accounting support. We also have the obligation to absorb any expected losses and the right to receive benefits. Additionally, from time to time we may be required to provide joint venture funding.

During 2024, we consolidated all but one of our joint ventures with health system partners as well as the professional corporation as we have concluded that we are the primary beneficiary of these VIEs; the joint venture that is not consolidated was accounted for under the equity method of accounting. During the three-month period ended March 31, 2024, we entered into an agreement to wind-down and dissolve the operations of the unconsolidated joint venture. We completed the wind-down during the third quarter.

During the three-month period ended December 31, 2024, we entered into an agreement to wind-down and dissolve the operations of one of our consolidated joint ventures. As a result, we adjusted the carrying value of the noncontrolling interest established upon the acquisition of the joint venture. The adjustment, which totaled $1.6 million, was recorded to miscellaneous, net within other income (expense) in our consolidated statement of operations during the three-month period ended December 31, 2024.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

We account for investments in entities in which we have less than 20% ownership interest under the cost method of accounting if we do not have the ability to exercise significant influence over the investee. During 2022, we made a $15.0 million investment in a home health benefit manager, which is accounted for under the cost method. During 2021, we made a $5.0 million investment in a workforce optimization company, which is accounted for under the cost method. The book value of investments that we account for under the cost method of accounting was $20.0 million as of December 31, 2023 and 2022 and is reflected in other assets within our consolidated balance sheets.

During the three-month period ended December 31, 2022, we sold a 49% interest in two of our home health care centers while maintaining a controlling interest in the newly formed joint venture. We are consolidating this joint venture. The total cash consideration received for the 49% noncontrolling interest was $1.9 million. In connection with the transaction, we recorded an after-tax gain of $1.4 million; this gain was recorded to additional paid-in capital within our consolidated balance sheet. During the three-month period ended September 30, 2022, we sold a 30% interest in two of our home health care centers while maintaining a controlling interest in the newly formed joint venture. We are consolidating this joint venture. The total cash consideration received for the 30% noncontrolling interest was $3.9 million. In connection with the transaction, we recorded an after-tax gain of $2.9 million; this gain was recorded to additional paid-in capital within our consolidated balance sheet.

During 2021, a third-party acquired a majority of the issued and outstanding membership interests of one of our equity method investments, Medalogix, for cash, with the remaining membership interests rolling over into a newly formed entity that includes Medalogix as well as another healthcare predictive data and analytics company. We rolled over 100% of our ownership interest in Medalogix to the newly formed entity, and in connection with this transaction, we recognized a $31.1 million gain based on the purchase price of Medalogix, which is reflected in gain on equity method investments within our consolidated statements of operations.

Our high acuity care segment includes interests in several joint ventures with health system partners and a professional corporation that employs clinicians. Each of these entities meets the criteria to be classified as a VIE. As of December 31, 2023, we are consolidating all but one of our admitting joint ventures with health system partners as well as the professional corporation as we have concluded that we are the primary beneficiary of these VIEs; the joint venture that is not consolidated is accounted for under the equity method of accounting. We have management agreements in place with each of the consolidated entities whereby we manage the entities and run the day-to-day operations. As such, we possess the power to direct the activities that most significantly impact the economic performance of the VIEs. The significant activities include, but are not limited to, negotiating provider and payor contracts, establishing patient care policies and protocols, making employment and compensation decisions, developing the operating and capital budgets, performing marketing activities and providing accounting support. We also have the obligation to absorb any expected losses and the right to receive benefits. Additionally, from time to time we may be required to provide joint venture funding.

During the year ended December 31, 2022, we recorded a $3.0 million impairment charge in connection with the wind down of operations of one of our high acuity care joint ventures accounted for under the equity method of accounting.

