10-Q 1 amed-20210930.htm 10-Q amed-20210930
FALSE2021Q3AMEDISYS INC0000896262--12-313.083,357124,4583.8Fluctuating rate per annum equal to the highest of (a) the federal funds rate plus 0.50% per annum, (b) the prime rate of interest established by the Administrative Agent, and (c) the Eurodollar Rate for an interest period of one month plus 1% per annum.Rate at which Eurodollar deposits in the London interbank market for an interest period of one, two, three or six 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 0-24260 
amed-20210930_g1.jpg
AMEDISYS, INC.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware 11-3131700
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
3854 American Way, Suite A, Baton Rouge, LA 70816
(Address of principal executive offices, including zip code)
(225) 292-2031 or (800) 467-2662
(Registrant’s telephone number, including area code)
 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareAMEDThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer   Accelerated filer 
Non-accelerated filer 
  Smaller reporting company 
Emerging growth company 
   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No  
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, is as follows: Common stock, $0.001 par value, 32,602,425 shares outstanding as of October 29, 2021.



TABLE OF CONTENTS
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PART I.
ITEM 1.
ITEM 2.
ITEM 3
ITEM 4.
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.




SPECIAL CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

When included in this Quarterly Report on Form 10-Q, or in other documents that we file with the Securities and Exchange Commission (“SEC”) or in statements made by or on behalf of the Company, words like “believes,” “belief,” “expects,” “strategy,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “will,” “could,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: the impact of the novel coronavirus pandemic ("COVID-19"), including the measures that have been and may be taken by governmental authorities to mitigate it, on our business, financial condition and results of operations, the impact of current and proposed federal, state and local vaccine mandates, including potential staffing shortages, changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, competition in the healthcare industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to consistently provide high-quality care, our ability to attract and retain qualified personnel, our ability to keep our patients and employees safe, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, widespread protests or civil unrest, our ability to integrate, manage and keep our information systems secure, our ability to realize the anticipated benefits of acquisitions, changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law. For a discussion of some of the factors discussed above as well as additional factors, see our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021, particularly, Part I, Item 1A - Risk Factors therein, which are incorporated herein by reference, and Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Additional risk factors may also be described in reports that we file from time to time with the SEC.
Available Information
Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website. In addition, we make available on the Investor Relations subpage of our website (under the link “SEC filings”), free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, ownership reports on Forms 3, 4 and 5 and any amendments to those reports as soon as reasonably practicable after we electronically file or furnish such reports with the SEC. Further, copies of our Certificate of Incorporation and Bylaws, our Code of Ethical Business Conduct, our Corporate Governance Guidelines and the charters for the Audit, Compensation, Quality of Care, Compliance and Ethics and Nominating and Corporate Governance Committees of our Board are also available on the Investor Relations subpage of our website (under the link “Governance”). Reference to our website does not constitute incorporation by reference of the information contained on the website and should not be considered part of this document. Our electronically filed reports can also be obtained on the SEC’s internet site at http://www.sec.gov.
1


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
September 30, 2021 (Unaudited)December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$124,458 $81,808 
Restricted cash3,750 1,549 
Patient accounts receivable274,570 255,145 
Prepaid expenses16,080 10,217 
Other current assets14,024 13,265 
Total current assets432,882 361,984 
Property and equipment, net of accumulated depreciation of $100,407 and $95,024
20,381 23,719 
Operating lease right of use assets100,028 93,440 
Goodwill1,188,054 932,685 
Intangible assets, net of accumulated amortization of $20,309 and $22,973
118,084 74,183 
Deferred income taxes10,111 47,987 
Other assets68,105 33,200 
Total assets$1,937,645 $1,567,198 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$41,649 $42,674 
Payroll and employee benefits155,123 146,929 
Accrued expenses154,264 166,192 
Provider relief fund advance58,535 60,000 
Current portion of long-term obligations13,225 10,496 
Current portion of operating lease liabilities31,553 30,046 
Total current liabilities454,349 456,337 
Long-term obligations, less current portion434,781 204,511 
Operating lease liabilities, less current portion67,723 61,987 
Other long-term obligations31,991 33,622 
Total liabilities988,844 756,457 
Commitments and Contingencies—Note 6
Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding
  
Common stock, $0.001 par value, 60,000,000 shares authorized; 37,659,284 and 37,470,212 shares issued; and 32,590,775 and 32,814,278 shares outstanding
38 38 
Additional paid-in capital
720,875 698,287 
Treasury stock, at cost 5,068,509 and 4,655,934 shares of common stock
(420,665)(319,092)
Retained earnings605,016 429,991 
Total Amedisys, Inc. stockholders’ equity905,264 809,224 
Noncontrolling interests43,537 1,517 
Total equity948,801 810,741 
Total liabilities and equity$1,937,645 $1,567,198 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2


AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
 
 For the Three-Month 
Periods Ended September 30,
For the Nine-Month 
Periods Ended September 30,
 2021202020212020
Net service revenue$553,485 $544,070 $1,654,795 $1,520,814 
Other operating income(4)4,812 13,300 27,592 
Cost of service, excluding depreciation and amortization310,294 297,668 916,188 878,633 
General and administrative expenses:
Salaries and benefits119,373 123,146 349,533 330,329 
Non-cash compensation4,397 7,124 17,860 19,758 
Other55,158 49,348 158,995 142,616 
Depreciation and amortization7,487 8,283 21,763 19,955 
Operating expenses496,709 485,569 1,464,339 1,391,291 
Operating income56,772 63,313 203,756 157,115 
Other income (expense):
Interest income 31 49 258 
Interest expense(2,730)(2,692)(6,734)(8,675)
Equity in earnings from equity method investments1,444 1,435 3,932 2,399 
Gain (loss) on equity method investments  31,092 (2,980)
Miscellaneous, net490 122 1,253 662 
Total other (expense) income, net(796)(1,104)29,592 (8,336)
Income before income taxes55,976 62,209 233,348 148,779 
Income tax (expense) benefit(10,731)10,202 (57,192)(9,175)
Net income45,245 72,411 176,156 139,604 
Net income attributable to noncontrolling interests(239)(430)(1,131)(1,147)
Net income attributable to Amedisys, Inc.$45,006 $71,981 $175,025 $138,457 
Basic earnings per common share:
Net income attributable to Amedisys, Inc. common stockholders$1.38 $2.20 $5.36 $4.26 
Weighted average shares outstanding32,607 32,662 32,658 32,469 
Diluted earnings per common share:
Net income attributable to Amedisys, Inc. common stockholders$1.37 $2.16 $5.30 $4.16 
Weighted average shares outstanding32,899 33,260 33,021 33,267 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in thousands, except common stock shares)
(Unaudited)
For the Three-Months Ended September 30, 2021
TotalCommon StockAdditional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
SharesAmount
Balance, June 30, 2021$875,887 37,553,355 $38 $714,334 $(400,110)$ $560,010 $1,615 
Issuance of stock – employee stock purchase plan1,061 5,095 — 1,061 — — — — 
Issuance/(cancellation) of non-vested stock 87,460   — — — — 
Exercise of stock options1,083 13,374 — 1,083 — — — — 
Non-cash compensation4,397 — — 4,397 — — — — 
Surrendered shares(9,750)— — — (9,750)— — — 
Shares repurchased(10,805)— — — (10,805)— — — 
Noncontrolling interest distribution(459)— — — — — — (459)
Acquired noncontrolling interest42,142 — — — — — — 42,142 
Net income45,245 — — — — — 45,006 239 
Balance, September 30, 2021$948,801 37,659,284 $38 $720,875 $(420,665)$ $605,016 $43,537 
For the Three-Months Ended September 30, 2020
TotalCommon StockAdditional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
SharesAmount
Balance, June 30, 2020$722,259 36,831,298 $37 $665,580 $(257,625)$ $312,859 $1,408 
Issuance of stock – employee stock purchase plan914 5,414 — 914 — — — — 
Issuance/(cancellation) of non-vested stock 81,767   — — — — 
Exercise of stock options3,123 538,965 — 3,123 — — — — 
Non-cash compensation7,124 — — 7,124 — — — — 
Surrendered shares(47,788)— — 13,358 (61,146)— — — 
Noncontrolling interest distribution(300)— — — — — — (300)
Net income72,411 — — — — — 71,981 430 
Balance, September 30, 2020$757,743 37,457,444 $37 $690,099 $(318,771)$ $384,840 $1,538 
For the Nine-Months Ended September 30, 2021
TotalCommon StockAdditional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
SharesAmount
Balance, December 31, 2020$810,741 37,470,212 $38 $698,287 $(319,092)$ $429,991 $1,517 
Issuance of stock – employee stock purchase plan3,022 13,357 — 3,022 — — — — 
Issuance/(cancellation) of non-vested stock 148,529   — — — — 
Exercise of stock options1,706 27,186 — 1,706 — — — — 
Non-cash compensation17,860 — — 17,860 — — — — 
Surrendered shares(16,694)— — — (16,694)— — — 
Shares repurchased(84,879)— — — (84,879)— — — 
Noncontrolling interest distribution(1,253)— — — — — — (1,253)
Acquired noncontrolling interest42,142 — — — — — — 42,142 
Net income176,156 — — — — — 175,025 1,131 
Balance, September 30, 2021$948,801 37,659,284 $38 $720,875 $(420,665)$ $605,016 $43,537 
For the Nine-Months Ended September 30, 2020
TotalCommon StockAdditional
Paid-in
Capital
Treasury
Stock
Accumulated
Other
Comprehensive Income
Retained
Earnings
Noncontrolling
Interests
SharesAmount
Balance, December 31, 2019$641,513 36,638,021 $37 $645,256 $(251,241)$15 $246,383 $1,063 
Issuance of stock – employee stock purchase plan2,600 16,772 — 2,600 — — — — 
Issuance of stock – 401(k) plan3,057 18,312  3,057 — — — — 
Issuance/(cancellation) of non-vested stock 166,651   — — — — 
Exercise of stock options6,070 617,688 — 6,070 — — — — 
Non-cash compensation19,758 — — 19,758 — — — — 
Surrendered shares(54,172)— — 13,358 (67,530)— — — 
Noncontrolling interest distribution(672)— — — — — — (672)
Write-off of other comprehensive income(15)— — — — (15)— — 
Net income139,604 — — — — — 138,457 1,147 
Balance, September 30, 2020$757,743 37,457,444 $37 $690,099 $(318,771)$ $384,840 $1,538 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


