Pennant welcomes Home Health payment increase, warns of fraud rule burdens. The Pennant Group's (Nasdaq: PNTG) CEO Brent Guerisoli said the 2027 home health final rule's payment increase is a welcome change, but warned that it falls short of protecting access to care. Guerisoli said that the 2.4% aggregate rate increase included in the final rule is a step in the right direction, but insufficient. "Home health reimbursements must account for the impacts of high inflation and must appropriately compensate high-quality providers," Guerisoli said. "We will continue to work with our industry partners to advance positive home health policies, and we are encouraged to see the introduction of bills in the House and the Senate that call upon those bodies to redress the persistent underfunding of home health." Guerisoli said that Pennant supports the Centers for Medicare & Medicaid Services' (CMS) efforts to root out fraud, but that several of the new fraud reduction measures included in the final rule are unnecessarily broad and will impose burdens on legitimate providers. Still, he said the company is prepared to adapt to the changes. Among the final rule's fraud-focused measures are a policy making all Medicare enrollment revocations retroactive to the date that noncompliance began and expanded grounds for revocation or denial of enrollment. Pennant hauled in $302.3 million in total Q3 revenue, a 32% increase year-over-year. The company's home health and hospice segment came in at $239.8 million, an increase of 38.2% year-over-year. In Q3, the company recorded 28,479 home health admissions, a 39.4% increase year-over-year. Its hospice arm's average daily census for the third quarter was 5,443, an increase of 34.6%. The company faced unexpected headwinds from elevated employee benefit expenses in Q3. Pennant has self-funded plans, so the expenses affected all of the company's service lines. Leadership said that the company would work to more predictably manage those costs in the future. Guerisoli said Pennant incorporated expectations for those expenses into Q4 projections, but that the company is still on track to achieve its full year guidance. The company said it completed the two largest and final waves of transitions in Q3 as it integrated 54 locations it acquired through UnitedHealth Group's (NYSE: UNH) acquisition of Amedisys. The electronic medical record transition was completed Oct. 31, though some transition work remains. Leadership anticipates that the company will complete its transition in Q4. Companies featured in this article: Morgan Gonzales is an award-winning reporter and associate editor of Home Health Care News. She received her bachelor's degree from the University of South Carolina and her master's from the University of Georgia. Her work has appeared in Behavioral Health Business, KFF Health News, Dallas Morning News and U.S. News and World Report. When not reporting, Morgan is usually on a trail, doing yoga, or cuddling with her cats, Ellen and Ocho.

Pennant reports 12.6 percent year-over-year senior living revenue growth in Q3 amid expansion. November 5, 2026 The Pennant Group's senior living segment "delivered solid results even as our teams worked through the demands of integrating several new communities" in the third quarter, CEO Brent Guerisoli said Thursday on the Eagle, ID-based company's latest earnings call. Pennant acquired two senior living communities in the third quarter, among seven bought in 2026 and 16 purchased since the beginning of 2025, President and Chief Operating Officer John Gochnour said. In one of the third-quarter acquisitions, Gochnour said, Pennant bought the real estate and operations of the 63-unit River Centre Assisted Living in Tucson, AZ, on Aug. 1. "This acquisition contributes to Pennant's strong and growing position in the Tucson market," he said. "During 2026, we doubled the number of communities we operate in Tucson, which has created a robust cluster of senior living operations in the market and complements our existing strength on the home health and hospice side." Pennant was able to purchase the community "at a significant discount to market rates," Gochnour said, due to its "low" occupancy and "poor" financial performance, "despite recent capital expenditures and an attractive building." The deal, he added, "reflects our opportunistic acquisition approach, which can create short-term financial drag but significant mid- and long-term upside." In September, Pennant acquired the real estate associated with one of its existing operations, Main Place Senior Living, in Orange, CA. Gochnour said the transaction "reflects our disciplined real estate investment strategy and our conviction that selective real estate ownership is a natural complement to operational success, supports long-term operating stability and creates enduring value." Pennant has been operating Main Place under a triple-net lease since 2019 and has "created significant value through improved performance, which is reflected not only in the operating cash flows but in the real estate," he said. "This purchase allowed us to capture much of the value we created through the operational turnaround." 10% more residents than a year ago. Pennant now serves 10% more residents than a year ago, which, when combined with growth in the firm's home health and hospice segment, was "significant," Guerisoli said, adding that it "reflects the effectiveness of our operating model and the continued execution of our local leaders and teams." The senior living growth, however, "created some short-term operating challenges during the quarter, concentrated primarily in two markets with a high number of transitions," Gochnour said. "In these markets, our growth temporarily outpaced leadership capacity, and several transitions and same-store operations did not perform at the level we expected." But the challenges "are concentrated rather than systemic, and they come against a backdrop of substantial growth in the senior living business as a whole," the COO said. "We are excited about each of our newly added communities, many of which were acquired at low occupancy and at a substantial discount to market rates, and the opportunity they present for organic growth for years to come," Gochnour continued. "As we have discussed many times, in periods of heavy expansion, we expect lumpiness in our short-term results, especially in communities we have acquired with low occupancy." That "lumpiness," he said, "may continue in the short term as we integrate and fill these communities. Experienced leaders are actively engaged. Concrete improvement plans are underway, and we expect steady operational progress in the near term and significant growth over the long term." Gochnour said that Pennant plans to focus primarily on stabilizing and optimizing its 2026 acquisitions, "though we may selectively pursue compelling and non-disruptive acquisitions in well-performing markets." Performance in the quarter. Senior living performance in the quarter compared with the same quarter in 2025: * Average occupancy was 78.4%, a decrease of 250 basis points over the same * Same-store average occupancy was 81.2%, a decrease of 60 basis points. * Average monthly revenue per occupied room was $5,385, an increase of $190, or 3.7%. * Same-store average monthly revenue per occupied room was $5,370, an increase of $234, or 4.6%. * Revenue was $62.4 million, up $7 million, or 12.6%. * Adjusted earnings before interest, taxes, depreciation and amortization were $5.7 million, up $0.2 million, or 3%. * Adjusted earnings before interest, taxes, depreciation, amortization and restructuring or rent costs from operations were $16.2 million, an increase of $0.9 million, or 5.7%. As of Sept. 30, Pennant's subsidiaries operated 70 senior living communities across 16 states: Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming, according to a filing with the Securities and Exchange Commission. Overall performance. Overall results from the quarter compared with the same quarter in 2025: * Revenue of $302.3 million was an increase of 32%. * Adjusted EBITDA of $24.7 million was an increase of 42.4%. * Adjusted EBITDA prior to non-controlling interest was $26.1 million, an increase of 44%. * Adjusted earnings per share of 35 cents was an increase of 16.7%. "While our underlying operating performance remained strong and in line with our expectations, we experienced higher than anticipated employee benefits costs during the quarter, including our newly acquired operations. These costs created additional margin pressure and modestly impacted our earnings for the quarter," Guerisoli said. "We are taking steps to more predictably manage these costs going forward and have incorporated our current expectations for elevated benefits expenses into our fourth-quarter projections. While additional volatility in these costs remain a potential variable, we continue to believe we are positioned to achieve our full-year guidance." The effect of the higher benefits costs as a percentage of revenue was about 50 basis points, Chief Financial Officer Lynette Walbom estimated.