U.S. Physical Therapy Announces Change in Medicare Rate Reduction for the Remainder of 2024
11 Mars 2024 - 12:00PM
Business Wire
U.S. Physical Therapy, Inc. (“USPH" or the “Company”) (NYSE:
USPH), reported today that the 3.5% reduction in the Medicare
physician fee schedule for therapy services for 2024 (as compared
to 2023 rates) has been addressed in the “Consolidated
Appropriations Act, 2024” (“Act”) signed into law on March 8, 2024.
The Act decreased the Medicare reduction for the remainder of 2024;
as a result, the Company now estimates that the Medicare rate
reduction effective March 9, 2024, will be approximately 1.8%
rather than 3.5%. The change in rate is not retroactive to January
1, 2024.
In the Company’s earnings announcement on February 28, 2024,
management noted that the 3.5% reduction in Medicare rates was
expected to reduce the Company’s revenue by approximately $6.0
million for the full year of 2024 which would equate to an EBITDA
reduction of approximately $5.3 million. Management estimates that
today’s reported change in the Medicare rate will increase its
revenue by approximately $2.3 million versus its previous
expectations, which would equate to an increase in EBITDA of
approximately $2.0 million. Therefore, management now expects the
Medicare rate reductions in 2024 (as compared to 2023 rates) to
reduce revenue by approximately $3.7 million for full year 2024
(rather than $6.0 million), which would equate to an EBITDA
reduction of approximately $3.3 million (rather than $5.3 million),
all as compared to full year 2023.
Forward Looking
Statements
This press release contains statements that are considered to be
forward-looking within the meaning under Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
contain forward-looking information relating to the financial
condition, results of operations, plans, objectives, future
performance and business of our Company. These statements (often
using words such as “believes”, “expects”, “intends”, “plans”,
“appear”, “should” and similar words) involve risks and
uncertainties that could cause actual results to differ materially
from those we expect. Included among such statements may be those
relating to new clinics, availability of personnel and the
reimbursement environment. The forward-looking statements are based
on our current views and assumptions and actual results could
differ materially from those anticipated in such forward-looking
statements as a result of certain risks, uncertainties, and
factors, which include, but are not limited to:
- changes in Medicare rules and guidelines and reimbursement or
failure of our clinics to maintain their Medicare certification
and/or enrollment status;
- the impact of future public health crises and
epidemics/pandemics, such as was the case with the novel strain of
COVID-19 and its variants;
- revenue we receive from Medicare and Medicaid being subject to
potential retroactive reduction;
- changes in reimbursement rates or payment methods from third
party payors including government agencies, and changes in the
deductibles and co-pays owed by patients;
- compliance with federal and state laws and regulations relating
to the privacy of individually identifiable patient information,
and associated fines and penalties for failure to comply;
- competitive, economic or reimbursement conditions in our
markets which may require us to reorganize or close certain clinics
and thereby incur losses and/or closure costs including the
possible write-down or write-off of goodwill and other intangible
assets;
- one of our acquisition agreements contains a put right related
to a future purchase of a majority interest in a separate
company;
- the impact of future vaccinations and/or testing mandates at
the federal, state and/or local level, which could have an adverse
impact on staffing, revenue, costs and the results of
operations;
- our debt and financial obligations could adversely affect our
financial condition, our ability to obtain future financing and our
ability to operate our business;
- changes as the result of government enacted national healthcare
reform;
- business and regulatory conditions including federal and state
regulations;
- governmental and other third party payor inspections, reviews,
investigations and audits, which may result in sanctions or
reputational harm and increased costs;
- revenue and earnings expectations;
- some of our acquisition agreements contain contingent
consideration, the value of which may impact future financial
results;
- legal actions, which could subject us to increased operating
costs and uninsured liabilities;
- general economic conditions, including but not limited to
inflationary and recessionary periods;
- actual or perceived events involving banking volatility or
limited liability, defaults or other adverse developments that
affect the U.S. or international financial systems, may result in
market wide liquidity problems which could have a material and
adverse impact on our available cash and results of
operations;
- our business depends on hiring, training, and retaining
qualified employees
- availability and cost of qualified physical therapists;
- competitive environment in the industrial injury prevention
services business, which could result in the termination or
non-renewal of contractual service arrangements and other adverse
financial consequences for that service line;
- our ability to identify and complete acquisitions, and the
successful integration of the operations of the acquired
businesses;
- impact on the business and cash reserves resulting from
retirement or resignation of key partners and resulting purchase of
their non-controlling interest (minority interests);
- maintaining our information technology systems with adequate
safeguards to protect against cyber-attacks;
- a security breach of our or our third-party vendors’
information technology systems may subject us to potential legal
action and reputational harm and may result in a violation of the
Health Insurance Portability and Accountability Act of 1996 of the
Health Information Technology for Economic and Clinical Health
Act;
- maintaining clients for which we perform management, industrial
injury prevention related services, and other services, as a breach
or termination of those contractual arrangements by such clients
could cause operating results to be less than expected;
- maintaining adequate internal controls;
- maintaining necessary insurance coverage;
- availability, terms, and use of capital; and
- weather and other seasonal factors.
Many factors are beyond our control. Given these uncertainties,
you should not place undue reliance on our forward-looking
statements. For additional information regarding these and other
risks and uncertainties, that could cause actual results to differ
materially from those contained in our forward-looking statements,
please refer to “Risk Factors” in our Annual Report on Form 10-K
for the year ended December 31, 2023, filed with the Securities and
Exchange Commission (“SEC”) on February 29, 2024 and any risk
factors contained in subsequent quarterly and annual reports we
file with the SEC. Our forward-looking statements represent our
estimates and assumptions only as of the date of this report.
Except as required by law, we are under no obligation to update any
forward-looking statement as a result of new information, future
events, or otherwise, except as required by law.
About U.S. Physical Therapy,
Inc.
Founded in 1990, U.S. Physical Therapy, Inc. operates 672
outpatient physical therapy clinics in 42 states. The Company's
clinics provide preventative and post-operative care for a variety
of orthopedic-related disorders and sports-related injuries,
treatment for neurologically-related injuries and rehabilitation of
injured workers. In addition to owning and operating clinics, the
Company manages 41 physical therapy facilities for unaffiliated
third parties, including hospitals and physician groups. The
Company also has an industrial injury prevention business which
provides onsite services for clients’ employees including injury
prevention and rehabilitation, performance optimization, post-offer
employment testing, functional capacity evaluations, and ergonomic
assessments.
More information about U.S. Physical Therapy, Inc. is available
at www.usph.com. The information included on that website is not
incorporated into this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240311910923/en/
U.S. Physical Therapy, Inc. Carey Hendrickson, Chief Financial
Officer email: chendrickson@usph.com
Chris Reading, Chief Executive Officer (713) 297-7000
Three Part Advisors Joe Noyons (817) 778-8424
US Physical Therapy (NYSE:USPH)
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