10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2015

OR

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

For the transition period from to

Commission file number: 001-33989

LHC GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	71-0918189
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

420 West Pinhook Road, Suite A

Lafayette, LA 70503

(Address of principal executive offices including zip code)

(337) 233-1307

(Registrant’s telephone number, including area code)

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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    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. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	ý
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	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  ý

Number of shares of common stock, par value $0.01, outstanding as of May 4, 2015: 17,968,180 shares.

LHC GROUP, INC.

INDEX

		Page
Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets — March 31, 2015 and December 31, 2014		3
Condensed Consolidated Statements of Income — Three months ended March 31, 2015 and 2014		4
Condensed Consolidated Statement of Changes in Equity — Three months ended March 31, 2015		5
Condensed Consolidated Statements of Cash Flows — Three months ended March 31, 2015 and 2014		6
Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
Part II. Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32
Signatures		33

2

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

(Unaudited)

	March 31,   2015			December 31,   2014
ASSETS
Current assets:
Cash	$	4,041		$	531
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts of $20,985 and $18,582, respectively	98,041			97,498
Other receivables	2,523			1,334
Amounts due from governmental entities	978			1,164
Total receivables, net	101,542			99,996
Deferred income taxes	12,713			11,381
Prepaid income taxes	615			3,093
Prepaid expenses	10,477			8,724
Other current assets	4,597			3,777
Receivable due from insurance carrier	—			7,850
Total current assets	133,985			135,352
Property, building and equipment, net of accumulated depreciation of $45,784 and $44,683, respectively	35,309			34,787
Goodwill	240,294			240,019
Intangible assets, net of accumulated amortization of $7,124 and $6,560, respectively	79,504			79,685
Other assets	1,872			1,896
Total assets	$	490,964		$	491,739
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	20,301		$	19,278
Salaries, wages, and benefits payable	30,711			22,466
Self-insurance reserve	7,923			6,559
Current portion of long-term debt	233			230
Amounts due to governmental entities	5,382			4,459
Legal settlement payable	—			7,850
Total current liabilities	64,550			60,842
Deferred income taxes	34,741			33,592
Income tax payable	3,415			3,415
Revolving credit facility	47,000			60,000
Long-term debt, less current portion	719			778
Total liabilities	150,425			158,627
Noncontrolling interest — redeemable	11,297			11,517
Stockholders’ equity:
LHC Group, Inc. stockholders’ equity:
Common stock — $0.01 par value; 40,000,000 shares authorized; 22,168,703 and 22,015,211 shares issued in 2015 and 2014, respectively	222			220
Treasury stock — 4,767,570 and 4,734,363 shares at cost, respectively	(36,782		)	(35,660		)
Additional paid-in capital	110,549			108,708
Retained earnings	252,176			245,371
Total LHC Group, Inc. stockholders’ equity	326,165			318,639
Noncontrolling interest — non-redeemable	3,077			2,956
Total equity	329,242			321,595
Total liabilities and equity	$	490,964		$	491,739

See accompanying notes to condensed consolidated financial statements.

3

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share and per share data)

(Unaudited)

	Three Months Ended    March 31,
	2015			2014
Net service revenue	$	193,079		$	163,681
Cost of service revenue	114,426			97,334
Gross margin	78,653			66,347
Provision for bad debts	5,259			3,362
General and administrative expenses	59,298			54,579
Operating income	14,096			8,406
Interest expense	(545		)	(388		)
Income before income taxes and noncontrolling interest	13,551			8,018
Income tax expense	4,729			2,923
Net income	8,822			5,095
Less net income attributable to noncontrolling interests	2,017			1,027
Net income attributable to LHC Group, Inc.’s common stockholders	$	6,805		$	4,068
Earnings per share — basic and diluted:
Net income attributable to LHC Group, Inc.’s common stockholders	$	0.39		$	0.24
Weighted average shares outstanding:
Basic	17,322,791			17,148,043
Diluted	17,489,483			17,268,716

See accompanying notes to the condensed consolidated financial statements.

4

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Amounts in thousands, except share data)

(Unaudited)

	Common Stock								Additional Paid-In Capital		Retained Earnings		Noncontrolling Interest Non Redeemable			Total Equity
	Issued			Treasury
	Amount		Shares	Amount			Shares
Balance as of December 31, 2014	$	220	22,015,211	$	(35,660	)	(4,734,363	)	$	108,708	$	245,371	$	2,956		$	321,595
Net income	—		—	—			—		—		6,805		407			7,212
Acquired noncontrolling interest	—		—	—			—		—		—		126			126
Noncontrolling interest distributions	—		—	—			—		—		—		(412		)	(412		)
Nonvested stock compensation	—		—	—			—		991		—		—			991
Issuance of vested stock	—		146,424	—			—		—		—		—			—
Treasury shares redeemed to pay income tax	—		—	(1,122		)	(33,207	)	—		—		—			(1,122		)
Excess tax benefits — vesting nonvested stock	—		—	—			—		642		—		—			642
Issuance of common stock under Employee Stock Purchase Plan	2		7,068	—			—		208		—		—			210
Balance as of March 31, 2015	$	222	22,168,703	$	(36,782	)	(4,767,570	)	$	110,549	$	252,176	$	3,077		$	329,242

