Well, great. Good morning, everyone. Thanks for joining us today. I've got the team from Enhabit with me. Barb, Crissy, thanks for joining us. I'll just get into the most recent developments. Is there anything you'd care to share, offer up around the strategic alternatives process and the outcome of that? And there's been some stuff filed today, so I don't know if there's anything you'd care to share or say. Yeah, what I would say is, you know, hopefully, people saw the preliminary proxy and the press release that was published last week. Went into a lot more detail on the strategic process. So, I think clear from all of that, that it was a very robust process. As far as kind of the newer re-release this morning that folks may have seen, you know, we're really confident in the slate that we have. We feel like we have a strong, very experienced board of directors. They have helped us navigate these waters over the last couple of years, so we're really confident in the future and with the leadership of our board. Okay, that's helpful. And everyone else can go read the proxies and the 8-Ks to get the update there. I wanna start just with Barb, the evolution of the Payer Innovation strategy. You guys seemingly started a little bit late in the game when you took over control of the organization, had a much higher Medicare Advantage mix than the peers. You had to aggressively get out and contract, and the amount of activity, you know, exceeded my expectations. Just where you are in the whole evolution of it, how you feel about how successful this has been? Yeah, well, I do think it was critically one of the most important things that we did, was to develop the team. As you know, that not only did we have a higher amount of fee-for-service, but the Medicare Advantage mix that we did have paid us with a significant discount. And so it was really important to get out there to get more and better contracts. I've been very pleased with the results of that team. Now sitting with 64 agreements, most of those are regional agreements, but there are two national agreements, the most recent being the national agreement that went into effect January 1 of this year. And obviously, the national just brings a much larger addressable market. Now the contracting is one piece, but the other piece we've been really pleased with is the work of the teams in the field, really being able to pivot and focus on not only bringing in those better-paying, contracted patients, but also using that to, to be seen as a more wholesome provider to our referral sources so that we can continue to gain their fee-for-service, and frankly, help us then stabilize, that fee-for-service, business that we do have. So pleased with that. Continue to have a lot of work, though, with the team. Still have about 30 agreements in the pipeline and 28 historic, older agreements that we're at the table renegotiating. Are the rates that you're getting a, quote-unquote, "case rate, an episodic rate?" Maybe talk about how the structure of these rates are different than a per-visit contract. Sure. So, you know, historically, before the Payer Innovation, the majority of them were per visit, and it was about a 40% plus discount. With the Payer Innovation, we made a conservative, conservative effort to say, "You know, we're not gonna really take anything, you know, more than a 25% discount." On the episodic agreements, with the regionals, we were kind of at a 0%-10% now, discount, and on the per visit, around that 20%-25%, just kind of on averages. I will say one difference that came is the new national agreement that went into effect January, is it has a little bit more layers to it. It is an episodic agreement, but we've aligned incentives with us and the payer to really help them be able to move patients out of institutional settings, and therefore, our payment's a little better, and we're able to move patients out of institutional settings. Can you unpack that a little bit? Just make sure I get this. So this a larger contract, different layers, national contract, episodic, but it also has- There's more components to it. More components. So instead of just having- Did you want this, or did they want this? It was the way- Both. Yeah, we negotiated it. And I think it was. It's a win for both, and it really aligns their incentives with ours. We wanna be paid better, and but we also wanna help them and where their pain points are, and that is having a timely and efficient movement of patients in institutional settings home. Okay. Okay. Makes sense. So you've got 30-ish additional contracts sort of in the pipeline, various stages of negotiation. Constantly learning and applying those learnings to these contracts. When you're done with these 30... Well, does the 30 include, like, recontracting? No- No. These are all new. All new. These are all new. All new. Mm-hmm. So how we build that pipeline is we really work with the business development teams in the field and say: "What would be a significant help for you? What contract would help you to be seen as a better provider to your referral sources?" And they really feed up to us because some of these are, seem small because they're at a regional level, but they can be meaningful at that local branch. Yeah. That's how we've built our pipeline over the last couple of years and continue to build it. Okay. What I would say, we've reached the point now where we are beginning to renegotiate historic contracts. These historic contracts that, again, we were gifted when we became the management team, we're now converting them and having the discussions to make them Payer Innovation contracts by showing the quality we delivered over that time period. Okay. What's the most resistance that you meet when you're sitting with a payer trying to move on these contracts? I would say the most resistance is when you find that they're siloed within their negotiating departments. So if it is- Yeah ... if it is the group that handles just home health, frankly, what we've learned is that they bonus or incentive to keep their unit cost in place. And so if they're not talking across the hall with those that are focused on emergency room visit cost- Right Acute care utilization cost, that's where we see the barrier. 