Amedisys Ties Up With Medalogix to Boost Home Health Unit

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Amedisys, Inc.AMED recently announced a minority equity investment in Medalogix - a Home Health and Hospice predictive modeling and analytics company in Nashville.

Per Amedisys, this partnership will help it to progress with respect to the latest and differentiated payment models. Further, Amedisys expects to strengthen partnerships with Managed Care Organizations and drive patient insights required for risk arrangements using the Medalogix platform.

Home Health and Hospice Opportunities Galore

In November 2017, Centers for Medicare and Medicaid Services (CMS) issued a final rule to update and revise the 2018 Medicare home health reimbursement rates without finalizing the Home Health Groupings Model (HHGM), which was proposed to be implemented in 2019. With this, CMS projects a decline of 0.4% in reimbursement to home health providers resulting from the payment provisions of the final rule.

According to home health players like Amedisys, HHGM is one of the most significant regulatory proposals and has the potential to hurt the industry. Amedisys is currently leaving no stone unturned to benefit from this situation. It is striving to improve the quality of care as well as implement disease management programs at hospitals. The company is also working on expanding its business by garnering more referrals from hospitals.

Amedisys also expects to be able to cope up with the ongoing "shift to value" in the healthcare industry by taking the necessary steps. Per management, CMS' three-pronged strategy aims at enhanced individual patient care, improved health outcomes and cost reduction.

Furthermore, there has been a surge in Medicare Advantage enrollment. Moreover, payors are forming new partnerships that allow patients to receive care in the home. Thus, management believes by combining new technology with home health services, Amedisys might be able to gain an edge over competitors and exploit the increasing opportunities in the niche market.

Market Potential

The home health industry is poised for tremendous growth, courtesy of an aging U.S. population, patients' desire for independence and home health as a cheaper care modality. The company should continue to benefit from the aging demographics of the U.S. population and the need for higher acuity patients to be taken care of in a home nursing environment.

Going by a report by Grand View Research, the global home healthcare market is expected to see a CAGR of 7.8% between 2014 and 2025.

Share Price Movement

Amedisys has been gaining investor confidence on consistently positive results. Over the past year, the company's share price has outperformed its industry . The stock has gained 134.5% in comparison with the industry's 22.8% rise.

Zacks Rank & Other Key Picks

Amedisys currently carries a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the broader medical space are Integer Holdings Corporation ITGR , Intuitive Surgical ISRG and Masimo Corporation MASI .

Integer Holdings' expected long-term earnings growth rate is 15%. The stock sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Intuitive Surgical's long-term expected earnings growth rate is 14.7%. The stock carries a Zacks Rank #1.

Masimo's long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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