Louisville, Ky.-based Kindred Healthcare saw revenue growth in its home health, hospice and inpatient rehabilitation businesses in the first quarter of fiscal year 2017. However, the long-term acute care provider ended the first quarter of fiscal year 2017 with a net loss.
Kindred reported consolidated revenues of $1.77 billion in the first quarter ended March 31, a 3.8 percent year-over-year decrease. Kindred said the decrease is largely due to the effect of the transition to CMS' long-term acute care patient criteria. As part of the CMS criteria, rules are more stringent as far as eligibility criteria for patients to qualify for the LTAC 25-day reimbursement rate, which is higher than per diem Medicare payments under the inpatient prospective payment system, according to Standard & Poor's Global. The sale or closure of 15 LTAC hospitals in the second half of last year was also a key contributor to the revenue decrease.
Kindred reported its home division, which includes home health, hospice, community care and home-based primary care businesses, saw revenues of $630.2 million in the first quarter of fiscal year 2017, up 3.9 percent over the same period the year prior.
The long-term acute care provider's hospital division saw revenues decrease from $643.3 million in the first quarter of fiscal year 2016 to $540.3 million in the first quarter of fiscal year 2017. Kindred said this largely was largely due to the effect of the CMS LTAC patient criteria, a nearly 2 percent reduction in same-hospital admissions compared to last year and the sale or closure of the 15 LTAC hospitals in the seond half last year. Same-hospital non-government admissions within the division were down 9.1 percent year over year in the first quarter of fiscal year 2017, the second full quarter the hospital division is under LTAC patient criteria.
After factoring in expenses, income from continuing operations was $8.8 million in the first quarter of fiscal year 2017 compared to $25.8 million in the same period of the year prior. Kindred said the drop in operating income was largely attributable to the effect of the CMS LTAC patient criteria and a spike in restructuring costs.
Kindred ended the first quarter of fiscal year 2017 with a net loss of $5.75 million, compared to a net gain of $13 million in the same period the year prior.
"In the first quarter, we delivered very encouraging sequential and year-over-year improvement in our Kindred at Home Division, with strong same-store volume growth in both our home health and hospice businesses. Combined with a sequential reduction of labor costs in the first quarter, we returned to historic growth levels and delivered results in line with our 2017 expectations," Benjamin Breier, president and CEO, said in a prepared statement.