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In a release on October 28, the Company noted that for the third quarter of 2009, net patient service revenue from continuing operations increased 6.0 percent to $175.2 million, compared with $165.2 million for the third quarter of 2008. The Company's net income attributable to Odyssey stockholders for the third quarter of 2009 was $11.6 million, or $0.35 per diluted share, as compared with $5.9 million, or $0.18 per diluted share, for the third quarter of 2008. The Company's EBITDA from continuing operations for the third quarter of 2009 was $22.3 million, compared with $13.6 million for the third quarter of 2008.
For the nine months ended September 30, net patient service revenue from continuing operations was $513.1 million, compared with $448.8 million for the same nine-month period of 2008. The Company's net income attributable to Odyssey stockholders for the nine months ended September 30, was $28.8 million, or $0.87 per diluted share, as compared with $9.1 million, or $0.27 per diluted share, for the same period of 2008. The Company's EBITDA from continuing operations for the first nine months of 2009 was $56.8 million, compared with $31.6 million for the first nine months of 2008.
In commenting on the results, Robert A. Lefton, president and chief executive officer of Odyssey HealthCare, said, "I am extremely pleased with our operating results for the third quarter. Our volume was very strong throughout the third quarter with our average daily patient census increasing to 12,633 for the third quarter of 2009 as compared with 12,329 for the third quarter of 2008, an increase of 2.5 percent. On a same store basis, our average daily patient census increased 1.8 percent over our average daily patient census for the third quarter of 2008 and increased 2.9 percent on a sequential basis over the second quarter of 2009. I am also pleased with the results in the expense area. Our Adjusted Operating Expense per patient day, excluding ramp down and integration expenses, decreased over the third quarter of 2008 and also decreased on a sequential basis from the second quarter of 2009. In addition to several cost saving initiatives that have delivered positive results, the decrease in operating expenses per patient day also illustrates the Company's ability to leverage corporate and program level overhead expenses as patient census increases."
Lefton added, "Our Medicare cap contractual amount for the third quarter was 1.3 percent of gross revenue, which was in line with our expectations for the quarter. The increase in the Medicare cap from the third quarter of 2008 was primarily focused in three sites. We have taken steps to address patient mix issues in those markets with a program consolidation in one of the markets and the development of an inpatient unit in another market, which opened last week and is currently awaiting Medicare certification."
The increase in the Company's bad debt expense in the third quarter of 2009 was due in part to an increase in the Company's allowance for uncollectible accounts as of September 30, in response to increased pre-payment reviews by the Company's Medicare fiscal intermediaries in the third quarter.
On October 1, payments to Medicare participating hospices increased by approximately 1.4 percent. This increase includes the first year phase-out of the budget neutrality adjustment factor ("BNAF") used in computing the hospice wage index. The phase-out of the BNAF will occur over a seven-year period with 10 percent in the first year and an additional 15 percent in each of the following six years.
The Company also announced an update to the previously disclosed investigation conducted by the U.S. Department of Justice ("DOJ") of alleged violations of the Federal False Claims Act and various state false claims acts related to VistaCare, Inc., a subsidiary of the Company, that arose from alleged conduct occurring prior to the Company's acquisition of VistaCare. The basis of the investigation is now known to be a qui tam complaint filed by a former employee of VistaCare, which has been unsealed. In connection with the unsealing of the complaint, the DOJ has filed a notice with the court declining to intervene in the qui tam action at this time. While this should not be viewed as a final assessment by the DOJ of the merits of this qui tam action, the Company considers this to be a positive development.
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