(1) Net income excludes net income attributable to noncontrolling interest-redeemable of $1.6 million during the three months endingMarch 31, 2015. Noncontrolling interest-redeemable is reflected outside of permanent equity on the condensed consolidated balance sheets. See Note 9 of the Notes to Condensed Consolidated Financial Statements.

See accompanying notes to condensed consolidated financial statements.

5

LHC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Three Months Ended   March 31,
	2015			2014
Operating activities:
Net income	$	8,822		$	5,095
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	2,716			2,125
Provision for bad debts	5,259			3,362
Stock-based compensation expense	991			1,048
Deferred income taxes	(183		)	395
Impairment of intangibles and other	79			—
Loss on disposal of assets	284			—
Changes in operating assets and liabilities, net of acquisitions:
Receivables	(7,026		)	956
Prepaid expenses and other assets	(2,549		)	(39		)
Prepaid income taxes	2,478			248
Accounts payable and accrued expenses	10,624			(6,428		)
Net amounts due to/from governmental entities	1,109			(659		)
Net cash provided by operating activities	22,604			6,103
Investing activities:
Purchases of property, building and equipment	(2,958		)	(1,520		)
Cash paid for acquisitions, primarily goodwill and intangible assets	(567		)	(61,159		)
Net cash (used in) investing activities	(3,525		)	(62,679		)
Financing activities:
Proceeds from line of credit	—			60,000
Payments on line of credit	(13,000		)	(12,000		)
Proceeds from employee stock purchase plan	210			184
Payments on debt	(57		)	(37		)
Noncontrolling interest distributions	(2,242		)	(1,768		)
Excess tax benefits from vesting of stock awards	642			112
Redemption of treasury shares	(1,122		)	(727		)
Sale of noncontrolling interest	—			193
Net cash provided by (used in) financing activities	(15,569		)	45,957
Change in cash	3,510			(10,619		)
Cash at beginning of period	531			14,014
Cash at end of period	$	4,041		$	3,395
Supplemental disclosures of cash flow information:
Interest paid	$	447		$	370
Income taxes paid	$	1,787		$	2,413

See accompanying notes to condensed consolidated financial statements.

6

LHC GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization

LHC Group, Inc. (the “Company”) is a health care provider specializing in the post-acute continuum of care primarily for Medicare beneficiaries. The Company provides home health services, hospice services, community-based services, and facility-based services, the latter primarily through long-term acute care hospitals (“LTACHs”). As of March 31, 2015, the Company, through its wholly- and majority-owned subsidiaries, equity joint ventures and controlled affiliates, operated 341 service providers in 29 states within the continental United States.

Unaudited Interim Financial Information

The condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014, and the related condensed consolidated statements of income for the three months ended March 31, 2015 and 2014, condensed consolidated statement of changes in equity for the three months ended March 31, 2015, condensed consolidated statements of cash flows for the three months ended March 31, 2015 and 2014 and related notes (collectively, these financial statements and the related notes are referred to herein as the “interim financial information”) have been prepared by the Company. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented. This report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2015, which includes information and disclosures not included herein.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates.

Critical Accounting Policies

The Company’s most critical accounting policies relate to the principles of consolidation, revenue recognition and accounts receivable and allowances for uncollectible accounts.

Principles of Consolidation

The interim financial information includes all subsidiaries and entities controlled by the Company. Control is defined by the Company as ownership of a majority of the voting interest of an entity. The interim financial information includes entities in which the Company receives a majority of the entities’ expected residual returns and absorbs a majority of the entities’ expected losses. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s interim financial information.

7

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended    March 31,
Ownership type	2015		2014
Wholly-owned subsidiaries	54.6	%	49.2	%
Equity joint ventures	43.2		48.0
License leasing arrangements	1.3		1.9
Management services	0.9		0.9
	100.0	%	100.0	%

All significant intercompany accounts and transactions have been eliminated in the Company’s accompanying interim financial information. Business combinations accounted for under the acquisition method have been included in the interim financial information from the respective dates of acquisition.

The following describes the Company’s consolidation policy with respect to its various ventures excluding wholly-owned subsidiaries:

Equity Joint Ventures

The members of the Company’s equity joint ventures participate in profits and losses in proportion to their equity interests. The Company consolidates these entities as the Company has voting control over the entities.

