All right. Thank you, everybody, for joining us. 45th Annual TD Healthcare Conference. Really excited to have Addus HomeCare here today. My name is Ryan Langston. I'm the Senior Analyst covering healthcare facilities and managed care with us. From From Addus, we have the CEO and Chairman of the Board, Dirk Allison. We also have the Executive Vice President, Chief Financial Officer, Brian Poff. Guys, thanks for being here. Thank you for having us. All right. Very quickly, Addus provides personal care, hospice, home health in 23 states and over 100,000 patients. Services offered primarily in the home through arrangements with federal and state governments, as well as managed care organizations. All right. Everybody's favorite topic, Medicaid. Dirk, I know you spent some time on the 4Q call at the top talking about, you know, kind of general thoughts. I'd love to kind of maybe get a recap of those. Obviously, there's been more developments even in the few days since then. Why don't you maybe just walk us through kind of at a high level where Addus is sitting in terms of their thoughts on Medicaid, and maybe we can dive into a couple of specifics from there. Great. You know, obviously, the House and the Senate are both talking about a budget bill. The Senate does not have a lot of Medicaid reduction in that at all. Let's talk more about the House, because that is where it started out at $2.3 trillion that scared everybody. It is really focused into where there is $880 billion in that bill. It is a very early bill. I doubt a lot of that gets through. Of the $880 billion, about $500 billion would be theoretically from Medicaid, considering. If you really look behind the $500 billion, there are a number of items that are listed in that that do not even affect Addus. They are claiming in that bill right now $120 billion of savings by just not doing the 80/20 bill in five years. In essence, by saying that bill does not go into effect for the last five years of the reconciliation bill, we save $120 billion. It is $22 billion savings for the SNF staffing ratio. Minimum staffing, right? Yeah. You're up to $150 billion of whatever number, the things that do not even affect a company like Addus. You look and say they have come out since that we talked about it, and I think the President has said, we're not going to do caps. Caps are off the table we talked about. They said, we're not going to reduce the FMAP funding. You take that off the table. Really, what's left that could affect us in any real way, there's about $130 billion related to work requirements, which is a positive for Addus. If you think about it, if they require people to go to work and they get $130 billion savings supposedly out of that, the people have to find a job. That job does not have to be full-time. There are certain requirements that may. Our workers work 18-20 hours a week. We're very flexible in hours and time. It could be an opportunity for us to increase our ability to recruit these new workers that have to go into the workforce. That is why when we look at the Medicaid discussions, and they still are discussions, nothing really concerns us. The overall, I think, risk to Addus or any Medicaid provider like ours is if the states lose some funding in some manner, what do they do to make up for that loss? If Addus was a high-cost provider in Medicaid services, I'd be concerned. We are the low-cost provider. We are the people they pay a rate that keeps our customers and clients out of the nursing homes, out of the hospitals, out of emergency room visits, which are all much higher cost of care. We obviously have to be aware of this. We are aware of it. We're continuing to work with our lobbyists, both state and federal. At this point in time, we don't see anything that's being discussed that would be a real concern of us going forward. On the work requirements piece, right, there's a sort of stipulation there about being able-bodied, right? I would assume that really wouldn't largely affect your not on the work's population, but your sort of member, if you will, client population, right? Yeah. Our understanding is if you're 65 or over, you're not required to work. Our average age is 77. And then we do have some disability patients that are younger. But if you're disabled, you're also exempt from work requirements. So we don't see that many, if any, of our 49,000 or, sorry, 60,000 patients that we take care of on a roving basis, we don't believe they're going to be affected and required to go to work. Do you have maybe a more precise number on that? Maybe you don't. In terms of the population that you're currently serving, who if work requirements, as we sort of understand them, was implemented, that there could be a potential risk of them losing covera+ge? Yeah, I think there are occasional, and this is very rare, but we do have some clients on the personal care side that are under the age of 65, whether it's developmentally disabled or something has occurred. The question is, would that particular issue that forced them to have personal care at a younger age—remember, personal care, you qualify for personal care when there are two or more activities of daily living you can't do on your own. You're asking people that