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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IiAWfDHCIvceaAjuD4xbwxAvtYlEcr/ljnnbb+zC5OT1QwA18c2d4IL3QnsfNnNg y3uY5p4ZnSR8Yzvr5nFmeA== 0001193125-08-109717.txt : 20080509 0001193125-08-109717.hdr.sgml : 20080509 20080509155331 ACCESSION NUMBER: 0001193125-08-109717 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20080330 FILED AS OF DATE: 20080509 DATE AS OF CHANGE: 20080509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENTIVA HEALTH SERVICES INC CENTRAL INDEX KEY: 0001096142 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 364335801 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-15669 FILM NUMBER: 08818349 BUSINESS ADDRESS: STREET 1: 3 HUNTINGTON QUADRANGLE 2S CITY: MELVILLE STATE: NY ZIP: 11747-8943 BUSINESS PHONE: 6315017000 MAIL ADDRESS: STREET 1: 3 HUNTINGTON QUADRANGLE 2S CITY: MELVILLE STATE: NY ZIP: 11747-8943 FORMER COMPANY: FORMER CONFORMED NAME: OLSTEN HEALTH SERVICES HOLDING CORP DATE OF NAME CHANGE: 19991001 10-Q 1 d10q.htm FORM 10-Q Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2008

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 1-15669

Gentiva Health Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware

36-4335801

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3 Huntington Quadrangle, Suite 200S, Melville, NY 11747-4627

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (631) 501-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant’s Common Stock, as of May 5, 2008, was 28,478,137.

INDEX


		Page No.
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets (Unaudited) – March 30, 2008 and December 30, 2007	3

	Consolidated Statements of Income (Unaudited) – Three Months Ended March 30, 2008 and April 1, 2007	4

	Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended March 30, 2008 and April 1, 2007	5

	Notes to Consolidated Financial Statements (Unaudited)	6-20

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20-31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31-32

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults Upon Senior Securities	33

Item 4.	Submission of Matters to a Vote of Security Holders	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

SIGNATURES		35

EXHIBIT INDEX		36

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Gentiva Health Services, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	March 30, 2008			December 30, 2007
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	16,382		$	36,181
Short-term investments		1,350			31,250
Receivables, less allowance for doubtful accounts of $9,305 and $9,437 at March 30, 2008 and December 30, 2007, respectively		230,190			207,801
Deferred tax assets		17,551			18,859
Prepaid expenses and other current assets		16,041			14,415

Total current assets		281,514			308,506

Long-term investments		12,641			—
Fixed assets, net		62,534			59,562
Intangible assets, net		233,872			211,602
Goodwill		310,909			276,100
Other assets		25,893			26,463

Total assets	$	927,363		$	882,233

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	3,072		$	2,304
Accounts payable		24,219			20,093
Payroll and related taxes		28,057			17,163
Deferred revenue		31,790			29,015
Medicare liabilities		8,257			7,985
Cost of claims incurred but not reported		22,732			24,321
Obligations under insurance programs		36,733			36,816
Other accrued expenses		39,616			42,282

Total current liabilities		194,476			179,979

Long-term debt		318,928			307,696
Deferred tax liabilities, net		55,218			48,572
Other liabilities		21,672			22,557

Shareholders’ equity:
Common stock, $.10 par value; authorized 100,000,000 shares; issued 28,506,356 and 28,104,750 shares at March 30, 2008 and December 30, 2007, respectively		2,850			2,810
Additional paid-in capital		322,086			314,747
Retained earnings		15,331			7,608
Accumulated other comprehensive loss		(1,227	)		(737	)
Treasury stock, 104,292 and 59,063 shares at March 30, 2008 and December 30, 2007, respectively		(1,971	)		(999	)

Total shareholders’ equity		337,069			323,429

Total liabilities and shareholders’ equity	$	927,363		$	882,233

See notes to consolidated financial statements.

Gentiva Health Services, Inc. and Subsidiaries

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)


	For the Three Months Ended
	March 30, 2008			April 1, 2007
Net revenues	$	323,722		$	299,542
Cost of services and goods sold		187,199			170,121

Gross profit		136,523			129,421
Selling, general and administrative expenses		117,880			111,065

Operating income		18,643			18,356
Interest expense		(6,093	)		(7,139	)
Interest income		667			817

Income before income taxes		13,217			12,034
Income tax expense		5,494			5,195

Net income	$	7,723		$	6,839

Net income per common share:
Basic	$	0.27		$	0.25

Diluted	$	0.27		$	0.24

Weighted average shares outstanding:
Basic		28,282			27,530

Diluted		29,043			28,439

See notes to consolidated financial statements.

Gentiva Health Services, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	For the Three Months Ended
	March 30, 2008			April 1, 2007
OPERATING ACTIVITIES:
Net income	$	7,723		$	6,839
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,151			4,783
Amortization of debt issuance costs		287			206
Provision for doubtful accounts		2,600			1,992
Equity-based compensation expense		1,736			1,652
Windfall tax benefits associated with equity-based compensation		(1,235	)		(241	)
Deferred income tax expense		4,848			3,699
Changes in assets and liabilities, net of acquired businesses:
Accounts receivable		(19,598	)		(17,741	)
Prepaid expenses and other current assets		(2,151	)		(4,863	)
Accounts payable		3,911			(103	)
Payroll and related taxes		9,102			10,654
Deferred revenue		809			4,717
Medicare liabilities		271			781
Cost of claims incurred but not reported		(1,590	)		449
Obligations under insurance programs		(354	)		2,482
Other accrued expenses		(3,324	)		(320	)
Other, net		(51	)		695

Net cash provided by operating activities		8,135			15,681

INVESTING ACTIVITIES:
Purchase of fixed assets		(6,624	)		(6,445	)
Acquisition of businesses, net of cash acquired		(47,405	)		—
Purchase of short-term investments available-for-sale		(28,000	)		(17,000	)
Sale of short-term investments available-for-sale		44,900			12,800

Net cash used in investing activities		(37,129	)		(10,645	)

FINANCING ACTIVITIES:
Proceeds from issuance of common stock		4,119			2,188
Windfall tax benefits associated with equity-based compensation		1,235			241
Borrowings under revolving credit facility		12,000			—
Home Health Care Affiliates debt repayments		(7,420	)		—
Other debt repayments		—			(7,000	)
Debt issuance costs		(432	)		—
Repayment of capital lease obligations		(307	)		(294	)

Net cash provided by (used in) financing activities		9,195			(4,865	)

Net change in cash, cash equivalents and restricted cash		(19,799	)		171
Cash, cash equivalents and restricted cash at beginning of period		36,181			32,910

Cash, cash equivalents and restricted cash at end of period	$	16,382		$	33,081

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid	$	5,702		$	7,912
Income taxes paid, net of refunds	$	416		$	286
FINANCING ACTIVITY AND SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING:
Fixed assets acquired under capital lease	$	301		$	516

On February 28, 2008, 45,229 shares of common stock were received from the Healthfield escrow account to satisfy certain pre-acquisition liabilities paid by the Company and were recorded as treasury stock.

See notes to consolidated financial statements.

Gentiva Health Services, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Background and Basis of Presentation

Gentiva^® Health Services, Inc. (“Gentiva” or the “Company”) provides comprehensive home health services throughout most of the United States through its Home Health, CareCentrix^® and Other Related Services reportable business segments. See Note 15 for a description of the Company’s operating segments.

On February 29, 2008, the Company completed the acquisition of Home Health Care Affiliates, Inc., a provider of home health and hospice services, which operates under the names Gilbert’s Home Health and Gilbert’s Hospice Care in 14 locations in the state of Mississippi, as further described in Note 6.

The accompanying interim consolidated financial statements are unaudited, and have been prepared by Gentiva using accounting principles consistent with those described in the Company’s Annual Report on Form 10-K for the year ended December 30, 2007 and pursuant to the rules and regulations of the Securities and Exchange Commission and, in the opinion of management, include all adjustments necessary for a fair presentation of financial position, results of operations and cash flows for each period presented. Results for interim periods are not necessarily indicative of results for a full year. The year-end balance sheet data was derived from audited financial statements. The interim financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America.

Accounting Policies

Cash, Cash Equivalents and Restricted Cash

The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. Restricted cash of $22.0 million at December 30, 2007 primarily represented segregated cash funds in a trust account designated as collateral under the Company’s insurance programs. The Company, at its option, may access the cash funds in the trust account by providing equivalent amounts of alternative collateral. In February 2008, the Company transferred approximately $21.8 million of its segregated cash funds to an operating account and replaced the collateral with an equivalent amount of letters of credit issued under the Company’s revolving credit facility. At March 30, 2008, restricted cash approximated $0.2 million. Interest on all restricted funds accrues to the Company. See Note 10.

The Company had operating funds of approximately $5.8 million at March 30, 2008 and December 30, 2007, which exclusively relate to a non-profit hospice operation in Florida. Cash and cash equivalents also included amounts on deposit with individual financial institutions in excess of $100,000, which is the maximum amount insured by the Federal Deposit Insurance Corporation. Management believes that these financial institutions are viable entities and believes any risk of loss is remote.

Investments

The Company’s investments consist of AAA-rated auction rate securities (“ARS”) and other debt securities with an original maturity of more than three months and less than one year on the acquisition date in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 115 “Accounting for Certain Investments in Debt and Equity Securities.” Investments in debt securities are classified by individual security into one of three separate categories: available-for-sale, held-to-maturity or trading.

At March 30, 2008 and December 30, 2007, all such investments were categorized as available-for-sale. Available-for-sale investments are carried on the balance sheet at fair value. Unrealized gains and losses on available-for-sale investments are reflected in other comprehensive income (loss). Fair value is determined in accordance with the provisions of SFAS No. 157 “Fair Value Investments” (“SFAS 157”), as further discussed in Note 3. ARSs are variable-rate debt securities that have a long-term maturity with the interest rate being reset every 7, 28 or 35 days. In a stable market, these securities are expected to trade at par and are callable at par on any interest payment date at the option of the issuer. Interest is paid at the end of each auction period. As of March 30, 2008, the Company held approximately $1.4 million of ARSs classified as short-term due to the underlying security being called at par, which settled on April 30, 2008. During the first quarter of fiscal 2008, the Company reclassified ARSs of approximately $13.0 million to long-term investments and recorded a valuation allowance of approximately $0.4 million due to reduced liquidity for these securities as a result of failed auctions.

Inventory

Inventories, which are included in prepaid expenses and other current assets, are stated at lower of cost or market. Cost is determined using the specific identification method. Inventories amounted to $2.3 million at March 30, 2008 and December 30, 2007.

Debt Issuance Costs

The Company amortizes deferred debt issuance costs over the term of its credit agreement. As of March 30, 2008 and December 30, 2007, the Company had unamortized debt issuance costs of $5.2 million and $5.0 million, respectively, recorded in other assets.

Home Medical Equipment

Home medical equipment (“HME”), which is included in fixed assets, is stated at cost and consists of medical equipment, such as hospital beds and wheelchairs, provided to in-home patients in the Company’s respiratory therapy and HME operations. Depreciation is provided using the straight-line method over the estimated useful lives of the equipment. At March 30, 2008 and December 30, 2007, the net book value of HME included in fixed assets, net in the accompanying balance sheets was $5.8 million and $5.1 million, respectively.

Fair Value of Financial Instruments

Effective January 1, 2008, the Company adopted SFAS 157. In February 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157”, which provides a one year deferral of the effective date of SFAS 157 for non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value at least annually. Therefore, the Company has adopted the provisions of SFAS 157 with respect to its financial assets and liabilities only. SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under SFAS 157 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under SFAS 157 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial Assets

In accordance with SFAS 157, the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) and selected financial liabilities measured at fair value on a recurring basis was as follows: (in thousands):


	March 30, 2008
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	6,307	$	—	$	—	$	6,307
Municipal bonds		—		1,350		12,641	$	13,991

Total assets	$	6,307	$	1,350	$	12,641	$	20,298

Liabilities:
Interest rate derivatives	$	—	$	1,686	$	—	$	1,686

Level 3 assets consist of municipal bonds with an auction reset feature (“auction rate securities”) whose underlying assets are AAA-rated municipal bonds supporting student loans which are substantially backed by the federal government. Amortized cost of the bonds approximates $13.0 million at March 30, 2008. The securities have been classified as level 3 as their valuation requires substantial judgment and estimation of factors that are not currently observable in the market due to the lack of trading in the securities. In February 2008, auctions began to fail for these securities and each auction since then has failed. Based on the overall failure rate of these auctions, the frequency of the failures, and the underlying maturities of the securities, which range between three and twenty seven years, the Company has classified $13.0 million of auction rate securities as long-term investments on the Company’s consolidated balance sheet. In addition, while these ARSs are categorized as available for sale, the Company expects to have the ability to hold these securities to maturity or until such time the credit market recovers.

The carrying amount of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and certain other current liabilities approximates fair value because of their short maturity.

The following table provides a summary of changes in fair value of the Company’s level 3 financial assets (in thousands):


	Total
Balance at December 30, 2007	$	—
Transfers in of level 3 securities		13,000
Unrealized loss on level 3 securities	$	(359	)

Balance at March 30, 2008	$	12,641

As of March 30, 2008, the Company had unrealized losses on auction rate securities, net of tax, of $0.2 million recorded in accumulated other comprehensive loss in the Company’s consolidated balance sheet.

Cash Flow Hedge

The Company utilizes a derivative financial instrument to help manage interest rate risk. Derivatives are held only for the purpose of hedging such risk, not for speculative purposes. The Company’s derivative instrument consists of a two year interest rate swap agreement designated as a cash flow hedge of the variability of cash flows associated with a portion of the Company’s variable rate term loan (see Note 10).

While the Company believes the derivative will effectively help manage its risk, the derivative is subject to the risk that the counterparty is unable to perform under the terms of the swap agreement. The Company executed the derivative with a counterparty that is a well known major financial institution. The Company has monitored the creditworthiness of its counterparty and based on this analysis considers nonperformance by its counterparty to be unlikely.

In accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” the derivative instrument is recorded at fair value on the Company’s consolidated balance sheet. Changes in the fair value of the derivative are reported in shareholders’ equity in accumulated other comprehensive income (loss) until earnings are affected by the hedged item. The effectiveness of the Company’s derivative was assessed at inception and is assessed on an ongoing basis, with any ineffective portion of the designated hedge reported currently in earnings. As of March 30, 2008 and December 30, 2007, the Company had unrealized losses, net of tax, on the derivative of $1.0 million and $0.7 million, respectively, recorded in accumulated other comprehensive loss in the Company’s consolidated balance sheets.

New Accounting Standards

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—An Amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 applies to all derivative instruments and related hedged items accounted for under SFAS 133. It requires entities to provide greater transparency about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, results of operations, and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Because SFAS 161 applies only to financial statement disclosures, it will not have a material impact on the Company’s consolidated financial statements.

Effective January 1, 2008, the Company adopted SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for specified financial assets and liabilities on a contract-by-contract basis. The Company did not elect to adopt the fair value option under this Statement for any of the Company’s existing financial assets and liabilities.

Net Revenues and Accounts Receivable

Net revenues by major payer classification were as follows (in thousands):


	First Quarter
	2008		2007		Percentage Variance
Medicare	$	159,680	$	150,543	6.0	%
Medicaid and Local Government		35,365		38,327	(7.7	)%
Commercial Insurance and Other		128,677		110,672	16.3	%

	$	323,722	$	299,542	8.1	%

Net revenues in Home Health and Other Related Services segments are derived from all major payer classes. CareCentrix net revenues are 100 percent attributable to the Commercial Insurance and Other payer source. The Company is party to a contract with CIGNA Health Corporation (“Cigna”), pursuant to which the Company provides or contracts with third-party providers to provide direct home nursing services and related services, home infusion therapies, and certain other specialty medical equipment to patients insured by Cigna. For the first quarter of fiscal 2008, Cigna accounted for approximately 20 percent of the Company’s total net revenues compared to approximately 18 percent for the first quarter of fiscal 2007.

Net revenues generated under capitated agreements with managed care payers were approximately 5 percent and 6 percent of total net revenues for the first quarter of fiscal 2008 and 2007, respectively.

Accounts receivable attributable to major payer sources of reimbursement were as follows (in thousands):


	March 30, 2008			December 30, 2007
Medicare	$	104,515		$	93,992
Medicaid and Local Government		22,848			21,818
Commercial Insurance and Other		112,132			101,428

Gross Accounts Receivable		239,495			217,238
Less: Allowance for doubtful accounts		(9,305	)		(9,437	)

Net Accounts Receivable	$	230,190		$	207,801

The Commercial Insurance and Other payer group included self-pay accounts receivable relating to patient co-payments of $7.8 million and $6.9 million as of March 30, 2008 and December 30, 2007, respectively.

Acquisitions

Home Health Care Affiliates, Inc.

On February 29, 2008, the Company completed the acquisition of 100 percent of the equity interest in Home Health Care Affiliates, Inc. and certain of its subsidiaries and affiliates (“HHCA”), a provider of home health and hospice services with 14 locations in Mississippi. Total consideration of $55 million, excluding transaction costs and subject to post-closing adjustments consisted of cash of $47.4 million and assumption of HHCA’s existing debt and accrued interest, aggregating $7.4 million, which the Company paid off at the time of closing, net of cash acquired of $0.2 million. The Company funded the purchase price using (i) existing cash balances of $43.4 million and (ii) $11.6 million of borrowings under its existing revolving credit facility, net of debt issuance costs.

The Company acquired HHCA to expand and extend its services in the southeast United States. The Company had not previously provided any services in Mississippi, a state which requires providers to have a Certificates of Need (“CON”) in order to operate a Medicare-certified home health agency. There have been no new CONs issued in Mississippi in recent years.

The transaction was accounted for in accordance with the provisions of SFAS No. 141, “Business Combinations”. Accordingly, HHCA’s results of operations are included in the Company’s consolidated financial statements from the acquisition date, February 29, 2008. The purchase price was allocated to the underlying assets acquired and liabilities assumed based on their estimated fair values at the date of the acquisition. The Company, with the assistance of independent appraisers, will determine the estimated fair values based on such independent appraisals, discounted cash flows and management estimates derived from an independent valuation analysis of the intangible assets acquired. A preliminary allocation of the purchase price follows (in thousands):


Cash	$	175
Accounts receivable, net		5,391
Fixed assets, net		624
Identifiable intangible assets		23,294
Goodwill		34,809
Other assets		307

Total assets acquired		64,600
Accounts payable and accrued liabilities		(416	)
Short-term and long-term debt		(7,420	)
Deferred tax liability		(4,956	)
Other liabilities		(4,228	)

Total liabilities assumed		(17,020	)

Net assets acquired	$	47,580

The allocation of the purchase price is subject to adjustment as the Company completes the independent valuation analysis of the intangible assets acquired and finalizes its purchase price allocation.

The preliminary valuation of the intangible assets by component and their respective useful life is as follows (in thousands):


	Intangible asset		Useful life
Tradenames	$	1,771	10 years
Customer relationships		1,191	10 years
Certificates of need		20,332	indefinite

Total	$	23,294

Restructuring and Integration Costs

Integration Activities

During the first quarter of fiscal 2008 and 2007, the Company recorded charges of $0.3 million and $1.0 million, respectively, in connection with integration activities relating primarily to the acquisition of The Healthfield Group, Inc. (“Healthfield”) on February 28, 2006. Charges during the fiscal 2008 and 2007 periods included severance costs in connection with the termination of personnel and facility lease and other costs. Additional Healthfield integration costs to be incurred during fiscal 2008, largely related to back office and systems integration, are not expected to have a material impact on the Company’s results of operations.