AMEDISYS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 For the Nine-Month 
Periods Ended September 30,
 20212020
Cash Flows from Operating Activities:
Net income$176,156 $139,604 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization21,763 19,955 
Non-cash compensation17,860 19,758 
Amortization and impairment of operating lease right of use assets30,181 29,149 
Gain on disposal of property and equipment(64)(77)
(Gain) loss on equity method investments(31,092)2,980 
Write-off of other comprehensive income (15)
Deferred income taxes34,729 (2,762)
Equity in earnings from equity method investments(3,932)(2,399)
Amortization of deferred debt issuance costs/debt discount669 653 
Return on equity method investments4,268 3,919 
Changes in operating assets and liabilities, net of impact of acquisitions:
Patient accounts receivable(17,638)6,486 
Other current assets(6,219)(28,217)
Other assets(938)(91)
Accounts payable(1,192)(1,627)
Accrued expenses(9,363)25,594 
Other long-term obligations(1,785)38,481 
Operating lease liabilities(27,372)(25,576)
Operating lease right of use assets(2,304)(2,775)
Net cash provided by operating activities183,727 223,040 
Cash Flows from Investing Activities:
Proceeds from sale of deferred compensation plan assets126 94 
Proceeds from sale of property and equipment140 80 
Purchases of property and equipment(5,187)(2,995)
Investments in technology assets(147) 
Investments in equity method investees (875)
Proceeds from sale of equity method investment 17,876 
Acquisitions of businesses, net of cash acquired(264,872)(299,723)
Net cash used in investing activities(269,940)(285,543)
Cash Flows from Financing Activities:
Proceeds from issuance of stock upon exercise of stock options1,706 6,070 
Proceeds from issuance of stock to employee stock purchase plan3,022 2,600 
Shares withheld to pay taxes on non-cash compensation(16,694)(54,172)
Noncontrolling interest distribution(1,253)(672)
Proceeds from borrowings under term loan290,312  
Proceeds from borrowings under revolving line of credit500,700 432,000 
Repayments of borrowings under revolving line of credit (551,700)(357,000)
Principal payments of long-term obligations(5,893)(7,360)
Debt issuance costs(2,792) 
Purchase of company stock(84,879) 
Provider relief fund advance(1,465)60,000 
Net cash provided by financing activities131,064 81,466 
Net increase in cash, cash equivalents and restricted cash44,851 18,963 
Cash, cash equivalents and restricted cash at beginning of period83,357 96,490 
Cash, cash equivalents and restricted cash at end of period$128,208 $115,453 
5


Supplemental Disclosures of Cash Flow Information:
Cash paid for interest$3,479 $4,902 
Cash paid for income taxes, net of refunds received$25,482 $30,290 
Cash paid for operating lease liabilities$29,676 $28,351 
Cash paid for finance lease liabilities$1,509 $1,483 
Supplemental Disclosures of Non-Cash Activity:
Right of use assets obtained in exchange for operating lease liabilities$34,881 $29,876 
Right of use assets obtained in exchange for finance lease liabilities$814 $822 
Reductions to right of use assets resulting from reductions to operating lease liabilities$1,183 $767 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)




1. NATURE OF OPERATIONS, CONSOLIDATION AND PRESENTATION OF FINANCIAL STATEMENTS
Amedisys, Inc., a Delaware corporation (together with its consolidated subsidiaries, referred to herein as “Amedisys,” “we,” “us,” or “our”), is a multi-state provider of home health, hospice, personal care and high acuity care services with approximately 75% of our net service revenue derived from Medicare for the three and nine-month periods ended September 30, 2021 and approximately 76% and 75% of our net service revenue derived from Medicare for the three and nine-month periods ended September 30, 2020, respectively. As of September 30, 2021, we owned and operated 328 Medicare-certified home health care centers, 177 Medicare-certified hospice care centers, 14 personal-care care centers and 8 high acuity care joint ventures in 38 states within the United States and the District of Columbia.
Basis of Presentation
In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of the results of our operations for the entire year and have not been audited by our independent auditors.
This report should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”) on February 25, 2021 (the “Form 10-K”), which includes information and disclosures not included herein. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented, as allowed by SEC rules and regulations.
Recently Adopted Accounting Pronouncements
On January 1, 2021, the Company adopted Accounting Standards Update ("ASU") 2020-10, Codification Improvements, which included minor technical corrections and clarifications to improve consistency and clarify the application of various provisions of the codification by amending the codification to include all disclosure guidance in the appropriate disclosure sections and by amending and adding new headings, cross referencing to other guidance and refining or correcting terminology. Our adoption of this standard did not have a material effect on our condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued, subject to meeting certain criteria. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which adds implementation guidance to ASU 2020-04 to clarify certain optional expedients in Topic 848. The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and may generally be applied prospectively through December 31, 2022. This standard will not have an effect on our condensed consolidated financial statements.
Use of Estimates
Our accounting and reporting policies conform with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we are required to make estimates and assumptions that impact the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
7


