UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 7, 2007
LHC GROUP, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 8082 71-0918189
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
420 West Pinhook Rd., Suite A
Lafayette, LA 70503
(Address of Principal Executive Offices, including Zip Code)
(337) 233-1307
(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
Since our earnings call on Thursday, November 1, 2008, we have received
numerous questions regarding the potential impact of our announcement relating
to the notices we issued to terminate 192 managed care contracts under which we
were being reimbursed at rates below our cost. Because we have multiple
contracts with the same payors, covering different provider numbers and
geographical services areas, the 192 contract terminations were with only 4
separate payors. Most of these managed care contracts have termination
provisions that require 30-90 days notice. Accordingly, we do not expect any
material impact from terminating these contracts until the first or second
quarter of 2008. As indicated on our earnings call, we are attempting to
negotiate new contracts with many of these payors. Our goal is to negotiate
contracts that contain reimbursement rates that reflect the true cost and value
of providing home care. Further, we expect that in many instances we may
negotiate reimbursement rates on a patient by patient basis with those payors
with whom we are unable to negotiate a new comprehensive contract. Because of
the many variables that could affect the financial impact in 2008 from
terminating these contracts, we do not believe it is appropriate at this time to
provide an estimate of the future financial impact. However, in order to provide
a basis for understanding the historical impact of these relationships, we have
elected to provide an estimate of the financial contribution of these contracts
during the nine month period ended September 30, 2007. For the nine months ended
September 30, 2007, these contracts contributed approximately $1.78 million in
revenue. Based on our best estimate of direct cost attributable to these
commercial patients, the overall direct cost of providing services under these
192 contracts during this period was approximately $2.42 million. Therefore, for
the nine months ended September 30, 2007 these contracts resulted in a pre-tax
operating loss of approximately $639,000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LHC GROUP, INC.
By: /s/ Peter J. Roman
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Peter J. Roman
Chief Financial Officer
Dated: November 7, 2007