The costs incurred and cash expenditures associated with restructuring activities by component were as follows (in thousands):


	Integration Activities									Other Related Services
	Compensation and Severance Costs			Facility Lease and Other Costs			Total			Compensation and Severance Costs			Facility Lease and Other Costs			Total
Ending balance at December 31, 2006	$	858		$	2		$	860		$	423		$	—		$	423

Charge in 2007		1,211			983			2,194			7			132			139
Cash expenditures		(1,560	)		(985	)		(2,545	)		(398	)		(132	)		(530	)

Ending balance at December 30, 2007		509			—			509			32			—			32

Charge in first quarter 2008		149			113			262			—			—			—
Cash expenditures		(337	)		(113	)		(450	)		(32	)		—			(32	)

Ending balance at March 30, 2008	$	321		$	—		$	321		$	—		$	—		$	—

In connection with a restructuring plan adopted in fiscal year 2002, the Company also had remaining lease obligations of $0.2 million at March 30, 2008 and $0.3 million at December 30, 2007, respectively. The balance of unpaid charges relating to all restructuring and integration activities aggregated $0.5 million at March 30, 2008 and $0.8 million at December 30, 2007, which was included in other accrued expenses in the consolidated balance sheets.

Goodwill and Other Intangible Assets

The gross carrying amount and accumulated amortization of each category of identifiable intangible assets and goodwill as of March 30, 2008 and December 30, 2007 were as follows (in thousands):


	March 30, 2008									December 30, 2007
	Home Health			Other Related Services			Total			Home Health			Other Related Services			Total			Useful Life
Amortized intangible assets:
Covenants not to compete	$	1,198		$	275		$	1,473		$	1,198		$	275		$	1,473		5 Years
Less: accumulated amortization		(707	)		(103	)		(810	)		(648	)		(89	)		(737	)

Net covenants not to compete		491			172			663			550			186			736

Customer relationships		17,361			1,600			18,961			16,170			1,600			17,770		7-10 Years
Less: accumulated amortization		(3,844	)		(419	)		(4,263	)		(3,390	)		(362	)		(3,752	)

Net customer relationships		13,517			1,181			14,698			12,780			1,238			14,018

Tradenames		18,799			—			18,799			17,028			—			17,028		10 Years
Less: accumulated amortization		(3,657	)		—			(3,657	)		(3,217	)		—			(3,217	)

Net tradenames		15,142			—			15,142			13,811			—			13,811

Subtotal		29,150			1,353			30,503			27,141			1,424			28,565

Indefinite-lived intangible assets:
Certificates of need		196,940			6,429			203,369			179,011			4,026			183,037		Indefinite

Total identifiable intangible assets	$	226,090		$	7,782		$	233,872		$	206,152		$	5,450		$	211,602

Goodwill	$	262,209		$	48,700		$	310,909		$	231,513		$	44,587		$	276,100

For the first three months of fiscal 2008 and 2007, the Company recorded amortization expense of approximately $1.0 million and $0.9 million, respectively. The estimated amortization expense for the remainder of 2008 is $3.2 million and for each of the next five succeeding years approximates $4.3 million for fiscal year 2009, $4.1 million for fiscal year 2010, $4.0 million for fiscal years 2011 and 2012, and $3.5 million for 2013.

Earnings Per Share

Basic and diluted earnings per share for each period presented has been computed by dividing net income by the weighted average number of shares outstanding for each respective period. The computations of the basic and diluted per share amounts were as follows (in thousands, except per share amounts):


	For the Three Months Ended
	March 30, 2008		April 1, 2007
Net income	$	7,723	$	6,839


Basic weighted average common shares outstanding		28,282		27,530
Shares issuable upon the assumed exercise of stock options and in connection with the employee stock purchase plan using the treasury stock method		761		909

Diluted weighted average common shares outstanding		29,043		28,439

Net income per common share:
Basic	$	0.27	$	0.25
Diluted	$	0.27	$	0.24

10.

Long-Term Debt

Credit Arrangements

The Company’s credit agreement initially provided for an aggregate borrowing amount of $445.0 million of senior secured credit facilities consisting of (i) a seven year term loan of $370.0 million repayable in quarterly installments of 1 percent per annum (with the remaining balance due at maturity on March 31, 2013) and (ii) a six year revolving credit facility of $75.0 million, of which $55.0 million is available for the issuance of letters of credit and $10.0 million is available for swing line loans. On March 5, 2008, in accordance with the provisions of its credit agreement, the Company and certain of its lenders agreed to increase the revolving credit facility from $75.0 million to $96.5 million.

Upon the occurrence of certain events, including the issuance of capital stock, the incurrence of additional debt (other than that specifically allowed under the credit agreement), certain asset sales where the cash proceeds are not reinvested, or if the Company has excess cash flow (as defined in the agreement), mandatory prepayments of the term loan are required in the amounts specified in the credit agreement.

Interest under the credit agreement accrues at Base Rate or Eurodollar Rate (plus an applicable margin based on the table presented below) for both the revolving credit facility and the term loan. Overdue amounts bear interest at 2 percent per annum above the applicable rate. The interest rates under the credit agreement are reduced if the Company meets certain reduced leverage targets as follows:


Revolving Credit Consolidated Leverage Ratio	Term Loan Consolidated Leverage Ratio	Margin for Base Rate Loans	Margin for Eurodollar Loans
³ 3.5	³ 3.5	1.25%	2.25%
< 3.5 & ³ 3.0	< 3.5 & ³ 3.0	1.00%	2.00%
< 3.0 & ³ 2.5	< 3.0	0.75%	1.75%
< 2.5		0.50%	1.50%

The Company is also subject to a revolving credit commitment fee equal to 0.375 percent per annum (0.5 percent per annum prior to August 1, 2007) of the average daily difference between the total revolving credit commitment and the total outstanding borrowings and letters of credit, excluding amounts outstanding under swing loans. As of July 1, 2007, the Company achieved a consolidated leverage ratio of less than 3.5 and, as a result, the margin on revolving credit and term loan borrowings was reduced by 25 basis points, effective August 1, 2007. As of December 30, 2007, the Company achieved a consolidated leverage ratio below 3.0 and as a result triggered an additional 25 basis point reduction in the margin on revolving credit and term loan borrowings, effective February 14, 2008. As of March 30, 2008, the consolidated leverage ratio was 2.8.

things, require the Company to deliver to the lenders specified financial information, including annual and quarterly financial information, and limit the Company’s ability to do the following, subject to various exceptions and limitations: (i) merge with other companies; (ii) create liens on its property; (iii) incur additional debt obligations; (iv) enter into transactions with affiliates, except on an arms-length basis; (v) dispose of property; (vi) make capital expenditures; and (vii) pay dividends or acquire capital stock of the Company or its subsidiaries. As of March 30, 2008, the Company was in compliance with the covenants in the credit agreement.

To assist in managing the potential interest rate risk associated with its floating rate term loan under the credit agreement, on July 3, 2006, the Company entered into a two year interest rate swap agreement with a notional value of $170 million. Under the swap agreement, the Company pays a fixed rate of 5.665 percent per annum plus an applicable margin (an aggregate of 7.915 percent per annum for the period July 3, 2006 through July 31, 2007, 7.665 percent per annum for the period August 1, 2007 through February 13, 2008 and 7.415 percent per annum thereafter) on the $170 million rather than a fluctuating rate plus an applicable margin.

During the quarter ended March 30, 2008, the Company made no prepayments relating to its term loan. Beginning in the second quarter of 2008, the Company is required to make quarterly installment payments of $768,000 with the remaining balance due at maturity on March 31, 2013. The required quarterly installment payments are reduced by any additional prepayments the Company may make, applied against the quarterly installments pro rata based on the remaining outstanding principal amount of such installments, including the balance due at maturity. As of March 30, 2008, maturities under the term loan were as follows: $2.3 million for fiscal 2008, $3.1 million per year for fiscal 2009 through fiscal 2012 and $295.3 million thereafter. As of March 30, 2008, the Company had outstanding borrowings under the term loan and the revolving credit facility of $310.0 million and $12.0 million, respectively.

Total outstanding letters of credit were approximately $41.6 million at March 30, 2008 and $20.1 million at December 30, 2007. The letters of credit, which expire one year from the date of issuance, were issued to guarantee payments under the Company’s workers’ compensation program and for certain other commitments. See Cash, Cash Equivalents and Restricted Cash in Note 2 for further discussion. The Company also had outstanding surety bonds of $1.9 million at March 30, 2008 and December 30, 2007.

Guarantee and Collateral Agreement

The Company has entered into a Guarantee and Collateral Agreement, among the Company and certain of its subsidiaries, in favor of the administrative agent under the credit agreement (the “Guarantee and Collateral Agreement”). The Guarantee and Collateral Agreement grants a collateral interest in all real property and personal property of the Company and its subsidiaries, including stock of its subsidiaries. The Guarantee and Collateral Agreement also provides for a guarantee of the Company’s obligations under the credit agreement by substantially all subsidiaries of the Company.

Other

The Company has equipment capitalized under capital lease obligations. At March 30, 2008 and December 30, 2007, long-term capital lease obligations were $1.6 million and were recorded in other liabilities on the Company’s consolidated financial statements. The current portion of obligations under capital leases was $1.2 million and $1.4 million at March 30, 2008 and December 30, 2007, respectively, and was recorded in other accrued expenses on the Company’s consolidated balance sheets.

For the first quarter of fiscal 2008 and 2007, net interest expense was approximately $5.4 million and $6.3 million, respectively, consisting primarily of interest expense of $6.1 million and $7.1 million, respectively, associated with the term loan borrowings and fees associated with the credit agreement and outstanding letters of credit and amortization of debt issuance costs, partially offset by interest income of $0.7 million and $0.8 million, respectively, earned on investments and existing cash balances.

11.

Shareholders’ Equity

Changes in shareholders’ equity for the three months ended March 30, 2008 were as follows (in thousands except share amounts):


	Common Stock			Additional Paid-in		Retained		Accumulated Other Comprehensive			Treasury
	Shares	Amount		Capital		Earnings		Loss			Stock			Total
Balance at December 30, 2007	28,104,750	$	2,810	$	314,747	$	7,608	$	(737	)	$	(999	)	$	323,429
Comprehensive income:
Net Income	—		—		—		7,723		—			—			7,723
Unrealized loss on auction rate securities, net of tax	—		—		—		—		(215	)		—			(215	)
Unrealized loss on interest rate swap, net of tax	—		—		—		—		(275	)		—			(275	)

Total Comprehensive income	—		—		—		7,723		(490	)		—			7,233

Income tax benefits associated with the exercise of non-qualified stock options	—		—		1,524		—		—			—			1,524

Equity-based compensation expense	—		—		1,736		—		—			—			1,736

Issuance of stock upon exercise of stock options and under stock plans for employees and directors	401,606		40		4,079		—		—			—			4,119

Treasury stock received from Healthfield escrow (additional 45,229 shares for a total of 104,292)	—		—		—		—		—			(972	)		(972	)

Balance at March 30, 2008	28,506,356	$	2,850	$	322,086	$	15,331	$	(1,227	)	$	(1,971	)	$	337,069

Comprehensive income amounted to $7.2 million and $6.9 million for the first quarter of fiscal 2008 and fiscal 2007, respectively.

The Company has an authorized stock repurchase program under which the Company can repurchase and retire up to 1,500,000 shares of its outstanding common stock. The repurchases can occur periodically in the open market or through privately negotiated transactions based on market conditions and other factors. The Company made no repurchases of its common stock during the three months ended March 30, 2008. As of March 30, 2008, the Company had remaining authorization to repurchase an aggregate of 683,396 shares of its outstanding common stock.

12.

Equity-Based Compensation Plans

The Company provides several equity-based compensation plans under which the Company’s officers, employees and non-employee directors may participate, including: (i) the 2004 Equity Incentive Plan, (ii) the Stock & Deferred Compensation Plan for Non-Employee Directors and (iii) the Employee Stock Purchase Plan (“ESPP”). Collectively, these equity-based compensation plans permit the grants of (i) incentive stock options, (ii) non-qualified stock options, (iii) stock appreciation rights, (iv) restricted stock, (v) stock units and (vi) cash, as well as allow employees to purchase shares of the Company’s common stock under the ESPP at a pre-determined discount.

Beginning in January 2008, the offering period under the ESPP was changed from six months to three months and the purchase price of shares under the ESPP was changed to represent 85 percent of the fair market value of the Company’s common stock on the last day of the three month offering period rather than the lesser of 85 percent of the fair market value of the first or the last business day of the offering period. Furthermore, since such date all employees of the Company are immediately eligible to purchase stock under the plan regardless of their actual or scheduled hours of service.

Stock option grants in fiscal 2008 and fiscal 2007 fully vest over a four year period based on a vesting schedule that provides for one-half vesting after year two and an additional one-fourth vesting after each of years three and four. For both the first quarter of fiscal 2008 and fiscal 2007, the Company recorded equity-based compensation expense of $1.7 million, which is reflected as selling, general and administrative expense in the consolidated statements of income, as calculated on a straight-line basis over the vesting periods of the related options in accordance with the provisions of SFAS No. 123(Revised), “Share-Based Payment” (“SFAS 123(R)”). The weighted-average fair values of the Company’s stock options granted during the first three months of fiscal 2008 and fiscal 2007, calculated using the Black-Scholes option-pricing model and other assumptions, are as follows:


	Three Months Ended
	March 30, 2008			April 1, 2007
Weighted average fair value of options granted	$	6.32		$	7.07
Risk-free interest rate		3.65	%		4.70	%
Expected volatility		30	%		30	%
Contractual life		10 years			10 years
Expected dividend yield		0	%		0	%

For stock options granted during the fiscal 2008 and 2007 periods, the expected life of an option is estimated to be 2.5 years following its vesting date, and forfeitures are reflected in the calculation using an estimate based on experience.

Compensation expense is calculated for the fair value of the employee’s purchase rights under the Company’s ESPP, using the Black-Scholes option pricing model. Assumptions for the first three months of fiscal 2008 and fiscal 2007 are as follows:


	Three Months Ended
	March 30, 2008		April 1, 2007
	1st Offering Period		1st Offering Period
Risk-free interest rate	1.22	%	5.09	%
Expected volatility	31	%	30	%
Expected life	0.25 years		0.5 years
Expected dividend yield	0	%	0	%

A summary of Gentiva stock option activity as of March 30, 2008 and changes during the three months then ended is presented below:


	Number of Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Balance as of December 30, 2007	3,350,198		$	14.23
Granted	776,500			18.54
Exercised	(266,941	)		6.90
Cancelled	(37,495	)		16.30

Balance as of March 30, 2008	3,822,262		$	15.59	7.4	$	22,494,922

Exercisable Options	1,397,198		$	10.39	5.0	$	15,495,065

During the first three months of fiscal 2008, the Company granted 776,500 stock options to officers and employees under its 2004 Equity Incentive Plan at an average exercise price of $18.54 and a weighted-average, grant-date fair value of $6.32. The total intrinsic value of options exercised during the three months ended March 30, 2008 and April 1, 2007 was $3.9 million and $1.5 million, respectively.

As of March 30, 2008, the Company had $7.8 million of total unrecognized compensation cost related to nonvested stock options. This compensation expense is expected to be recognized over a weighted-average period of 1.2 years. The total fair value of options that vested during the first three months of fiscal 2008 was $1.1 million. There were no options that vested during the first three months of fiscal 2007.

13.

Legal Matters

Litigation

In addition to the matters referenced in this Note 13, the Company is party to certain legal actions arising in the ordinary course of business, including legal actions arising out of services rendered by its various operations, personal injury and employment disputes. Management does not expect that these other legal actions will have a material adverse effect on the business or financial condition of the Company.

Indemnifications

Healthfield

Upon the closing of the acquisition of Healthfield on February 28, 2006, an escrow fund was created to cover potential indemnification claims by the Company after the closing. Covered claims include, for example, claims for breaches of representations under the acquisition agreement and claims relating to legal proceedings existing as of the closing date, taxes for the pre-closing periods and medical malpractice and workers’ compensation claims relating to any act or event occurring on or before the closing date. The escrow fund initially consisted of 1,893,656 shares of Gentiva’s common stock valued at $30 million and $5 million in cash. The first $5 million of any disbursements consist of shares of Gentiva’s common stock; the next $5 million of any disbursements consist of cash; and any additional disbursements consist of shares of Gentiva’s common stock. The escrow fund is subject to staged releases of shares of Gentiva’s common stock and cash in the escrow fund to certain principal stockholders of Healthfield, less the amount of claims the Company makes against the escrow fund. On December 29, 2006 and June 29, 2007, 47,489 shares and 11,574 shares of Gentiva’s common stock, respectively, valued at $767,000 and $232,000, respectively, were disbursed to the Company from the escrow fund covering interim claims the Company had made against the escrow fund. On February 28, 2008, the second anniversary of the closing, another release from the escrow fund took place, at which time 45,229 shares of Gentiva’s common stock, valued at $972,000, were disbursed to the Company from the escrow fund covering additional interim claims.

HHCA

Upon the closing of HHCA on February 29, 2008, an escrow fund, consisting of $8.3 million in cash, was created generally to cover potential indemnification claims by the Company after the closing. Covered claims include, for example, breaches of representations, warranties or covenants under the purchase agreement, taxes for pre-closing periods and claims for legal proceedings arising from any condition, act or omission occurring on or before the closing date.

Government Matters

PRRB Appeal

In connection with the audit of the Company’s 1997 cost reports, the Medicare fiscal intermediary made certain audit adjustments related to the methodology used by the Company to allocate a portion of its residual overhead costs. The Company filed cost reports for years subsequent to 1997 using the fiscal intermediary’s methodology. The Company believed the methodology it used to allocate such overhead costs was accurate and consistent with past practice accepted by the fiscal intermediary; as such, the Company filed appeals with the Provider Reimbursement Review Board (“PRRB”) concerning this issue with respect to cost reports for the years 1997, 1998 and 1999. The Company’s consolidated financial statements for the years 1997, 1998 and 1999 had reflected use of the methodology mandated by the fiscal intermediary.

In June 2003, the Company and its Medicare fiscal intermediary signed an Administrative Resolution relating to the issues covered by the appeals pending before the PRRB. Under the terms of the Administrative Resolution, the fiscal intermediary agreed to reopen and adjust the Company’s cost reports for the years 1997, 1998 and 1999 using a modified version of the methodology used by the Company prior to 1997. This modified methodology will also be applied to cost reports for the year 2000, which are currently under audit. The Administrative Resolution required that the process to (i) reopen all 1997 cost reports, (ii) determine the adjustments to allowable costs through the issuance of Notices of Program Reimbursement and (iii) make appropriate payments to the Company, be completed in early 2004. Cost reports relating to years subsequent to 1997 were to be reopened after the process for the 1997 cost reports was completed.

The fiscal intermediary completed the reopening of all 1997, 1998 and 1999 cost reports and determined that the adjustment to allowable costs aggregated $15.9 million which the Company has received and recorded as adjustments to net revenues in the fiscal years 2004 through 2006. The time frame for resolving all items relating to the 2000 cost reports cannot be determined at this time.

Subpoena

In April 2003, the Company received a subpoena from the Department of Health and Human Services, Office of the Inspector General, Office of Investigations (“OIG”). The subpoena seeks information regarding the Company’s implementation of settlements and corporate integrity agreements entered into with the government, as well as the Company’s treatment on cost reports of employees engaged in sales and marketing efforts. With respect to the cost report issues, the government has preliminarily agreed to narrow the scope of production to the period from January 1, 1998 through September 30, 2000. In February 2004, the Company received a subpoena from the U.S. Department of Justice (“DOJ”) seeking additional information related to the matters covered by the OIG subpoena. The Company has provided documents and other information requested by the OIG and DOJ pursuant to their subpoenas and similarly intends to cooperate fully with any future OIG or DOJ information requests. To the Company’s knowledge, the government has not filed a complaint against the Company. The timing and financial impact, if any, of the resolution of this matter cannot be determined at this time.

