Significant dollars are also spent at the end of people's lives. High-quality hospice care, and in particular, consistent and attentive clinician visits during the last days of life are critical in preventing revocations and unnecessary hospitalizations because of the benefit it provides our patients and their families. We are proud that our team provides hospice visits in the last phase of life 53.2% better than the national average. We anticipate our home health and hospice quality will continue to drive our future growth as well as employee retention. Now let's talk about some of our key 2024 focus areas and how the fourth quarter set us up for success. With our traditional Medicare mix of home health revenue now in line with peers, we expect the continued decline in our traditional Medicare volumes to slow at a rate consistent with the industry in 2024.

Episodic admissions are beginning to stabilize as our sequential episodic admissions were down only 0.8% in the fourth quarter compared to the third quarter. With our strong quality metrics and our increased list of the payers we can accept, we expect an increase in referrals as we improve our status as a preferred provider. Our payer innovation team continues to succeed in demonstrating our value proposition to Medicare Advantage payers and has set us up for success with these payers in 2024. We had another strong quarter negotiating a total of 11 new agreements, with 8 of those negotiated at episodic rates. Specifically, we are extremely excited to announce a new national agreement that became effective January 1, 2024. This new national agreement is an advanced episodic model that allows us to prioritize access to home care for patients discharged from institutional settings.

Said in another way, it aligns our incentives with the payers need for member access to skilled home care for a successful transition to home following an institutional admission. This contract allows us to further increase our focus on moving volumes away from the lower-paying agreement that do not recognize the value of our high-quality outcomes. Since the inception of the payer innovation team in the summer of 2022, we have successfully negotiated 59 new agreements. Over 2/3 of those are episodic rates. Our home health business development and branch operations teams continue to be successful in moving volume to our payer innovation agreements. In the fourth quarter, approximately 25% of our non-episodic visits were in new payer innovation contracts.

That is up from 5% in quarter 1 2023. We are confident in our ability to make continued improvement in Medicare Advantage pricing and in the shift of our Medicare Advantage admissions to these improved contracts. With an advanced episodic model added to our payer contracts versus a traditional episodic structure, we will now update how we report our payer groups in 2024, separating traditional Medicare from all other episodic contracts. Our rollout of Medalogix Pulse to all of our branches was complete by the end of quarter 3. Our visits per episode in quarter 4 was flat year-over-year at 14.3% and down sequentially from quarter 3 to 14.9%. We continue to work with our leaders on how to best use this tool for clinical resource management based on our patient's acuity and complexity.

In regards to hospice, moving to the case management model has helped us recruit and retain our hospice staff resulting in the elimination of all contract nursing and eliminating staffing capacity constraints. The sales team can now focus on further referral source development. We continually analyze our hospice business and effort to increase efficiency in the referral to-admission process and improve our ability to respond quickly to our referral sources. Recently, we reallocated certain hospice resources to form centralized admission departments with the sole focus on those efforts. We complement our organic growth strategy with our de novo strategy. This allows us to enter a new market with low capital costs. The main investment is in staffing as we hire the clinical teams to build the patient census to obtain our licensing survey.

We added 1 home health and 1 hospice de novo location in quarter 4, bringing our 2023 total to 8. Two additional locations are complete with the necessary preparation steps and are awaiting regulatory approval. We expect to finalize these 2 from 2023 and open another 10 de novo locations in 2024. Our operational and sales teams are focused on ramping up referral and admissions growth in the de novo locations opened in 2023. Continued progress with our people strategy remains a priority, and we believe we're winning the battle for labor. During the fourth quarter, our full-time nursing candidate pool increased 21.5% year-over-year and resulted in the addition of 119 net new full-time nurses. Given our strong nursing hires in 2023, we eliminated all hospice nursing contract labor by the end of quarter 3 and our home health nursing contract labor by the end of the year.

Our focus in 2024 will be on employee engagement so we can continue to improve retention. In particular, we are focused on our clinician satisfaction with their schedules. Given our success with nursing hires, we are now able to turn some talent acquisition resources through recruiting additional therapists as our improved nursing workforce is allowing us to grow and add therapy team members. Before I turn it over to Crissy, I want to remind everyone that the purpose of today's call is to discuss our financial and operational results and outlook. The Board, with the assistance of our advisers, is being comprehensive in its assessment of strategic alternatives and discussions with interested parties are ongoing. We are in the later stages of our strategic review but don't intend to disclose developments unless and until we determine further disclosure is appropriate or necessary.

We will not be commenting beyond that and so we ask you to keep your questions focused on our business and our results. In summary, our success in our payer strategy and our ongoing payer innovation contracting and our people strategy, and hospice growth strategies and our de novos are examples of our continuing investment for the future to meet the growing need of home health and hospice services. I will now turn it over to Crissy to further discuss the quarter's results and 2024 guidance.

Crissy Carlisle: Thanks, Barb. Consolidated net revenue was $260.6 million for the fourth quarter, down $2.6 million or 1% year-over-year. Adjusted EBITDA was $25.2 million, down $5.1 million or 16.8% year-over-year. We estimate the continued shift to more non-episodic payers in home health decrease revenue and adjusted EBITDA of approximately $8 million year-over-year net of the impact from improved pricing of payer innovation contracts. In our home health segment, total admissions growth of 3.9% year-over-year was driven by 34.2% growth in non-episodic admissions. Our non-episodic visits grew to approximately 33% of our total home health visits in the quarter. While we are making significant progress demonstrating our value proposition to payers as we negotiate new agreements with improved rates and are successfully shifting Medicare Advantage volumes into our payer innovation agreements, the revenue and adjusted EBITDA impact from this volume shift has not been enough to overcome the financial impact from the erosion of Medicare fee-for-service volumes.

