Medicaid Redetermination Meant A Slowdown In New Patients For Addus

At Addus HomeCare Corporation (Nasdaq: ADUS), the impact of Medicaid redetermination resulted in a slowdown of new patients.

“We didn’t lose a lot of patients,” Addus CEO Dirk Allison said last week at the Cowen Health Care Conference. “What we really saw was a slowdown in new patients because of states like Illinois.”

Based in Frisco, Texas, Addus provides home care, home health and hospice services to over 62,000 consumers through 257 locations across 23 states.

While Allison describes Illinois as supportive of the services the company offers, he also pointed out that the state didn’t have enough excess workers to handle the redetermination process.

“What we found is that 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 the redetermination, so one week they do redeterminations, the next week they do new starts,” he said. “We have seen in Illinois, our new starts are lower than normal.”

Staying on the topic of Medicaid, Allison also reiterated his belief that the company was largely insulated from any potential changes to the program.

“When we look at the Medicaid discussions, and they still are discussions, nothing really concerns us,” he said. “The overall 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, but we’re the low-cost provider.”

Leadership changes

In more recent Addus news, the company announced on Tuesday that W. Bradley Bickham, the company’s longtime president and COO, will retire in March 2026.

“We are fortunate to have had Brad’s steady leadership throughout our company’s growth and expansion over the last eight years,” Allison said in a press statement released Tuesday. “I am grateful that he has agreed to continue in that capacity for another year, while also providing us with the time to identify and develop the next generation of our leadership. While all of us at Addus will miss working with Brad, I will particularly miss him as we have worked together since 2006. However, we are very happy for Brad and his family and wish him all the best in his retirement.”

Prior to joining Addus, Bickham was chief legal officer at United Surgical Partners International.

Rate environment and Gentiva integration

During the conversation, Addus CFO and executive vice president Brian Poff touched on the current rate environment.

Coming into 2025, Addus will receive a 5.5% rate increase from Illinois, which is the company’s largest market.

“In personal care, our long term target range has always kind of been that 3% to 5%,” Poff said. “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, 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 three to 5% in personal care.”

Allison also offered an update on the Gentiva integration. In December, Addus completed its purchase of Gentiva’s personal care assets in a $350 million transaction.

In the first 90 days, Addus leaders have already met with leaders on the Gentiva side during a two day session.

“I’d say 90 days out, we’re very pleased they’re meeting us from a financial standpoint, they’re meeting our goals,” Allison said. “From a transition standpoint, we ticked all the bases that we had.”

Through the Gentiva deal, Addus also became the largest provider of home care services in Texas. With this in mind, Addus views the state as an opportunity to layer its personal care assets with home health and hospice.

“It’s a good opportunity for us,” Poff said. “We have good relationships with a lot of the managed Medicaid folks in the state. There’s some things that we could do with them. If you think about the 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 would be a really nice addition for us, and that’s probably toward the top of our list of things we’d like to do.”

Allison added that Addus would focus on extending the company’s geographic coverage in Texas, likely through small deals.

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