14.

Income Taxes

The Company recorded a federal and state income tax provision of $5.5 million for the first quarter of fiscal 2008, of which $0.6 million represented a current tax provision and $4.9 million represented a deferred tax provision.

The difference between the federal statutory income tax rate of 35 percent and the Company’s effective rate of 41.6 percent for the first three months of 2008 is due to (i) the impact of equity-based compensation (approximately 1.2 percent) and (ii) state taxes and other items partially offset by tax exempt interest (approximately 5.4 percent).

The Company recorded a federal and state income tax provision of $5.2 million for the first quarter of fiscal 2007, of which $1.5 million represented a current tax provision and $3.7 million represented a deferred tax provision. The difference between the federal statutory income tax rate of 35 percent and the Company’s effective rate of 43.2 percent for the quarter ended April 1, 2007 is due to (i) the impact of equity-based compensation (approximately 2.5 percent) and (ii) state taxes and other items partially offset by tax exempt interest (approximately 5.7 percent).

Deferred tax assets and deferred tax liabilities were as follows (in thousands):


	March 30, 2008			December 30, 2007
Deferred tax assets
Current:
Reserves and allowances	$	10,006		$	9,947
Federal net operating loss and other carryforwards		2,947			4,628
Other		4,598			4,284

Total current deferred tax assets		17,551			18,859

Noncurrent:
Intangible assets		41,324			42,996
State net operating loss carryforwards		7,958			7,958
Less: valuation allowance		(4,076	)		(4,076	)
Other		553			(25	)

Total noncurrent deferred tax assets		45,759			46,853

Total deferred tax assets		63,310			65,712

Deferred tax liabilities:
Noncurrent:
Fixed assets		(1,703	)		(1,750	)
Intangible assets		(85,213	)		(80,667	)
Developed software		(12,516	)		(11,463	)
Acquisition reserves		(1,545	)		(1,545	)

Total non-current deferred tax liabilities		(100,977	)		(95,425	)

Net deferred tax liabilities	$	(37,667	)	$	(29,713	)

At March 30, 2008, the Company had a federal tax credit carryforward of $2.6 million and federal net operating loss carryforwards of $0.8 million, which expire in 2026. Deferred tax assets relating to federal net operating carryforwards approximate $0.3 million. In addition, the Company had state net operating loss carryforwards of approximately $159 million, which expire between 2008 and 2027. Deferred tax assets relating to state net operating loss carryforwards approximate $8.0 million. A valuation allowance of $4.1 million has been recorded to reduce this deferred tax asset to its

estimated realizable value since certain state net operating loss carryforwards may expire before realization. Approximately $1.1 million of the valuation allowance relates to Healthfield’s net operating losses in various states.

15.

Business Segment Information

The Company’s operations involve servicing patients and customers through its three reportable business segments: Home Health, CareCentrix and Other Related Services. The Other Related Services segment encompasses the Company’s hospice, respiratory therapy and HME, infusion therapy and consulting services businesses.

Home Health

The Home Health segment is comprised of direct home nursing and therapy services operations, including specialty programs.

The Company conducts direct home nursing and therapy services operations through licensed and Medicare-certified agencies from which the Company provides various combinations of skilled nursing and therapy services, paraprofessional nursing services and, to a lesser extent, homemaker services to adult and elder patients. The Company’s direct home nursing and therapy services operations also deliver services to its customers through focused specialty programs that include:

•

Gentiva Orthopedics, which provides individualized home orthopedic rehabilitation services to patients recovering from joint replacement or other major orthopedic surgery;

•

Gentiva Safe Strides ^®, which provides therapies for patients with balance issues who are prone to injury or immobility as a result of falling; and

•

Gentiva Cardiopulmonary, which helps patients and their physicians manage heart and lung health in a home-based environment.

Through its Rehab Without Walls ^® unit, the Company also provides home and community-based neurorehabilitation therapies for patients with traumatic brain injury, cerebrovascular accident injury and acquired brain injury, as well as a number of other complex rehabilitation cases.

CareCentrix

The CareCentrix segment encompasses Gentiva’s ancillary care benefit management and the coordination of integrated homecare services for managed care organizations and health benefit plans. CareCentrix operations provide an array of administrative services and coordinate the delivery of home nursing services, acute and chronic infusion therapies, HME, respiratory products, orthotics and prosthetics, and services for managed care organizations and health benefit plans. CareCentrix accepts case referrals from a wide variety of sources, verifies eligibility and benefits and transfers case requirements to the providers for services to the patient. CareCentrix provides services to its customers, including the fulfillment of case requirements, care management, provider credentialing, eligibility and benefits verification, data reporting and analysis, and coordinated centralized billing for all authorized services provided to the customer’s enrollees.

Other Related Services

Hospice

Hospice serves terminally ill patients in the southeast United States. Comprehensive management of the healthcare services and products needed by hospice patients and their families are provided through the use of an interdisciplinary team. Depending on a patient’s needs, each hospice patient is assigned an interdisciplinary team comprised of a physician, nurse(s), home health aide(s), medical social worker(s), chaplain, dietary counselor and bereavement coordinator, as well as other care professionals.

Respiratory Therapy and Home Medical Equipment

Respiratory therapy and HME services are provided to patients at home through branch locations primarily in the southeast United States. Patients are offered a broad portfolio of products and services that serve as an adjunct to traditional home health nursing and hospice care. Respiratory therapy services are provided to patients who suffer from a variety of conditions including asthma, chronic obstructive pulmonary diseases, cystic fibrosis and other respiratory conditions. HME includes hospital beds, wheelchairs, ambulatory aids, bathroom aids, patient lifts and rehabilitation equipment.

Infusion Therapy

Infusion therapy is provided to patients at home through pharmacy locations in the southeast United States. Infusion therapy serves as a complement to the Company’s traditional service offerings, providing clients with a comprehensive home health provider while diversifying the Company’s revenue base. Services provided include: (i) enteral nutrition, (ii) antibiotic therapy, (iii) total parenteral nutrition, (iv) pain management, (v) chemotherapy, (vi) patient education and training and (vii) nutrition management.

Consulting

The Company provides consulting services to home health agencies through its Gentiva Consulting unit. These services include billing and collection activities, on-site agency support and consulting, operational support and individualized strategies for reduction of days sales outstanding.

Corporate Expenses

Corporate expenses consist of costs relating to executive management and corporate and administrative support functions that are not directly attributable to a specific segment, including equity-based compensation expense. Corporate and administrative support functions represent primarily information services, accounting and reporting, tax compliance, risk management, procurement, marketing, legal and human resource benefits and administration.

Other Information

The Company’s senior management evaluates performance and allocates resources based on operating contributions of the reportable segments, which exclude corporate expenses, depreciation, amortization and net interest costs, but include revenues and all other costs (including special items and restructuring and integration costs) directly attributable to the specific segment. Intersegment revenues primarily represent Home Health segment revenues generated from services provided to the CareCentrix segment. Segment assets represent net accounts receivable, inventory, HME, identifiable intangible assets, goodwill and certain other assets associated with segment activities. Intersegment assets represent accounts receivable associated with services provided by the Home Health segment to the CareCentrix segment. All other assets are assigned to corporate assets for the benefit of all segments for the purposes of segment disclosure.

For the first quarter of fiscal 2008 and fiscal 2007, net revenues relating to the Company’s participation in Medicare amounted to $159.7 million and $150.5 million, respectively, of which $145.1 million and $135.2 million, respectively, was included in the Home Health segment and $14.6 million and $15.3 million, respectively, was included in the Other Related Services segment. Revenues from Cigna amounting to $63.8 million and $53.5 million for the first quarter of fiscal 2008 and 2007, respectively, were included in the CareCentrix segment.

Net revenues associated with the Other Related Services segment are as follows (in thousands):


	Three Months Ended
	March 30, 2008		April 1, 2007
Hospice	$	16,051	$	16,908
Respiratory services and HME		9,944		9,373
Infusion therapies		2,736		3,156
Consulting services		1,087		1,126

Total net revenues	$	29,818	$	30,563

Segment information about the Company’s operations is as follows (in thousands):


	Home Health			CareCentrix		Other Related Services		Total
For the three months ended March 30, 2008 (unaudited)
Net revenue - segments	$	217,000		$	77,848	$	29,818	$	324,666

Intersegment revenues									(944	)

Total net revenue								$	323,722

Operating contribution	$	31,202	(1)	$	6,326	$	2,845	$	40,373

Corporate expenses									(16,579	)(1)
Depreciation and amortization									(5,151	)
Interest expense, net									(5,426	)

Income before income taxes								$	13,217

Segment assets	$	641,719		$	57,237	$	78,305	$	777,261

Intersegment assets									(309	)
Corporate assets									150,411

Total assets								$	927,363

For the three months ended April 1, 2007 (unaudited)
Net revenue - segments	$	205,031		$	65,890	$	30,563	$	301,484

Intersegment revenues									(1,942	)

Total net revenue								$	299,542

Operating contribution	$	29,988	(1)	$	6,954	$	3,987	$	40,929

Corporate expenses									(17,790	)(1)
Depreciation and amortization									(4,783	)
Interest expense, net									(6,322	)

Income before income taxes								$	12,034

Segment assets	$	540,495		$	53,759	$	97,429	$	691,683

Intersegment assets									(564	)
Corporate assets									177,267

Total assets								$	868,386

(1)

Home Health operating contribution for the first quarter of fiscal 2008 and fiscal 2007 included costs of $0.1 million and $0.3 million, respectively, and corporate expenses included costs of $0.2 million and $0.7 million for the first quarter of fiscal 2008 and fiscal 2007, respectively, in connection with integration activities relating to the Healthfield acquisition. (See Note 7.)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q, including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects,” “assumes,” “trends” and similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the Company’s current plans, expectations and projections about future events. However, such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following:

•

general economic and business conditions;

•

demographic changes;

•

changes in, or failure to comply with, existing governmental regulations;

•

legislative proposals for healthcare reform;

•

changes in Medicare and Medicaid reimbursement levels, including changes to the Medicare home health Prospective Payment System effective January 1, 2008;

•

effects of competition in the markets in which the Company operates;

•

liability and other claims asserted against the Company;

•

ability to attract and retain qualified personnel;

•

availability and terms of capital;

•

loss of significant contracts or reduction in revenues associated with major payer sources;

•

ability of customers to pay for services;

•

business disruption due to natural disasters or terrorist acts;

•

ability to successfully integrate the operations of acquisitions the Company may make and achieve expected synergies and operational efficiencies within expected time-frames;

•

effect on liquidity of the Company’s debt service requirements;

•

a material shift in utilization within capitated agreements; and

•

changes in estimates and judgments associated with critical accounting policies and estimates.

Forward-looking statements are found throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q. The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission (“SEC”), the Company does not have any intention or obligation to publicly release any revisions to forward-looking statements to reflect unforeseen or other events after the date of this report. The Company has provided a detailed discussion of risk factors in its 2007 Annual Report on Form 10-K and various filings with the SEC. The reader is encouraged to review these risk factors and filings.

General

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of Gentiva’s results of operations and financial position. This discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this report.

The Company’s results of operations are impacted by various regulations and other matters that are implemented from time to time in its industry, some of which are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2007 and in other filings with the SEC.

Overview

Gentiva Health Services, Inc. is the nation’s largest provider of comprehensive home health services. Gentiva serves patients through more than 300 locations in 37 states, and through CareCentrix, which provides an array of administrative services and coordinates the delivery of home nursing services, acute and chronic infusion therapies, home medical equipment (“HME”), respiratory products, orthotics and prosthetics, and services for managed care organizations and health plans. These administrative services are delivered through an extensive nationwide network of nearly 4,000 credentialed third-party provider locations in all 50 states. The Company provides a single source for skilled nursing; physical, occupational, speech and neurorehabilitation services; hospice services; social work; nutrition; disease management education; help with daily living activities; respiratory therapy and HME; infusion therapy services; and other therapies and services. Gentiva’s revenues are generated from federal and state government programs, commercial insurance and individual consumers.

The Company has identified three business segments for reporting purposes: Home Health, CareCentrix and Other Related Services. The Other Related Services segment encompasses the Company’s hospice, respiratory therapy and HME, infusion therapy and consulting services businesses. This presentation aligns financial reporting with the manner in which the Company manages its business operations with a focus on the strategic allocation of resources and separate branding strategies among the business segments.

Home Health

The Home Health segment is comprised of direct home nursing and therapy services operations, including specialty programs. The Company conducts direct home nursing and therapy services operations through licensed and Medicare-certified agencies from which the Company provides various combinations of skilled nursing and therapy services, paraprofessional nursing services and, to a lesser extent, homemaker services to adult and elder patients. The Company’s direct home nursing and therapy services operations also deliver services to its customers through focused specialty programs that include:

•

Gentiva Orthopedics, which provides individualized home orthopedic rehabilitation services to patients recovering from joint replacement or other major orthopedic surgery;

•

Gentiva Safe Strides ^® , which provides therapies for patients with balance issues who are prone to injury or immobility as a result of falling; and

•

Gentiva Cardiopulmonary, which helps patients and their physicians manage heart and lung health in a home-based environment.

CareCentrix

Other Related Services

Hospice

Respiratory Therapy and Home Medical Equipment

Infusion Therapy

Consulting

Significant Developments

Home Health Care Affiliates, Inc.

The Company acquired HHCA to strengthen and expand its services in the southeast United States. The Company had not previously provided any services in Mississippi, a state which requires providers to have a Certificate of Need (“CON”) in order to operate a Medicare-certified home health agency. There have been no new CONs issued in Mississippi in recent years.

Results of Operations

Revenues

The Company’s net revenues increased by $24.2 million, or 8.1 percent, to $323.7 million for the quarter ended March 30, 2008 as compared to the quarter ended April 1, 2007.

A summary of the Company’s net revenues by segment follows:


(Dollars in millions)	First Quarter
	2008			2007			Percentage Variance
Home Health	$	217.0		$	205.0		5.8	%
CareCentrix		77.8			65.9		18.1	%
Other Related Services		29.8			30.5		(2.4	)%
Intersegment revenues		(0.9	)		(1.9	)	(51.4	)%

Total net revenues	$	323.7		$	299.5		8.1	%

A summary of the Company’s net revenues by payer follows:


(Dollars in millions)	First Quarter
	2008		2007		Percentage Variance
Medicare
Home Health	$	145.1	$	135.2	7.3	%
Other Related Services		14.6		15.3	(4.7	)%

Total Medicare		159.7		150.5	6.1	%
Medicaid and Local Government		35.3		38.3	(7.7	)%
Commercial Insurance and Other		128.7		110.7	16.3	%

	$	323.7	$	299.5	8.1	%

Home Health

Home Health segment revenues are derived from all three payer groups: Medicare, Medicaid and Local Government and Commercial Insurance and Other. First quarter 2008 net revenues were $217.0 million, up $12.0 million, or 5.8 percent, from $205.0 million in the prior year period.

Revenues generated from Medicare were $145.1 million in the first quarter of 2008 as compared to $135.2 million in the first quarter of 2007, an increase of $9.9 million or 7.3 percent. In addition, non-Medicare Prospective Payment System (“PPS”) revenues, which are included in Commercial Insurance and Other and represent Medicare Advantage business paid on an episodic basis, were $11.1 million in the first quarter of 2008 as compared to $5.4 million in the first quarter of 2007, an increase of $5.7 million. The combination of Medicare and non-Medicare PPS revenues grew about $15.6 million or 11 percent in the first quarter of 2008 as compared to the prior year period. This increase resulted from growth in total episodes of care of nearly 13 percent offset somewhat by a decline in revenue per episode of nearly 2 percent compared to the first quarter of 2007. The growth in total episodes of care was fueled primarily by increased volume in specialty programs in both existing and new markets and (ii) the impact of the HHCA acquisition as noted below.

Revenues from Medicaid and Local Government payer sources were $29.4 million in the first quarter of 2008 as compared to $32.2 million in the first quarter of 2007. Revenues from Commercial Insurance and Other payer sources, excluding non-Medicare PPS revenues, were $31.4 million in the first quarter of 2008 as compared to $32.2 million in the first quarter of 2007. These decreases resulted primarily from the Company’s ongoing strategy to reduce or eliminate certain lower gross margin business as the Company continues to pursue more favorable commercial pricing and a higher mix of Medicare and non-Medicare PPS business.

In the first quarter of 2008 and 2007, Medicare revenues as a percentage of total Home Health revenues were 67 percent and 66 percent, respectively, and the combination of Medicare and non-Medicare PPS revenues as a percent of total Home Health revenues were 72 percent and 69 percent, respectively. Home Health revenues derived from the HHCA acquisition approximated $2.6 million in the first quarter of 2008, the majority of which related to Medicare revenues.

CareCentrix

CareCcntrix segment revenues are derived from the Commercial Insurance and Other payer group only. First quarter 2008 net revenues were $77.8 million, an 18.1 percent increase from $65.9 million reported in the prior year period. The increase in net revenues for the first quarter is due primarily to increased membership enrollments among certain CareCentrix customers, including Cigna’s PPO and Open Access plans, and other new business relationships offset somewhat by a decline in membership enrollments under capitated plans. Revenues derived from Cigna increased by approximately $10.3 million to $63.8 million in the first quarter of 2008 as compared to the corresponding period of 2007.

Other Related Services

Other Related Services segment revenues are derived from all three payer groups. First quarter of fiscal 2008 net revenues were $29.8 million, a 2.4 percent decrease from $30.5 million in the prior year period. The decrease was attributable primarily to a $0.9 million reduction in hospice revenues resulting from higher than normal discharges in the first quarter of 2008 and a $0.4 million reduction in infusion therapies revenues, offset somewhat by a $0.6 million increase in respiratory therapy services and HME revenues.

In Other Related Services, Medicare revenues were $14.6 million in the first quarter of 2008 as compared to $15.3 million in the first quarter of 2007. Medicaid revenues were $6.0 million and $6.2 million in the first quarter of 2008 and 2007, respectively. Commercial Insurance and Other revenues in the first quarter of 2008 and 2007 were $9.2 million and $9.1 million, respectively. Hospice revenues derived from the HHCA acquisition approximated $0.4 million.

Gross Profit


(Dollars in millions)	First Quarter
	2008			2007			Variance
Gross profit	$	136.5		$	129.4		$	7.1
As a percent of revenue		42.2	%		43.2	%		(1.0	)%

As a percentage of revenues, gross profit of 42.2 percent in the first quarter of 2008 represented a 1.0 percentage point decrease as compared to the first quarter of 2007. From a total Company perspective, increases in Home Health segment gross margin percentage attributable to significant changes in business mix were offset by growth in the lower gross margin CareCentrix business and margin declines due to various other factors.

The changes in revenue mix in the Home Health segment resulted from (i) organic revenue growth in Medicare, particularly in the Company’s specialty programs, and non-Medicare PPS business and (ii) the elimination or reduction of certain low margin Medicaid and local government business and commercial business. The positive impact on gross profit percentage of the change in revenue mix was offset somewhat by incremental fuel costs and the short-term negative impact of hiring and orienting about twice the normal complement of full-time clinicians in a quarter. These changes contributed to an overall increase in gross margin within the Home Health segment from 49.8 percent in the first quarter of 2007 to 50.8 percent in the first quarter of 2008.