'Cause then all they see is, well, if I pay you more, my unit cost goes up, and can't really understand, well, but that unit cost going up can significantly help that unit cost. Right. If that's the biggest barrier, and so, you know, that's what we have to work through, which is why some of these take the amount of time that they've taken. Yeah. Okay. So once we get fast-forward a year from now, I don't know what it's gonna look like in a year from now, you don't know, but, like, do you think that, like, the mix is... I mean, you're down to sort of like peer levels now- Mm-hmm ... in terms of your fee-for-service MA split. Do you think that, I mean, it's gonna continue to go lower, fee-for-service. I don't really know where the question's gonna go here, but do you, do you think that, like, you're, you're done through, like, the majority of the contracting that you need to do? Or is there more work to do after these 30 contracts? Oh, I think as after we get through these 30 and the 28 we're negotiating, 'cause on the renegotiations, we're either going to win at the renegotiation or we will walk away. At some point, what we have told our teams in the field is, at some point, we don't want them to have to think so hard when they get the referrals. Yeah. We want anything that they're contracted for, that they can simply say yes to, that's our ultimate goal for them. Got it. When you were at your prior employer, you worked really hard on an MA strategy. I'm thinking about, like, Enhabit was taking a—they had outsized exposure to the referrals that you were getting from- Mm-hmm Encompass. What does that look like today in terms of the mix that you have coming from the old parent company? Is it something you share? We don't share, 'cause it's harder to get that data, right? When all of our data was together- Yeah ... it was easier to know. Like, what we don't know today is that denominator, what number of patients from the IRFs are going home with home health so that we know what of that we're getting. What I would say is that the last three quarters, we have seen those numbers stabilize. Sure. We do feel that us getting on more contracts has helped us, you know, really kind of firm up the relationship now so that we can at least stabilize those referrals. Because that was a missing piece as well for them- Yeah ... as they saw more MA, and we couldn't service that, that doesn't really help us to be seen as kind of the, a preferred provider. Okay. On the operational side of this, there was an awful lot of work that you guys have undertaken to prioritize in terms of preferred economics of each of these payers. Do you wanna just talk about the process that you put into place internally to, you know, like, how you're kind of working through at the field level this? Yeah. So at the field level, what we've given them now is the resources to kinda have what we call kind of a red, yellow, green reports, right? So that if I'm in the field, and I'm getting these referrals, and, you know, I only have so much capacity, right? And so what we've said to the field is: We know this is tough. There's a patient on the other side of this, but to be good stewards of our resources, we need you to be smart making these decisions. And so at the field level, they know, obviously, all green contracts, you just accept immediately. The yellow contracts and the red contracts, you kinda look at, well, where are they coming from, right? If they're coming from a referral source that only wants to send those, it's gonna be hard to prioritize those. But if they're coming from referral sources that we know we have a good collaborative working relationship with, then we take them. The other thing that we look at is, what is the productivity of our staff, right? Until at a certain branch, we get on more and better contracts, it may be with their salaried staff, you'd rather have productive staff. So you may take a yellow or red just simply because, well, it's better than having my staff be unproductive. Right. And so that's kind of the thought process. Mm. But we do have the information now at the field level for them to make those decisions. Do you ever feel like there's risk that you deflect some of the volume in that sort of yellow category, that people get a little nervous, like, I'm only gonna take the green? I'm trying to think of, like, what's the downside risk of that initiative. Yeah, so that's again why they need to know the referral source, right? Yeah. If I'm in a referral source, and again, I think our teams have done a really good job making sure that they can articulate that we want to be seen as a full-service provider to those referral sources. It's why we're asking the referral sources: What contracts should we be going after? We want them to know we wanna work on their behalf to be able to serve more of their patients. Got it. When I think of the referral sources, what's your mix of institutional versus community today? So historically, and I would say still pretty close today, we're about a third acute care hospitals, a third more of that kind of sub, you know, acute, you know, your, your IRFs, your SNFs, your LTACs, and then a third community, directly from the physicians. Yeah. I do see over time, we could potentially start getting higher at those institutional, because again, you know, our hope is that we continue to negotiate better agreements, particularly focused on those patients needing to get moved out of the hospital. In that, institutional, the subacute, as you said- Mm-hmm ... has the