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Principles of Consolidation
These unaudited condensed consolidated financial statements include the accounts of Amedisys, Inc. and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated and business combinations accounted for as purchases have been included from their respective dates of acquisition. In addition to our wholly owned subsidiaries, we also have certain equity investments that are accounted for as set forth below.
Investments
We consolidate investments when the entity is a variable interest entity ("VIE") and we are the primary beneficiary or if we have controlling interests in the entity, which is generally ownership in excess of 50%. Third-party equity interests in our consolidated joint ventures are reflected as noncontrolling interests in our condensed consolidated financial statements. We account for investments in entities in which we have the ability to exercise significant influence under the equity method if we hold 50% or less of the voting stock and the entity is not a VIE in which we are the primary beneficiary. The book value of investments that we account for under the equity method of accounting was $48.3 million and $14.2 million as of September 30, 2021 and December 31, 2020, respectively, and is reflected in other assets within our condensed consolidated balance sheets.
In connection with the acquisition of Contessa Health ("Contessa") on August 1, 2021, we obtained interests in several joint ventures with health system partners and a professional corporation that employs clinicians. Each of these entities meets the criteria to be classified as a VIE. As of September 30, 2021, we are proportionately consolidating seven of our eight joint ventures with health system partners as well as the professional corporation as we have concluded that we are the primary beneficiary of these VIEs. We have management agreements in place with each of these entities whereby we manage the entities and run the day-to-day operations. As such, we possess the power to direct the activities that most significantly impact the economic performance of the VIEs. The significant activities include, but are not limited to, negotiating provider and payor contracts, establishing patient care policies and protocols, making employment and compensation decisions, developing the operating and capital budgets, performing marketing activities and providing accounting support. We also have the obligation to absorb any expected losses and the right to receive benefits. We account for one of our joint ventures with a health system partner under the equity method of accounting as we are not considered to be the primary beneficiary of this VIE.
The terms of the agreements with each VIE prohibit us from using the assets of the VIE to satisfy the obligations of other entities. The carrying amount of the VIEs’ assets and liabilities included in our condensed consolidated balance sheet are as follows (amounts in millions):
September 30, 2021
ASSETS
Current assets:
     Cash and cash equivalents$3.7 
     Patient accounts receivable2.5 
     Other current assets0.1 
          Total current assets6.3 
Property and equipment0.1 
          Total assets$6.4 
LIABILITIES
Current liabilities:
     Payroll and employee benefits$0.3 
     Accrued expenses3.3 
     Current portion of long-term obligations0.8 
          Total current liabilities4.4 
Other long-term obligations0.1 
          Total liabilities$4.5 
8


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


During the three-month period ended June 30, 2021, a third-party acquired a majority of the issued and outstanding membership interests of one of our equity method investments, Medalogix, for cash, with the remaining membership interests rolling over into a newly formed entity that includes Medalogix as well as another healthcare predictive data and analytics company. We rolled over 100% of our ownership interest in Medalogix to the newly formed entity, and in connection with this transaction, we recognized a $31.1 million gain based on the purchase price of Medalogix which is reflected in gain (loss) on equity method investments within our condensed consolidated statements of operations.
During the three-month period ended June 30, 2020, we sold our investment in the Heritage Healthcare Innovation Fund, LP via a secondary transaction for $17.9 million which resulted in a $3.0 million loss which is reflected in gain (loss) on equity method investments within our condensed consolidated statements of operations. The Company's original investment was made in 2010 and no longer fit within our strategic areas of focus. Proceeds from the sale were used to pay down debt and fund capital needs.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
We account for revenue from contracts with customers in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, and as such, we recognize revenue in the period in which we satisfy our performance obligations under our contracts by transferring our promised services to our customers in amounts that reflect the consideration to which we expect to be entitled in exchange for providing patient care, which are the transaction prices allocated to the distinct services. The Company's cost of obtaining contracts is not material.
Revenues are recognized as performance obligations are satisfied, which varies based on the nature of the services provided. Our performance obligation is the delivery of patient care services in accordance with the nature and frequency of services outlined in physicians' orders, which are determined by a physician based on a patient's specific goals.
The Company's performance obligations relate to contracts with a duration of less than one year; therefore, the Company has elected to apply the optional exemption provided by ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. The unsatisfied or partially unsatisfied performance obligations are generally completed when the patients are discharged, which generally occurs within days or weeks of the end of the reporting period.
We determine the transaction price based on gross charges for services provided, reduced by estimates for contractual and non-contractual revenue adjustments. Contractual revenue adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third-party payors and others for services provided. Non-contractual revenue adjustments include discounts provided to self-pay, uninsured patients or other payors, adjustments resulting from payment reviews and adjustments arising from our inability to obtain appropriate billing documentation, authorizations or face-to-face documentation. Subsequent changes to the estimate of the transaction price are recorded as adjustments to net service revenue in the period of change.
Non-contractual revenue adjustments are recorded for self-pay, uninsured patients and other payors by major payor class based on our historical collection experience, aged accounts receivable by payor and current economic conditions. The non-contractual revenue adjustments represent the difference between amounts billed and amounts we expect to collect based on our collection history with similar payors. The Company assesses its ability to collect for the healthcare services provided at the time of patient admission based on the Company's verification of the patient's insurance coverage under Medicare, Medicaid, and other commercial or managed care insurance programs. Medicare represents approximately 75% of our net service revenue for the three and nine-month periods ended September 30, 2021 and approximately 76% and 75% of our net service revenue for the three and nine-month periods ended September 30, 2020, respectively.
Amounts due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), include variable consideration for retroactive revenue adjustments due to settlements of audits and payment reviews. We determine our estimates for non-contractual revenue adjustments related to audits and payment reviews based on our historical experience and success rates in the claim appeals and adjudication process.
We determine our estimates for non-contractual revenue adjustments related to our inability to obtain appropriate billing documentation, authorizations, or face-to-face documentation based on our historical experience which primarily includes a historical collection rate of over 99% on Medicare claims. Revenue is recorded at amounts we estimate to be realizable for services provided.
9


AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)



Revenue by payor class as a percentage of total net service revenue is as follows:
For the Three-Month Periods Ended September 30,For the Nine-Month Periods
Ended September 30,
2021202020212020
Home Health:
     Medicare41 %41 %41 %41 %
     Non-Medicare - Episodic-based8 %7 %8 %6 %
     Non-Medicare - Non-episodic based12 %12 %12 %13 %
Hospice:
     Medicare34 %35 %34 %34 %
     Non-Medicare2 %2 %2 %2 %
Personal Care3 %3 %3 %4 %
100 %100 %100 %100 %

Home Health Revenue Recognition
Medicare Revenue
Effective January 1, 2020, the Centers for Medicare and Medicaid Services ("CMS") implemented a revised case-mix adjustment methodology, the Patient-Driven Groupings Model ("PDGM"), to better align payment with patient care needs and ensure that clinically complex and ill beneficiaries have adequate access to home health care. PDGM uses 30-day periods of care rather than 60-day episodes of care as the unit of payment, eliminates the use of the number of therapy visits provided in determining payment and relies more heavily on clinical characteristics and other patient information.
Net service revenue is recorded based on the established Federal Medicare home health payment rate for a 30-day period of care. ASC 606 notes that if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. We have elected to apply the "right to invoice" practical expedient and therefore, our revenue recognition is based on the reimbursement we are entitled to for each 30-day payment period. We utilize our historical average length of stay for each 30-day period of care as the measure of progress towards the satisfaction of our performance obligation.
PDGM uses timing, admission source, functional impairment levels and principal and other diagnoses to case-mix adjust payments. The case-mix adjusted payment for a 30-day period of care is subject to additional adjustments based on certain variables, including, but not limited to (a) an outlier payment if our patient's care was unusually costly (capped at 10% of total reimbursement per provider number); (b) a low utilization payment adjustment (“LUPA”) if the number of visits provided was less than the established threshold, which ranges from two to six visits and varies for every case-mix group under PDGM; (c) a partial payment if a patient is transferred to another provider or from another provider before completing the 30-day period of care; and (d) the applicable geographic wage index. Payments for routine and non-routine supplies are included in the 30-day payment rate.
Medicare can also make various adjustments to payments received if we are unable to produce appropriate billing documentation or acceptable authorizations. We estimate the impact of such adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record this estimate during the period in which services are rendered to revenue with a corresponding reduction to patient accounts receivable.
Amounts due from Medicare include variable consideration for retroactive revenue adjustments due to settlements of audits and payment reviews. We determine our estimates for non-contractual revenue adjustments related to audits and payment reviews based on our historical experience and success rates in the claim appeals and adjudication process.
All Medicare contracts are required to have a signed plan of care which represents a single performance obligation, comprised of the delivery of a series of distinct services that are substantially similar and have a similar pattern of transfer to the customer. Accordingly, the Company accounts for the series of services ("episode") as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. An episode starts the first day a billable visit is performed and ends 60 days later or upon discharge, if earlier, with multiple continuous episodes allowed.
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AMEDISYS, INC. AND SUBSIDIARIES
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The Medicare home health benefit requires that beneficiaries be homebound (meaning that the beneficiary is unable to leave his/her home without a considerable and taxing effort), require intermittent skilled nursing, physical therapy or speech therapy services, and receive treatment under a plan of care established and periodically reviewed by a physician. In order to provide greater flexibility during the novel coronavirus pandemic ("COVID-19"), CMS relaxed the definition of homebound status through the duration of the public health emergency. During the pandemic, a beneficiary is considered homebound if they have been instructed by a physician not to leave their home because of a confirmed or suspected COVID-19 diagnosis or if the patient has a condition that makes them more susceptible to contracting COVID-19. Therefore, if a beneficiary is homebound due to COVID-19 and requires skilled services, the services will be covered under the Medicare home health benefit.
During 2020, 20% of reimbursement from each Medicare episode, referred to as a request for anticipated payment ("RAP"), was billed near the start of each 30-day period of care, and cash was typically received before all services were rendered. Any cash received from Medicare for a RAP for a 30-day period of care that exceeded the associated revenue earned was recorded to accrued expenses within our condensed consolidated balance sheets. CMS fully eliminated all upfront payments associated with RAPs effective January 1, 2021.
Non-Medicare Revenue
Episodic-based Revenue. We recognize revenue in a similar manner as we recognize Medicare revenue for amounts that are paid by other insurance carriers, including Medicare Advantage programs; however, these amounts can vary based upon the negotiated terms, the majority of which range from 95% to 100% of Medicare rates.
Non-episodic based Revenue. Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established or estimated per-visit rates. Contractual revenue adjustments are recorded for the difference between our standard rates and the contracted rates to be realized from patients, third parties and others for services provided and are deducted from gross revenue to determine net service revenue. We also make non-contractual revenue adjustments to non-episodic revenue based on our historical experience to reflect the estimated transaction price. We receive a minimal amount of our net service revenue from patients who are either self-insured or are obligated for an insurance co-payment.
