Q2 2024 Encompass Health Corp Earnings Call Transcript
Key Points
- Encompass Health Corp (EHC) reported a 9.6% increase in revenue and an 8.9% increase in adjusted EBITDA for Q2 2024.
- Total discharges for Q2 increased by 6.7%, with same-store discharges growing by 4.8%.
- Medicare discharges increased by 7.2%, and Medicare Advantage discharges grew by 9.6% for the quarter.
- Encompass Health Corp (EHC) added 194 beds to its capacity during Q2, including three new hospitals and one satellite hospital.
- The company resumed share repurchase activity, buying back approximately 200,000 shares for $17 million, and increased its share repurchase authorization to $500 million.
- Bad debt expense increased to 2.9% of revenue, primarily due to an increase in medical necessity claim review audits.
- The company experienced a significant ramp-up in TPE audits from its primary MAC, Palmetto, leading to higher reserves for claims under review.
- Contract labor expenses remained high, with premium labor expense for Q2 at $32.6 million and contract labor FTEs at 1.6% of total.
- The Oracle Fusion ERP conversion is expected to incur costs of approximately $2.5 million in the second half of 2024.
- The addition of the existing Augusta, Georgia hospital to the joint venture with Piedmont is expected to increase income attributable to noncontrolling interest by approximately $3.5 million in the second half of 2024.
Good morning, everyone, and welcome to Encompass Health's second quarter 2024 earnings conference Call. (Operator Instructions) Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to Mark Miller, Encompass Health's Chief Investor Relations Officer. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining Encompass Health's Second Quarter 2024 Earnings Call.
Before we begin, if you do not already have a copy, the second quarter earnings release, supplemental information and related Form 8-K filed with the SEC are available on our website at encompasshealth.com. On page 2 of the supplemental information, you will find the safe harbor statements, which are also set forth in greater detail on the last page of the earnings release.
During the call, we will make forward-looking statements, which are subject to risks and uncertainties, many of which are beyond
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