Our home health team successfully managed cost of services, resulting in cost per visit flat year-over-year as the reduction in nursing contract labor offset the impact of merit market increases. For full year 2023 compared to 2022, cost per visit increased approximately 2%. That's less than the 3% average merit market increase for the year, thus demonstrating our ability to control costs through productivity and optimization of staff. In our hospice segment, revenue increased $3.7 million or 7.8% year-over-year, primarily due to an increase in revenue per day that resulted from changes in our estimated recoverability of net service revenue in the fourth quarter of 2022 an increased Medicare reimbursement rate that went into effect on October 1, 2023.

Admissions decreased 1.5% year-over-year, while average daily census decreased 4.3% year-over-year. Sequentially, our average daily census increased 1.3% over the third quarter. Adjusted EBITDA increased $6.1 million year-over-year, primarily due to the increase in revenue per day and a reduction in general administrative costs for the segment. Cost per day improved sequentially to $76 after stabilizing at $77 for the prior 3 quarters as the elimination of nursing contract labor and increased census helped gain leverage against the fixed cost associated with the case management staffing model. General and administrative expenses decreased $2.1 million year-over-year, primarily due to changes in back-office staffing needs as a result of implementation of the case management staffing model.

Our home office general and administrative expenses increased $4.3 million year-over-year to 10.3% of consolidated revenue, primarily due to a declining revenue base, investments in information technology and talent acquisitions and annual merit increases. Our stand-alone company costs in 2023 approximated to $23 million, which is less than the $26 million to $28 million original estimate at the spend date. At this time, we have transitioned all services from Encompass Health, except for our PeopleSoft Financials and HR systems, and we expect to complete the transition of those services by the end of Q1 2024. Let's transition now to the balance sheet. Information on our debt and liquidity metrics is included on Page 17 of the supplemental slides.

We ended 2023 with a leverage ratio of 5.4x, well within our covenant maximum of 6.75x. We have available liquidity of approximately $61 million, including approximately $27 million of cash on hand. We believe this is adequate to support our operations, including our de novo strategy. We generated approximately $59 million of free cash flow during 2023, which equates to a free cash flow conversion rate of approximately 60%. Let's now turn to 2024. Our 2024 guidance and related guidance considerations can be found on Pages 19 and 20 of the supplemental slides that accompanied our earnings release. Our 2024 guidance range for net service revenue is $1,076 billion to $1.102 billion with adjusted EBITDA in a range of $98 million to $110 million.

Within our home health segment, and as Barb mentioned in her remarks, we are focused on achieving growth through the stabilization of Medicare as a percent of total home health revenue, continued progress with our payer innovation strategy and increased utilization of our clinical resources. We expect our Medicare pricing to increase approximately 1.2% in 2024 based on the home health final rule, and we expect our Medicare Advantage pricing to improve based on the success of our payer innovation team, including a full year of impact from the national agreement that became effective May 1, 2023 and the additional benefit of the new national agreement that became effective on January 1 of this year. For volumes, we expect the success we've had with our payer innovation team and our recruitment and retention of clinical staff to drive volume growth.

With our traditional Medicare mix of home health revenue now in line with our peers, we expect the continued decline in our traditional Medicare volumes to slow to a more industry-like rate in 2024 and a new episodic payer innovation contract will provide an avenue of growth to offset some of the continued erosion of traditional Medicare. For our hospice segment, we are focused on growing census, which will also allow us to gain operating leverage against the fixed cost structure associated with the management staffing model. For pricing, we expect our reimbursement rate will increase approximately 2.9% for the first 3 quarters of the year based on the hospice final rule effective October 1, 2023. For volumes, we are clinically staffed to grow and we are working with our talent acquisition team to further build our business development team for growth.

On the cost side of the equation, we faced 2 primary headwinds in 2024: wage inflation and increased costs associated with durable medical equipment. A 3% average merit market increase resulted in an approximate $10 million net headwind for our company year-over-year. This represents the impact of wage inflation above the net reimbursement rate increases we received from Medicare in both segments. In our home health segment, we believe we can partially offset wage inflation through productivity and optimization improvements and currently believe our cost per visit will increase between 2% and 3% year-over-year. In our hospice segment, we estimate our cost per day will increase 2% to 4%. This increase is primarily due to service issues we encountered with our durable medical equipment provider in the fourth quarter of 2023.

To avoid disruption to our patients and to ensure they receive the equipment they need, we made alternative arrangements in the affected markets. We estimate these new arrangements will result in an approximate $2 million of additional costs associated with durable medical equipment year-over-year. We expect patient volumes to increase without the need to hire a significant number of additional staff resulting in operating leverage against the fixed costs associated with our case management staffing model. We expect our home office costs to stay relatively flat as a percent of consolidated revenue as merit increases and increased incentive compensation year-over-year are partially offset by the implementation of cost structure and other savings in 2023.

As we've noted previously, our greatest challenge in forecasting relates to the shift of Medicare eligibles into Medicare Advantage and forecasting not only the mix of traditional Medicare admissions versus Medicare Advantage admissions but also forecasting the shift of Medicare Advantage admissions into our payer innovation contracts. With this in mind, the difference between the low and high end of our guidance range primarily is dependent upon our payer mix. We expect to generate $36 million to $62 million of free cash flow in 2024, as shown on Page 21 of the supplemental slides that accompanied our earnings release, free cash flow in 2024 will be impacted by our return to cash income tax payment, which represents a $12 million to $14 million swing in uses of free cash flow year-over-year.

In addition, free cash flow generation will be dependent on the timing of working capital, specifically accounts receivable. With that, I'll ask the operator to open the lines for Q&A.

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