Hospice Revenue Recognition
Hospice Medicare Revenue
Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are predetermined daily or hourly rates for each of the four levels of care we deliver. The four levels of care are routine care, general inpatient care, continuous home care and respite care. Routine care accounted for 97% of our total Medicare hospice service revenue for the three and nine-month periods ended September 30, 2021 and September 30, 2020. There are two separate payment rates for routine care: payments for the first 60 days of care and care beyond 60 days. In addition to the two routine rates, we may also receive a service intensity add-on (“SIA”). The SIA is based on visits made in the last seven days of life by a registered nurse or medical social worker for patients in a routine level of care.
The performance obligation is the delivery of hospice services to the patient, as determined by a physician, each day the patient is on hospice care.
We make adjustments to Medicare revenue for non-contractual revenue adjustments, which include our inability to obtain appropriate billing documentation or acceptable authorizations and other reasons unrelated to credit risk. We estimate the impact of these non-contractual revenue adjustments based on our historical experience, which primarily includes a historical collection rate of over 99% on Medicare claims, and record it during the period services are rendered.
Additionally, our hospice service revenue is subject to certain limitations on payments from Medicare which are considered variable consideration. We are subject to an inpatient cap limit and an overall Medicare payment cap for each provider number. We monitor these caps on a provider-by-provider basis and estimate amounts due back to Medicare if we estimate a cap has been exceeded. We record these adjustments as a reduction to revenue and an increase in accrued expenses within our condensed consolidated balance sheets. Providers are required to self-report and pay their estimated cap liability by February 28th of the following year. As of September 30, 2021, we have recorded $8.6 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2016 through September 30, 2021; $2.5 million of this balance was acquired with the AseraCare acquisition. As of December 31, 2020, we had recorded $9.3 million for estimated amounts due back to Medicare in accrued expenses for the Federal cap years ended October 31, 2014 through September 30, 2021.
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Hospice Non-Medicare Revenue
Gross revenue is recorded on an accrual basis based upon the date of service at amounts equal to our established rates or estimated per day rates, as applicable. Contractual revenue adjustments are recorded for the difference between our standard rates and the contractual rates to be realized from patients, third-party payors and others for services provided and are deducted from gross revenue to determine our net service revenue. We also make non-contractual adjustments to non-Medicare revenue based on our historical experience to reflect the estimated transaction price.
Personal Care Revenue Recognition
Personal Care Revenue
We generate net service revenues by providing our services directly to patients based on authorized hours, visits or units determined by the relevant agency, at a rate that is either contractual or fixed by legislation. Net service revenue is recognized at the time services are rendered based on gross charges for the services provided, reduced by estimates for contractual and non-contractual revenue adjustments. We receive payment for providing such services from payors, including state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Payors include the following elder service agencies: Aging Services Access Points ("ASAPs"), Senior Care Options ("SCOs"), Program of All-Inclusive Care for the Elderly ("PACE") and the Veterans Administration ("VA").
High Acuity Care Revenue Recognition
High Acuity Care Revenue
Our revenues are derived from contracts with (1) health insurance plans for the coordination and provision of home recovery care services to patients who are enrolled members in those insurance plans and (2) health system partners for the coordination and provision of home recovery care services to patients who are discharged early from a health system facility to complete their inpatient stay at home.

Our health insurance plan contracts provide for fixed payment rates for a 30-day or 60-day episode of care indexed to assigned patient diagnoses in return for our obligation to assume risk for the coordination and payment of required medical services necessary to treat the medical condition for which the patient was diagnosed in a home-based setting. Our performance obligation is the coordination and provision of patient care in accordance with physicians’ orders over either a 30-day or 60-day episode of care. The majority of our care coordination services and direct patient care is provided in the first five to seven days of the episode period (the "acute phase"). Monitoring services and follow-up direct patient care, as deemed necessary by the treating physician, is provided throughout the remainder of the episode. Since the majority of our services are provided during the acute phase, we recognize net service revenues over the acute phase based on gross charges for the service provided per the applicable managed care contract rates, reduced by estimates for revenue adjustments.

Our contracts with health system partners provide for reimbursement on a per diem basis at the contracted rate for each day during the remainder of an inpatient acute stay serviced at the patient’s home. The performance obligation is the coordination and provision of required medical services, as determined by the treating physician, for each day the patient receives inpatient-equivalent care at home. As such, revenues are recognized as services are administered and as our performance obligations are satisfied on a per diem basis, reduced by estimates for revenue adjustments.