CareCentrix gross profit declined from 22.0 percent in the first quarter of 2007 to 18.4 percent in the first quarter of 2008. This decline was driven by higher utilization of services in its capitated business as well as the timing of rate changes which occurred during the quarter; these factors had a negative impact on gross margin of approximately $0.8 million. The Company expects this situation to be offset during the remainder of 2008 by seasonal changes in service utilization patterns as well as the benefit of recent price changes in certain contracts. In addition, the amendment to the Company’s national homecare contract with Cigna, which occurred during the first quarter of 2008, involved some changes in product mix that are expected to be more than offset by the long-term benefit gained from extending the Company’s relationship with Cigna through January 31, 2011. However, this factor had a negative impact on gross profit of $0.7 million in the first quarter of 2008.

Gross profit was also impacted by depreciation expense of $1.3 million and $1.2 million in the first quarter of 2008 and 2007, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $6.8 million to $117.9 million for the quarter ended March 30, 2008, as compared to $111.1 million for the quarter ended April 1, 2007.

The increase of $6.8 million for the first quarter of 2008 as compared to the corresponding period of 2007 was primarily attributable to (i) Home Health segment field operating costs (approximately $3 million) to support higher revenue volume in the 2008 period as compared to the 2007 period and to train and educate employees as discussed below, (ii) incremental selling expenses in Home Health ($2.4 million) and CareCentrix ($0.2 million) associated with increased headcount, (iii) incremental provision for doubtful accounts of approximately $0.6 million, primarily related to certain receivable balances in the Home Health and Other Related Services segments on legacy Healthfield systems, and (iv) increased depreciation and amortization expense (approximately $0.2 million). Selling, general and administrative expenses for the first quarter of 2008 included incremental costs of nearly $1 million primarily related to training and education of caregivers and administrative personnel in connection with the implementation of new Medicare PPS rules which became effective January 1, 2008.

Depreciation and amortization expense included in selling, general and administrative expenses was $3.8 million and $3.6 million in the first quarter of 2008 and 2007, respectively.

Interest Expense and Interest Income

loan borrowings and fees associated with the credit agreement and outstanding letters of credit and amortization of debt issuance costs, partially offset by interest income of $0.7 million and $0.8 million, respectively, earned on investments and existing cash balances.

Income before Income Taxes

Components of income before income taxes were as follows:


(Dollars in millions)	First Quarter
	2008			2007			Variance
Operating Contribution:
Home Health	$	31.2		$	30.0		$	1.2
CareCentrix		6.3			6.9			(0.6	)
Other Related Services		2.9			4.0			(1.1	)

Total Operating Contribution		40.4			40.9			(0.5	)
Corporate expenses		(16.6	)		(17.8	)		1.2
Depreciation and amortization		(5.2	)		(4.8	)		(0.4	)
Interest (expense) income, net		(5.4	)		(6.3	)		0.9

Income before income taxes	$	13.2		$	12.0		$	1.2

As a percent of revenue		4.1	%		4.0	%		0.1	%

Income Taxes

Net Income

For the first quarter of fiscal 2008, net income was $7.7 million, or $0.27 per diluted share, compared with net income of $6.8 million, or $0.24 per diluted share, for the corresponding period of 2007.

Net income for the 2008 first quarter reflected a pre-tax charge of $0.3 million relating to restructuring and integration costs.

Net income for the 2007 first quarter reflected a pre-tax charge of $1.0 million, or $0.02 per diluted share, relating to restructuring and integration costs.

Liquidity and Capital Resources

Liquidity

The Company’s principal source of liquidity is the collection of its accounts receivable. For healthcare services, the Company grants credit without collateral to its patients, most of whom are insured under third party commercial or governmental payer arrangements. Additional liquidity is provided from existing cash balances and the Company’s credit arrangements, principally through its revolving credit facility. See Note 10 to the Company’s consolidated financial statements.

During the first quarter of 2008, cash provided by operating activities was $8.1 million. In addition, the Company received proceeds of $12 million from the revolving credit facility and generated cash from the issuance of common stock

upon exercise of stock options and under the Company’s Employee Stock Purchase Plan (“ESPP”) of $4.1 million. In the 2008 first quarter, the Company used $47.4 million to fund the acquisition of HHCA, $7.4 million for the repayment of HHCA acquired debt and $6.6 million of cash for capital expenditures. Net cash provided by operating activities decreased by $7.6 million, from $15.7 million in the first quarter of 2007 to $8.1 million in the first quarter of 2008. The decrease was primarily driven by changes in current liabilities ($9.8 million) offset by an increase in cash provided by operations prior to changes in assets and liabilities ($2.2 million).

Adjustments to add back non-cash items affecting net income are summarized as follows (in thousands):


	Three Months Ended
	March 30, 2008			April 1, 2007			Variance
OPERATING ACTIVITIES:
Net income	$	7,723		$	6,839		$	884
Adjustments to add back non-cash items affecting net income:
Depreciation and amortization		5,151			4,783			368
Amortization of debt issuance costs		287			206			81
Provision for doubtful accounts		2,600			1,992			608
Equity-based compensation expense		1,734			1,652			82
Windfall tax benefits associated with equity-based compensation		(1,235	)		(241	)		(994	)
Deferred income tax expense		4,848			3,699			1,149

Total cash provided by operations prior to changes in assets and liabilities	$	21,108		$	18,930		$	2,178

The $2.2 million difference in “Total cash provided by operations prior to changes in assets and liabilities” between the 2007 and 2008 periods is primarily related to improvements in net income after adjusting for components of income that do not have an impact on cash, such as depreciation and amortization, deferred income taxes and equity-based compensation expense.

Cash flow from operating activities between the 2007 and 2008 reporting periods was negatively impacted by $1.9 million as a result of changes in accounts receivable represented by a $17.7 million reduction in the 2007 period and a $19.6 million decrease in the 2008 period, exclusive of accounts receivable of acquired businesses, and positively impacted by $1.9 million as a result of changes in prepaid expenses, other current assets and other items.

Cash flow from operating activities was negatively impacted by $9.8 million as a result of changes in current liabilities of $8.8 million in the 2008 period and $18.6 million in the 2007 period. A summary of the changes in current liabilities impacting cash flow from operating activities for the three months ended March 30, 2008 follows (in thousands):


	Three Months Ended
	March 30, 2008			April 1, 2007			Variance
OPERATING ACTIVITIES:
Changes in current liabilities:
Accounts payable	$	3,911		$	(103	)	$	4,014
Payroll and related taxes		9,102			10,654			(1,552	)
Deferred revenue		809			4,717			(3,908	)
Medicare liabilities		271			781			(510	)
Cost of claims incurred but not reported		(1,590	)		449			(2,039	)
Obligations under insurance programs		(354	)		2,482			(2,836	)
Other accrued expenses		(3,324	)		(320	)		(3,004	)

Total changes in current liabilities	$	8,825		$	18,660		$	(9,835	)

The primary drivers for the $9.8 million difference resulting from changes in current liabilities that impacted cash flow from operating activities include:

•

Accounts payable, which had a positive impact on cash of $4.0 million, and payroll and related taxes, which had a negative impact of $1.6 million, between the 2007 and 2008 reporting periods, primarily related to the timing of payments.

•

Deferred revenue, which had a negative impact of $3.9 million between the 2007 and 2008 reporting periods, exclusive of businesses acquired.

•

Medicare liabilities, which had a negative impact of $0.5 million between the 2007 and 2008 reporting periods.

•

Cost of claims incurred but not reported, which had a negative impact of $2.0 million on the changes in operating cash flows between the 2007 and 2008 reporting periods.

•

Obligations under insurance programs, which had a negative impact on the change in operating cash flow of $2.8 million between the 2007 and 2008 reporting periods, primarily as a result of an increase in health and welfare benefit liabilities due to an increase in the number of covered associates and benefits coverage.

•

Other accrued expenses, which had a negative impact on the change in operating cash flow of $3.0 million between the 2007 and 2008 reporting periods, due primarily to accrued interest payable associated with the credit agreement and incentive and commission payments during the first three months of fiscal 2008, as well as changes in various other accrued expenses.

Working capital at March 30, 2008 was approximately $87 million, a decrease of $41 million, as compared to approximately $128 million at December 30, 2007, primarily due to:

•

a $20 million decrease in cash, cash equivalents and restricted cash, primarily related to the purchase of HHCA;

•

a $30 million decrease in short-term investments, primarily due to liquidation of auction rate securities and a classification change of approximately $13 million in auction rate securities to long-term investments;

•

a $1 million decrease in deferred tax assets;

•

a $14 million increase in current liabilities, consisting of increases in current portion of long-term debt ($1 million), accounts payable ($4 million), payroll and related taxes ($11 million), and deferred revenue ($3 million), partially offset by a decrease in cost of claims incurred but not reported ($2 million), and other accrued expenses ($3 million). The changes in current liabilities are described above in the discussion on net cash provided by operating activities; offset somewhat by

•

a $22 million increase in accounts receivable, due to normal seasonal patterns, receivables acquired in the HHCA acquisition, as well as a temporary delay associated with the Medicare PPS reimbursement system; and

•

a $2 million increase in prepaid expenses and other assets due to prepayments made in connection with the Company’s insurance programs.

Days Sales Outstanding (“DSO”) as of March 30, 2008 were 63 days, an increase of three days from December 30, 2007. DSO at March 30, 2008 for Home Health, CareCentrix and Other Related Services were 63, 67 and 61 days, respectively, compared to 59, 63 and 61 days, respectively, at December 30, 2007, due primarily to changes associated with the Medicare PPS reimbursement system.

Accounts receivable attributable to major payer sources of reimbursement at March 30, 2008 and December 30, 2007 were as follows (in thousands):


	March 30, 2008
	Total		Current		31 - 90 days		91 - 180 days		Over 180 days
Medicare	$	104,515	$	54,145	$	35,371	$	10,120	$	4,879
Medicaid and Local Government		22,848		10,940		7,214		2,367		2,327
Commercial Insurance and Other		104,322		68,844		21,543		8,428		5,507
Self - Pay		7,810		857		2,564		2,093		2,296

Gross Accounts Receivable	$	239,495	$	134,786	$	66,692	$	23,008	$	15,009


	December 30, 2007
	Total		Current		31 - 90 days		91 - 180 days		Over 180 days
Medicare	$	93,992	$	44,755	$	34,186	$	10,335	$	4,716
Medicaid and Local Government		21,818		10,753		6,935		2,248		1,882
Commercial Insurance and Other		94,540		58,960		19,884		8,753		6,943
Self - Pay		6,888		625		1,611		2,355		2,297

Gross Accounts Receivable	$	217,238	$	115,093	$	62,616	$	23,691	$	15,838

The Company participates in Medicare, Medicaid and other federal and state healthcare programs. Revenue mix by major payer classifications is as follows:


	Three Months Ended
	March 30, 2008		April 1, 2007
Medicare	49	%	50	%
Medicaid and Local Government	11		13
Commercial Insurance and Other	40		37

	100	%	100	%

Segment revenue mix by major payer classifications was as follows:


	First Quarter
	2008				2007
	Home Health		Other Related Services		Home Health		Other Related Services
Medicare	67	%	49	%	66	%	50	%
Medicaid and Local Government	13		20		16		20
Commercial Insurance and Other	20		31		18		30

Total net revenues	100	%	100	%	100	%	100	%

CareCentrix revenues are all derived from the Commercial Insurance and Other payer group.

In August 2007, the Centers for Medicare and Medicaid Services (“CMS”) published the “Home Health Prospective Payment System Refinement and Rate Update for Calendar Year 2008” that contains significant refinements to the Medicare home health PPS reimbursement methodology including, among other things, a multi-year reduction in the home health system payment rates to offset coding changes since the original implementation of PPS in 2000, referred to in various CMS documents as “case mix creep”, and a 3.0 percent market basket update, effective January 1, 2008. On June 29, 2007, CMS released a transmittal that confirmed an increase of 3.3 percent to the fiscal 2008 Medicare hospice annual update payment.

There are certain standards and regulations that the Company must adhere to in order to continue to participate in Medicare, Medicaid and other federal and state healthcare programs. As part of these standards and regulations, the Company is subject to periodic audits, examinations and investigations conducted by, or at the direction of, governmental investigatory and oversight agencies. Periodic and random audits conducted or directed by these agencies could result in a delay or adjustment to the amount of reimbursements received under these programs. Violation of the applicable federal and state health care regulations can result in our exclusion from participating in these programs and can subject the Company to substantial civil and/or criminal penalties. The Company believes that it is currently in compliance with these standards and regulations. The Company’s HME and respiratory therapy business operates in certain markets that are subject to a competitive bidding process for Medicare.

The Company is party to a contract with Cigna, pursuant to which the Company provides or contracts with third-party providers to provide various homecare services including direct home nursing and related services, home infusion therapies and certain other specialty medical equipment to patients insured by Cigna. For the first quarter of fiscal 2008, Cigna accounted for approximately 20 percent of the Company’s total net revenues compared to approximately 18 percent for the first quarter of fiscal 2007. This increase in Cigna revenues as a percent of the Company’s total net revenues is primarily attributable to growth in membership in Cigna’s PPO and Open Access plans.

Effective February 1, 2006, the Cigna contract was amended for a period through January 31, 2009. Subsequent to the effective date of this amended contract, the Company no longer provides ancillary care benefit management services relating to the delivery of respiratory therapy services and certain HME to members of Cigna’s health plans. On February 7, 2008, the Company announced that it had signed another extension of its contract with Cigna, which provides for the coordination and delivery of homecare services to Cigna members through January 31, 2011. The contract automatically renews thereafter for additional one year terms. Either party may elect not to renew this contract by providing at least 90 days written notice to the other party prior to January 31, 2011 or the start of each subsequent one year term. If Cigna chose to terminate or not renew the contract, or to significantly modify its use of the Company’s services, there could be a material adverse effect on the Company’s cash flow.

Credit Arrangements


Revolving Credit Consolidated Leverage Ratio	Term Loan Consolidated Leverage Ratio	Margin for Base Rate Loans	Margin for Eurodollar Loans
³ 3.5	³3.5	1.25%	2.25%
< 3.5 & ³ 3.0	<3.5 & ³ 3.0	1.00%	2.00%
< 3.0 & ³ 2.5	< 3.0	0.75%	1.75%
< 2.5		0.50%	1.50%

The credit agreement requires the Company to meet certain financial tests. These tests include a consolidated leverage ratio and a consolidated interest coverage ratio. The credit agreement also contains additional covenants which, among other things, require the Company to deliver to the lenders specified financial information, including annual and quarterly financial information, and limit the Company’s ability to do the following, subject to various exceptions and limitations: (i) merge with other companies; (ii) create liens on its property; (iii) incur additional debt obligations; (iv) enter into transactions with affiliates, except on an arms-length basis; (v) dispose of property; (vi) make capital expenditures; and (vii) pay dividends or acquire capital stock of the Company or its subsidiaries. As of March 30, 2008, the Company was in compliance with the covenants in the credit agreement.

During the first quarter of fiscal 2008, in connection with the purchase of HHCA, the Company borrowed $12 million under the revolving credit facility. During the quarter ended March 30, 2008, the Company made no prepayments relating to its term loan. Beginning in the second quarter of 2008, the Company is required to make quarterly installment payments of $768,000 with the remaining balance due at maturity on March 31, 2013. The required quarterly installment payments are reduced by any additional prepayments the Company may make, applied against the quarterly installments pro rata based on the remaining outstanding principal amount of such installments, including the balance due at maturity. As of March 30, 2008, maturities under the term loan were as follows: $2.3 million for fiscal 2008, $3.1 million per year for fiscal 2009 through fiscal 2012 and $295.3 million thereafter. As of March 30, 2008, the Company had outstanding borrowings under the term loan and the revolving credit facility of $310.0 million and $12.0 million, respectively.

Guarantee and Collateral Agreement

The Company has entered into a Guarantee and Collateral Agreement which grants a collateral interest in all real property and personal property of the Company and its subsidiaries, including stock of its subsidiaries, in favor of the administrative agent under the credit agreement. The Guarantee and Collateral Agreement also provides for a guarantee of the Company’s obligations under the credit agreement by substantially all subsidiaries of the Company.

Insurance Programs

The Company may be subject to workers’ compensation claims and lawsuits alleging negligence or other similar legal claims. The Company maintains various insurance programs to cover these risks with insurance policies subject to substantial deductibles and retention amounts. The Company recognizes its obligations associated with these programs in the period the claim is incurred. The Company estimates the cost of both reported claims and claims incurred but not reported, up to specified deductible limits and retention amounts, based on its own specific historical claims experience and current enrollment statistics, industry statistics and other information. These estimates and the resulting reserves are reviewed and updated periodically.

The Company is responsible for the cost of individual workers’ compensation claims and individual professional liability claims up to $500,000 per incident which occurred prior to March 15, 2002 and $1,000,000 per incident thereafter. The Company also maintains excess liability coverage relating to professional liability and casualty claims which provides insurance coverage for individual claims of up to $25,000,000 in excess of the underlying coverage limits. Payments under the Company’s workers’ compensation program are guaranteed by letters of credit and segregated restricted cash balances.

Capital Expenditures

The Company’s capital expenditures for the three months ended March 30, 2008 were $6.6 million as compared to $6.4 million for the same period in fiscal 2007. The Company intends to make investments and other expenditures to upgrade its computer technology and system infrastructure and comply with regulatory changes in the industry, among other things. In this regard, management expects that capital expenditures for fiscal 2008 will range between $22 million and $24 million. Management expects that the Company’s capital expenditure needs will be met through operating cash flow and available cash reserves.

Cash Resources and Obligations

The Company had cash, cash equivalents, restricted cash and investments of approximately $30.4 million as of March 30, 2008. The restricted cash of $0.2 million at March 30, 2008 related primarily to a deposit to comply with New York state regulations requiring that one month of revenues generated under capitated agreements in the state be held in escrow. Interest on all restricted funds accrues to the Company. As of March 30, 2008, the Company had operating funds of approximately $5.8 million exclusively relating to a non-profit hospice operation in Florida.

During the first quarter of fiscal 2008, the Company replaced $21.8 million of its segregated cash funds with additional letters of credit as collateral under the Company’s insurance programs.

The Company held investments in AAA-rated auction rate securities of $14.0 million at March 30, 2008, as a result of failed auctions. Based on the Company’s expected operating cash flows, and its other sources of cash, the Company does not anticipate the potential lack of liquidity on these investments will affect its ability to execute its current business plan. See Notes 2 and 3 to the Company’s consolidated financial statements.

The Company anticipates that repayments to Medicare for partial episode payments and prior year cost report settlements will be made periodically through 2008. These amounts are included in Medicare liabilities in the accompanying consolidated balance sheets.

The Company made no purchases of its common stock during the first three months of 2008. As of March 30, 2008, the Company had remaining authorization to repurchase an aggregate of 683,396 shares of its outstanding common stock.

Management anticipates that in the near term the Company may make voluntary prepayments on the term loan and borrowings under the revolving credit facility rather than stock repurchases with certain excess cash resources.