The terms of the agreements with each VIE prohibit us from using the assets of the VIE to satisfy the obligations of other entities. The carrying amount of the VIEs’ assets and liabilities included in our consolidated balance sheets are as follows (amounts in millions):


	As of December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	10.0	$	8.8
Patient accounts receivable	8.1		9.0
Other current assets	—		0.1
Total current assets	18.1		17.9
Property and equipment	—		0.1
Operating lease right of use assets	—		0.1
Goodwill	8.5		8.5
Intangible assets	0.4		0.4
Other assets	0.3		0.3
Total assets	$	27.3	$	27.3
LIABILITIES
Current liabilities:
Accounts payable	$	0.6	$	0.5
Payroll and employee benefits	1.2		0.9
Accrued expenses	9.4		7.9
Operating lease liabilities	0.1		—
Total liabilities	$	11.3	$	9.3

4. MERGERS, ACQUISITIONS AND DISPOSITIONS

Mergers

On June 26, 2023, Amedisys, UnitedHealth Group Incorporated, a Delaware corporation ("UnitedHealth Group"), and Aurora Holdings Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of UnitedHealth Group ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Amedisys with Amedisys continuing as the surviving corporation and becoming a wholly owned subsidiary of UnitedHealth Group (the “Merger”).

On November 12, 2024, the U.S. Department of Justice (“DOJ”) and certain other parties commenced litigation (the “DOJ Action”) against Amedisys and UnitedHealth Group alleging that the Merger, if consummated, would violate Section 7 of the Clayton Act and so should be enjoined. Additionally, the DOJ Action alleges that the Company committed certain violations of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and requests civil penalties against the Company for alleged violation of Section 7A. We believe the plaintiffs' claims are without merit and intend to vigorously defend against such claims. The DOJ Action remains pending. The U.S. District Court for the District of Maryland has tentatively set October 27, 2025 as the start date for the trial, but may reschedule the trial to begin later, on or about February 9, 2026. The U.S. District Court for the District of Maryland has stated that it will make a final determination as to the trial date in late August 2025. See Part I, Item 1A. "Risk Factors – Litigation challenging the Merger Agreement may prevent the Merger from being consummated by the end of the Waiver Period or at all" for additional information.

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

~~The~~On ~~terms~~December 26, 2024, each of the ~~agreements~~parties ~~with~~to the Merger Agreement entered into a waiver (the “Waiver”) pursuant to which, among other things, Amedisys and UnitedHealth Group each ~~VIE~~waived ~~prohibit~~its usright ~~from~~to ~~using~~terminate the ~~assets~~Merger Agreement due to a failure of the ~~VIE~~Merger to ~~satisfy~~have been consummated by the ~~obligations~~outside date (as defined in the Merger Agreement) until the earlier of ~~other~~(i) ~~entities~~5:00 p.m. ~~The~~(New ~~carrying~~York ~~amount~~time) on the tenth business day following a final order (whether or not appealable) issued by the U.S. District Court for the District of Maryland with respect to the ~~VIEs’~~complaint ~~assets~~filed by the DOJ and ~~liabilities~~certain ~~included~~other parties regarding the Merger and the other transactions contemplated by the Merger Agreement that permanently prohibits the consummation of the Merger and (ii) 11:59 p.m. (New York time) on December 31, 2025 (the “Waiver Period”). The Waiver also contains waivers by the parties thereto such that, (i) the Regulatory Break Fee (as defined in ~~our~~the ~~consolidated~~Merger ~~balance~~Agreement) ~~sheets~~under ~~are~~the Merger Agreement will be $275,000,000, which may escalate up to $325,000,000 for the failure to meet certain timing milestones related to divesting certain assets to gain approval; (ii) the revenue-related aspect of the definition of “Burdensome Condition” (as ~~follows~~defined in the Merger Agreement) is increased, (~~amounts~~iii) Amedisys may take certain actions that would otherwise be prohibited by interim operating covenants contained in ~~millions~~the Merger Agreement and (iv): certain closing conditions relating to government approvals are no longer conditions to the consummation of the Merger.