License Leasing Arrangements

The Company, through wholly-owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing and hospice agencies. The Company owns 100% of the equity of these subsidiaries and consolidates them based on such ownership.

Management Services

The Company has various management services agreements under which the Company manages certain operations of agencies. The Company does not consolidate these agencies because the Company does not have an ownership interest in, and does not have an obligation to absorb losses of, the entities that own the agencies or the right to receive the benefits from those entities.

Revenue Recognition

The Company reports net service revenue at the estimated net realizable amount due from Medicare, Medicaid and other commercial or managed care insurance programs for services rendered. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance program. All such payors contribute to the net service revenue of the Company’s home health services, hospice services, community-based services, and facility-based services.

8

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Payor:	2015		2014
Medicare	74.7	%	78.7	%
Medicaid	1.4		1.3
Other	23.9		20.0
	100.0	%	100.0	%

The following table sets forth the percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Reporting segment:	2015		2014
Home health services	75.9	%	78.1	%
Hospice services	8.7		9.3
Community-based services	5.1		0.5
Facility-based services	10.3		12.1
	100.0	%	100.0	%

Medicare

Home Health

The Company’s home nursing Medicare patients are classified into one of 153 home health resource groups prior to receiving services. Based on the patient’s home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60-day period referred to as an episode. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period.

Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. In calculating net service revenue, management estimates the impact of these payment adjustments based on historical experience and records this estimate as the services are rendered using the expected level of services that will be provided.

Hospice Services

The Company is paid by Medicare under a per diem payment system. The Company receives one of four predetermined daily or hourly rates based upon the level of care the Company furnished. The Company records net service revenue from hospice services based on the daily or hourly rate and recognizes revenue as hospice services are provided.

Hospice payments are subject to an inpatient cap and an overall Medicare payment cap. The inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall Medicare payment cap relates to individual providers receiving reimbursements in excess of a “cap amount,” calculated by multiplying the number of beneficiaries during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. The Company monitors its limits on a provider-by-provider basis and records an estimate of its liability for reimbursements received in excess of the cap amount. Beginning with the cap year October 1, 2014, CMS implemented a new process requiring hospice providers to self-report their cap liabilities and remit applicable payment by March 31, 2016.

9

Facility-Based Services

The Company is reimbursed by Medicare for services provided under the LTACH prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient classified in that particular long-term care diagnosis-related group. For selected patients, the amount may be further adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for the Company’s LTACHs as services are provided.

Medicaid, managed care and other payors

The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as services are provided based on this fee schedule. The Company’s managed care and other payors reimburse the Company based upon a predetermined fee schedule or an episodic basis, depending on the terms of the applicable contract. Accordingly, the Company recognizes revenue from managed care and other payors in the same manner as the Company recognizes revenue from Medicare or Medicaid.

Accounts Receivable and Allowances for Uncollectible Accounts

The Company reports accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and consist of amounts due from Medicare, other third-party payors and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations of receivables is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 55% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The provision for bad debts is based upon the Company’s assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined the account will not be collected.

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is deducted from the final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% instead of 60% of the estimated reimbursement.

The Company’s services to the Medicare population are paid at prospectively set amounts that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and contracts with other payors provide for payments based upon a predetermined fee schedule or an episodic basis, depending on the terms of the applicable contract. The Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated contractual allowance when reporting net service revenue for each reporting period.

Other Significant Accounting Policies

Earnings Per Share

Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding plus potentially dilutive shares.

10

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended    March 31,
	2015	2014
Weighted average number of shares outstanding for basic per share calculation	17,322,791	17,148,043
Effect of dilutive potential shares:
Options	5,487	4,290
Nonvested stock	161,205	116,383
Adjusted weighted average shares for diluted per share calculation	17,489,483	17,268,716
Anti-dilutive shares	191,065	195,945

Recently Issued Accounting Pronouncements

On May 28, 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers, ("ASU 2014-9") which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-9 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-9 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

3. Acquisitions and Disposals

The Company acquired the majority-ownership of one home health agency and one community-based services agency during the three months ended March 31, 2015. The total aggregate purchase price for the Company’s acquisition was $0.6 million, which was paid in cash. The purchase price was determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows.

Acquired intangible assets consist of a Medicare license, Medicaid license, and trade name. The fair value of the acquired intangible assets was $0.4 million, which is preliminary pending the final valuation of those assets.

The Company's home health services segment and community-based services segment each recognized goodwill of $0.2 million. Goodwill generated from the acquisitions was recognized based on the expected contributions of each acquisition to the overall corporate strategy. The Company expects its portion of goodwill to be fully tax deductible. The acquisition was accounted for under the acquisition method of accounting, and, accordingly, the accompanying interim financial information includes the results of operations of the acquired entity from the date of acquisition.