Contractual Obligations and Commercial Commitments

As of March 30, 2008, the Company had outstanding borrowings of $310 million under the term loan of the credit agreement and $12 million under the revolving credit facility. Debt repayments, future minimum rental commitments for all non-cancelable leases and purchase obligations at March 30, 2008 are as follows (in thousands):


	Payment due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Long-term debt obligations	$	322,000	$	3,072	$	6,144	$	312,784	$	—
Capital lease obligations		2,850		1,238		1,367		245		—
Operating lease obligations		83,489		26,231		37,489		17,037		2,732
Purchase obligations		9,704		2,588		5,175		1,941		—

Total	$	418,043	$	33,129	$	50,175	$	332,007	$	2,732

During the first three months of fiscal 2008, the Company made no voluntary debt prepayments relating to its term loan. On April 30, 2008, the Company repaid $2 million on its revolving credit facility. Beginning in the second quarter of 2008, the Company is required to make quarterly installment payments of $768,000 with the remaining balance due at maturity on March 31, 2013. The required quarterly installment payments are reduced by any additional prepayments the Company may make, applied against the quarterly installments pro rata based on the remaining outstanding principal amount of such installments, including the balance due at maturity. The Company had total letters of credit outstanding of approximately $41.6 million at March 30, 2008 and $20.1 million at December 30, 2007. The letters of credit, which expire one year from date of issuance, were issued to guarantee payments under the Company’s workers’ compensation program and for certain other commitments. On April 7, 2008, the amount of collateral required under the Company’s insurance programs was reduced and as such the Company’s outstanding letters of credit were reduced by approximately $4.8 million. The Company has the option to renew these letters of credit or set aside cash funds in a segregated account to satisfy the Company’s obligations as further discussed above under the caption “Cash Resources and Obligations.” In February 2008, the Company replaced $21.8 million of its segregated cash funds with additional letters of credit as collateral under the Company’s insurance programs. The Company also had outstanding surety bonds of $1.9 million at March 30, 2008 and December 30, 2007.

The Company has no other off-balance sheet arrangements and has not entered into any transactions involving unconsolidated, limited purpose entities or commodity contracts.

Management expects that the Company’s working capital needs for fiscal 2008 will be met through operating cash flow and existing cash balances. The Company may also consider other alternative uses of cash including, among other things, acquisitions, voluntary prepayments on the term loan and borrowings under the revolving credit facility, additional share repurchases and cash dividends. These uses of cash may require the approval of its Board of Directors and may require the approval of its lenders. If cash flows from operations, cash resources or availability under the credit agreement fall below expectations, the Company may be forced to delay planned capital expenditures, reduce operating expenses, seek additional financing or consider alternatives designed to enhance liquidity.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Generally, the fair market value of fixed rate debt will increase as interest rates fall and decrease as interest rates rise. The Company is exposed to market risk from fluctuations in interest rates. The interest rate on the Company’s borrowings under the credit agreement can fluctuate based on both the interest rate option (i.e., base rate or LIBOR plus applicable margins) and the interest period. As of March 30, 2008, the total amount of outstanding debt subject to interest rate fluctuations was $152.0 million. A hypothetical 100 basis point change in short-term interest rates as of that date would result in an increase or decrease in interest expense of $1.5 million per year, assuming a similar capital structure.

Item 4.

Controls and Procedures

Evaluation of disclosure controls and procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (“Exchange Act”) Rule 13a-15(e)) as of the end of the period covered by this report. Based on that evaluation, the

Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of the end of such period to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in internal control over financial reporting

As required by the Exchange Act Rule 13a-15(d), the Company’s Chief Executive Officer and Chief Financial Officer evaluated the Company’s internal control over financial reporting to determine whether any change occurred during the quarter ended March 30, 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Based on that evaluation, there has been no such change during such quarter.

PART II—OTHER INFORMATION

Item 1.

Legal Proceedings

See Note 13 to the consolidated financial statements included in this report for a description of legal matters and pending legal proceedings, which description is incorporated herein by reference.

Item 1A.

Risk Factors

There have been no material changes from the risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2007.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Submission of Matters to a Vote of Security Holders

None.

Item 5.

Other Information

Corporate Integrity Agreement

In connection with a July 19, 1999 settlement with various government agencies, Olsten Corporation, the Company’s former parent corporation, executed a corporate integrity agreement with the OIG, effective until August 18, 2004, subject to the Company’s filing of a final annual report with the OIG in form and substance acceptable to the government. The Company has filed a final annual report and is awaiting closure by the government.

The Company believes that it has been in compliance with the corporate integrity agreement and has timely filed all required reports. If the Company has failed to comply with the terms of its corporate integrity agreement, the Company will be subject to penalties. The corporate integrity agreement applies to the Company’s businesses that bill the federal government health programs directly for services, such as its nursing brand, and focuses on issues and training related to cost report preparation, contracting, medical necessity and billing of claims. Under the corporate integrity agreement, the Company is required, for example, to maintain a corporate compliance officer to develop and implement compliance programs, and to maintain a compliance program and reporting systems, as well as to provide certain training to employees.

Item 6.

Exhibits


Exhibit Number		Description

3.1		Amended and Restated Certificate of Incorporation of Company. (1)

3.2		Amended and Restated By-Laws of Company. (1)

4.1		Specimen of common stock. (4)

4.2		Form of Certificate of Designation of Series A Junior Participating Preferred Stock. (2)

4.3		Form of Certificate of Designation of Series A Cumulative Non-Voting Redeemable Preferred Stock. (3)

10.1		Ninth Amendment dated February 4, 2008 to Managed Care Alliance Agreement between CIGNA Health Corporation and Gentiva CareCentrix, Inc. entered into as of January 1, 2004 (confidential treatment requested as to portions of this document)*

10.2		Form of Change of Control Agreement with each of Tony Strange, John R. Potapchuk, Stephen B. Paige and Brian D. Silva. (5)

10.3		Form of Severance Agreement with each of John R. Potapchuk, Stephen B. Paige and Brian D. Silva (6) (the Severance Agreements are identical in substance for each of the named officers, except that the Severance Agreement for Mr. Potapchuk provides for payments of 18 months of severance and the Severance Agreements for Mr. Paige and Mr. Silva provide for payments of 12 months of severance)

10.4		Severance Agreement dated February 28, 2008 with Tony Strange.*

10.5		Confidentiality, Non-Competition and Intellectual Property Agreement dated February 28, 2006 with Tony Strange.*

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a).*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a).*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.*

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*

(1)	Incorporated herein by reference to Form 8-K of Company dated May 12, 2006 and filed May 15, 2006.

(2)	Incorporated herein by reference to Amendment No. 2 to the Registration Statement of Company on Form S-4 dated January 19, 2000 (File No. 333-88663).

(3)	Incorporated herein by reference to Amendment No. 3 to the Registration Statement of Company on Form S-4 dated February 4, 2000 (File No. 333-88663).

(4)	Incorporated herein by reference to Amendment No. 4 to the Registration Statement of Company on Form S-4 dated February 9, 2000 (File No. 333-88663).

(5)	Incorporated herein by reference to Form 8-K of Company dated and filed March 4, 2008.

(6)	Incorporated herein by reference to Form 10-K of Company for fiscal year ended December 30, 2007.

*	Filed herewith

SIGNATURES

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 thereunto duly authorized.


		GENTIVA HEALTH SERVICES, INC.
		(Registrant)

Date: May 9, 2008		/s/ Ronald A. Malone
		Ronald A. Malone
		Chairman and Chief Executive Officer


Date: May 9, 2008		/s/ John R. Potapchuk
		John R. Potapchuk
		Executive Vice President,
		Chief Financial Officer and Treasurer

EXHIBIT INDEX


Exhibit Number		Description

3.1		Amended and Restated Certificate of Incorporation of Company. (1)

3.2		Amended and Restated By-Laws of Company. (1)

4.1		Specimen of common stock. (4)

4.2		Form of Certificate of Designation of Series A Junior Participating Preferred Stock. (2)

4.3		Form of Certificate of Designation of Series A Cumulative Non-Voting Redeemable Preferred Stock. (3)

10.1		Ninth Amendment dated February 4, 2008 to Managed Care Alliance Agreement between CIGNA Health Corporation and Gentiva CareCentrix, Inc. entered into as of January 1, 2004 (confidential treatment requested as to portions of this document)*

10.2		Form of Change of Control Agreement with each of Tony Strange, John R. Potapchuk, Stephen B. Paige and Brian D. Silva. (5)

10.3		Form of Severance Agreement with each of John R. Potapchuk, Stephen B. Paige and Brian D. Silva (6) (the Severance Agreements are identical in substance for each of the named officers, except that the Severance Agreement for Mr. Potapchuk provides for payments of 18 months of severance and the Severance Agreements for Mr. Paige and Mr. Silva provide for payments of 12 months of severance)

10.4		Severance Agreement dated February 28, 2008 with Tony Strange.*

10.5		Confidentiality, Non-Competition and Intellectual Property Agreement dated February 28, 2006 with Tony Strange.*

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a).*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a).*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.*

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*

(1)	Incorporated herein by reference to Form 8-K of Company dated May 12, 2006 and filed May 15, 2006.

(2)	Incorporated herein by reference to Amendment No. 2 to the Registration Statement of Company on Form S-4 dated January 19, 2000 (File No. 333-88663).

(3)	Incorporated herein by reference to Amendment No. 3 to the Registration Statement of Company on Form S-4 dated February 4, 2000 (File No. 333-88663).

(4)	Incorporated herein by reference to Amendment No. 4 to the Registration Statement of Company on Form S-4 dated February 9, 2000 (File No. 333-88663).

(5)	Incorporated herein by reference to Form 8-K of Company dated and filed March 4, 2008.

(6)	Incorporated herein by reference to Form 10-K of Company for fiscal year ended December 30, 2007.

*	Filed herewith

EX-10.1 2 dex101.htm NINTH AMENDMENT TO MANAGED CARE ALLIANCE AGREEMENT Ninth Amendment to Managed Care Alliance Agreement

Exhibit 10.1

NINTH AMENDMENT TO

MANAGED CARE ALLIANCE AGREEMENT

THIS NINTH AMENDMENT (the “Amendment”) is entered into this 4^th day of February, 2008 by and between CIGNA Health Corporation, for and on behalf of its CIGNA Affiliates (individually and collectively, “CIGNA”) and Gentiva CareCentrix, Inc. (“MCA”).

WITNESSETH

WHEREAS, CIGNA and MCA entered into a Managed Care Alliance Agreement which became effective January 1, 2004, as amended from time to time, (the “Agreement”) whereby MCA agreed to provide or arrange for the provision of certain home health care services to Participants, as that term is defined in the Agreement;

WHEREAS, the parties wish to amend the Agreement to extend the term of the Agreement and to change the capitation service rates and other designated fee for service rates effective February 1, 2008 and to include such other terms and conditions as set forth in this Amendment.

NOW THEREFORE, CIGNA and MCA agree to amend the Agreement as follows:

This Ninth Amendment shall be effective on February 1, 2008 for services rendered on and after February 1, 2008.

Section III.B. of the Agreement is amended to extend the term of the Agreement until January 31, 2011 and is replaced to read as follows:

“Term of Agreement

This Agreement shall terminate on January 31, 2011. Either party may elect not to renew this Agreement by providing at least ninety (90) days advance written notice to the other party, prior to the termination date of this Agreement. If neither party exercises such right to terminate, the existing rates will remain in place and this Agreement shall automatically renew for consecutive one (1) year terms without any further action by either party, unless either party elects not to renew this Agreement by providing at least ninety (90) days advance written notice to the other party, prior to the commencement of the next term.

Notwithstanding the expiration or non-renewal of this Agreement pursuant to this Section B., this Agreement shall continue in effect with respect to those Payors covered under Service Agreements in effect as of the end of the term of this Agreement or the notice period, as applicable, but not to exceed twelve months from the effective date of termination or expiration.”

The notice provision of the agreement, entitled “Notice”, is hereby deleted in its entirety and replaced with the new Section III.K. as follows:

“Any notice required hereunder shall be in writing and shall be sent by United States mail, postage prepaid, to CIGNA and MCA at the addresses set forth below:

If to MCA:

Senior Vice President

CareCentrix

3 Huntington Quadrangle 200S

Melville, NY 11747

and:

General Counsel

Gentiva Health Services, Inc.

3 Huntington Quadrangle 200S

Melville, NY 11747

If to CIGNA:

CIGNA HealthCare

National Contracting

900 Cottage Grove Road, B7NC

Hartford, CT 06152

and:

CIGNA HealthCare

Legal Department

900 Cottage Grove Road, B6LPA

Hartford, CT 06152”

Exhibit A HMO Program Attachment – Capitation Schedule of Capitation Rates is hereby deleted in its entirety and replaced with a new Exhibit A HMO Program Attachment – Capitation Schedule of Capitation Rates attached hereto for services provided on and after February 1, 2008.

Exhibit A HMO Program Attachment – Fee for Service Reimbursement For Other Services is hereby deleted in its entirety and replaced with a new Exhibit A HMO Program Attachment – Fee for Service Reimbursement For Other Services attached hereto for services provided on and after February 1, 2008.

Exhibit A Gatekeeper Program Attachment – Capitation Schedule of Capitation Rates is hereby deleted in its entirety and replaced with a new Exhibit A Gatekeeper Program Attachment – Capitation Schedule of Capitation Rates attached hereto for services provided on and after February 1, 2008

Exhibit A Gatekeeper Program Attachment – Fee for Service Reimbursement For Other Services is hereby deleted in its entirety and replaced with a new Exhibit A Gatekeeper Program Attachment – Fee for Service Reimbursement For Other Services attached hereto for services provided on and after February 1, 2008.

Exhibit A PPO & Indemnity Program Attachment – Fee for Service Reimbursement For Other Services is hereby deleted in its entirety and replaced with a new Exhibit A PPO & Indemnity Program Attachment Reimbursement For Other Services attached hereto for services provided on and after February 1, 2008.

CIGNA and MCA agree to the following additional terms:

***

MCA will submit, by May 1, 2008, a fee schedule at code level detail to be used for CIGNA audit purposes. The Agreement will be amended at that time, if necessary, to make changes to the Agreement to address any issues identified through such review;

The parties will collaborate to create, by May 1, 2008, a summary report showing CAP and fee-for-service detail specific to products and geographic locations. The Agreement will be amended at that time, if necessary, to make changes to the Agreement to address any issues identified through such review;

***

***	Confidential Treatment Requested.

10.

To the extent that the provisions in the Agreement, including any prior amendments, conflict with the terms of this Amendment (including the exhibits and schedules hereto), the terms in this Amendment shall supersede and control. All other terms and conditions of the Agreement, including the Program Attachments and the Exhibits attached thereto, shall remain the same and in full force and effect. Capitalized terms not defined herein but defined in the Agreement shall have the same meaning as defined in the Agreement.

IN WITNESS WHEREOF, CIGNA and MCA have caused their duly authorized representatives to execute this Amendment as of the date first written above.


CIGNA HEALTH CORPORATION

By:		/s/ Joseph E. Turgeon, III,
Its:		VP Network Strategy & Development
Dated:		February 5, 2008

GENTIVA CARECENTRIX, INC.

By:		/s/ Thomas Boelsen
Its:		Sr. V.P
Dated:		February 4, 2008

EXHIBIT A

HMO PROGRAM ATTACHMENT - CAPITATION

SCHEDULE OF CAPITATION RATES

CAPITATION RATES EFFECTIVE 2/1/08 - 1/31/09

These are the capitation rates that apply to services rendered to Patient Panel Participants enrolled in HMO Programs. An “HMO Program” means a non-governmental, fully insured HMO or Point of Service product that is underwritten based on a community rating methodology (i.e. community rating, community rating by class, adjusted community rating by class).


		CareCentrix Home Health, Infusion, DME/ HME Capitation Rates PMPM
All Commercial HMO Program Capitated Affiliates		***

Capitation Rate Compensation Terms

The following rates are established for the provision of Home Care Services rendered to Program Participants covered under the HMO and Gatekeeper plans:


February 1, 2008 - January 31, 2009		*** per member per month
February 1, 2009 - January 31, 2010		*** per member per month
February 1, 2010 - January 31, 2011		*** per member per month

The capitation rate listed above will be allocated between HMO and Gatekeeper Program particiants in accordance with established business practices. On or about February 1 of each year, the parties shall reconcile the allocation and settle any payment difference no later than February 28 of each calendar year.

If an outlier calcuation for *** demonstrates a patient per thousand (PPK) increase in excess of ***, (***), then MCA reserves the right to propose an *** pmpm outlier adjustment. CIGNA may elect to accept this adjustment or *** and *** from this agreement.

***	Confidential Treatment Requested.

EXHIBIT A

HMO PROGRAM ATTACHMENT - FEE FOR SERVICE

REIMBURSEMENT FOR OTHER SERVICES

RATE AREA DESIGNATIONS:


STATE	RATE AREA	RATE DESIGNATION
Alabama	***	***
Alaska	***	***
Arizona	***	***
Arkansas	***	***
California	***	***
Colorado	***	***
Connecticut	***	***
Delaware	***	***
District of Columbia	***	***
Florida	***	***
Georgia	***	***
Hawaii	***	***
Idaho	***	***
Illinois	***	***
Indiana	***	***
Iowa	***	***
Kansas	***	***
Kentucky	***	***
Louisiana	***	***
Maine	***	***
Maryland	***	***
Massachusetts	***	***
Michigan	***	***
Minnesota	***	***
Mississippi	***	***
Missouri	***	***
Montana	***	***
Nebraska	***	***
Nevada	***	***
New Hampshire	***	***
New Jersey	***	***
New Mexico	***	***
New York	***	***
North Carolina	***	***
North Dakota	***	***
Ohio	***	***
Oklahoma	***	***
Oregon	***	***
Pennsylvania	***	***
Rhode Island	***	***
South Carolina	***	***
South Dakota	***	***
Tennessee	***	***
Texas	***	***
Utah	***	***
Vermont	***	***
Virginia	***	***
Washington	***	***
West Virginia	***	***
Wisconsin	***	***
Wyoming	***	***

***	Confidential Treatment Requested

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

HMO RATES EFFECTIVE FEBRUARY 1, 2008 - JANUARY 31, 2009

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN - HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

HMO RATES EFFECTIVE FEBRUARY 1, 2009 - JANUARY 31, 2010

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN - HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

HMO RATES EFFECTIVE FEBRUARY 1, 2010 - JANUARY 31. 2011

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN - HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

HOME INFUSION RATES

HMO RATES EFFECTIVE FEBRUARY 1, 2008 - JANUARY 31, 2009

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP (if applicable), and there is NO price difference between primary and multiple therapies


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives - Primary Anti-Infective	***		***
Anti-Infectives - Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			*	**
Flolan 1.5 mg vial			*	**
Flolan diluent vial			*	**

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies

	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

*** Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY HMO FEE-FOR-SERVICE RATES

NOTES:

Per Diems EXCLUDING drugs include all costs related to the therapy except the cost of drugs, including but not limited to facility overhead, supplies, delivery, professional labor including compounding and monitoring, all nursing required, maintenance of specialized catheters, equipment/patient supplies, disposables, pumps, general and administrative expenses, etc.

Per Diems INCLUDING drugs include ALL costs - including but not limited to cost of drugs, facility overhead, supplies, delivery, professional labor including compounding and monitoring, all nursing required, maintenance of specialized catheters, equipment/patient supplies, disposables, pumps, general and administrative expenses, etc.

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY HMO FEE-FOR-SERVICE RATES


Factor Concentrates
	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***
Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***

Above rates include all necessary ancillary supplies and waste disposal unit; 24-hour on-call clinical support; home infusion monitoring system; product delivery nationwide; patient training, education, and evaluation

***	Confidential Treatment Requested.

HOME INFUSION RATES

HMO RATES EFFECTIVE FEBRUARY 1, 2009—JANUARY 31, 2010


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			*	**
Flolan 1.5 mg vial			*	**
Flolan diluent vial			*	**

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies

	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY HMO FEE-FOR-SERVICE RATES

NOTES:

Per Diems INCLUDING drugs include ALL costs—including but not limited to cost of drugs, facility overhead, supplies, delivery, professional labor including compounding and monitoring, all nursing required, maintenance of specialized catheters, equipment/patient supplies, disposables, pumps, general and administrative expenses, etc.

