Home Health – Expect Volume Rebound + Favorable Pricing: Elective procedures were 20-25% below pre-pandemic levels during 1Q'21, representing the last leg before full volume recovery. AMED indicated Intra-quarter that its aggressive chase of ASC volumes has prompted electives to rise back to 100% of pre-pandemic levels. While more of AMED’s elective procedures are now coming from ASCs versus hospitals, management expects that hospitals will replace these ceded elective procedures with other types of patients - providing room for upside. Despite electives remaining 75 - 80% versus its historical run rate, LHCG disclosed that its HH admissions per day are 4% higher compared to its pre-pandemic run rate. LHCG indicated there is upside for an additional couple hundred of bps improvement in admissions volume with elective procedures expected to come back online early Q3. Coupled with the extension of the Medicare Sequestration holiday and the 1.9% CY21 HH rate update, the solid HH pricing environment is expected to help fuel strong performance in 2021.  

Hospice LOS Recovery Remains Primary Focus for Remainder of '21: After bottoming out in Jan. '21, hospice LOS has been slow to recover, and we anticipate it will continue to pressure ADC growth. While AMED's median LOS has recovered to 26 days in April '21 (26 days pre-COVID), LHCG's average LOS dropped to 73 days in March '21 and sequentially recovered to 75 days in April. At mid-May, LOS improved to 78/79 days, but still below its pre-COVID level of low 80s. We believe that the positive LOS trajectory hospices have seen in late Q1/early Q2 should result in improved hospice ADC in Q2.