We recognize adjustments to revenue during the period in which changes to estimates of assigned patient diagnoses or episode terminations become known, in accordance with the applicable managed care contracts. For certain health insurance plans, revenue is reduced by amounts owed by enrollees to healthcare providers under deductible, coinsurance or copay provisions of health insurance plan policies, since those amounts are repaid to the health insurance plans by us as part of a retrospective reconciliation process.
Government Grants
In the absence of specific guidance to account for government grants under U.S. GAAP, we have decided to account for government grants in accordance with International Accounting Standard ("IAS") 20, Accounting for Government Grants and Disclosure of Government Assistance, and as such, we recognize grant income on a systematic basis in line with the recognition of expenses or the loss of revenues for which the grants are intended to compensate. We recognize grants once both of the following conditions are met: (1) we are able to comply with the relevant conditions of the grant and (2) the grant will be
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received. See Note 3 - Novel Coronavirus Pandemic ("COVID-19") for additional information on our accounting for government funds received under the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and the Mass Home Care ASAP COVID-19 Provider Sustainability Program.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include certificates of deposit and all highly liquid debt instruments with maturities of three months or less when purchased. Our cash balance as of September 30, 2021 includes $58.5 million associated with unutilized CARES Act Provider Relief Fund ("PRF") funds, which were repaid to the U.S. Department of Health and Human Services ("HHS") in October 2021. Restricted cash includes cash that is not available for ordinary business use. As of September 30, 2021, we had $3.8 million of restricted cash that was placed into escrow accounts related to the indemnity and closing payment adjustment provisions within the purchase agreements for various acquisitions.
The following table summarizes the balances related to our cash, cash equivalents and restricted cash (amounts in millions):
As of September 30, 2021As of December 31, 2020
Cash and cash equivalents$124.4 $81.8 
Restricted cash3.8 1.5 
Cash, cash equivalents and restricted cash$128.2 $83.3 
Patient Accounts Receivable
We report accounts receivable from services rendered at their estimated transaction price, which includes contractual and non-contractual revenue adjustments based on the amounts expected to be due from payors. Our patient accounts receivable are uncollateralized and consist of amounts due from Medicare, Medicaid, other third-party payors and patients. The Company's non-Medicare third-party payor base is comprised of a diverse group of payors that are geographically dispersed across the country. As of September 30, 2021, there is no single payor, other than Medicare, that accounts for 10% of our total outstanding patient receivables. Thus, we believe there are no other significant concentrations of receivables that would subject us to any significant credit risk in the collection of our patient accounts receivable. We write off accounts on a monthly basis once we have exhausted our collection efforts and deem an account to be uncollectible. We believe the collectability risk associated with our Medicare accounts, which represent 65% and 64% of our patient accounts receivable at September 30, 2021 and December 31, 2020, respectively, is limited due to our historical collection rate of over 99% from Medicare and the fact that Medicare is a U.S. government payor.
We do not believe there are any significant concentrations of revenues from any payor that would subject us to any significant credit risk in the collection of our accounts receivable.
Medicare Home Health
For our home health patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. Prior to January 1, 2021, we submitted a RAP for 20% of our estimated payment for each 30-day period of care. The RAP received was then deducted from our final payment. Effective January 1, 2021, CMS eliminated all upfront payments associated with RAPs.
Medicare Hospice
For our hospice patients, our pre-billing process includes verifying that we are eligible for payment from Medicare for the services that we provide to our patients. Our Medicare billing begins with a process to ensure that our billings are accurate through the utilization of an electronic Medicare claim review. We bill Medicare on a monthly basis for the services provided to the patient.
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AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Non-Medicare Home Health, Hospice, Personal Care and High Acuity Care
For our non-Medicare patients, our pre-billing process primarily begins with verifying a patient’s eligibility for services with the applicable payor. Once the patient has been confirmed for eligibility, we will provide services to the patient and bill the applicable payor. Our review and evaluation of non-Medicare accounts receivable includes a detailed review of outstanding balances and special consideration to concentrations of receivables from particular payors or groups of payors with similar characteristics that would subject us to any significant credit risk.
Business Combinations
We account for acquisitions using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Acquisitions are accounted for as purchases and are included in our condensed consolidated financial statements from their respective acquisition dates. Assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method. Goodwill generated from acquisitions is recognized for the excess of the purchase price over tangible and identifiable intangible assets. In determining the fair value of identifiable intangible assets, we use various valuation techniques including discounted cash flow analysis, the income approach, the cost approach and the market approach. These valuation methods require us to make estimates and assumptions surrounding projected revenues and costs, growth rates and discount rates.
Fair Value of Financial Instruments
The following details our financial instruments where the carrying value and the fair value differ (amounts in millions):
 Fair Value at Reporting Date Using
Financial InstrumentCarrying Value as of September 30, 2021Quoted Prices in Active
Markets for Identical
Items
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Long-term obligations$450.8 $ $468.5 $ 