4. Goodwill and Intangibles

The changes in recorded goodwill by reporting unit for the three months ended March 31, 2015 were as follows (amounts in thousands):

	Home health reporting unit			Hospice reporting unit		Community - based reporting unit		Facility-based reporting unit		Total
Balance as of December 31, 2014	$	196,296		$	14,793	$	17,339	$	11,591	$	240,019
Goodwill from acquisitions	138			—		205		—		343
Goodwill related to noncontrolling interests	14			—		22		—		36
Goodwill related to disposal	(104		)	—		—		—		(104		)
Balance as of March 31, 2015	$	196,344		$	14,793	$	17,566	$	11,591	$	240,294

11

Intangible assets consisted of the following as of March 31, 2015 and December 31, 2014 (amounts in thousands):

	March 31, 2015
	Estimated useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived assets:
Trade names	Indefinite	$	54,855	$	—		$	54,855
Certificates of need/licenses	Indefinite	19,321		—			19,321
Indefinite-lived balance at end of period		$	74,176	$	—		$	74,176
Definite-lived assets:
Trade names	2 months — 5 years	$	8,228	$	(3,276	)	$	4,952
Non-compete agreements	4 month — 3 years	4,224		(3,848		)	376
Definite-lived balance at end of period		$	12,452	$	(7,124	)	$	5,328
Balance as of March 31, 2015		$	86,628	$	(7,124	)	$	79,504

	December 31, 2014
	Estimated useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived assets:
Trade names	Indefinite	$	54,732	$	—		$	54,732
Certificates of need/licenses	Indefinite	19,058		—			19,058
Indefinite-lived balance at end of period		$	73,790	$	—		$	73,790
Definite-lived assets:
Trade names	2 months — 5 years	$	8,230	$	(2,797	)	$	5,433
Non-compete agreements	3 months — 3 years	4,225		(3,763		)	462
Definite-lived balance at end of period		$	12,455	$	(6,560	)	$	5,895
Balance as of December 31, 2014		$	86,245	$	(6,560	)	$	79,685

Intangible assets of $66.1 million, net of accumulated amortization, were related to the home health services segment, $5.1 million were related to the hospice services segment, $7.3 million were related to the community-based services segment, and $1.0 million were related to the facility-based services segment as of March 31, 2015.

5. Debt

Credit Facility

On June 18, 2014, the Company entered into a Credit Agreement (the “Credit Agreement”) with Capital One, National Association, which provides a senior, secured revolving line of credit commitment with a maximum principal borrowing limit of $225.0 million and a letter of credit sub-limit equal to $15.0 million. The Credit Agreement replaced the Third Amended and Restated Credit Agreement with Capital One, National Association, dated August 31, 2012. The expiration date of the Credit Agreement is June 18, 2019. Revolving loans under the Credit Agreement bear interest at either a (1) Base Rate, which is defined as a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate in effect on such day plus 0.5% (b) the Prime Rate in effect on such day and (c) the Eurodollar Rate for a one month interest period on such day plus 1.0%, plus a margin ranging from 0.75% to 1.5% per annum or (2) Eurodollar rate plus a margin ranging from 1.75% to 2.5% per annum. Swing line loans bear interest at the Base Rate. The Company is limited to 15 Eurodollar borrowings outstanding at the same time. The Company is required to pay a commitment fee for the unused commitments at rates ranging from 0.225% to 0.375% per annum depending upon the Company’s consolidated Leverage Ratio, as defined in the Credit Agreement. The Base Rate at March 31, 2015 was 4.25% and the Eurodollar rate was 2.17%.

As of March 31, 2015 and December 31, 2014, respectively, the Company had $47.0 million and $60.0 million drawn and letters of credit totaling $7.1 million outstanding under its credit facilities with Capital One, National Association.

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As of March 31, 2015, the Company had $170.9 million available for borrowing under the Credit Agreement with Capital One, National Association.

6. Income Taxes

As of March 31, 2015, an unrecognized tax benefit of $3.4 million was recorded in income tax payable, which, if recognized, would decrease the Company’s effective tax rate. All of the Company’s unrecognized tax benefit is due to the settlement with the United States of America, which was announced September 30, 2011. On July 30, 2014, the Internal Revenue Service (“IRS”) issued a notice of proposed adjustment asserting that a portion of the original tax deduction claimed by the Company associated with the settlement with the United States of America should be disallowed. The Company is currently appealing this proposed adjustment with IRS Appeals. The Company intends to vigorously defend its original position of the deductibility of the full settlement amount on its 2011 tax return.