can't, maybe they can't drive, they can't feed themselves, they can't dress themselves. You're now saying, do those people, are they going to be required into this work environment? We don't think there's a lot of risk in that. Okay. Just to remind us, because I think this kind of ties in, but redeterminations. What was sort of the overall impact from redeterminations? Or maybe you're still seeing it, maybe the tail of it at this point. You know what's interesting? I think there's a lot of our patients that would qualify for redetermination to be back in Medicaid, and some of them probably just didn't do the paperwork. Maybe they moved, different reasons for that. We didn't lose a lot of patients. What we really saw was a slowdown in new patients, because states like Illinois, which is a great state, very supportive of the service. When the federal government came in and said, you have to do these redeterminations in a certain period of time, they did not have excess state workers to add this completely new process to what they were doing. What we found is the people that were normally going out and reviewing potential new patients and authorizing the number of hours ended up being the same people that were now doing redeterminations. One week they do redeterminations, the next week they do new starts. We did see, and we have seen in Illinois, our new starts be lower than normal. We believe we've started to see that turn in the first quarter. That's been the real issue. It's not our patients disappeared because they all qualify. It's that the states were slower in bringing new patients around because they were busy with the redeterminations. That's fair. I appreciate the framing of sort of the Medicaid issue. Just from my standpoint, you know, I've written about this. I think home care, like you said, the lowest cost sort of setting seems to be more insulated from some of the higher cost, maybe more institutional type settings. You know, the flip side, I think the pushback would be the reality is that this administration has simply got pretty much everything they've wanted so far. They've gotten through most or all the cabinet members with very little sort of pushback. If they did want to institute sort of material Medicaid cuts, you did a good job laying them out. You know, it seems at least up to date, they've been pretty successful getting what they want. From that standpoint, have you heard anything from sort of the states that would actually have to bear the brunt of this and/or like your lobbying groups of where they think the appetite is? Because frankly, all you need on the House is three votes, and you do not get anything. Just maybe from that aspect of state lobbyists or just the states themselves. It's really more the federal lobbyists that we've heard from that don't believe it's going to be able to get through. I think it's easier to vote for the President's plan when it's the beginning of a reconciliation bill that nothing really happens. Now, all of a sudden, you're talking about going back to your state. There are some Republican House members in New York, in California. These are blue states that have a lot of money run through their Medicaid program. Now they've got to take a stand to vote against what their state leadership would like them to do if they're going to vote for the President. Even in a state like Texas, which is very, very supportive of the President, they get a lot of money from the tax. They've learned how to maximize that additional Medicaid tax to get payment from the federal government. I'm not saying they won't stand up and vote for it, but there's going to be a lot of pressure from the state not to do that because it's going to take direct dollars out of the state. I think your point's well taken. Up to date, I think the real key is when you've got to make a vote that actually takes dollars out of the state coffers, will these folks that are really more in blue states, not even so much the Texas, but in these blue states, will they stand up and say, I'm going to vote against my state leadership and vote for the Trump administration? Our belief is, based on what we're hearing, that's going to be a difficult stand for them to take. 10 minutes exactly on Medicaid. I think that's good. Maybe we can move on. Brian, you know, obviously on the 4Q call, you don't provide formal guidance, but you do usually give us some tidbits. Maybe kind of just remind us some of the components, how do we think about not only the first quarter, but kind of 2025 and maybe the cadence through that? Because I think, you know, that's not necessarily unclear, but I think there were some questions after the call. Maybe kind of just give us a flavor on some of those components. Sure. I think the way we like to talk about just, you know, kind of financial trending and seasonality through the year, you know, we always start with top line. It is a little different by segment, but I think, you know, we believe coming into this year, we are getting a 5.5% rate increase we got from Illinois, which is our largest market. That is going to be helpful just thinking about same store. In personal care, you know, our long-term target range has always kind of been that 3%-5%. We