	As of December 31,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	8.8	$	15.6
Patient accounts receivable	9.0		6.1
Other current assets	0.1		0.6
Total current assets	17.9		22.3
Property and equipment	0.1		0.1
Operating lease right of use assets	0.1		0.1
Goodwill	8.5		8.5
Intangible assets	0.4		0.4
Other assets	0.3		0.2
Total assets	$	27.3	$	31.6
LIABILITIES
Current liabilities:
Accounts payable	$	0.5	$	0.1
Payroll and employee benefits	0.9		0.5
Accrued expenses	7.9		5.8
Operating lease liabilities	—		0.1
Current portion of long-term obligations	—		0.2
Total liabilities	$	9.3	$	6.7

Subject to the terms and conditions set forth in the Merger Agreement, as modified by the Waiver, at the effective time of the Merger (the "Effective Time"), by virtue of the Merger: (i) each share of Amedisys common stock (“Amedisys Common Stock”) held in treasury by Amedisys or owned by UnitedHealth Group or Merger Sub or any of their respective subsidiaries, in each case, immediately prior to the Effective Time will be cancelled (collectively, “cancelled shares”) without consideration; and (ii) each share of Amedisys Common Stock, other than any cancelled shares, issued and outstanding immediately prior to the Effective Time will be converted into the right to receive $101 per share in cash, without interest, less any applicable withholding taxes.

4On June 28, 2024, Amedisys, UnitedHealth Group and certain of their respective subsidiaries entered into an agreement (the "VCG Purchase Agreement") relating to the sale of certain Amedisys home health care centers and certain UnitedHealth Group care centers to VCG Luna, LLC ("VCG Luna"), an affiliate of VitalCaring Group. ~~NOVEL~~On ~~CORONAVIRUS~~January ~~PANDEMIC~~3, 2025, UnitedHealth Group delivered a notice (the "~~COVID-19~~Termination Notice") to VCG Luna terminating the VCG Purchase Agreement, following which, on January 8, 2025, UnitedHealth Group and VCG Luna entered into an agreement which provides for, among other things, the mutual release by the parties thereto of all claims against the other parties to the VCG Purchase Agreement that relate to the VCG Purchase Agreement.

OnThe ~~March~~Merger ~~27,~~is ~~2020,~~subject ~~the~~to ~~CARES~~a ~~Act~~number ~~was~~of ~~signed~~conditions ~~into~~to ~~legislation.~~closing ~~The~~as ~~CARES~~specified ~~Act~~in ~~provided~~the ~~for~~Merger ~~$175 billion to healthcare providers~~Agreement, ~~including~~as ~~hospitals~~modified onby the ~~front lines of the COVID-19 pandemic~~Waiver. OfThese ~~this~~closing ~~total~~conditions ~~allocated amount~~include, ~~$30 billion~~among ~~was~~others, ~~distributed~~(i) ~~immediately~~approval toby ~~providers~~Amedisys ~~based~~stockholders onat ~~their~~the ~~proportionate~~Amedisys ~~share~~Stockholders ofMeeting ~~Medicare~~(as ~~fee-for-service~~defined ~~reimbursements~~ in ~~2019.~~the ~~Healthcare~~Merger ~~providers~~Agreement) ~~were~~of ~~required~~the proposal to ~~sign~~adopt anthe ~~attestation~~Merger ~~confirming~~Agreement, ~~receipt~~which ofapproval ~~the~~was ~~Provider~~obtained ~~Relief~~on ~~Fund~~September 8, 2023; (~~"PRF"~~ii) ~~funds and agree to~~ the ~~terms~~expiration ~~and~~or ~~conditions~~termination of ~~payment.~~the ~~Our~~applicable ~~home~~waiting ~~health~~period (and ~~hospice~~any ~~segments~~extension ~~received~~thereof) ~~approximately~~under ~~$100 million~~the ~~from~~Hart-Scott-Rodino ~~the~~Antitrust ~~first~~Improvements ~~$30 billion~~Act of ~~funds~~1976, ~~distributed~~as toamended; ~~healthcare~~(iii) ~~providers~~the inreceipt ~~April 2020, which is inclusive~~ of ~~$2 million~~the ~~related~~required tostate ~~our~~regulatory ~~joint~~approvals; ~~venture~~(iv) ~~care~~the ~~centers~~absence ~~(equity~~of ~~method~~any ~~investments).~~law Weor ~~also~~order ~~acquired~~that ~~approximately~~has ~~$6 million~~the effect of ~~PRF~~enjoining ~~funds~~or inotherwise ~~connection~~prohibiting ~~with~~ the ~~acquisition~~completion of ~~AseraCare~~the ~~Hospice~~Merger; and (~~"AseraCare"~~v). ~~Under~~ the ~~terms~~expiration ~~and~~or ~~conditions~~early ~~for~~termination ~~receipt~~ of the ~~payment,~~waiting weperiod ~~were~~(and ~~allowed~~any toextension ~~use~~thereof) ~~the~~applicable ~~funds~~ to ~~cover~~the ~~lost~~consummation ~~revenues~~of ~~and~~the ~~health~~transactions ~~care~~contemplated ~~costs~~by ~~related~~the toMerger ~~COVID-19~~Agreement ~~through~~under ~~June~~all ~~30,~~applicable ~~2021,~~antitrust ~~and~~laws wewithout ~~were~~the ~~required~~imposition toby ~~properly~~any ~~and~~governmental ~~fully~~entity ~~document the use~~ of ~~these~~any ~~funds~~term, incondition, ~~reports~~obligation, torequirement, ~~the~~limitation, ~~U.S.~~prohibition, ~~Department~~remedy, ofsanction ~~Health~~or ~~and~~other ~~Human~~action ~~Services~~that ~~("HHS").~~has ~~All~~resulted ~~required~~in ~~reporting~~or ~~was~~would ~~completed~~reasonably ~~during~~be ~~the~~expected ~~three-month~~to ~~period~~result ~~ended~~in ~~September~~a ~~30,~~Burdensome ~~2021,~~Condition ~~and~~(as ~~our~~defined ~~audit~~in ~~report~~the ~~was~~Merger ~~submitted~~Agreement toas ~~HHS~~modified onby ~~September~~the ~~26, 2022~~Waiver).

