Humana Finally Reveals KAH Revenues

Strange Tony,

Humana has reported minimal information about Kindred at Home's finances since it became the 100% owner of the company in August 2021.  Today's Q1 earnings report had top line revenue of $726 million for KAH but not much more.   Assuming steady business throughout the year KAH would come in under $3 billion in revenue, i.e. less than when it acquired the company in July 2018.  Hospice has some seasonality so the number could come in over $3 billion.

Hospice had higher margins than Home Health when Humana closed last summer on the 40% it did not own.  Another sale of the hospice division to financial rapscallions should enrich CEO David Causby yet again.  He's on his __nth king's ransom?

Some may recall Causby's butchering of the Harden Healthcare integration (during the Gentiva days).  He combined Kindred Hospice with Curo Healthcare by keeping the brand salad and putting larger hospices under Curo's crappy technology and miserly staffing models.  

Anyone who remembers the torture TPG Capital, WCAS and Humana put our hospice through must be dreading Clayton, Dubilier and Rice.  

There has been no word on David Causby's response to the Senate Finance Committee's request for information on private equity ownership of hospice companies.  

I'd love to read a report before our hospice gets sold down the river yet again.

Anonymous

CDR Due Diligence on Kindred/Curo Hospice

Strange Tony,

Financial rapscallion Clayton, Dubilier and Rice conducted due diligence on Kindred Hospice and Community Care before agreeing to buy 60% from Humana for $2.8 billion in cash.  

Did they find the June 1, 2021 False Claim lawsuit against Kindred/Curo Hospice CEO Larry Graham before inking the deal? 

Thus, by knowingly submitting false claims or causing the submission of false claims, and knowingly concealing or knowingly and improperly avoiding Avalon’s obligations to repay overpayments, for hospice services provided to Medicare and TennCare beneficiaries in Tennessee who were not terminally ill from at least January 1, 2010 through February 20, 2020, Defendants are liable under the False Claims Act, 31 U.S.C. § 3729, et seq. (the “FCA”), the Tennessee Medicaid False Claims Act, Tenn. Code Ann. §§ 71-5-182 to -185 (the “TMFCA”), and common law theories of payment by mistake and unjust enrichment.

The lawsuit misses Kindred at Home's ownership of Curo, as well as Humana and its financial rapscallion partners (TPG Capital and WCAS) packaging the two companies in a summer 2018 buyout.

Humana was the operating partner of Kindred at Home from July 2018 through February 2020 and responsible for any fraudulent claims made to Medicare/Medicaid.

In approximately late 2018 or early 2019, at least two former Avalon nurses repeatedly raised concerns regarding ineligible patients to Avalon and Curo managers, including the Avalon Johnson City DOO, medical director, and the lead nurse, as well as the Curo Area Vice President of Operations, about patients who were not eligible for hospice. When these nurses informed the DOO that certain referred patients were ineligible, the DOO responded that “corporate” was requiring that the patients be admitted.

Similarly, in early 2020, Avalon Nashville terminated a former nurse after she repeatedly informed the current Nashville DOO that referrals or patients were not eligible for hospice, including numerous patients who were residents at Hillcrest Healthcare Center, a skilled nursing facility in Ashland City. For example, one Hillcrest patient who the nurse did not think was hospice appropriate informed the nurse that Hillcrest had told her the only way she could continue to stay at the facility was to elect hospice. When this former nurse did not believe a referred patient was eligible, the Nashville DOO sent a different nurse to evaluate the patient.

Humana pushed the Curo Health model on Kindred Hospice sites in 2019.  That's how Larry Graham became Hospice CEO.  It's not clear how much Graham profited from the multiple sales of Curo/Kindred at Home in 2018 through today?  How much more will he make when CDR acquires their controlling interest?  The public will likely never know.

Anonymous

Anonymous

Kindred Hospice Goes to Clayton, Dubilier and Rice

Strange Tony,

The winning financial rapscallion for a 60% stake of Kindred Hospice/Community Care is Clayton, Dubilier and Rice (CDR).  Humana will get $2.8 billion in the deal.  The press release said the whole deal was valued at $3.4 billion.  That makes no sense.  

A 60% stake for $2.8 billion translates to a $4.67 billion valuation for the whole company.  The difference between $4.67 billion and $3.4 billion is likely debt, which has to be refinanced at today's higher interest rates.  

Humana paid 11.5 times EBITDA for the rest of Kindred at Home in August 2021.  That deal valued the company at $8.1 billion.  Historically hospice has accounted for roughly half the revenue and half of the company's EBITDA.  

Humana is selling the hospice and community care divisions for a 12x adjusted EBITDA figure.  That means Humana will make money on the sale.  What's a few millions amongst greedy executives.

Not taking Kindred Hospice public means President David Causby's series of king's ransom paydays remain a secret.  CDR is excited to partner with Causby and the executive team.  

The rest of Kindred Hospice is an expense to be controlled.  Executive pay is allowed to soar.  Your's is not.  More pain lies ahead.  

Anonymous