Option Care Health 'cautiously optimistic'

BANNOCKBURN, Ill. - Option Care Health saw broad improvement in the third quarter, as referrals increased after a tough second quarter.

The company delivered $781.6 million in net revenues for the third quarter of 2020 compared to $615.9 million for the same period in 2019, a 27% increase.

“Our chronic portfolio continues to benefit from the transfer of patients from hospitals and other sites of care to the home or one of our infusion suites,” said CFO Mike Shapiro. “Acute referrals and revenue did improve modestly over the second quarter in most markets, as acute activity and hospitals did sequentially improve. Clearly, we're pleased with the overall revenues results for the quarter.”

Gross profit was $174.2 million or 22.3% of net revenue for the third quarter, a 26% increase. Adjusted EBITDA was $59.2 million, a 70% increase.

While the ongoing public health emergency has been tough on everyone, the health care system, in general, is far better equipped now to deal with the pandemic than it was back in March, and providers like Option Care Health have benefitted from their ability to demonstrate their value in caring for patients in the home, says CEO John Rademacher.

“We're cautiously optimistic that we're going to continue to drive our team to be in a position to capture the referrals that are available and to work closely with the providers to identify patients that can come into service with us,” he said.

Looking ahead, Option Care Health has entered into multi-year, national contracts with Centene and Cigna, and conversations with payers continue to evolve as value-based care models take shape, says Rademacher.

“There's a significant amount of interest in understanding some of the construct of what a value-based care reimbursement model could look like, opportunities for us to work closely with them around managing cohorts of their members that require the therapy set,” he said. “I wouldn't be surprised that the evolution would move down the path of some risk share for performance and for making certain that we're managing effectively the outcome for the patients that we are privileged to serve.”