~~For~~Termination ~~our~~of ~~wholly-owned~~Option ~~subsidiaries~~Care Health, ~~we utilized PRF funds to the extent we had qualifying COVID-19 expenses; we did not use PRF funds to cover lost revenues resulting from COVID-19~~Inc. ~~The~~("OPCH") ~~grant~~Merger ~~income associated with the COVID-19 expenses incurred through June 30, 2021 is reflected in other operating income within our consolidated statements of operations.~~ Agreement

As previously disclosed in Amedisys’ Current Report on Form 8-K filed with the SEC on May 3, 2023 and its Quarterly Report on Form 10-Q filed with the SEC on May 4, 2023, Amedisys entered into an Agreement and Plan of Merger on May 3, 2023 (the “OPCH Merger Agreement”) with OPCH, a Delaware corporation, and Uintah Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of OPCH (“OPCH Merger Sub”). On June 26, 2023, Amedisys, OPCH and OPCH Merger Sub entered into the Termination Agreement (the “Termination Agreement”), pursuant to which the parties thereto agreed to terminate the OPCH Merger Agreement and grant mutual releases by the parties of all claims against the other parties based upon, arising from, in connection with or relating to the OPCH Merger Agreement. Pursuant to the terms of the Termination Agreement, each of the termination of the OPCH Merger Agreement and the mutual releases provided for in the Termination Agreement would become effective upon receipt by OPCH of a $106,000,000 termination fee payable by, or on behalf of, Amedisys within 24 hours of the execution of the Termination Agreement (i.e., before the market open on June 27, 2023). On June 26, 2023, following the execution of the Termination Agreement, UnitedHealth Group, on behalf of Amedisys, delivered funds to OPCH in an amount equal to $106,000,000, representing the termination fee payable to OPCH under the OPCH Merger Agreement and the Termination Agreement, satisfying the condition precedent to the effectiveness of the termination of the OPCH Merger Agreement and the releases contained in the Termination Agreement. If the Merger Agreement is terminated under certain specified circumstance set forth in the Merger Agreement (as modified by the Waiver), Amedisys may be required