7. Stockholder’s Equity

Equity Based Awards

The 2010 Long Term Incentive Plan (the “2010 Incentive Plan”) is administered by the Compensation Committee of the Company’s Board of Directors. A total of 1,500,000 shares of the Company’s common stock were reserved and 499,037 shares are currently available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee of the Board of Directors. The Compensation Committee determines the exercise price for non-statutory stock options. The exercise price for any option cannot be less than the fair market value of the Company’s common stock as of the date of grant.

Share Based Compensation

Nonvested Stock

During the three months ended March 31, 2015, the Company’s independent directors were granted 16,200 nonvested shares of common stock under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan. The shares were drawn from the 1,500,000 shares of common stock reserved for issuance under the 2010 Incentive Plan. The shares vest 100% on the one year anniversary date. During the three months ended March 31, 2015, employees were granted 174,865 nonvested shares of common stock pursuant to the 2010 Incentive Plan. The shares vest over a five year period, conditioned on continued employment. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date. The weighted average grant date fair value of nonvested shares of common stock granted during the three months ended March 31, 2015 was $33.80.

The following table represents the nonvested stock activity for the three months ended March 31, 2015:

	Number of shares		Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2014	524,287		$	22.56
Granted	191,065		$	33.80
Vested	(146,424	)	$	22.82
Nonvested shares outstanding as of March 31, 2015	568,928		$	26.26

During the three months ended March 31, 2015, an independent director of the Company received a share based award, which will be settled in cash at March 1, 2016. The amount of such cash payment will equal the fair market value of 1,800 shares on the settlement date.

As of March 31, 2015, there was $12.4 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.54 years. The total fair value of shares of common stock vested during the three months ended March 31, 2015 and 2014 was $3.3 million. The

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Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight line basis for shares of common stock that vest over time. The Company recorded $1.0 million of compensation expense related to nonvested stock grants in the three months ended March 31, 2015 and 2014.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan. In 2013, the Company adopted the Amended and Restated Employee Stock Purchase Plan, which reserved an additional 250,000 shares of common stock to the plan.

The table below details the shares of common stock issued during 2015:

	Number of shares	Per share price
Shares available as of December 31, 2014	236,483
Shares issued during three months ended March 31, 2015	7,068	$	29.62
Shares available as of March 31, 2015	229,415

Stock Options

As of March 31, 2015, 15,000 options were issued and exercisable. During the three months ended March 31, 2015, no options were exercised or forfeited and no options were granted.

Treasury Stock

In conjunction with the vesting of the nonvested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the three months ended March 31, 2015, the Company redeemed 33,207 shares of common stock valued at $1.1 million, related to these tax obligations.

8. Commitments and Contingencies

Contingencies

The Company is involved in various legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, management believes the outcome of pending litigation will not have a material adverse effect, after considering the effect of the Company’s insurance coverage, on the Company’s interim financial information.

On June 13, 2012, a putative shareholder securities class action was filed against the Company and its Chairman and Chief Executive Officer in the United States District Court for the Western District of Louisiana, styled City of Omaha Police & Fire Retirement System v. LHC Group, Inc., et al., Case No. 6:12-cv-1609-JTT-CMH. The action was filed on behalf of LHC shareholders who purchased shares of the Company’s common stock between July 30, 2008 and October 26, 2011. Plaintiff generally alleges that the defendants caused false and misleading statements to be issued in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (“the Exchange Act”) and Rule 10b-5 promulgated thereunder and that the Company’s Chairman and Chief Executive Officer is a control person under Section 20(a) of the Exchange Act. On November 2, 2012, Lead Plaintiff City of Omaha Police & Fire Retirement System filed an Amended Complaint for Violations of the Federal Securities Laws (“the Amended Complaint”) on behalf of the same putative class of LHC shareholders as the original Complaint. In addition to claims under Sections 10(b) and 20(a) of the Exchange Act, the Amended Complaint added a claim against the Chairman and Chief Executive Officer for violation of Section 20A of the Exchange Act. The Company believes these claims are without merit. On December 17, 2012, the Company and the Chairman and Chief Executive Officer filed a motion to dismiss the Amended Complaint, which was denied by Order dated March 15, 2013. On June 16, 2014, following mediation, the parties entered into a Stipulation of Settlement. On August 5, 2014, the District Court entered an Order Preliminarily Approving Settlement and Providing for Notice. The District Court held a final fairness hearing on December 11, 2014 and issued two Report and Recommendations on February 11, 2015 approving the

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settlement plan of allocation and Lead Plantiff's fees and expenses. On March 3, 2015, the District Court entered its Judgments adopting the Report and Recommendation previously issued and dismissing the action with prejudice. The time for appeal has passed and no appeals were filed. This matter is now concluded. The Company's insurance carrier has funded the entire $7.9 million settlement amount.

