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August 30, 2010

Quote of the Week:

“When the people fear the government we have tyranny.  When the government fears the people we have liberty.” Thomas Jefferson.

New:

On July 16 CMS issued a Proposed Ruling with plans to cut Medicare payments and to step up therapy documentation requirements.  Public comments can be submitted through Sept. 14, 2010.

We won’t  go into detail regarding all of these changes,  however the base episodic rate is reduced from $2,312.94 to $2,198.58….a 4.75% decrease.  There will also be stricter standards for justifying therapy visits.

It is estimated that in some states as many as 90% of home health agencies will be unable to cover their costs due to this reduction.

36 Month Rule: In a new Proposed Rule to take affect year 2011, CMS states that if there is a “change in majority ownership” within 36 months of the effective date of the agency’s enrollment in Medicare, the buyer of an HHA must enroll as an initial applicant, be surveyed or accredited, and cannot bill Medicare until the buyer’s Medicare enrollment has been approved.  CMS confuses this issue by stating that the 36-month rule applies not only after initial enrollment in Medicare, but also within 36 months of the last change in ownership.

Even for the government, this rule is confusing.  To see the entire article go to www.nahc.org

Subpoenas and More Subpoenas: It now appears that all four of the larger public Medicare providers have received civil subpoenas for documents and notice of investigation from the SEC.  The subpoena seeks documents related to the Companies home health care services and operations, including reimbursements under PPS since January 1, 2000.

Financial Reform: And…..although it barely made the front page, President Obama has signed a grand deal on the biggest overhaul of financial regulation since the 1930s, amounting to 2,000 pages of small print.  The law calls for a new Bureau for Consumer Financial Protection, and involves 350 rules, 47 studies and will issue 74 reports.  The controversial 2002 Sarbanes-Oxley reforms required 16 rules and six studies.

Don’t we all feel safer now?

SOLD:

Senior 1st Choice, a leading private duty agency located in Georgia was recently sold to a national home care company.  We brokered the transaction representing the Seller.

Trinity Home Care Services, an excellent Oklahoma Medicare home health provider sold.  Congratulations to Leola Wright for a great job in building this fine agency.  Cory Mertz, a partner at Stoneridge, handled the transaction representing the seller.

A note from the owner:  ” From the first contact with Cory, he has been amazing in assisting me with the sell of Trinity.  His professionalism, dedication, caring, and vast array of knowledge was the only reason this sell was completed. I could have never survived this without the assistance of Cory Mertz”.  Sincerely, Leola Wright

Coastal Health Services, a Florida Medicare home health agency was recently sold to a regional home care provider.  We represented the seller,  and Cory Mertz, one of our partners, was the dealmaker.

Intrepid USA Healthcare, a large Medicare home care company based in Dallas, Texas, has sold their private duty agency in Hickory, NC.   We represented Intrepid in this transaction, and Susan Moyer, one of our partners, was the dealmaker.

Home Health Index:

Check out our new web feature, a tab on our front page titled Home Health Index. We have indexed the stock prices of the four major public Medicare companies. We think you will find the results interesting. Over the last several years we all would have been better off investing in Home Health rather than the S&P.

See our article on the perfect storm developing in home health acquisitions.

http://stoneridgepartners.com/articles/the-perfect-storm-for-selling-a-home-health-agency/

We Just Returned……

From Home Care Association of Florida’s (HCAF)annual conference in Orlando, and NAHC’s Financial Conference in Chicago.  We met with many strategic buyers of home care companies along with private equity groups, with new money in their pockets for acquisitons.  The market for home health agencies has never been better.

We also had a great time when we gave our presentation on How to Build the Value of a Home Health Agency.  If you would like to get a copy of this presentation just give us a call.  800-218-3944 or send us an e-mail. partners@stoneridgepartners.com.

Look For Us……

September 15, 2010 at the Ohio Council for Homecare’s annual conference in Columbus where we will be displaying our booth and meeting privately with buyers and sellers.  www.homecareohio.org

October 2-6 at NAHC’s 29th annual Meeting & Expo in Dallas, where we will be displaying our booth and giving our presentation on Building the Value of a Home Health Agency.  www.nahc.org

November 15 – 17 at Decision Health’s 13th Annual Private Duty Conference & Expo in Las Vegas where we will be displaying our booth and giving our presentation on the “13 Steps to the Successful Sale of a Home Health Agency”.