rate of growth of Medicare Advantage been greater there than community or acute? I get the feeling that there has been more growth in patients that are going into those facilities. I actually would say we have probably seen more of it on the community side because a lot of our focus on the community side had been more in your, like, senior apartment settings, ALFs, those settings. Mm-hmm. What you find is you have one really strong salesperson of a payer go in and provide a great lunch, and the next thing you know, the majority of people in the building have signed up. Right. We've actually seen that shift, I would say, more in our community faster than we have even on the subacute. Okay. Labor, just let's talk about just your labor agenda. You've worked really hard to recruit and retain and improve retention. Any metrics to share around where you are today and your level of satisfaction? We have been really pleased with that we've been able to increase our candidate pool by about 30% this year over last year in the first quarter. I think a lot of that has become of the branding and people getting to recognize the Enhabit brand. We do have now eliminated all contract labor, so we have enough nurses now in the field to have eliminated all of that. Continue on the recruitment and retention side, I would say now that we have our own data warehouse, and we're able to get more of our data to look at in greater depth, one of the things we're focused on now is: how do we do the right hire upfront? Because what we do see is with our turnover today, it does tend to be folks within that first six to nine months. Once somebody's with us a year or two, our retention is really strong. And so it's really using the data to say, you know, what are the most successful? Is it a certain nurse coming from a certain setting? So that we can start drilling down, now that our candidate pool has increased, how can we be smarter on the selection side up front, so that we can continue to improve that retention. Okay. Cost per visit. I don't know, Crissy, do you want to just sort of talk about how that's been trending? And, I guess the corollary to this, too, is, you know, visits per episode and opportunities there to invest into some technology or optimization opportunities. Yeah. So I'll take the cost per visit question, then maybe ask Barb to complement that with some of the VPE initiatives we have underway. But our cost per visit, we're really pleased with the way our teams are managing the cost in the field. You know, 90% of our cost per visit is labor, and so their ability to manage that. We did a great job, as we just talked about, with our labor initiatives in 2023 and really building up our clinical staff through that increased candidate pool, increased retention. And doing so has allowed us to be more productive, which allows us to offset some of the merit increases. It's allowed us to eliminate contract labor by the end of 2023. That was worth about $6 million in 2023, with the majority of that being in the first half of that year. And then right now, to continue to manage that, we're looking at our optimization. And so when we say optimization, what we really mean is sending an RN to do an RN's work. So having that clinician work at the top of their license. Right now, we're at about a 32% optimization rate, meaning that about 32% of the time, an RN will go to do something an LPN could do. On average, about a $13 difference in the cost per visit when an RN goes versus an LPN. So in those markets where we have our nurses fully productive, we're looking actively to add more LPNs to optimize our clinical mix, which allows us to be more efficient and further push that cost per visit down. So right now, we've got a guidance consideration out for the year of 2%-3% increase. If you think about it, merit increase-wise, we're probably average about 3%, and there's likely to be some markets where we have to give a little bit something above that just to remain competitive. Q1, we were at a little over 2%, so we like where we're headed. We like the initiatives we have underway and feel good about that 2%-3% increase. And then on visits per episode, you know, we rolled out Medalogix Pulse to all the branches last year, and now really the focus is on the leaders knowing how to use their dashboards to say, "You know, if I look this morning at my caseload of patients as a branch, which of them are at very low risk versus low risk versus high risk of readmission? And do my visits look like they complement that, or do I see overutilization or potential overutilization for my very low-risk patients? Right. And how do I move those appropriately, particularly to new starts of care, so that we can manage those visits per episode and actually gain more through the clinical workforce we have today?" We are complementing that in a few markets right now with some virtual visits, and seeing how that's gonna help to determine if we want to build that out as well. Any targets around visits per episode, where you are today, where you could... I mean, you're certainly operating at a structurally higher level than your peer group, When we piloted the Medalogix Pulse, what we saw in those 17 branches was a 5% reduction in the visits per episode with no change in our quality. And obviously, that's an important thing for us. With that being our biggest value proposition to the payers, we can't afford to impact, negatively impact that. So we feel that conservatively, 5% makes sense in the long range to look for as an initial savings. So it's really not a targeted number for visits per episode. It really is about a 1% decline at a branch level. Because if I'm a branch with a high neuro mix, I'm gonna have higher visits per episode because of all the disciplines. So it's really looking at that branch level, how can I lower theirs based compared to their baseline? Okay. To