On October 18, 2013, a derivative complaint was filed by a purported Company shareholder against certain of the Company’s current and former executive officers, employees and members of its Board of Directors in the United States District Court for the Western District of Louisiana, styled Plummer v. Myers, et al., Case No. 6:13-cv-2899-JTT-CMH. The action was brought derivatively on behalf of the Company, which is also named as a nominal defendant. Plaintiff generally alleges that the individual defendants breached their fiduciary duties owed to the Company. The complaint also alleges claims for insider selling and unjust enrichment against the Company’s Chairman and Chief Executive Officer and the Company’s former President and Chief Operating Officer.

On December 30, 2013, a related derivative complaint was filed by a purported Company shareholder against certain of the Company’s current and former executive officers, employees and members of its Board of Directors in the United States District Court of the Western District of Louisiana, styled McCormack v. Myers, et al., Case No. 6:13-cv-3301-JTT-CMH. The action was brought derivatively on the Company’s behalf and the Company was also named as a nominal defendant. Plaintiff generally alleges that the individual defendants breached their fiduciary duties owed to the Company and wasted corporate assets. Plaintiff also alleges that the Company’s Chairman and Chief Executive Officer caused false and misleading statements to be issued in violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and that the Company’s Directors are control persons under Section 20(a) of the Exchange Act. The complaint also alleges claims for insider selling, misappropriation of information and unjust enrichment against the Company’s Chairman and Chief Executive Officer and the Company’s former President and Chief Operating Officer.

On March 25, 2014, the McCormack derivative action was consolidated with the Plummer derivative action described above and stayed pending the conclusion of expert discovery in the related City of Omaha shareholder securities class action described above. The parties are presently discussing future case scheduling. The Company believes these claims are without merit and intends to defend this consolidated lawsuit vigorously. The Company cannot predict the outcome or effect of this consolidated lawsuit, if any, on the Company’s financial condition and results of operations.

Except as discussed above, we are not aware of any pending or threatened investigations involving allegations of potential wrongdoing.

Any negative findings in the above described lawsuits could result in substantial financial penalties or awards against the Company. At this time, the Company cannot predict the ultimate outcome of these matters or the potential range of damages, if any.

Joint Venture Buy/Sell Provisions

Most of the Company’s joint ventures include a buy/sell option that grants to the Company and its joint venture partners the right to require the other joint venture party to either purchase all of the exercising member’s membership interests or sell to the exercising member all of the non-exercising member’s membership interest, at the non-exercising member’s option, within 30 days of the receipt of notice of the exercise of the buy/sell option. In some instances, the purchase price is based on a multiple of the historical or future earnings before income taxes and depreciation and amortization of the equity joint venture at the time the buy/sell option is exercised. In other instances, the buy/sell purchase price will be negotiated by the partners and subject to a fair market valuation process. The Company has not received notice from any joint venture partners of their intent to exercise the terms of the buy/sell agreement nor has the Company notified any joint venture partners of its intent to exercise the terms of the buy/sell agreement.

Compliance

The laws and regulations governing the Company’s operations, along with the terms of participation in various government programs, regulate how the Company does business, the services offered and its interactions with patients and the public. These laws and regulations, and their interpretations, are subject to frequent change. Changes in existing laws or regulations, or their interpretations, or the enactment of new laws or regulations could materially and adversely affect the Company’s operations and financial condition.

The Company is subject to various routine and non-routine governmental reviews, audits and investigations. In recent years, federal and state civil and criminal enforcement agencies have heightened and coordinated their oversight efforts related to the health care industry, including referral practices, cost reporting, billing practices, joint ventures and other financial

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relationships among health care providers. Violation of the laws governing the Company’s operations, or changes in the interpretation of those laws, could result in the imposition of fines, civil or criminal penalties and/or termination of the Company’s rights to participate in federal and state-sponsored programs and suspension or revocation of the Company’s licenses. The Company believes that it is in material compliance with all applicable laws and regulations.

9. Noncontrolling interest

Noncontrolling Interest-Redeemable

A majority of the Company’s equity joint venture agreements include a provision that requires the Company to purchase the noncontrolling partner’s interest upon the occurrence of certain triggering events, such as death or bankruptcy of the partner or the partner’s exclusion from the Medicare or Medicaid programs. These triggering events and the related repurchase provisions are specific to each individual equity joint venture; if the repurchase provision is triggered in any one equity joint venture, the remaining equity joint ventures would not be impacted. Upon the occurrence of a triggering event, the Company would be required to purchase the noncontrolling partner’s interest at either the fair value or the book value at the time of purchase, as stated in the applicable joint venture agreement. The Company has never been required to purchase the noncontrolling interest of any of its equity joint venture partners, and the Company believes the likelihood of a triggering event occurring is remote. According to authoritative guidance, redeemable noncontrolling interests must be reported outside of permanent equity on the consolidated balance sheet in instances where there is a repurchase provision with a triggering event that is outside the control of the Company.