And Finally…..

The Return of the Death Tax:  As part of your estate planning process you might give serious consideration to dying this year, because if you wait until year 2011 your heirs may face a 55 percent tax rate on estates over $1 million.  Just something else to think about.

Previous Quotes:

“When you try to dodge ownership of a problem, when you try to hide from responsibility, life will give you ownership and responsibility the hard way”  Peggy Noonan, Wall Street Journal

“The budget should be balanced, the treasury should be refilled, the arrogance of officiadom should be tempered and controlled, people must again learn to work instead of living on public assistance, and the assistance to foreign lands should be curtailed lest Rome become bankrupt.”  Cicero, 55 BC

“Our financial health is directly related to our national security”  Admiral Mike Mullen, Chairman, Joint Chiefs of Staff

“A dollar borrowed is a dollar earned”    U.S. Government

It was easy…they sunk my boat.

John F. Kennedy to a high school student who asked how he had become a war hero.

Christmas is a time when children tell Santa Claus what they want, and we pay for it.  Now, with the budget deficits, we tell the government what we want, and our children pay for it. Josef Ackermann, CEO. Deutsche Bank

“Regardless of the dollar price involved, one ounce of gold would purchase a qood quality man’s suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Rosevelt, and today.”

Peter A. Burshire

“You know you can’t please everyone so you’ve got to please yourself. ”

As sung by Rick Nelson on “Garden Party “  a 1972 hit song .  It tells of his leaving the stage at Madison Square Garden, because he was being booed for playing his newer, country-tinged music instead of the 1950s-era rock that he had been successful with earlier.

An example of where the rubber meets the road…..

Mickey: “Your nose is broken.”

Rocky: “How does it look?”

Mickey: “Ah, it’s an improvement.”

From the original “Rocky” movie.

More previous quotations:

“The faintest ink is more powerful than the strongest memory” Ancient Chinese Proverb

“Efforts and courage are not enough without purpose and direction”…..John F. Kennedy

Damn the torpedos!  Full speed ahead…..Admiral David Farragut.  August 1864. Lashed to the rigging of his flagship, as he led 18 warships into a spectacular naval battle that captured Mobile Bay.

“Arnie, I’m going to loosen up my girdle and let it fly” …..   Babe Didrikson Zaharias, as told to then 16 year old Arnold Palmer, and Arnie said she did just that.   “She hit it farther than I could believe.”

“Those who do not create the future they want, most endure the future they get.” – Draper L. Kaufman, Jr.

“Our favorite holding period is forever.”  Warren Buffet

“If a man is offered a fact which goes against his instincts, he will scrutinize it closely, and unless the evidence is overwhelming, he will refuse to believe it.  If, on the other hand, he is offered something which affords a reason for acting in accordance to his instincts, he will accept it even on the slightest evidence.”  …….Bertrand Russell

“Never put off until tomorrow what you can do the day after tomorrow.” -Mark Twain

“One of the surest ways of influencing the opinion of another is to give consideration and respect to his or her opinion”…..Dale Carnegie

“Fall seven times,  stand up eight”…..Japanese proverb

“The significant problems we face cannot be solved at the same level of thinking we were at when we created them.” -Albert Einstein

“On account of being a democracy and run by the people, we are the only nation in the world that has to keep a government for four years, no matter what it does.” -Will Rogers

‘Tis better to be silent and be thought a fool than to speak and remove all doubt.” - Abraham Lincoln

“A man with no enemies is a man with no character.” -Paul Newman (1925-2008)

“A huge amount of financial folly is being exposed. You only learn who has been swimming naked when the tide goes out – and what we are witnessing at some of our largest financial institutions is an ugly sight.” Warren Buffet

On the difference between gross profit and net profit: “Pretend you’re fishing. Net is all the fish in your net at the end of the year. Gross is that plus everything that got away.” -Richard Branson

Question: How do you stay level headed in a bubble? Response: I don’t. I panic. I’m given to euphoria and despair. I’m only rich because I know when I’m wrong.” .. George Soros

Almost everything I’ve done I’ve copied from someone else”—Sam Walton

If the power to do hard work is not talent, it is the best possible substitute for it.”– James A. Garfield

Timing has a lot to do with the outcome of a rain dance… George Owens