Tuesday, November 4, 2014

Bounty for Bagging Gentiva?


Kindred reported in an SEC filing that Kindred President Paul Diaz will get kicked further upstairs, placing him in Rod Windley territory as Executive Vice Chairman of Kindred's Board.  The company spelled out the arrangement which includes:

Within 14 days following March 31, 2015, the Company shall pay Diaz a cash payment in the amount of $6,011,244. 

I view this as a commission or bounty for bagging a reluctant Gentiva.  Diaz' $6 million payday equals six months of capital expenditures for Gentiva.

Recall Medicare just released its home health payment update for 2015 with an overall 0.3% reduction.  Hospice received a 1.4% increase effective October 1.  There's not much to trickle down between payouts to the big boys and greatly increased borrowings, which should cause interest expense to rise dramatically.

It's hard to believe Kindred could be worse than Gentiva's false-faced executives, but the structural nature of the combination could continue our hospice's pain.

Anonymous (from Gentiva)

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