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, ~~2023~~2024

Weto ~~did~~reimburse ~~not~~UnitedHealth ~~fully~~Group ~~utilize~~for the ~~funds~~$106,000,000 ~~received;~~termination ~~all~~fee ~~unutilized~~that ~~funds~~UnitedHealth ~~were~~Group, ~~repaid~~on Amedisys' behalf, paid to OPCH, which may be in ~~October~~addition ~~2021.~~to Inthe ~~summary~~$125,000,000 termination fee payable by Amedisys to UnitedHealth Group in the ~~total~~event ~~funds~~the ~~that~~Merger weAgreement ~~received~~is ~~from~~terminated under certain specified circumstances. During the ~~CARES~~year ~~Act~~ended ~~PRF~~December ~~were~~31, ~~accounted~~2023, ~~for~~the as$106,000,000 ~~follows~~termination ~~(amounts~~fee inwas ~~millions~~recorded to other income (expense): within our consolidated statement of operations with a corresponding liability to termination fee paid by UnitedHealth Group within our consolidated balance sheet.

	Amount
Funds utilized through June 30, 2021 by consolidated entities	$	46.6
Funds repaid to the government by consolidated entities (excludes $0.2 million of interest repaid)	58.3
Funds utilized through June 30, 2021 by unconsolidated joint ventures	1.3
Funds repaid to the government by unconsolidated joint ventures	0.6
	$	106.8

The CARES Act also provided for the temporary suspension of the 2% reduction of Medicare claim reimbursements ("sequestration") for the period May 1, 2020 through December 31, 2020. During 2020 and 2021, Congress passed additional COVID-19 relief legislation which extended the 2% suspension of sequestration through March 31, 2022; sequestration was reinstated as a 1% reduction to Medicare claim reimbursements effective April 1, 2022 and a 2% reduction to Medicare claim reimbursements effective July 1, 2022. We recognized benefits to net service revenue totaling $13 million and $36 million during 2022 and 2021, respectively.

Additionally, the CARES Act provided for the deferral of the employer share of social security tax (6.2%), effective for payments due after the enactment date through December 31, 2020. During 2020, we deferred payment of approximately $55 million of social security taxes. Approximately $27 million was paid during December 2021; the remaining balance was paid during December 2022.

5. MERGERS, ACQUISITIONS AND DISPOSITIONS

Mergers

On June 26, 2023, Amedisys, UnitedHealth Group Incorporated, a Delaware corporation ("UnitedHealth Group"), and Aurora Holdings Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of UnitedHealth Group ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Amedisys with Amedisys continuing as the surviving corporation and becoming a wholly owned subsidiary of UnitedHealth Group (the “Merger”).

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the "Effective Time"), by virtue of the Merger: (i) each share of Amedisys common stock (“Amedisys Common Stock”) held in treasury by Amedisys or owned by UnitedHealth Group or Merger Sub or any of their respective subsidiaries, in each case, immediately prior to the Effective Time will be cancelled (collectively, “cancelled shares”) without consideration; and (ii) each share of Amedisys Common Stock, other than any cancelled shares, issued and outstanding immediately prior to the Effective Time will be converted into the right to receive $101 per share in cash, without interest, less any applicable withholding taxes.

The Merger is subject to a number of conditions to closing as specified in the Merger Agreement. These closing conditions include, among others, (i) approval by Amedisys stockholders at the Amedisys Stockholders Meeting (as defined in the Merger Agreement) of the proposal to adopt the Merger Agreement, which approval was obtained on September 8, 2023; (ii) the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iii) the receipt of the required state regulatory approvals; (iv) the absence of any law or order that has the effect of enjoining or otherwise prohibiting the completion of the Merger; and (v) the expiration or early termination of the waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated by the Merger Agreement under all applicable antitrust laws without the imposition by any governmental entity of any term, condition, obligation, requirement, limitation, prohibition, remedy, sanction or other action that has resulted in or would reasonably be expected to result in a Burdensome Condition (as defined in the Merger Agreement).