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY HMO FEE-FOR-SERVICE RATES

Factor Concentrates


	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***
Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***
Factor IX (Other)

Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***

***	Confidential Treatment Requested.

HOME INFUSION RATES

HMO RATES EFFECTIVE FEBRUARY 1, 2010—JANUARY 31, 2011


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies

	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY HMO FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.


Blood Transfusion per Unit (Tubing, Filters)	*	**
Catheter Care Per Diem	*	**
Midline Insertion (Catheter & Supplies)	*	**
PICC Line Insertion (Catheter & Supplies)	*	**
Blood Product	*	**

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY HMO FEE-FOR-SERVICE RATES


Factor Concentrates

	Vial price	Unit Price

Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne - 80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP - 10ml vial		***
Stimate - 2.5ml vial		***

***	Confidential Treatment Requested.

DME / HME RESPIRATORY RATES:

HMO RATES EFFECTIVE FEBRUARY 1, 2008—JANUARY 31. 2011

CAT

TYPE

HCPCS
CODE

CHC
CODE

CareCentrix
Code

DESCRIPTION

PURCHASE
PRICE

RENTAL
PRICE

DAILY
PRICE

HME

A4230

Infusion set for external insulin pump, non-needle cannula Type

***

HME

A4231

Infusion set for external insulin pump, needle type

***

HME

A4232

Reservoir/Syringe with needle for external insulin pump

***

HME

A4632

Replacement battery for external insulin pump, any type, each

***

HME

A5119

Skin Barrier, wipes, box per 50

***

HME

A6257

Transparent film/dressing

***

HME

INSULPP

E0784

2158

PUMP (E0784), EXT AMBULATORY INFUSION, MINIMED, INSULIN

***

HME

INSULPP

E0784

8563

PUMP DISETRONIC ACCU-CHEK SPIRIT, INSULIN (E0784)

***

HME

INSULPP

E0784

7704

PUMP, EXT INFUSION, DANA DIABECARE, INSULIN (E0784)

***

HME

INSULPP

E0784

7731

PUMP, EXT INFUSION, ANIMAS, INSULIN (E0784)

***

HME

INSULPP

E0784

7773

PUMP (E0784), EXT AMBULATORY INFUSION, DELTEC, INSULIN

***

HME

OTHER

E0746

DM570

2109

ELECTROMYOGRAPHY (EMG) (E0746), BIOFEEDBACK DEVICE

***

HME

OTHER

E0935

2125

PASSIVE MOTION (E0935) EXERCISE DEVICE

***

HME

OTHER

E0935

2857

PASSIVE MOTION (E0935) EXERCISE DEVICE, HAND

***

HME

OTHER

E0935

2858

PASSIVE MOTION (E0935) EXERCISE DEVICE, SHOULDER

***

HME

OTHER

E0935

2859

PASSIVE MOTION (E0935) EXERCISE DEVICE, ANKLE

***

HME

OTHER

E0935

2860

PASSIVE MOTION (E0935) EXERCISE DEVICE, ELBOW

***

HME

OTHER

E0935

2861

PASSIVE MOTION (E0935) EXERCISE DEVICE, WRIST

***

HME

OTHER

E1300

DM570

2062

WHIRLPOOL (E1300), PORT (OVERTUB TYPE)

***

HME

OTHER

E1310

DM570

2061

WHIRLPOOL (E1399), NON-PORT (BUILT-IN TYPE)

***

HME

OTHER

E1399

2327

DURABLE MEDICAL EQUIP (E1399), MISCELLANEOUS

***

HME

WDSUCT

K0538

DM570

6873

WOUND SUCTION DEVICE (K0538)

***

HME

WDSUCT

K0539

DM570

7914

DRESSING SET, FOR WOUND SUCTION DEVICE (K0539)

***

HME

WDSUCT

K0540

DM570

7915

CANISTER SET, FOR WOUND SUCTION DEVICE (K0540)

***

The following may be charged under extraordinary circumstances:

HME

SUP

E1399

4551

LABOR/SERVICE/SHIPPING CHARGES

***

HME

SUP

E1399

2731

SHIPPING AND HANDLING FEES

***

The following may be charged if over and above routine on rental equipment:

RESP

EQUIP

E1350

2382

REPAIR OR NON-ROUTINE (E1350) SERVICE REQUIRING SKILL OF A TECH

***

HME

SUP

E1399

4552

MISCELLANEOUS SUPPLIES

***

NOTES:

1.	Whether rental or purchase, rates include all shipping, labor and set-up.

2.	If item is rented, rates include all supplies to enable the equipment to function effectively with the exception Suction and CPM. Such exception supplies will be billed at ***.

3.	If item is rented, rates include repair and maintenance costs.

***	Confidential Treatment Requested.

EXHIBIT A

GATEKEEPER PROGRAM ATTACHMENT - CAPITATION

SCHEDULE OF CAPITATION RATES

CAPITATION RATES EFFECTIVE 2/1/08 - 1/31/09

These are the capitation rates that apply to services rendered to Patient Panel Participants enrolled in Gatekeeper Programs. A “Gatekeeper Program” means (i) a product that includes fully insured Standard HMO, Point of Service, or Gatekeeper PPO benefits and which is underwritten by a licensed insurance company based on an experience rating methodology, or (ii) a self funded product which includes Standard HMO, Point of Service, or Gatekeeper PPO benefits. This definition includes, but is not limited to, Participants covered under FlexCare plans insured/administered by Connecticut General Life Insurance Company.


		CareCentrix Home Health, Infusion, DME/ HME Capitation Rates PMPM
All Gatekeeper (FlexCare) Capitated Affiliates		***

Capitation Rate Compensation Terms

The following rates are established for the provision of Home Care Services rendered to Program Participants covered under the HMO and Gatekeeper plans:


February 1, 2008 - January 31, 2009		*** per member per month
February 1, 2009 - January 31, 2010		*** per member per month
February 1, 2010 - January 31, 2011		*** per member per month

The capitation rate listed avove will be allocated between HMO and Gatekeeper Program particiants in accordance with established business practices. On or about February 1 of each year, the parties shall reconcile the allocation and settle any payment difference no later than February 28 of each calendar year.

***	Confidential Treatment Requested.

EXHIBIT A

GATEKEEPER PROGRAM ATTACHMENT - FEE FOR SERVICE

REIMBURSEMENT FOR OTHER SERVICES

RATE AREA DESIGNATIONS:


STATE	RATE AREA	RATE DESIGNATION
Alabama	***	***
Alaska	***	***
Arizona	***	***
Arkansas	***	***
California	***	***
Colorado	***	***
Connecticut	***	***
Delaware	***	***
District of Columbia	***	***
Florida	***	***
Georgia	***	***
Hawaii	***	***
Idaho	***	***
Illinois	***	***
Indiana	***	***
Iowa	***	***
Kansas	***	***
Kentucky	***	***
Louisiana	***	***
Maine	***	***
Maryland	***	***
Massachusetts	***	***
Michigan	***	***
Minnesota	***	***
Mississippi	***	***
Missouri	***	***
Montana	***	***
Nebraska	***	***
Nevada	***	***
New Hampshire	***	***
New Jersey	***	***
New Mexico	***	***
New York	***	***
North Carolina	***	***
North Dakota	***	***
Ohio	***	***
Oklahoma	***	***
Oregon	***	***
Pennsylvania	***	***
Rhode Island	***	***
South Carolina	***	***
South Dakota	***	***
Tennessee	***	***
Texas	***	***
Utah	***	***
Vermont	***	***
Virginia	***	***
Washington	***	***
West Virginia	***	***
Wisconsin	***	***
Wyoming	***	***

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2008 - JANUARY 31, 2009

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN—HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per

Diem

Per

Diem

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2009 - JANUARY 31, 2010

The following Traditional Home Health Services have both Visit and Hourly rates.

Area 1

Area 2

Area 3

Notes 1, 2, 3, 4, 5 and 6 apply

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN—HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Area 1

Area 2

Area 3

Notes 1, 3, 4, 5, 7 and 8 apply

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Area 1

Area 2

Area 3

Notes 3, 4 and 5 apply

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Area 1

Area 2

Area 3

Notes 3, 4 and 5 apply

Per

Diem

Per

Diem

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2010—JANUARY 31, 2011

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN—HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

HOME INFUSION RATES

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2008—JANUARY 31, 2009


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies
	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY GATEKEEPER FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.


Blood Transfusion per Unit (Tubing, Filters)	*	**
Catheter Care Per Diem	*	**
Midline Insertion (Catheter & Supplies)	*	**
PICC Line Insertion (Catheter & Supplies)	*	**
Blood Product	*	**

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY GATEKEEPER FEE-FOR-SERVICE RATES

Factor Concentrates


	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***

***	Confidential Treatment Requested.

HOME INFUSION RATES

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2009—JANUARY 31, 2010


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies

	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY GATEKEEPER FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY GATEKEEPER FEE-FOR-SERVICE RATES

Factor Concentrates


	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***

***	Confidential Treatment Requested.

HOME INFUSION RATES

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2010—JANUARY 31, 2011


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies

	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY GATEKEEPER FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY GATEKEEPER FEE-FOR-SERVICE RATES

Factor Concentrates


	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***

***	Confidential Treatment Requested.

DME / HME RESPIRATORY RATES:

GATEKEEPER RATES EFFECTIVE FEBRUARY 1, 2008—JANUARY 31. 2011

CAT

TYPE

HCPCS
CODE

CHC
CODE

CareCentrix
Code

DESCRIPTION

PURCHASE
PRICE

RENTAL
PRICE

DAILY
PRICE

HME

A4230

Infusion set for external insulin pump, non-needle cannula Type

***

HME

A4231

Infusion set for external insulin pump, needle type

***

HME

A4232

Reservoir/Syringe with needle for external insulin pump

***

HME

A4632

Replacement battery for external insulin pump, any type, each

***

HME

A5119

Skin Barrier, wipes, box per 50

***

HME

A6257

Transparent film/dressing

***

HME

INSULPP

E0784

2158

PUMP (E0784), EXT AMBULATORY INFUSION, MINIMED, INSULIN

***

HME

INSULPP

E0784

8563

PUMP DISETRONIC ACCU-CHEK SPIRIT, INSULIN (E0784)

***

HME

INSULPP

E0784

7704

PUMP, EXT INFUSION, DANA DIABECARE, INSULIN (E0784)

***

HME

INSULPP

E0784

7731

PUMP, EXT INFUSION, ANIMAS, INSULIN (E0784)

***

HME

INSULPP

E0784

7773

PUMP (E0784), EXT AMBULATORY INFUSION, DELTEC, INSULIN

***

HME

OTHER

E0746

DM570

2109

ELECTROMYOGRAPHY (EMG) (E0746), BIOFEEDBACK DEVICE

***

HME

OTHER

E0935

2125

PASSIVE MOTION (E0935) EXERCISE DEVICE

***

HME

OTHER

E0935

2857

PASSIVE MOTION (E0935) EXERCISE DEVICE, HAND

***

HME

OTHER

E0935

2858

PASSIVE MOTION (E0935) EXERCISE DEVICE, SHOULDER

***

HME

OTHER

E0935

2859

PASSIVE MOTION (E0935) EXERCISE DEVICE, ANKLE

***

HME

OTHER

E0935

2860

PASSIVE MOTION (E0935) EXERCISE DEVICE, ELBOW

***

HME

OTHER

E0935

2861

PASSIVE MOTION (E0935) EXERCISE DEVICE, WRIST

***

HME

OTHER

E1300

DM570

2062

WHIRLPOOL (E1300), PORT (OVERTUB TYPE)

***

HME

OTHER

E1310

DM570

2061

WHIRLPOOL (E1399), NON-PORT (BUILT-IN TYPE)

***

HME

OTHER

E1399

2327

DURABLE MEDICAL EQUIP (E1399), MISCELLANEOUS

***

HME

WDSUCT

K0538

DM570

6873

WOUND SUCTION DEVICE (K0538)

***

HME

WDSUCT

K0539

DM570

7914

DRESSING SET, FOR WOUND SUCTION DEVICE (K0539)

***

HME

WDSUCT

K0540

DM570

7915

CANISTER SET, FOR WOUND SUCTION DEVICE (K0540)

***

The following may be charged under extraordinary circumstances:

HME

SUP

E1399

4551

LABOR/SERVICE/SHIPPING CHARGES

***

HME

SUP

E1399

2731

SHIPPING AND HANDLING FEES

***

The following may be charged if over and above routine on rental equipment:

RESP

EQUIP

E1350

2382

REPAIR OR NON-ROUTINE (E1350) SERVICE REQUIRING SKILL OF A TECH

***

HME

SUP

E1399

4552

MISCELLANEOUS SUPPLIES

***

NOTES:

1.	Whether rental or purchase, rates include all shipping, labor and set-up.

2.	If item is rented, rates include all supplies to enable the equipment to function effectively with the exception Suction and CPM. Such exception supplies will be billed at ***.

3.	If item is rented, rates include repair and maintenance costs.

***	Confidential Treatment Requested.

EXHIBIT A

PPO & INDEMNITY PROGRAM ATTACHMENT—FEE FOR SERVICE

REIMBURSEMENT FOR OTHER SERVICES

RATE AREA DESIGNATIONS:


STATE	RATE AREA	RATE DESIGNATION
Alabama	***	***
Alaska	***	***
Arizona	***	***
Arkansas	***	***
California	***	***
Colorado	***	***
Connecticut	***	***
Delaware	***	***
District of Columbia	***	***
Florida	***	***
Georgia	***	***
Hawaii	***	***
Idaho	***	***
Illinois	***	***
Indiana	***	***
Iowa	***	***
Kansas	***	***
Kentucky	***	***
Louisiana	***	***
Maine	***	***
Maryland	***	***
Massachusetts	***	***
Michigan	***	***
Minnesota	***	***
Mississippi	***	***
Missouri	***	***
Montana	***	***
Nebraska	***	***
Nevada	***	***
New Hampshire	***	***
New Jersey	***	***
New Mexico	***	***
New York	***	***
North Carolina	***	***
North Dakota	***	***
Ohio	***	***
Oklahoma	***	***
Oregon	***	***
Pennsylvania	***	***
Rhode Island	***	***
South Carolina	***	***
South Dakota	***	***
Tennessee	***	***
Texas	***	***
Utah	***	***
Vermont	***	***
Virginia	***	***
Washington	***	***
West Virginia	***	***
Wisconsin	***	***
Wyoming	***	***

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

PPO AND INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2008—JANUARY 31, 2009

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN—HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST—CPAP clinic

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

PPO AND INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2009—JANUARY 31, 2010

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN—HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST—CPAP clinic

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

TRADITIONAL HOME HEALTH FEE-FOR-SERVICE RATES

PPO AND INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2010—JANUARY 31. 2011

The following Traditional Home Health Services have both Visit and Hourly rates.

Notes 1, 2, 3, 4, 5 and 6 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

CERTIFIED NURSES AIDE

***

HOME HEALTH AIDE

***

LVN/LPN

***

LVN/LPN—HIGH TECH

***

PEDIATRIC HIGH TECH LVN/LPN

***

PEDIATRIC HIGH TECH RN

***

PEDIATRIC LVN/LPN

***

PEDIATRIC RN

***

RN HIGH TECH INFUSION

***

RN HIGH TECH OTHER

***

The following Traditional Home Health Services have Visit only rates.

Notes 1, 3, 4, 5, 7 and 8 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

DIABETIC NURSE

***

N/A

***

N/A

***

N/A

DIETITIAN

***

N/A

***

N/A

***

N/A

ENTEROSTOMAL THERAPIST

***

N/A

***

N/A

***

N/A

MATERNAL CHILD HEALTH

***

N/A

***

N/A

***

N/A

MEDICAL SOCIAL WORKER

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST

***

N/A

***

N/A

***

N/A

OCCUPATIONAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PHLEBOTOMIST

***

N/A

***

N/A

***

N/A

PHOTOTHERAPY PACKAGE SERVICE

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST

***

N/A

***

N/A

***

N/A

PHYSICAL THERAPIST ASSISTANT

***

N/A

***

N/A

***

N/A

PSYCHIATRIC NURSE

***

N/A

***

N/A

***

N/A

REHABILITATION NURSE

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST

***

N/A

***

N/A

***

N/A

RESPIRATORY THERAPIST—CPAP clinic

***

N/A

***

N/A

***

N/A

RN ASSESSMENT, INITIAL

***

N/A

***

N/A

***

N/A

RN SKILLED NURSING VISIT-EXTENSIVE

***

N/A

***

N/A

***

N/A

SPEECH THERAPIST

***

N/A

***

N/A

***

N/A

WOUND CARE—RN

***

N/A

***

N/A

***

N/A

WOUND CARE—LVN/LPN

***

N/A

***

N/A

***

N/A

The following Traditional Home Health Service has Hourly only rates.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Visit

Hour

Visit

Hour

Visit

Hour

HOMEMAKER

N/A

***

N/A

***

N/A

***

The following Traditional Home Health Service is priced on a Per Diem basis.

Notes 3, 4 and 5 apply

Area 1

Area 2

Area 3

Per
Diem

COMPANION/LIVE IN

***

NOTES:

1.	Visits are defined as two (2) hours or less in duration (EXCEPT MATERNAL CHILD HEALTH VISITS, which have no maximum duration).

2.	Hourly rate for visits exceeding two (2) hours in duration, starting with hour 3.

3.	CIGNA does not reimburse for travel time, weekend, holiday or evening differentials.

4.	Above prices have no exclusions.

5.	All services not listed above will be billed at *** until rates are mutually established and become part of the fee schedule.

6.	RN High Tech Infusion visit and hourly utilization/costs to be reported with HIT.

7.	Respiratory Therapist visit utilization/costs to be reported with HME/RT.

8.	Diabetic Nurse, Psychiatric Nurse and Rehabilitation Nurse assume specialty certification which is not readily available in the home care environment. Use requires special coordination.

***	Confidential Treatment Requested.

HOME INFUSION RATES

PPO AND INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2008—JANUARY 31, 2009


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies
	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY PPO & INDEMNITY FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable.

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.


Blood Transfusion per Unit (Tubing, Filters)	*	**
Catheter Care Per Diem	*	**
Midline Insertion (Catheter & Supplies)	*	**
PICC Line Insertion (Catheter & Supplies)	*	**
Blood Product	*	**

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY PPO & INDEMNITY FEE-FOR-SERVICE RATES

Factor Concentrates


	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***

***	Confidential Treatment Requested.

HOME INFUSION RATES

PPO AND INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2009—JANUARY 31. 2010


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies

	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY PPO & INDEMNITY FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable.

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.