maybe round out some of the operational home health questions, just volumes have stabilized, mostly. Mix is stabilizing. You've got some underlying solid unit cost trends, cost per visit, visit per episode, moving in the right direction. Where is the single largest area to drive earnings growth in the next 12-24 months, and compartmentalize anything that happens on the regulatory front. Right. I would say, definitely our focus on the visits per episode and being able to grow with the clinical. So it's not like we're not gonna add clinical workforce, but even grow more with the clinical workforce that we have, is certainly an area of great focus for us because we do believe that now that we're on more payers, we can accept more and grow more. We wanted to be careful how much we were growing in those really low-paying agreements. So now that we have more payers, it's how do we use the clinical workforce to grow within that? Sure. Okay. The proposed rule, we're gonna get that out in the next month or so. Yeah. I think anyone that's spent any time around the industry knows that CMS is intent on following the spirit of the law and the statute, and implementing various layers of behavioral adjustments. There's more that they have to implement that they delayed last year. Then you've got the permanent cut that has ballooned to a very large amount, that could continue to grow. I don't know. What's sort of the internal expectation as we head into this proposed rule? Well, I think they definitely signaled last year that they would come back for the other half of the permanent cut that we didn't get last year. I think the question will be: What sort of market basket are they gonna put with that in the proposed rule? Certainly, as you mentioned, what hangs out there is those clawbacks, the temporary clawbacks, that is a huge number now. So far, they have not put any language in a proposed rule regarding those. It will be interesting to see, is anything introduced in the proposed rule this time? And obviously, there'll be a lot of focus for the industry on, you know, trying to eliminate those temporary cuts, because, you know, there was a well-attended Finance, Senate Finance hearing last fall, where they talked about, yes, the number of locations may still be out there, but there are providers that are having to shrink geographic areas to be able to- Yeah ... have a margin that's sustainable. And so, you know, it's have we created, and will we create enough noise to make an impact on those temporary adjustments? I know this is a difficult question to answer, and I'm afraid I'm not gonna get it answered. But, like, let's just say that you're in a multi-year cycle of generally just flat fee-for-service rates, and you have some volume, mix tilted more MA, less fee-for-service. Can you grow earnings in a timeframe where you don't have pricing to cover the cost inflation? I think there are two things we'd have to focus on. One is getting to the point that we've moved everything over to a Payer Innovation that's, that's not fee for service, right? So that's the opportunity for us. I guess, if you look historically, it's, it's probably better for us that we actually have more to move over into those- Mm-hmm ... so that you can try to negate some of that pricing impact from that perspective. And then, obviously, the continued focus on things like productivity, optimization, and visits per episode. Those are your greatest tools in the toolbox, to mitigate that. Yeah. Somebody once told me that, home health, 100% of costs are actually variable at the end of the day. So, I think there's an element of truthiness to that. Can we spend just a minute on, hospice? I was trying to balance the time to align with the percentage earnings- You did it! that you had in the enterprise organization. It's been, I think, it's-- you said one time, Crissy, "It's been a journey." How do you feel about the progress there? A lot of investments on business development, your sales, marketing, teams. It was a decent first quarter- Mm-hmm ... from what I could tell. So just any update on, you know, how you feel about those investments and the progress? Yeah. So as you said, it's been a journey. You know, it was most important for us to stabilize the workforce and remove the capacity constraints. It made no sense to add business development teams when you were they were selling to say no. And so I think we did a really good job on getting all the positions filled for, at a clinical level, putting in that case management model, which has really helped us from a recruitment and retention standpoint. And now it is fully focused on business development, and not only adding the resources from business development, but also making sure that we are complementing and looking at our referral sources so that we can make sure that we balance that length of stay. I think we did overcorrect early on to try to alleviate any sort of cap exposure. Mm-hmm ... and really ended up, you know, kind of impacting and having more short length of stay, which is why we saw kind of admissions going, but not census. As we noted in the first quarter call, we did see sequential census improvement throughout the first quarter that persisted into April. So I think all the work that we've done, and now adding the business development resources, is certainly paying off. More stable length of stay trends- That's right ... throughout the first quarter, and given the length of stay you have, that hopefully persist into the next quarter or so. That's right. Okay. What was I gonna say around hospice? How do you, I mean, given that it's not a significant piece of the overall earnings stream today, does it become more of a distraction than an opportunity, or, you know, how are those conversations evolving internally? Yeah, I think it is still an opportunity. I mean, first of all, we certainly have a lot more