Home health firms fall as CMS proposes deep Medicare cuts

Amedisys

01/07/2025 14:06

** Shares of home health and hospice providers fall premarket after the Centers for Medicare & Medicaid Services proposes a 6.4% reduction cut in 2026 Medicare payments

** Enhabit EHAB.N fall 8% to $8.86, while Amedisys AMED.O drop 1.3% to $97.10

** Monday's recommendation could cut $1.1 billion from the sector compared to 2025, CMS estimates

** Oppenheimer called the proposed cut "significantly worse" than industry expectations and warned it would be "devastating" for the home health industry

** For every 1% cut, companies like Amedisys and Enhabit would see a direct hit to earnings, brokerage says

** Jefferies estimates the cut would reduce EBITDA by about $55 million for AMED and $30 million for EHAB

** However, analysts at TD Cowen said they expect the HHA industry to heavily lobby CMS for relief from the temporary cut, suggesting the final reduction will likely be smaller

** As of last close, EHAB up 23.4% and AMED up 8.4% YTD

 (Reporting by Kamal Choudhury in Bengaluru)

 ((Kamal.Choudhury@thomsonreuters.com;))