Blood Transfusion per Unit (Tubing, Filters)	*	**
Catheter Care Per Diem	*	**
Midline Insertion (Catheter & Supplies)	*	**
PICC Line Insertion (Catheter & Supplies)	*	**
Blood Product	*	**

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY PPO & INDEMNITY FEE-FOR-SERVICE RATES


Factor Concentrates

	Vial price	Unit Price
Factor VII
Novoseven 1200MCG Vial	***
Novoseven 4800MCG Vial	***
Novoseven in 1200MCG or 4800MCG QTY		***

Factor VIII (Recombinant)
Recombinate		***
Kogenate or Helixate		***
Bioclate		***
Helixate FS		***
Kogenate FS		***
Refacto		***
Advate		***

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M		***
Monoclate P		***
Monarc-M		***

Factor VIII (Other)
Koate		***
Humate		***
Alphanate SDHT		***

Factor IX (Recombinant)
BeneFix		***

Factor IX (Monoclonal/High Purity)
Mononine		***
Alphanine		***

Factor IX (Other)
Konyne—80		***
Proplex T		***
Bebulin		***
Profilnine SD		***

Anti-Inhibitor Complex
Autoplex-T		***
Feiba-VH		***
Hyate-C		***

HEMOSTATIC AGENTS
DDAVP—10ml vial		***
Stimate —2.5ml vial		***
Above rates include all necessary ancillary supplies and waste disposal unit; 24-hour on-call clinical support; home infusion monitoring system; product delivery nationwide; patient training, education, and evaluation

***	Confidential Treatment Requested.

HOME INFUSION RATES

PPO AND INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2010—JANUARY 31, 2011


	Primary or Multiple Therapy Per Diem	Primary or Multiple Therapy Dispensing Fee	Primary or Multiple Therapy Drug Discount off AWP
Ancillary Drugs		***	***
Biological Response Modifiers		***	***
Cardiac (Inotropic) Therapy	***		***
Chelation Therapy	***		***
Chemotherapy	***		***
Enzyme Therapy	***		***
Growth Hormone		***	***
IV Immune Globulin	***		***
Other Injectable Therapies		***	***
Other Infusion Therapies	***		***
Pain Management Therapy	***		***
Steroid Therapy	***		***
Thrombolytic (Anticoagulation) Therapy	***		***
Synagis		***	***
Remodulin Therapy	***		***

The following Home Infusion Therapy service rates EXCLUDE drugs. Drugs are priced as a percentage discount off AWP, and there IS a price difference between primary and multiple anti-infective therapies

	Per Diem		Drug Discount Off AWP
Anti-Infectives—Primary Anti-Infective	***		***
Anti-Infectives—Multiple Anti-Infective	***		***

The following Home Infusion Therapy service rate EXCLUDES drugs. Drugs are priced per vial, and there is NO price difference between primary and multiple anti-infective therapies

	Primary or Multiple Therapy Per Diem		Cost of Drug
Flolan Therapy	***
Flolan 0.5 mg vial			***
Flolan 1.5 mg vial			***
Flolan diluent vial			***

The following Home Infusion Therapy service rates INCLUDE drugs, and there is NO price difference between primary and multiple therapies
	Primary or Multiple Therapy Per Diem
Hydration Therapy	***
Total Parenteral Nutrition	***

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 2: HOME INFUSION THERAPY PPO & INDEMNITY FEE-FOR-SERVICE RATES

NOTES:

3.	“DISPENSING FEE” is defined as per each time the drug is dispensed by the home infusion provider.

4.	“PER DIEM” costs are the same for primary or multiple treatments for all drug categories, except ANTI-INFECTIVES.

5.	The per diem rate shall only be charged for those days the Participant receives medication.

6.	For home infusion pharmaceuticals not listed on fee schedule, *** will apply.

7.	All Medications are subject to MAC pricing, where applicable.

The following are for the stated item ONLY. Unless otherwise noted, nursing, supplies, etc. are NOT included.


Blood Transfusion per Unit (Tubing, Filters)	*	**
Catheter Care Per Diem	*	**
Midline Insertion (Catheter & Supplies)	*	**
PICC Line Insertion (Catheter & Supplies)	*	**
Blood Product	*	**

***	Confidential Treatment Requested.

SCHEDULE 2A, PAGE 3: HOME INFUSION THERAPY PPO & INDEMNITY FEE-FOR-SERVICE RATES


Factor Concentrates

	Vial price		Unit Price
Factor VII
Novoseven 1200MCG Vial	*	**
Novoseven 4800MCG Vial	*	**
Novoseven in 1200MCG or 4800MCG QTY			*	**

Factor VIII (Recombinant)
Recombinate			*	**
Kogenate or Helixate			*	**
Bioclate			*	**
Helixate FS			*	**
Kogenate FS			*	**
Refacto			*	**
Advate			*	**

Factor VIII (Monoclonal)
Hemofil-M or A. R. C. Method M			*	**
Monoclate P			*	**
Monarc-M			*	**

Factor VIII (Other)
Koate			*	**
Humate			*	**
Alphanate SDHT			*	**

Factor IX (Recombinant)
BeneFix			*	**

Factor IX (Monoclonal/High Purity)
Mononine			*	**
Alphanine			*	**

Factor IX (Other)
Konyne—80			*	**
Proplex T			*	**
Bebulin			*	**
Profilnine SD			*	**

Anti-Inhibitor Complex
Autoplex-T			*	**
Feiba-VH			*	**
Hyate-C			*	**

HEMOSTATIC AGENTS
DDAVP—10ml vial			*	**
Stimate —2.5ml vial			*	**

Above rates include all necessary ancillary supplies and waste disposal unit; 24-hour on-call clinical support; home infusion monitoring system; product delivery nationwide; patient training, education, and evaluation

***	Confidential Treatment Requested.

DME / HME RESPIRATORY RATES:

PPO and INDEMNITY RATES EFFECTIVE FEBRUARY 1, 2008—JANUARY 31. 2011

CAT

TYPE

HCPCS
CODE

CHC
CODE

CareCentrix
Code

DESCRIPTION

PURCHASE
PRICE

RENTAL
PRICE

DAILY
PRICE

HME

A4230

Infusion set for external insulin pump, non-needle cannula Type

***

HME

A4231

Infusion set for external insulin pump, needle type

***

HME

A4232

Reservoir/Syringe with needle for external insulin pump

***

HME

A4632

Replacement battery for external insulin pump, any type, each

***

HME

A5119

Skin Barrier, wipes, box per 50

***

HME

A6257

Transparent film/dressing

***

HME

INSULPP

E0784

2158

PUMP (E0784), EXT AMBULATORY INFUSION, MINIMED, INSULIN

***

HME

INSULPP

E0784

8563

PUMP DISETRONIC ACCU-CHEK SPIRIT, INSULIN (E0784)

***

HME

INSULPP

E0784

7704

PUMP, EXT INFUSION, DANA DIABECARE, INSULIN (E0784)

***

HME

INSULPP

E0784

7731

PUMP, EXT INFUSION, ANIMAS, INSULIN (E0784)

***

HME

INSULPP

E0784

7773

PUMP (E0784), EXT AMBULATORY INFUSION, DELTEC, INSULIN

***

HME

OTHER

E0746

DM570

2109

ELECTROMYOGRAPHY (EMG) (E0746), BIOFEEDBACK DEVICE

***

HME

OTHER

E0935

2125

PASSIVE MOTION (E0935) EXERCISE DEVICE

***

HME

OTHER

E0935

2857

PASSIVE MOTION (E0935) EXERCISE DEVICE, HAND

***

HME

OTHER

E0935

2858

PASSIVE MOTION (E0935) EXERCISE DEVICE, SHOULDER

***

HME

OTHER

E0935

2859

PASSIVE MOTION (E0935) EXERCISE DEVICE, ANKLE

***

HME

OTHER

E0935

2860

PASSIVE MOTION (E0935) EXERCISE DEVICE, ELBOW

***

HME

OTHER

E0935

2861

PASSIVE MOTION (E0935) EXERCISE DEVICE, WRIST

***

HME

OTHER

E1300

DM570

2062

WHIRLPOOL (E1300), PORT (OVERTUB TYPE)

***

HME

OTHER

E1310

DM570

2061

WHIRLPOOL (E1399), NON-PORT (BUILT-IN TYPE)

***

HME

OTHER

E1399

2327

DURABLE MEDICAL EQUIP (E1399), MISCELLANEOUS

***

HME

WDSUCT

K0538

DM570

6873

WOUND SUCTION DEVICE (K0538)

***

HME

WDSUCT

K0539

DM570

7914

DRESSING SET, FOR WOUND SUCTION DEVICE (K0539)

***

HME

WDSUCT

K0540

DM570

7915

CANISTER SET, FOR WOUND SUCTION DEVICE (K0540)

***

The following may be charged under extraordinary circumstances:

HME

SUP

E1399

4551

LABOR/SERVICE/SHIPPING CHARGES

***

HME

SUP

E1399

2731

SHIPPING AND HANDLING FEES

***

The following may be charged if over and above routine on rental equipment:

RESP

EQUIP

E1350

2382

REPAIR OR NON-ROUTINE (E1350) SERVICE REQUIRING SKILL OF A TECH

***

HME

SUP

E1399

4552

MISCELLANEOUS SUPPLIES

***

NOTES:

1.	Whether rental or purchase, rates include all shipping, labor and set-up.

2.	If item is rented, rates include all supplies to enable the equipment to function effectively with the exception Suction and CPM. Such exception supplies will be billed at ***.

3.	If item is rented, rates include repair and maintenance costs.

***	Confidential Treatment Requested.

EX-10.4 3 dex104.htm SEVERANCE AGREEMENT DATED FEBRUARY 28, 2008 WITH TONY STRANGE Severance Agreement dated February 28, 2008 with Tony Strange

EXHIBIT 10.4

February 28, 2008

Mr. Tony Strange

3655 Rivers Call Blvd.

Atlanta, GA 30339-8502

Dear Tony:

In consideration of the mutual promises, covenants and obligations contained herein, this letter agreement (the “Letter Agreement”) amends and restates the letter agreement between you and Gentiva Health Services, Inc. (the “Company”) dated February 28, 2006 (the “Original Letter Agreement”), which is superseded in its entirety by this Letter Agreement; provided, however, that the Confidentiality, Non-Competition and Intellectual Property Agreement dated as of February 28, 2006 by and among you, the Company and The Healthfield Group, Inc. (the “Confidentiality, Non-Competition and Intellectual Property Agreement”) shall remain in full force and effect. This amendment and restatement of the Original Letter Agreement is intended to bring it into compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

Your employment with the Company will be as an employee at will. Your status as an officer of the Company will be determined by the Board of Directors of the Company in accordance with the By-Laws of the Company.

Your compensation (including bonus opportunity) shall be as set forth on Schedule 7.2(g) to the Agreement and Plan of Merger, dated as of January 4, 2006, by and among the Company, Tara Acquisition Sub Corp., The Healthfield Group, Inc., Rodney D. Windley, as the representative for the Securityholders (as defined therein) of the Company, and the Securityholders named therein, as may be adjusted from time to time.

Should the Company terminate your employment other than for cause (as hereinafter defined), the Company will pay to you, subject to paragraph 7 below, on a bi-weekly basis (or other regular payroll cycle in use by the Company at the time your employment terminates), twelve (12) months of severance (the “Severance Period”), based on your then current base salary; provided, however, that any such amount otherwise payable to you prior to sixty (60) days after such termination of employment shall be paid, subject to paragraph 7 below, on the sixtieth (60^th) day following such termination of employment. In addition, your medical/prescriptions/dental/vision benefits will be continued until the end of the Severance Period or until similar benefits become available to you from a new employer, whichever comes first. Such benefits continuation shall be on the same basis as if you had continued in the employ of the Company (e.g., including any required associate contributions) during that period adjusted for any plan changes. The payment of severance, however, is expressly conditioned upon your compliance with the terms set forth in paragraph 5(b) of this Letter Agreement.

The term “cause” shall mean the following: your conviction for any felony, fraud or embezzlement or crime of moral turpitude; controlled substance abuse; alcoholism which interferes with or affects your responsibilities to the Company or which reflects negatively upon the integrity or reputation of the Company; gross negligence which is materially injurious to the Company; any material violation of any express written directions or any reasonable written policy or procedure established by the Company from time to time regarding the conduct of its business and such violation has not been cured within ten (10) days after written notice of such violation from the Company to you; or any violation by you of any material term and condition of this Letter Agreement.

Upon a reduction in your current base salary, as the same may be increased from time to time, which is not part of a general salary reduction for a majority of salaried employees of the Company and to which you do not consent in writing, you will have the right (subject to the notice and cure provisions below) to resign and receive the severance benefits described above, with your severance payments based on your salary prior to it having been reduced. In order to exercise this right you must have given written notice to the Company of the reduction in base salary within sixty (60) days after it is so reduced, and the Company must not have remedied the base salary reduction within the thirty (30) day period after receipt of such written notice; provided further, however, that any termination of employment by you under this paragraph 4 must occur not later than one (1) year following the initial existence of the base salary reduction giving rise to your right to terminate under this paragraph 4.

(a) Your employment with the Company and your receipt of stock options is expressly conditioned upon your consent and agreement to be bound by the non-competition and non-solicitation provisions set forth in the Confidentiality, Non-Competition and Intellectual Property Agreement.

(b) Further, should the Company terminate your employment other than for “cause” (as defined in paragraph 3 of this Letter Agreement) or should you terminate your employment pursuant to paragraph 4 above, you also agree that your receipt of the severance payments and benefits provided for herein is expressly conditioned upon your consent and agreement to continue to be bound by the non-competition and non-solicitation provisions set forth in the Confidentiality, Non-Competition and Intellectual Property Agreement and your execution and delivery within fifty (50) days after termination of your employment of, and your failure to revoke within the statutory revocation period, the General Release Agreement, the form of which is attached hereto as Exhibit A.

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This Letter Agreement may be amended only by a written instrument signed by the Company and you. Except with respect to your Change in Control Agreement of even date with the Company, the Merger Agreement and any other agreement between the Company and you specifically referenced herein and intended to continue beyond the execution of this Letter Agreement, this Letter Agreement shall constitute the entire agreement between the Company and you with respect to the subject matter hereof and supersedes any other severance or separation pay plan or policy that would otherwise apply to you. Specifically, you and the Company have agreed that your employment agreement dated December 10, 2001 between you and Healthfield, Inc. (“Employment Agreement”) has been terminated as of February 28, 2006 and is of no further force or effect. You have waived and released all rights you may have had under the Employment Agreement. This Letter Agreement shall be governed by the laws of the State of New York, without regard to the principles of conflict of laws thereof. This Letter Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs (in your case) and assigns.

It is intended that this Letter Agreement will comply with Section 409A of the Code (and any regulations and guidelines issued thereunder) to the extent the Letter Agreement is subject thereto, and the Letter Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Letter Agreement is necessary in order for it to comply with Section 409A, the parties hereto will negotiate in good faith to amend the Letter Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. Notwithstanding any provision to the contrary in this Letter Agreement, if you are deemed on the date of your “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) to be a “specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)), then with regard to any payment that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code, such payment shall not be made prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of your “separation from service,” or (ii) the date of your death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this paragraph 7 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to you in a lump sum, and any remaining payments due under this Letter Agreement shall be paid in accordance with the normal payment dates specified for them herein. Notwithstanding any provision of this Letter Agreement to the contrary, your employment will be deemed to have terminated on the date of your “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. Wherever payments under this Letter Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. No action or failure to act, pursuant to this paragraph 7 shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect you from the obligation to pay any taxes pursuant to Section 409A of the Code.

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Sincerely,

By:		/s/ Ronald A. Malone
		Ronald A. Malone
		Chairman and Chief Executive Officer


Agreed to and Accepted by:

/s/ Tony Strange				4/30/08
Tony Strange				Date

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Schedule 7.2 (g)

TERM SHEET

EMPLOYMENT ARRANGEMENTS FOR TONY STRANGE


1.	Title:	Executive Vice President of Gentiva and President of Home Health.

2.	Base Salary	$425,000 annually.

3.	Bonus Opportunity:	If targets are achieved, 60% of Base Salary; if targets are exceeded, greater than 60% of Base Salary.

4.	Change of Control:	Same terms as other senior executives of Gentiva.

5.	Severance:	12 months for termination other than for cause.

6.	Stock Options:	Amount commensurate with his position as determined annually by the Compensation, Corporate Governance and Nominating Committees of the Board.

7.	Other Benefits:	Commensurate with other senior executives of Gentiva.

8.	Commencement of Employment:	Upon consummation of merger of The Healthfield Group, Inc. with a subsidiary of Gentiva.

9.	Definition of Documentation:	Generally same terms as other senior executives of Gentiva in form previously provided.

EXHIBIT A

GENERAL RELEASE

1) I, Tony Strange, understand that, in order to receive the severance package contained in Section 3 of the Letter Agreement between Gentiva Health Services, Inc. and me dated as of February 28, 2008 (the “Letter Agreement”) which I would not otherwise receive or be entitled to, I have been requested to sign this General Release. I further understand that by signing this General Release, I am waiving my right to raise any claims against Gentiva Health Services, Inc. (“Gentiva” or “the Company”) and other Releasees (as defined below) under federal, state and/or local law.

2) General Release

I hereby agree to release and forever discharge the Company, its subsidiaries and affiliates, and its and their directors and officers, predecessors, employees, agents, successors and assigns (collectively “Releasees”) from any and all actions or causes of action, suits, claims, charges, complaints, contracts and promises whatsoever, in law or equity which I, my heirs, assigns and any personal or legal representatives have or may have against any of the Releasees including all unknown, undisclosed and unanticipated losses, wrongs, injuries, debts, claims and/or damages arising out of or in any way connected with my employment with the Company or its subsidiaries and the cessation of such employment. This shall include but not be limited to any alleged violation of Title VII of the Civil Rights Act of 1964, Section 1981 et seq. of Title 42 of the United States Code, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Fair Labor Standards Act, the Occupational, Safety and Health Act, the New York Human Rights Law, Executive Law Section 290 et seq., the New York Labor Law, the New York Equal Rights Law Section 40 et seq., the New York Minimum Wage Law, the New York Equal Pay Law, each of the foregoing as amended, and any and all other Federal, State or local civil or human rights laws, or any other alleged violation of any local, State or Federal law, regulation or ordinance, and/or public policy, contract or tort or common-law claim having any bearing whatsoever on the terms and conditions and/or cessation of my employment with the Company and its subsidiaries which I now have or shall have as of the date of this General Release.

This General Release does not constitute a waiver of my right to bring action against the Company to enforce the terms and provisions of the Letter Agreement.

This General Release does not constitute a waiver of my prior indemnification rights, if any, should I be ordered to appear as a witness or made a defendant in any litigation regarding matters or actions taken within the scope of my responsibilities as an employee of the Company.

3) Not A Waiver of Vested Benefits

This General Release shall not constitute a waiver of (i) right to benefits which have vested on or prior to the date of termination of my employment or the terms of any applicable employee benefit plan, or (ii) my unreimbursed business expenses properly incurred prior to the date my employment was terminated in accordance with Company policy.

4) Covenant Not to Sue

I agree that I will not file, charge (except that I may file a charge with the Equal Employment Opportunity Commission alleging age discrimination), claim, sue or cause or permit to be filed any civil action, suit or legal proceeding seeking personal equitable or monetary relief for me in connection with any matter occurring at any time in the past concerning my employment relationship with the Company, up to and including the date of this General Release, or involving any continuing effects of any acts or practices which may have arisen or occurred on or prior to the date of this General Release. I further agree that should any person, organization, or other entity file, charge, claim, sue, or cause or permit to be filed any civil action, suit or legal proceeding involving any matter occurring at any time in the past, I will not seek or accept any personal relief in such civil action, suit or legal proceeding. Nothing in this Section 4 shall limit my right to cooperate with the Equal Employment Opportunity Commission (“EEOC”) in an investigation of a charge of age discrimination, including a charge filed with the EEOC filed by me.

5) Non-Disclosure of Terms

I hereby agree that I shall not directly or indirectly publish the terms or conditions of this General Release nor discuss or make any statements with regard to such terms or conditions except to my personal lawyer or as required by law.

6) Governing Law and Interpretation

This General Release shall be governed by and construed in accordance with the laws of New York State without regard to its conflict of laws provisions. Should any provision of this General Release be declared illegal or unenforceable by any court of competent jurisdiction, and cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this General Release in full force and effect. However, if the release portion is held invalid or unenforceable by a court of competent jurisdiction or any governmental agency, or I exercise my right to rescind set forth in Section 8 below, then I agree to immediately return to the Company any payment I received as part of the severance package and the Company shall have no further obligation under the Letter Agreement.