The following table summarizes the activity of noncontrolling interest-redeemable for the three months ended March 31, 2015 (amounts in thousands):

Balance as of December 31, 2014	$	11,517
Net income attributable to noncontrolling interest-redeemable	1,610
Noncontrolling interest-redeemable distributions	(1,830		)
Balance as of March 31, 2015	$	11,297

10. Allowance for Uncollectible Accounts

The following table summarizes the activity in the allowance for uncollectible accounts for the three months ended March 31, 2015 (amounts in thousands):

Balance as of December 31, 2014	$	18,582
Additions	5,259
Deductions	(2,856		)
Balance as of March 31, 2015	$	20,985

11. Fair Value of Financial Instruments

The carrying amounts of the Company’s cash, receivables, accounts payable and accrued liabilities approximate their fair values because of their short maturity. The estimated fair value of intangible assets acquired was calculated using level 3 inputs based on the present value of anticipated future benefits. For the three months ended March 31, 2015, the carrying value of the Company’s long-term debt approximates fair value as the interest rates approximate current rates.

12. Segment Information

During the first quarter of 2015, the Company had a change in the composition of segments due to the community-based services meeting the criteria of qualitative thresholds established by ASC 280, Segment Reporting. Prior-period segment data has been restated to reflect the newly reportable segment in which community-based services were previously included in home-based services.

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The Company’s reportable segments consist of home health services, community-based services, hospice services and facility-based services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies, as described in Note 2 of the Notes to Condensed Consolidated Financial Statements.

The following tables summarize the Company’s segment information for the three months ended March 31, 2015 and 2014 (amounts in thousands):

	Three Months Ended March 31, 2015
	Home health services			Hospice services			Community-based services			Facility-based services			Total
Net service revenue	$	146,592		$	16,851		$	9,773		$	19,863		$	193,079
Cost of service revenue	85,546			10,099			6,900			11,881			114,426
Provision for bad debts	4,476			347			180			256			5,259
General and administrative expenses	46,454			4,888			2,217			5,739			59,298
Operating income	10,116			1,517			476			1,987			14,096
Interest expense	(430		)	(60		)	(6		)	(49		)	(545		)
Income before income taxes and noncontrolling interest	9,686			1,457			470			1,938			13,551
Income tax expense	3,657			620			45			407			4,729
Net income	6,029			837			425			1,531			8,822
Less net income attributable to noncontrolling interests	1,521			246			(20		)	270			2,017
Net income attributable to LHC Group, Inc.’s common stockholders	$	4,508		$	591		$	445		$	1,261		$	6,805
Total assets	$	385,653		$	34,019		$	32,971		$	38,321		$	490,964

	Three Months Ended March 31, 2014
	Home health services			Hospice services			Community-based services			Facility-based services			Total
Net service revenue	$	127,793		$	15,222		$	887		$	19,779		$	163,681
Cost of service revenue	75,800			8,897			644			11,993			97,334
Provision for bad debts	2,623			105			31			603			3,362
General and administrative expenses	44,194			4,444			323			5,618			54,579
Operating income (loss)	5,176			1,776			(111		)	1,565			8,406
Interest expense	(307		)	(39		)	(3		)	(39		)	(388		)
Income (loss) before income taxes and noncontrolling interest	4,869			1,737			(114		)	1,526			8,018
Income tax expense	2,270			346			23			284			2,923
Net income (loss)	2,599			1,391			(137		)	1,242			5,095
Less net income attributable to noncontrolling interests	607			201			—			219			1,027
Net income (loss) attributable to LHC Group, Inc.’s common stockholders	$	1,992		$	1,190		$	(137	)	$	1,023		$	4,068
Total assets	$	400,911		$	28,919		$	1,544		$	36,726		$	468,100

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to future plans and strategies, anticipated events or trends, future financial performance and expectations and beliefs concerning matters that are not historical facts or that necessarily depend upon future events. The words “may,” “should,” “could,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” and similar expressions are intended to identify forward-looking statements. Specifically, this report contains, among others, forward-looking statements about:

• our expectations regarding financial condition or results of operations for periods after March 31, 2015;

• our critical accounting policies;

• our business strategies and our ability to grow our business;

• our participation in the Medicare and Medicaid programs;

• the impact of healthcare reform;

• the reimbursement levels of Medicare and other third-party payors;

• the prompt receipt of payments from Medicare and other third-party payors;

• our future sources of and needs for liquidity and capital resources;

• the effect of any changes in market rates on our operations and cash flows;

