On August 13, Aveanna Healthcare (NASDAQ:AVAH) held its second-quarter earnings call, and the tone was different from prior quarters spent explaining away a caregiver shortage.
Revenue climbed 13.7% year over year to roughly $670 million, and every one of the company’s three divisions grew
But the headline moment came when CEO Jeffrey Shaner announced that California’s 2027 budget will finally include a meaningful pediatric private duty nursing rate increase, effective January 1, 2027, closing out an advocacy push that took four years and now touches all 32 of Aveanna’s private duty states. Bull Case: The Labor Fix Is Working Aveanna’s core strategy for the past several years has been aligning caregiver capacity with the payers willing to pay for it, and the numbers on the call suggest that bet is paying off. Home health and hospice revenue rose 14.8% year over year, private duty services grew 14.0%, and medical solutions added 9.4%, with adjusted EBITDA up 8% to $95.4 million.
On the government side, Aveanna landed seven state rate enhancements by the second quarter and expects more once state budget processes wrap up in the third quarter, with California standing as the biggest prize of all. On the payer side, private duty services now has 37 preferred payer agreements after adding three in the quarter, and those agreements cover 64% of the division’s managed care volume, up from 60% in the first quarter. Home health has already hit its full-year goal of 50 preferred payers, with episodic admissions running at 81% of the mix and episodic volume growth of 18.5%.