7) Entire Agreement; Amendment

This General Release and the Letter Agreement, along with the Confidentiality, Non-Competition and Intellectual Property Agreement dated as of February 26, 2006 by and among me, the Company and The Healthfield Group, Inc., set forth the entire agreement between

-2-

the parties hereto and shall supersede any and all prior understandings between the parties, except to the extent as set forth in the Letter Agreement. This General Release may not be amended except by a written agreement signed by both parties to the Letter Agreement.

8) Effective Date; Right to Revoke

I understand that I have been provided the opportunity to review this General Release for a period of twenty-one (21) days. I understand that this General Release shall not become effective or enforceable until the expiration of seven (7) days following the date on which I first execute this General Release. I also understand that I have the right to revoke this General Release within seven (7) days of when I sign this General Release and that such revocation shall not be effective unless each of the following conditions has been met:

(a) the revocation is made in writing addressed to the Company and includes the statement, “I hereby revoke my agreement to the General Release and the terms and conditions set forth in the Letter Agreement.”

(b) such written revocation is delivered either by hand to the office of the General Counsel of Gentiva Health Services, Inc. or by mail with a postmark dated before the end of the seven (7) day revocation period, such mail to be certified, return receipt requested.

I HAVE READ AND CONSIDERED THE TERMS AND CONDITIONS CONTAINED IN THIS GENERAL RELEASE. I UNDERSTAND THAT MY RIGHT TO RECEIVE THE SEVERANCE PACKAGE IN ACCORDANCE WITH THE LETTER AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS GENERAL RELEASE AND THAT I WOULD NOT RECEIVE SUCH BENEFIT BUT FOR MY EXECUTION OF THIS GENERAL RELEASE. I ALSO UNDERSTAND THAT BY EXECUTING THIS GENERAL RELEASE, I WILL BE WAIVING MY RIGHTS UNDER FEDERAL, STATE AND LOCAL LAW TO BRING ANY CLAIMS THAT I HAVE OR MIGHT HAVE AGAINST ANY RELEASEES (AS DEFINED ABOVE). I HAVE BEEN AFFORDED AT LEAST TWENTY-ONE (21) DAYS TO CONSIDER THIS GENERAL RELEASE AND HAVE BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS GENERAL RELEASE.

IN WITNESS WHEREOF, I have executed this General Release as of the date set forth below.


Signed:

Date:

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EX-10.5 4 dex105.htm CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY AGREEMENT Confidentiality, Non-Competition and Intellectual Property Agreement

EXHIBIT 10.5

CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY AGREEMENT (this “Agreement”), dated as of February 28, 2006 (the “Effective Date”), among Gentiva Health Services, Inc., a Delaware corporation (“Gentiva”; together with all subsidiaries of Gentiva, “Parent”), The Healthfield Group, Inc., a Delaware corporation (“Healthfield”; together with all subsidiaries of Healthfield, the “Healthfield Group”), (together with the Parent and the Healthfield Group, the “Companies”) and Tony Strange (“Executive”).

WHEREAS, the Companies are currently engaged in the business of, among other things, providing comprehensive home health care services.

WHEREAS, Tara Acquisition Sub Corp., a wholly owned subsidiary of Gentiva, has merged with and into Healthfield (the “Merger”).

WHEREAS, Executive had an employment agreement with the Healthfield Group (the “Old Employment Agreement”), which Executive acknowledges has been terminated as of the date hereof, and Executive has a letter severance agreement with the Companies dated the date hereof (the “Letter Agreement”). In such role, Executive will receive or has received specific confidential information relating to the businesses of the Companies, which confidential information is or was necessary to enable Executive to perform Executive’s duties. Executive will play or has played a significant role in the development and management of the businesses of the Companies and has been or will be entrusted with the Companies’ confidential information relating to the Companies’ customers, manufacturers, distributors and others.

WHEREAS, Executive is a holder of Healthfield preferred stock and Healthfield common stock and is receiving significant consideration as a result of the Merger.

WHEREAS, it is a condition to the closing of the Merger that Executive enter into this Agreement.

NOW, THEREFORE, it is mutually agreed as follows:

1. Confidentiality.

(a) Executive shall not, during the term of any employment with the Companies or at any time thereafter, directly or indirectly, divulge, use, furnish, disclose, exploit or make available to any person or entity, whether or not a competitor of the Companies, any Unauthorized disclosure of Confidential Information. In the event that Executive is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoenas, civil demand or similar process) to disclose any Confidential Information, Executive will give the Companies prompt written notice of such request or requirement so that the Companies may seek an appropriate protective order or other remedy and/or waive compliance with the provisions of this Agreement, and Executive will cooperate with the Companies’ efforts to obtain such protective order. In the event that such protective order or other remedy is not obtained or the Companies waive compliance with the relevant provisions of this Agreement, Executive is permitted to furnish that Confidential Information which is legally required to be disclosed and will use his reasonable efforts to obtain assurances that confidential treatment will be accorded to such information.

As used herein, the term:

“Confidential Information” shall mean trade secrets, confidential or proprietary information, and all other information, documents or materials, relating to, owned, developed or possessed by any of the Companies, whether in tangible or intangible form. Confidential Information includes, but is not limited to, (i) financial information, (ii) products, (iii) product and service costs, prices, profits and sales, (iv) new business, technical or other ideas, proposals, plans and designs, (v) business strategies, (vi) product and service plans, (vii) marketing plans and studies, (viii) forecasts, (ix) budgets, (x) projections, (xi) computer programs, (xii) data bases and the documentation (and information contained therein), (xiii) computer access codes and similar information, (xiv) source codes, (xv) know-how, technologies, concepts and designs, including, without limitation, patent applications, (xvi) research projects and all information connected with research and development efforts, (xvii) records, (xviii) business methods and recommendations, (xix) existing or prospective client, customer, vendor and supplier information (including, but not limited to, identities, needs, transaction histories, volumes, characteristics, agreements, prices, identities of individual contacts, and spending, preferences or habits), (xx) training manuals and similar materials used by the Companies in conducting its business operations, (xxi) personnel files of employees, directors and independent contractors of any of the Companies, (xxii) competitive analyses, (xxiii) contracts with other parties, (xxiv) product formulations, and (xxv) other confidential or proprietary information that has not been made available to the trade or general public by any of the Companies. Confidential Information shall not include any information that (A) is or becomes generally available to the public or the trade other than as a result of a disclosure by the Executive in violation of this Agreement or (B) becomes available to the Executive on a non-confidential basis from a source other than the Companies which is not prohibited from disclosing such information to the Executive by a legal, contractual or fiduciary obligation to the Employer or any other Person.

“Unauthorized” shall mean: (i) in contravention of the policies or procedures of any of the Companies; (ii) otherwise inconsistent with any measures taken by any of the Companies to protect its interests in the Confidential Information; (iii) in contravention of any lawful instruction or directive, either written or oral, of the board of directors, or an officer or employee of any of the Companies empowered to issue such instruction or directive; (iv) in contravention of any duty existing under law or contract; or (v) to the detriment of any of the Companies; but shall not include any disclosure which is customary in the normal course of business in the trade and consistent with the past practice of the Companies.

(b) Executive further agrees to take all reasonable measures to prevent unauthorized persons or entities from obtaining or using Confidential Information. Promptly upon termination, for any reason, of Executive’s employment with the Companies, Executive agrees to deliver to the Companies all property and materials within Executive’s possession or control which belong to any of the Companies or which contain Confidential Information.

(c) Nothing in this Section 1 is intended to preclude Executive from using his general knowledge and know-how regarding the management of a health care service provider in any future employment or business venture; provided, that Executive’s use of such general knowledge and know-how does not violate the provisions of Section 2 hereof.

2. Non-Competition; Non-Solicitation.

(a) For a period of time equal to the later of the fifth anniversary of the effective date of the Merger or the second anniversary after the termination of the Executive’s employment with the Companies (the “Noncompete Period”), Executive will not, directly or indirectly, engage, anywhere in the United States, whether such engagement be as an individual, officer, director, proprietor, consultant, employee, partner, member, stockholder, investor (other than solely as a holder of less than three percent (3%) of the outstanding capital stock of a corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended), creditor, consultant, advisor, sales representative, agent or other participant, in a Restricted Business.

(b) During the Noncompete Period, Executive shall not directly or indirectly (i) solicit, divert, or entice away any person who is an officer, agent, or employee of, or consultant or advisor to, any of the Companies to accept employment or a consultancy with a third party or (ii) hire any current or future employees of the Companies, unless such person has not been employed by any of the Companies for not less than 12 months (other than, Lisa Shunnarah).

(c) During the Noncompete Period, Executive shall not solicit or accept on behalf of yourself or anyone else any of the Companies’ customers and/or clients with a view to sell or provide any product or service competitive with any product or service sold or provided or under development by the Companies. For the purposes of this Agreement, the term “customer” and/or “client” shall include any person or entity to whom the Companies, through its offices in which you had direct or indirect oversight and managerial duties during your employment with the Companies, have sold, provided or been obligated to provide, any service or product, or who has otherwise received any service or benefit from the Companies, within 24 months prior to the termination of Executive’s employment with the Companies.

“Restricted Business” shall mean (i) the business operations operated by the Companies; (ii) home health services, including but not limited to the provision of skilled nursing, rehabilitative therapy services (physical, occupational and speech therapy and social work), home health aid care, and homemaker services to pediatric, adult, and elderly patients in their homes or places of residence; (iii) hospice care; (iv) home/durable medical equipment and/or respiratory services; and (v) infusion therapy.

Notwithstanding the foregoing, nothing in this Section 2 shall prohibit Executive from (i) owning any amount of stock in Gentiva or serving in any capacity as an officer, director or employee of Gentiva or (ii) making passive investments in another entity (e.g. a private equity or debt fund) not controlled by Executive that makes investments, whether debt or equity, in other entities that may be engaged in a Restricted Business, provided that Executive does not directly or indirectly own or control in excess of 10% of any Restricted Business.

3. Intellectual Property. Executive agrees that during the term of Executive’s employment with the Companies, any and all inventions, discoveries, innovations, writings, domain names, improvements, trade secrets, designs, drawings, business processes, secret

processes and know-how, whether or not patentable or a copyright or trademark, which Executive may create, conceive, develop or make, either alone or in conjunction with others and related or in any way connected with any of the Companies, its strategic plans, products, processes, apparatus or business now or hereafter carried on by any of the Companies (collectively, “Inventions”), shall be fully and promptly disclosed to the Companies and shall be the sole and exclusive property of the Companies (as they shall determine) as against Executive or any of Executive’s assignees. Regardless of the status of Executive’s employment by the Companies, Executive and Executive’s heirs, assigns and representatives shall promptly assign to the Companies any and all right, title and interest in and to such Inventions made during the term of Executive’s employment by any of the Companies. Executive represents that there are no Inventions with respect to any of the Companies conceived of, developed or made by Executive before the date of this Agreement which have not been disclosed to and assigned to the Companies.

Whether during or after Executive’s employment with the Companies, Executive further agrees to execute and acknowledge all papers and to do, at the Companies’ expense, any and all other things necessary for or incident to the applying for, obtaining and maintaining of such letters patent, copyrights, trademarks or other intellectual property rights, as the case may be, and to execute, on request, all papers necessary to assign and transfer such Inventions, copyrights, patents, patent applications and other intellectual property rights to the Companies, their successors and assigns (as they shall determine). In the event that the Companies are unable, after reasonable efforts and, in any event, after thirty (30) business days, to secure Executive’s signature on a written assignment to the Companies, of any application for letters patent, trademark registration or to any common law or statutory copyright or other property right therein to which the Companies are entitled to ownership pursuant to this Section 3, whether because of his physical or mental incapacity, or for any other reason whatsoever, Executive irrevocably designates and appoints the Secretary or any Assistant Secretary of the Parent as Executive’s attorney-in-fact to act on Executive’s behalf to execute and file any such applications and to do all lawfully permitted acts to further the prosecution or issuance of such assignments, letters patent, copyright or trademark; provided, however, that the provisions of this sentence shall not apply if the Executive disputes in writing the Companies’ ownership of the intellectual property rights which are the subject of the proposed assignment.

4. Non-Disparagement. Executive shall not make any false, defamatory or disparaging statements about any of the Companies or any of its officers, directors and employees. No officer or director of the Parent shall make any false, defamatory or disparaging statements about the Executive.

5. No Right to Continued Employment. Nothing in this Agreement shall confer upon Executive any right to continue in the employ of the Companies or shall interfere with or restrict in any way the rights of the Companies, which, subject to the terms of the Letter Agreement, are hereby reserved, to discharge Executive at any time for any reason whatsoever, with or without cause.

6. No Conflicting Agreements. Executive warrants that Executive is not bound by the terms of a confidentiality agreement, non-competition or other agreement with a third party that would conflict with Executive’s obligations hereunder.

7. Remedies. The period of time during which the restrictions set forth in Section 2(a) hereof will be in effect will be extended by the length of time during which Executive is in breach of the terms of those provisions as finally determined by any court of competent jurisdiction.

8. Successors and Assigns. This Agreement shall be binding upon Executive and Executive’s heirs, assigns and representatives and inure to the benefit of the Companies and their successors and assigns, including without limitation any entity to which substantially all of the assets or the business of any of the Companies are sold or transferred. The obligations of Executive are personal to Executive and shall not be assigned by Executive. The Companies may assign its rights under this Agreement to any affiliate of the Companies that employs Executive.

9. Severability. It is expressly agreed that if any restrictions set forth in this Agreement are found by any court having jurisdiction to be unreasonable because they are too broad in any respect, then and in each such case, the remaining provisions herein contained shall, nevertheless, remain effective, and this Agreement, or any portion hereof, shall be considered to be amended, so as to be considered reasonable and enforceable by such court, and the court shall specifically have the right to restrict the time period or the business or geographical scope of such restrictions to any portion of the time period, business or geographic areas to the extent the court deems such restriction to be necessary to cause the covenants to be enforceable and, in such event, the covenants shall be enforced to the extent so permitted and the remaining provisions shall be unaffected thereby. In such event, the parties hereto agree to execute all documents necessary to evidence such amendment so as to eliminate or modify any such unreasonable provision in order to carry out the intent of this Agreement insofar as possible and to render this Agreement enforceable in all respects as so modified. The covenants contained in this Section 9 shall be construed to extend to separate jurisdictions or subjurisdictions of the United States in which the Companies, during the term of Executive’s employment, have been or are engaged in business, and to the extent that any such covenant shall be illegal and/or unenforceable with respect to any jurisdiction, said covenant shall not be affected thereby with respect to each other jurisdiction, such covenants with respect to each jurisdiction being construed as severable and independent. Any covenant on Executive’s part contained hereinabove, which may not be specifically enforceable, shall nevertheless, if breached, give rise to a cause of action for monetary damages. The restrictive covenant provisions of this Agreement shall govern to the extent there is any conflict between their terms and the terms of any other agreement or understanding with the Companies.

10. Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered personally by hand (with written confirmation of receipt), (ii) when sent by facsimile (with written confirmation of transmission) or (iii) one Business Day following the day sent by overnight courier (with written confirmation of receipt), in each case at the following addresses and facsimile numbers (or to such other address or facsimile number as a party may have specified by notice given to the other party pursuant to this provision):


If to the Companies, to:		with a copy to:

Gentiva Health Services, Inc. 3 Huntington Quadrangle, Suite 200S Melville, NY 11747-4627 Attention: Stephen B. Paige, General Counsel Facsimile: (913) 814-5920		Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Attention: Jeffrey J. Weinberg, Esq. Facsimile: (212) 310-8007

If to the Executive, to:

Executive’s address set forth beneath Executive’s signature on this Agreement.		Greenberg Traurig The Forum 3290 Northside Parkway, NW Suite 1400 Atlanta, GA 30327 Attention: Gary Snyder, Esq. Facsimile: (678) 553-2212

11. Amendment. No provision of this Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed by the Companies and Executive.

12. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto, oral or written, with respect to the subject matter hereof.

13. Waiver, etc. The failure of the Companies to enforce at any time any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any way affect the validity of this Agreement or any provision hereof or the right of the Companies to enforce thereafter each and every provision of this Agreement. No waiver of any breach of any of the provisions of this Agreement by the Companies shall be effective unless set forth in a written instrument executed by the Companies, and no waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent breach.

14. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be wholly performed therein without reference to conflicts of law principles, except as otherwise provided.

15. Enforcement. If any party shall institute legal action to enforce or interpret the terms and conditions of this Agreement or to collect any monies under it, venue for any such action shall be the State of New York. Each party irrevocably consents to the jurisdiction of the courts located in the State of New York for all suits or actions arising out of this Agreement. Each party hereto waives to the fullest extent possible, the defense of an

inconvenient forum, and each agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

[Next Page is Signature Page]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day written above.


GENTIVA HEALTH SERVICES, INC.

By:		/s/ John R. Potapchuk
Name:		John R. Potapchuk
Title:		Senior Vice President, Chief Financial Officer and Treasurer

THE HEALTHFIELD GROUP, INC.

By:		/s/ John R. Potapchuk
Name:		John R. Potapchuk
Title:		Senior Vice President, Chief Financial Officer and Treasurer

TONY STRANGE

/s/ Tony Strange
Tony Strange

3350 Riverwood Parkway
Suite 1400
Atlanta, GA 30339

EX-31.1 5 dex311.htm CERTIFICATION OF CEO PURSUANT TO RULE 13A-14(A) Certification of CEO pursuant to Rule 13a-14(a)

EXHIBIT 31.1

CERTIFICATIONS

I, Ronald A. Malone, certify that:

I have reviewed this quarterly report on Form 10-Q of Gentiva Health Services, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 9, 2008
		/s/ Ronald A. Malone
		Ronald A. Malone
		Chairman and Chief Executive Officer

EX-31.2 6 dex312.htm CERTIFICATION OF CFO PURSUANT TO RULE 13A-14(A) Certification of CFO pursuant to Rule 13a-14(a)

EXHIBIT 31.2

CERTIFICATIONS

I, John R. Potapchuk, certify that:

I have reviewed this quarterly report on Form 10-Q of Gentiva Health Services, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 9, 2008
		/s/ John R. Potapchuk
		John R. Potapchuk
		Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1 7 dex321.htm CERTIFICATION OF CEO PURSUANT TO 18 U.S.C. SECTION 1350 Certification of CEO pursuant to 18 U.S.C. Section 1350

Exhibit 32.1

Furnished (but not filed) as an exhibit to the periodic report identified in the Certification.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gentiva Health Services, Inc. (the “Company”) on Form 10-Q for the period ended March 30, 2008 as filed with the Securities and Exchange Commission (the “Report”), I, Ronald A. Malone, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: May 9, 2008		/s/ Ronald A. Malone
		Ronald A. Malone
		Chairman and Chief Executive Officer

EX-32.2 8 dex322.htm CERTIFICATION OF CFO PURSUANT TO 18 U.S.C. SECTION 1350 Certification of CFO pursuant to 18 U.S.C. Section 1350

Exhibit 32.2

Furnished (but not filed) as an exhibit to the periodic report identified in the Certification.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gentiva Health Services, Inc. (the “Company”) on Form 10-Q for the period ended March 30, 2008 as filed with the Securities and Exchange Commission (the “Report”), I, John R. Potapchuk, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: May 9, 2008		/s/ John R. Potapchuk
		John R. Potapchuk
		Executive Vice President, Chief Financial Officer and Treasurer

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Blood Transfusion per Unit (Tubing, Filters)

Catheter Care Per Diem

Midline Insertion (Catheter & Supplies)

PICC Line Insertion (Catheter & Supplies)

Blood Product