New Humana deal cuts into Amedisys’ shares, revenue

Baton Rouge-based Amedisys Inc. saw its shares fall nearly 11% in pre-market trading today after the company cut its revenue outlook under a new contract to provide home health services for Humana Inc. In announcing the deal this morning, Amedisys noted it expects revenue of about half of the $65 million to $70 million a former contract with Humana generated. Revenue will be affected beginning in the fourth quarter, Amedisys says, and the full impact will not be felt until 2013. Under the new agreement, Amedisys will receive payment on a per-visit basis, whereas it used to get reimbursed on an “episodic” basis. Also, while the new agreement remains national in scope, Amedisys notes not all of the markets served under the former agreement may be served under the new one. Headquartered in Louisville, Humana is one of the nation’s largest health and supplemental benefits companies. “We are pleased to continue our relationship with Humana by delivering high-quality care for its members. This agreement demonstrates our commitment to caring for patients whose health care is covered by managed care organizations,” says Amedisys CEO William Borne in a prepared statement. Amedisys shares opened at $13.33 this morning, and Humana at $74.82. Shares of Amedisys were off 10% as of press time, down to about $12, while Humana shares were about flat.