stable, rate environment for hospice. Right. And so it is good to be able to see that we continue to get some positive rate updates. I also think, you know, it's been part of our de novo strategy, because we do believe where we have home health, if possible, to add hospice, it just makes sense. And so it continues to be a strategy for us to build on the hospice. When you say it makes sense where you have home health to have hospice, can you elaborate a little bit more on that? Is that we think there's an opportunity? A cross-referral opportunity there, or there's business development is, you know, two people could be doing one person's job. I mean, where is the opportunity? The opportunity is first brand recognition, both, both from a referral development as well as a recruitment and retention. So, you know, just having that name in the market and being able to, to build off of that. But it also helps from a standpoint of, you know, about 20-25% of our patients do come from a home health. And so, you know, it makes sense that, you know, especially where we have, you know, significant size and census for home health, to have hospice, you know, already, you already have a referral stream there. And so just kind of that combination helps both. Okay. Makes sense. On the... Going through my model in my head, I'm now down to the corporate line. There's been some progress I see evident in the first quarter. Crissy, do you just want to talk a little bit about some of the steps you guys took to step into 2024 and actively? I mean, there's been all the transition costs that- Yeah. kind of obscured things. Sure. So in 2023, that's really the first full-year that we had to be a standalone company. Those original cost estimates were $26-$28 million for standalone costs. We actually came in around $23-$24 million. So very proud of what we were able to achieve there. Effective about the middle of March of this year, we are now officially off the transition services agreement with Encompass Health, so everything is ours. The last thing to transition was part of the IT network for our PeopleSoft financial system. So there should be a little bit of no double-dipping going forward with that. First quarter, we were about $27 million of corporate costs. I think that $27-$28 million is a good run rate going forward. We do wanna make sure that our clinicians in the field are well supported and feel well supported by the home office team. But again, I feel comfortable with those numbers, given the initiatives that we took in 2023 with cost savings and other restructurings in order to maximize our efforts there. Okay. Last year, things have been, you guys have had to operate a little bit more on the defensive. You've had to respond with some active efforts with your bank agreement and your syndicate. Haven't been as active on M&A. How do you think about returning a little bit more offensive to begin to grow? Yeah. We continue to believe that growth is a very important part of the long-term strategy. We continue to diligence opportunities we see in the market. We remain interested, and certainly want to be returning to that mode, and if a quality asset were to come to market, kind of these onesie twosies, we'd certainly take a long, hard look at it. We continue to believe that some of the challenges we've talked about here today, the Medicare reimbursement, uncertainty, and the shift to Medicare Advantage, those, we continue to believe, will drive some of the mom-and-pops to the market, and then it's a matter of can seller and buyer agree on the same multiple for that deal. At the same time, we are having said all of that, we acknowledge where we are with our credit agreement and our leverage, and the current priority will remain to de-lever for the time being. We're really pleased with the fact that we have stabilized EBITDA, and that, combined with the required amortization on our term loan, will allow us to de-lever in 2024. In addition, we continue to generate very strong free cash flow, and as we use that to continue to reduce debt, that in turn reduces interest expense, which in turn increases free cash flow. Right. So we're excited about the cycle that we're going to be in in 2024. Remind me, the amortization, the quarterly amortization, and I presume that there's also, like, an M&A basket that you have as well. Yeah. So right now, it's, it's very limited on the M&A side. You know, they want everything going to, to them- Yeah ... which is, which is fair, I believe. But I would say that the required amortization is $20 million per year. Yeah. No, quarterly, it's just, it's all, it's all at annual. It's $5 million a quarter. $5 million a quarter. $20 million for the year. Okay. All right. Well, final question for me is, I wanna know what you're most excited about? Well, I would say I'm most excited about our team has done a phenomenal job of keeping their head down and doing a really good job. And so because of that, we've seen the results on the build of the clinical workforce and the Payer Innovation. So I'm excited, and I think we saw it in the fourth quarter, we saw it again in the first quarter, that the strategies we put in place are making an impact. And so I'm most excited to have the year continue to progress. I'm excited about, again, just like Barb, the success that we're seeing, the stabilization of EBITDA and what that will mean to our leverage, to our performance, to our earnings, to our free cash flow. The efficacy of home care is undeniable. So to be in this industry and to have the opportunity to take care of that, and to take care of our patients, and to provide them the high-quality care they deserve, that's exciting to us. Well, great. Well, guys, we're just about out of time. Yeah. Why don't we just go ahead and end there? All right. Thank you so much for joining us today. Thank you. Thank you. All right, thank you so much.