expected last year to be well above that with some of the rate support, which we were. We expected it to moderate in the back half of the year, which it did. I think this year, you know, we think with that rate support, and we've got a few others that I think are potential for this year, we think we'll be toward the top end of that 3%-5% in personal care, just same store basis through the year. Probably not to the same level. Last year, we were kind of pushing almost double digit in personal care in a couple of quarters. Don't see us probably coming into that range, but still at the top end of 3%-5%. I think on the clinical side, particularly hospice, which is 20% of our business, you know, I think we've got some nice momentum early here in the year on ADC. I think we're hopeful behind 2.5%, 3% rate increases, get some volume growth. We'd like to see that be kind of mid, maybe even start to slide toward the upper single digit would be kind of our expectation for this year. Just kind of starting there with just, you know, volume growth. I think on the margin side, I think it's pretty standard for us this year as far as our view. Not a lot of moving pieces. I know there's a lot of noise at the end of last year with, you know, Gentiva coming on board for one month in Q4, New York kind of coming out of the mix. Even the way New York came out of the mix, you know, with signing to that deal, everything was still in our numbers. EBITDA was essentially zero through our consulting agreement. You get to Q4 and everything comes out. It kind of impacted some of the metrics and percentages. I tried to give a little bit of just a bridge how to think about Q4 into Q1. Typically Q4 is always our highest margin quarter of the year. We get our hospice rate increase. We do not do merits until Q1. You have a little bit of, you know, that money that is very helpful in Q4. Usually by then we have kind of hit all payroll kind of, you know, tax limits. No issues there. Q1 is always our low watermark of the year. Thinking about Q4 into Q1 with payroll taxes, merits, and then just to be fair, with Gentiva coming on board for a full quarter, it is going to shift our mix a little more toward personal care. You know, we came out in Q4 probably right about 75%, 74%, 75%. That'll probably tick up closer to 77% in Q1. That is just a lower margin business than our clinical business. With all that, I think we expect to see, you know, about 200 basis points of impact. In our view, that's very normal, very seasonal. We see that every year. I think nothing to be alarmed about there. We typically see some improvement through the year. The cadence is typically Q2, usually a little higher profile in gross margin. We'll get some relief from payroll taxes. We see that come up Q2, Q3, probably pretty flat, not a lot of moving pieces there. Q4, like I said, we get our hospice rate increase, typically 20% of our business is very helpful. We, you know, some of the folks that work for us, as you're kind of alluding to, they're part-time workers. A lot of folks, you think about, hey, you should hit kind of payroll tax limits early in the year. Some of our folks, it takes an extended amount of time for them to hit some of those dollar thresholds. We typically see some more relief going into Q4. All that being said, you know, top line growth, again, that kind of puts M&A aside. That's kind of the wild card. Obviously we're focused on continuing to be acquisitive this year, well capitalized. If there's a mixed shift between clinical, non-clinical, that could impact kind of margin profile, but that's kind of, you know, TBD. That is helpful. Just to maybe frame it from a high level, like from an, again, no guidance, but EBITDA perspective, take 2024, strip New York out of it. You already gave us what Gentiva was, bolt that on, and then maybe some amount of same store growth using the metrics that you have already given us. Is that kind of a fair way to think about 2025 in the full year? That's fair. That's That's fair. That's correct. Awesome. All right. On Gentiva, so obviously the biggest deal you guys have ever done in your history by quite a bit, actually. You know, I think it's been closed 90 days, give or take. Maybe give us some just sort of initial thoughts on how that process is going, how the cultures are fitting, anything you've learned so far. Obviously, you're based in Texas. Now you're actually in Texas. So just anything on Gentiva first 90 plus days. Yeah, you know, I think one of the things we saw when we started the due diligence process with Gentiva was how well does PCS business fit with our culture? They seem to have the same type thought process of how we take care of patients, the importance of taking care of patients. You know, we felt like from a culture standpoint, the PCS part of that business was going to be a very nice fit with us. Because of the extended time between us signing the agreement and us actually closing the agreement due to some of the issues related around various states and whatnot, we had the opportunity to spend a lot of time with their team planning for that first day. Why that was most important here is because of the ownership of Gentiva and what they were doing with their Heartland