Aveanna Healthcare executives vowed Thursday to turn up the heat on payers for better rates to offset rising labor costs which they partly blamed for a $237.8 million loss in the fourth quarter of 2022.
“The labor environment represents the primary challenge we need to address in 2023 to see Aveanna begin to resume the growth trajectory we believe our company can achieve,” Aveanna CEO Jeff Shaner said during an earnings call with analysts.
Shaner and CFO Dave Afshar laid out a three-pronged strategy to improve reimbursement rates that they hope will boost the bottom line and help Aveanna attract more caregivers by paying higher wages.
The company has launched a legislative and media strategy in California, Texas and Oklahoma to lobby for legislation that would increase Medicaid reimbursement rates for private-duty services (PDS) providers. Those three states currently represent 25% of Aveanna’s PDS business.
The executives also said the firm would aggressively pursue value-based care arrangements with payers who provide better reimbursement rates and would shift labor capacity to them to ensure their beneficiaries have caregiver coverage.
“Our preferred provider relationships are experiencing nurse hires approximately 2 to 3 times more than our other payers,” Shaner added. “We are experiencing staffing rates 15% to 20% greater with preferred payers and significantly higher patient admissions.”
Shaner’s comments followed the company’s release Thursday of its disappointing fourth quarter and full 2022 performance. Aveanna reported a $237.8 million loss compared to a $126.2 million loss for the same quarter in 2021. The company reported a $662 million loss for the full year compared to a $117 million loss for 2021.
Aveanna is a 42-year-old firm offering private duty and home health services in 30 states. The company went public in 2021 in the midst of the COVID-19 pandemic and has struggled against pandemic headwinds and rising inflation during its time as a publicly held company.