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Aveanna Healthcare ends four-year push for California pediatric nursing rates
The company raised full-year guidance to more than $2.68 billion revenue and expects adjusted EBITDA of over $365 million, after Q2 revenue rose 13.7% to about $670 million.
Aveanna Healthcare closed out a four-year advocacy effort aimed at boosting pediatric private duty nursing rates in California. During its second-quarter earnings call on August 13, CEO Jeffrey Shaner said California's 2027 budget will include a meaningful rate increase effective January 1, 2027, and that the push now covers all 32 of Aveanna's private duty states, according to Yahoo Finance.
The shift in pay, alongside Aveanna's strategy of aligning caregiver capacity with payers willing to pay, showed up in its quarterly results. Revenue rose 13.7% year over year to roughly $670 million, with all three divisions growing, including home health and hospice revenue up 14.8%, private duty services up 14.0%, and medical solutions up 9.4%. Adjusted EBITDA increased 8% to $95.4 million.
On the payer side, Aveanna said private duty services added three preferred payer agreements in the quarter to reach 37, covering 64% of managed care volume, up from 60% in the first quarter. For home health, the company said it hit its full-year goal of 50 preferred payers, with episodic admissions at 81% of the mix and episodic volume growth of 18.5%.
Management also pointed to policy items it believes support stable industry rates, including CMS's proposed home health rule published July 1 and its finalized hospice rule published August 6. Aveanna added that it is integrating the Family First Homecare acquisition, which closed in early June and is on track to finish by late in the fourth quarter, and it raised guidance for the year to more than $2.68 billion in revenue and more than $365 million in adjusted EBITDA.
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