acquisition, they really needed to be moving and not giving a lot of transitional services to us after the fact. We had to play and to take over some of the things that we normally take 90 days. Payroll was very important day one. Of course, we always take over financing. Come that first week, you know, we all were very much aware and it went very well. I would say today here, 90 days out, we've met with the leadership team. We brought them in for a two-day session that I was able to attend. We were training them in some of the leadership thoughts of us, how we run the business at Addus. Great people. We're happy to be on board. I think they were excited. They were on with the PCS company because before they were with the hospice company and they're just, they're different businesses. This allowed them to, when they call the help desk and mention a PCS problem, the help desk knows what it is. From that standpoint, I'd say 90 days out, we're very pleased. They're meeting us from a financial standpoint. They're meeting our goals from a transition standpoint. We ticked all the bases that we had. I think the one, a couple of big things out there. One is we knew from day one we weren't going to compare their EMR to ours. They went to a new system a little over a year ago. It's a good system. We're going to put them on the tail end of our conversion to Homecare Homebase. They're still probably about 18 months out. The other thing, and Brian can talk a little bit about this, I think it's kind of interesting, is our finance team does a fantastic job of giving data to each of our locations. Every month that finance package goes out and you give the leaders the ability to make the decisions they need to make because they see what's happening. I think what we found with Gentiva, they didn't have that information before. I think it's somewhat overwhelming when they get that first month and Brian drops that package on them and they got to figure out how to make it work. I think that's starting to come around because Brian and his team are very good about helping them walk through about this is the data we're going to give you. These are the decisions you can make as a leader. I think that's been an exciting part of the business. Probably one of the upsides we can see is they learn a little bit more of how to really take their business and drive towards some of the metrics that we have. That's great. On Gentiva and M&A kind of tying together, now that you're in Texas, I think number one in terms of market share in that state, you know, you've always talked about layering home health and maybe to some extent hospice over that. Is it maybe more of a focus now to look at Texas as an opportunity to sort of layer on some home health assets potentially, or are you just kind of too early in this acquisition process now to understand if that's the right way to go? No, I think we think it would be very complimentary to us in Texas. Obviously, being the largest personal care provider in the state now, we did have some hospice there more around the central Texas area. I think there's still maybe even some opportunity in other markets in Texas to add some hospice. I think we'd like to look for some complimentary home health in that state. It's a good opportunity for us. I think we have good relationships with a lot of the managed Medicaid folks in the state. There are some things that we could do with them. You know, if you think about value-based or some of those demonstration type projects we've done in other markets, I think they've been ready for us to be able to help them in Texas as well. Having some clinical assets, I think would be a really nice addition for us. And something that's, you know, probably toward the top of our list of things we'd like to do. With only 5% of the market share, even though we're the largest, that still leaves a lot of room for PCS in Texas. Texas is a big market, as you guys know. I think we'll be, as Brian just said, we're going to be focused on extending our geographic coverage and PCS in the state, probably through smaller deals where we can go into a market where we're already at, add something on top of that to give us greater strength. We will also be looking for small opportunities in the home health side to add three levels of care in that market. Does what's going on in Washington change that calculus at all? Right? I mean, you've talked pretty consistently for several quarters about your strategy, probably even years now. Does what's going on, maybe the uncertainty sort of maybe push that out a little bit, or is it sort of just business as usual? I think as a management team, we have to believe in our strategy. If we believe in our strategy, if we think this, whatever's happening in Washington is more short term, then I don't think we should let it change the way we do business. That being said, it always makes you look at what you're doing and make sure you're paying the right amount, knowing there's some uncertainty out there. I think we've tried to do that as a company regardless, but I would be wrong to tell you that the turmoil out there has not caused us to at least say, you know, how quickly do we push, where do we push, what are the criteria we need