The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three levels of inputs are as follows:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
Our deferred compensation plan assets are recorded at fair value and are considered a level 2 measurement. For our other financial instruments, including our cash and cash equivalents, patient accounts receivable, accounts payable, payroll and employee benefits and accrued expenses, we estimate the carrying amounts approximate fair value.
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Weighted-Average Shares Outstanding
Net income per share attributable to Amedisys, Inc. common stockholders, calculated on the treasury stock method, is based on the weighted average number of shares outstanding during the period. The following table sets forth, for the periods indicated, shares used in our computation of the weighted-average shares outstanding, which are used to calculate our basic and diluted net income attributable to Amedisys, Inc. common stockholders (amounts in thousands):
 For the Three-
Month Periods
Ended September 30,
For the Nine-
Month Periods
Ended September 30,
 2021202020212020
Weighted average number of shares outstanding - basic32,607 32,662 32,658 32,469 
Effect of dilutive securities:
Stock options113 336 135 506 
Non-vested stock and stock units179 262 228 292 
Weighted average number of shares outstanding - diluted32,899 33,260 33,021 33,267 
Anti-dilutive securities141 36 82 31 

3. NOVEL CORONAVIRUS PANDEMIC ("COVID-19")
In March 2020, the World Health Organization declared COVID-19 a pandemic. As a healthcare at home company, we have been and will continue to be impacted by the effects of COVID-19; however, we remain committed to carrying out our mission of caring for our patients. We will continue to closely monitor the impact of COVID-19 on all aspects of our business, including the impacts to our employees, patients and suppliers; however, at this time, we are unable to estimate the ultimate impact the pandemic will have on our consolidated financial condition, results of operations or cash flows.
On March 27, 2020, the CARES Act was signed into legislation. The CARES Act provided for $175 billion to healthcare providers, including hospitals on the front lines of the COVID-19 pandemic. Of this total allocated amount, $30 billion was distributed immediately to providers based on their proportionate share of Medicare fee-for-service reimbursements in 2019. Healthcare providers were required to sign an attestation confirming receipt of the Provider Relief Fund ("PRF") funds and agree to the terms and conditions of payment. Our home health and hospice segments received approximately $100 million from the first $30 billion of funds distributed to healthcare providers in April 2020, which is inclusive of $2 million related to our joint venture care centers (equity method investments). We also acquired approximately $6 million of PRF funds in connection with the acquisition of AseraCare. Under the terms and conditions for receipt of the payment, we were allowed to use the funds to cover lost revenues and health care costs related to COVID-19 through June 30, 2021, and we were required to properly and fully document the use of these funds in reports to the U.S. Department of Health and Human Services ("HHS"). All required reporting was completed during the three-month period ended September 30, 2021.
For our wholly-owned subsidiaries, we utilized PRF funds to the extent we had qualifying COVID-19 expenses; we did not use PRF funds to cover lost revenues resulting from COVID-19. The grant income associated with the COVID-19 expenses incurred through June 30, 2021 is reflected in other operating income within our condensed consolidated statements of operations.
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We did not fully utilize the PRF funds received; therefore, we have recorded a liability for the amount to be repaid which totaled $59 million (including interest) at September 30, 2021 and $60 million at December 31, 2020 (see the Provider Relief Fund Advance account in current liabilities within our condensed consolidated balance sheets). All unutilized funds were repaid in October 2021. In summary, the total funds that we received from the CARES Act PRF have been accounted for as follows as of September 30, 2021 (amounts in millions):
Amount
Funds utilized through June 30, 2021 by consolidated entities$46.6 
Funds to be repaid to the government by consolidated entities (excludes $0.2 million of interest to be repaid)
58.3 
Funds utilized through June 30, 2021 by unconsolidated joint ventures1.3 
Funds to be repaid to the government by unconsolidated joint ventures0.6 
$106.8 

The CARES Act also provided for the temporary suspension of the automatic 2% reduction of Medicare claim reimbursements ("sequestration") for the period May 1, 2020 through December 31, 2020. In December 2020, Congress passed additional COVID-19 relief legislation as part of the Consolidated Appropriations Act, 2021. This legislation extended the suspension of sequestration through March 31, 2021. In April 2021, Congress passed H.R. 1868, which among other items, provided for an additional extension of the temporary suspension of sequestration through December 31, 2021. We estimate that the suspension of sequestration will increase our 2021 net service revenue by approximately $36 million.
Additionally, the CARES Act provided for the deferral of the employer share of social security tax (6.2%), effective for payments due after the enactment date through December 31, 2020. Fifty percent of the deferred payroll taxes are due on December 31, 2021 with the remaining amounts due on December 31, 2022. During 2020, we deferred approximately $55 million of social security tax; approximately $28 million is reflected in each of payroll and employee benefits and other long-term obligations within our condensed consolidated balance sheets.
Our personal care segment did not receive funds under the CARES Act; however, it did receive funds totaling $1 million from the Mass Home Care ASAP COVID-19 Provider Sustainability Program, which were used during 2020 to cover costs related to COVID-19.

4. ACQUISITIONS
We complete acquisitions from time to time in order to pursue our strategy of increasing our market presence by expanding our service base and enhancing our position in certain geographic areas as a leading provider of home health, hospice, personal care and high acuity care services. The purchase price pai