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

the Termination Agreement would become effective upon receipt by OPCH of a $106,000,000 termination fee payable by, or on behalf of, Amedisys within 24 hours of the execution of the Termination Agreement (i.e., before the market open on June 27, 2023). On June 26, 2023, following the execution of the Termination Agreement, UnitedHealth Group, on behalf of Amedisys, delivered funds to OPCH in an amount equal to $106,000,000, representing the termination fee payable to OPCH under the OPCH Merger Agreement and the Termination Agreement, satisfying the condition precedent to the effectiveness of the termination of the OPCH Merger Agreement and the releases contained in the Termination Agreement. If the Merger Agreement is terminated under certain specified circumstances, Amedisys may be required to reimburse UnitedHealth Group for the $106,000,000 termination fee that UnitedHealth Group, on Amedisys’ behalf, paid to OPCH in addition to the $125,000,000 termination fee payable by Amedisys to UnitedHealth Group upon termination of the Merger Agreement. The $106,000,000 termination fee was recorded to other income (expense) within our consolidated statement of operations with a corresponding liability to termination fee paid by UnitedHealth Group within our consolidated balance sheet during the year ended December 31, 2023.

Acquisitions

We complete acquisitions from time to time in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health, hospice and high acuity care services. The purchase price paid for acquisitions is negotiated through arm’s length transactions, with consideration based on our analysis of, among other things, comparable acquisitions and expected cash flows. Acquisitions are accounted for as purchases and are included in our consolidated financial statements from their respective acquisition dates. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets because of the expected contributions of the acquisitions to our overall corporate strategy. We typically engage outside appraisal firms to assist in the fair value determination of identifiable intangible assets and noncontrolling interests, if any, for significant acquisitions. The preliminary purchase price allocation is adjusted, as necessary, up to one year after the acquisition closing date if management obtains more information regarding asset valuation and liabilities assumed.

2023 Acquisitions

On January 20, 2023, we acquired the regulatory assets of a home health provider in West Virginia for a purchase price of $0.4 million. The purchase price was paid with cash on hand on the date of the transaction. We recorded goodwill of $0.3 million and other intangibles (certificate of need) of $0.1 million in connection with the acquisition.

2022 Acquisitions

On March 23, 2022, we entered into a transaction with one of our high acuity care health system partners in which we contributed cash and our health system partner contributed its home health operations to one of our existing high acuity care joint ventures. As a result of this transaction, we recorded goodwill of $8.5 million, other intangibles of $0.4 million (certificate of need and licenses) and noncontrolling interest of $8.9 million within our consolidated balance sheet. The fair value of noncontrolling interest was determined using an income approach and a market approach.

On April 1, 2022, we acquired 15 home health care centers from Evolution Health, LLC, a division of Envision Healthcare, doing business as Guardian Healthcare, Gem City, and Care Connection of Cincinnati ("Evolution"), for an estimated purchase price of $67.8 million. A portion of the purchase price ($51.1 million) was paid to the seller with cash on hand and proceeds from borrowings under our Revolving Credit Facility. The remainder ($16.7 million) was placed into an escrow account in accordance with the closing payment, indemnity and other provisions within the purchase agreement.

Of the total $16.7 million placed into escrow, $1.0 million was set aside for the closing payment adjustment. The closing payment calculated on the acquisition date included estimates for cash, working capital and various other items. Under the purchase agreement, the purchase price was subject to an adjustment for any differences between estimated amounts included in the closing payment and actual amounts at close. The closing payment adjustment, which was finalized during 2022, reduced the purchase price by $1.3 million from $67.8 million to $66.5 million. The remaining $15.7 million placed into escrow relates to certain outstanding matters existing as of the acquisition date as well as potential losses the Company may incur for which the seller has an obligation to indemnify the Company. The amounts in escrow will either be paid to third parties as outstanding matters are resolved or to the seller at certain intervals in the future. As of December 31, 2023, $9.6 million of the $16.7 million has been released from escrow; $7.1 million plus interest remains in escrow and is reflected as restricted cash within our consolidated balance sheet. Corresponding liabilities related to these contingent consideration arrangements are reflected in accrued expenses within our consolidated balance sheet as of December 31, 2023.

$15 million of goodwill recorded for this acquisition will be deductible for income tax purposes over approximately two to five years.

AMEDISYS, INC. AND SUBSIDIARIES

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