to look at to make sure we're protected. I think there's been some change, but it didn't change our strategy. We still believe in three levels of care. We still believe Texas is a great marketplace to do that in, as long as other states, and we'll continue to look in those areas. Balance sheet's in a good spot right around one times, I think, from a leverage standpoint. Given the size of the Gentiva deal, does it preclude strongly? Does it preclude you from doing a larger deal because you're focused on integrating that asset? Or could you potentially take on another, maybe not the same size, but a larger asset and still have the capability to properly integrate those businesses? Yeah, I think we've been pretty open with Gentiva that that hasn't really put us in a position where we say, hey, we need to pause because we just don't have bandwidth to do deals. We need to focus on integration. To be honest, like Dirk was mentioning earlier, a lot of the large lift of that integration was done very early with this deal. We're not moving their EMR until sometime, you know, probably 2026. For the time being, most of our teams that are typically focused on, you know, that type of work or additional M&A are available. Yeah, I think we continue to, you know, look for things our development teams are trying to source. I think back to the earlier point as well, if you think about, you know, smaller, you know, personal care deals or tuck-in deals, those are typically at, you know, mid-single digit valuations. Even with, you know, kind of the uncertainty that's out there today, those are still very attractive, accretive type opportunities for us. I think we want to continue to push that way. I think if you think about, you know, maybe larger deals that maybe have a higher valuation, those are things that, you know, we have the ability to do them, you know, absent, you know, some of the noise, but always things that we're looking for. Maybe on PCS, can you remind us sort of the proportion of your patients that are duly eligible? I thought at one point it was closer to three quarters of your patients. From that standpoint, you know, I've always thought just interesting, such a large component of the customer base, you know, the big payers always talk about the difficulty of outreach to that particular population. You're in the house, you have that access that the payers do not typically, but you have not necessarily monetized it. How do you think about being able to monetize that access in the future? You know, that's a really good question. We are 70-80% dual eligible. And so this is a population that is very valuable to payers and others. I think if you go back nine years ago when I came, Brian and I came on board, PCS was an afterthought to most people. Medicaid was an afterthought to most people. I can remember times when people would look at Medicaid business and run away from it. Now I think people have realized Medicaid can be a really valuable service and can be very valuable as far as an investment. Now all of a sudden, over the last, you know, five, six, seven years, I think more and more of the payers are seeing the value of PCS. Now, you're right, we haven't monetized it today. We're working on some of the aspects to prove our value. I think one of the things you have to do is you can't just tell people you're valuable, you have to have data. Amazing that. People want to see that it's actually true. We've started to gather data. I think we started publishing it to our payers about a year ago where we actually have been able to demonstrate that we can lower the cost of emergency room visits by keeping people in the home and not sending them to emergency rooms when it's not truly necessary. We've worked with payers on keeping readmits, surgical readmits. You know, someone comes out of surgery in the first 60 days, which is a critical time, a lot of readmits. We're able to work with that population and keep them in the home by not only our non-clinical training with PCS, but also being able to drop clinical services on top of that as an add to that. We think we're getting closer and closer to being able to monetize that value. It's not there today, but we do believe over the next two or three years, you'll start to see more and more value in the population in which we serve. Okay. One thing on that is technology. You've talked a bit. I think you've been, you know, really investing in, especially on maybe the PCS side in terms of recruitment, retention, of course, in this industry, turnover can be 70-80%. I think you're closer to 50-ish, somewhere in that range. Maybe give us an update on where you're at in terms of technology and getting your hours more, you know, more hours to your employees. It's maybe what some of that investment has actually looked like. Yeah, I think we've done several things over the last few years to try to really be as efficient as we can. I think one of the main complaints we hear from people that leave us actually is, which seems a little counterintuitive, is that they just, they would like to get more hours. The way our services work in personal care, you know, we get an authorization for a number of hours and then how many of those can we serve and trying