Addus HomeCare, ModivCare fall after potential hit from govt proposal

Addus HomeCare

28/04/2023 16:16

(Updates)
    ** Shares of some home-health companies fall; Addus HomeCare
Corp  ADUS.O  shares drop ~26% to $83.87, ModivCare Inc  MODV.O 
down ~6% at $66.31
    ** U.S. Centers for Medicare & Medicaid Services (CMS) late
on Thursday proposed a rule that requires at least 80% of
Medicaid payments for home- and community-based service (HCBS)
providers to be spent directly on compensation for care workers 
    ** Proposal from CMS is a "potentially negative surprise",
would put a margin cap on providers, such as Addus HomeCare,
ModivCare - Jefferies 
    ** Brokerage adds that rolling out of this proposal "could
strain already stressed" profit and losses for most providers in
the space and could translate to reduced capacity 
    ** Says it expects strong pushback to the proposal over the
next few months, given how significant the changes can be
    ** HCBS provides opportunities for Medicaid beneficiaries to
receive services in their own home or community rather than
institutions or other isolated settings 
    ** So far this year, MODV shares are down ~25%, ADUS is down
~18%

 (Reporting by Raghav Mahobe)
 ((Raghav.Mahobe@thomsonreuters.com;))