to kind of, we call that kind of our fill rate, how do we get some improvement there. I think we've actually seen probably, I would say, two to three hundred basis points of improvement over the last year with some of the things that we've put in place either with our teams out in the field, but then also using technology in a way to get to our care workers to allow them to know, hey, there are extra shifts available to you. Trying to keep them out of an overtime situation, of course, but you know, I think that's been pretty helpful. I think the next evolution for us there, and we've talked about it, is our development of Homecare Homebase. Just thinking about optimization of scheduling, you know, how that interacts with our clinical systems as well, where we have patients in the same area that can actually get multiple lines of service. That, you know, for us right now is still in development. We have a couple of states that are, you know, smaller, on the smaller side that we're working with, but looking for probably a broader enterprise-wide rollout later this year into 2026. We've developed our own caregiver application and a way to try to communicate with our, you know, caregivers out in the field. Sometimes it's hard to get to them. You don't see them in the office a lot. Their office is their client's home. That has been, I think, helpful in order to let them know ways to get in touch with us, ways to change their preferences on, you know, where they have availability, what areas of town they'll go to, things like that. We've rolled that out in Illinois now. We're moving into New Mexico next. I think there's additional opportunity and upside for us there as we get that rolled out to some of our additional larger markets. On hospice, you know, we've heard industry providers talking about elevated mortality, dialysis. Folks have been talking about the same thing, others obviously as well. How do we think about the environment now, sort of four or five years post-COVID and where we think that goes and how maybe you're seeing that flow through your, you know, hospice business? I do believe we did see higher mortality for a period of time. You saw a lot of short-stay patients. People stayed in facilities longer, did not come out into hospice quite as early. Once they got out into hospice, their length of stay was much shorter than we had normally seen. I think, you know, we have kind of documented as a company, and I think the industry has, that the length of stay has gradually increased back to more normalized levels today. We would tell you we are starting to see more of a normalized basis, not just in the mortality of a patient, but also in the seasonality of the business. You know, used to we were in the hospice business for a number of years with Odyssey. We could tell you what was going to happen in the fourth quarter and what was going to happen in January. It was every year. We got away from that with the pandemic for whatever reason. It seems that some of that seasonality is starting to come back in our business. We think we are starting to get back to more of that. We are starting to see patients at the earlier time frame than maybe we did during the pandemic. We are starting to get a little longer length of stay. Obviously, you have to balance that with the Medicare cap issue. You have to make sure you also are getting shorter length of stay patients. We are pretty comfortable. It's been a long slide, honestly, but we think we're getting much closer to where we need to be after the pandemic with the hospice industry itself. Got it. Home health, touch on it for 30 seconds. You know, obviously a small part of the business, but three years of below 100 basis points, rate updates, still some overhang from temporary permanent adjustments. Where do we think that sort of evens out over the next couple of years? Because it just seems like it can't stop at this point. You know, we've been saying for two years we didn't see how it could continue forever. It seems like it's continuing forever. We've got the hangover, you know, kind of the overhang from is there going to be a clawback? When will the federal government start taking into effect that we no longer do 90% fee-for-service, 10% Medicare Advantage? We do 50/50 and the margin's profile is much less. We think if they can ever understand that, then we will start getting back to the 2%-3% rate increases. I don't know when that occurs. We were hoping the Trump administration might come in with a different viewpoint of home care. We haven't seen whether or not that's going to be the case yet. I would say for us, we need to see that before we really do much more in home health other than these small deals that we've been doing. Couple seconds left. Easy one. What are you personally most proud of at your time at Addus over the next eight, nine years? Or the last eight, nine years? If I can just give as a given the fact that we do really good care, I think that's great. I am also, from a personal standpoint, always very appreciative and excited about the team that we've been able to build here at Seer. I think we've got a great leadership team that gives me a lot of confidence. Fantastic. We are at time. Thank you, everybody.