• our ability to obtain financing;

• our ability to make payments as they become due;

• the outcomes of various routine and non-routine governmental reviews, audits and investigations;

• our expansion strategy, the successful integration of recent acquisitions and, if necessary, the ability to relocate or restructure our current facilities;

• the value of our proprietary technology;

• the impact of legal proceedings;

• our insurance coverage;

• the costs of medical supplies;

• our competitors and our competitive advantages;

• our ability to attract and retain valuable employees;

• the price of our stock;

• our compliance with environmental, health and safety laws and regulations;

• our compliance with health care laws and regulations;

• our compliance with SEC laws and regulations and Sarbanes-Oxley requirements;

• the impact of federal and state government regulation on our business; and

• the impact of changes in our future interpretations of fraud, anti-kickback or other laws.

The forward-looking statements included in this report reflect our current views about future events and are based on assumptions and are subject to known and unknown risks and uncertainties. Many important factors could cause actual results

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or achievements to differ materially from any future results or achievements expressed in or implied by our forward-looking statements. Many of the factors that will determine future events or achievements are beyond our ability to control or predict. Important factors that could cause actual results or achievements to differ materially from the results or achievements reflected in our forward-looking statements include, among other things, the factors discussed in the Part II, Item 1A. “Risk Factors,” included in this report and in our other filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”), as updated by our subsequent filings with the SEC. This report should be read in conjunction with the 2014 Form 10-K, and all of our other filings, including quarterly reports on Form 10-Q and current reports on Form 8-K made with the SEC through the date of this report.

You should read this report, the information incorporated by reference into this report and the documents filed as exhibits to this report completely and with the understanding that our actual future results or achievements may differ materially from what we expect or anticipate.

The forward-looking statements contained in this report reflect our views and assumptions only as of the date this report is filed with the SEC. Except as required by law, we assume no responsibility for updating any forward-looking statements.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refer to LHC Group, Inc. and its consolidated subsidiaries.

OVERVIEW

We provide quality cost-effective post-acute health care services to our patients. As of March 31, 2015, we have 341 service providers in 29 states: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia and Wisconsin. Our services are classified into four segments: (1) home health services; (2) hospice services; (3) community-based services and (4) facility-based services offered through our long-term acute care hospitals (“LTACHs”).

Through our home health services segment, we offer a wide range of services, including skilled nursing, medically-oriented social services, and physical, occupational and speech therapy. As of March 31, 2015, we operate 279 home health services locations, of which 162 are wholly-owned, 111 are majority-owned through equity joint ventures, three are under license lease arrangements and the operations of the remaining three locations are only managed by us. We intend to increase the number of home nursing agencies that we operate through continued acquisitions and organic development.

Through our hospice services segment, we offer a wide range of services, including pain and symptom management, emotional and spiritual support, inpatient and respite care, homemaker services, and counseling. As of March 31, 2015, we operate 38 hospice locations, of which 25 are wholly-owned, 11 are majority-owned through equity joint ventures and two are under license lease arrangements.

Through our community-based services segment, our services are performed by paraprofessional personnel, and include assistance to the elderly, chronically ill, and disabled patients with activities of daily living. As of March 31, 2015, we operate 14 community-based services locations, all of which are wholly-owned.

We provide facility-based services principally through our LTACHs. As of March 31, 2015, we operate six LTACHs with 8 locations, of which all but one are located within host hospitals. Of these facility-based services locations, three are wholly-owned and five are majority-owned through equity joint ventures. We also wholly-own and operate a family health center and a pharmacy.

The percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2015 and 2014 was as follows:

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	Three Months Ended    March 31,
Type of segment	2015		2014
Home health services	75.9	%	78.1	%
Hospice services	8.7		9.3
Community-based services	5.1		0.5
Facility-based services	10.3		12.1
	100.0	%	100.0	%

Recent Developments

Home Health Services

When the Patient Protection and Affordable Care Act (“PPACA”) was enacted in 2010, it changed a number of Medicare payment rates, including the reinstatement of the 3% home health rural add-on, which began on April 1, 2010 (expiring January 1, 2016). Other changes from PPACA that took effect on or after January 1, 2011 are:

• reducing the market basket adjustment to be determined by CMS for each of 2011, 2012 and 2013 by 1%;

• instituting a full productivity adjustment beginning in 2015; and

• rebasing of the base payment rate for Medicare beginning in 2014 and phasing in over a four year period.

On November 22, 2013, CMS issued a final rule (effective January 1, 2014) regarding payment rates for home health services provided during 2014, which includes the following elements:

• decreased base payment rate by 1.05%, which is made up of a market basket increase of 2.3%, rebasing decrease of 2.75% and HH PPS Grouper refinements decrease of 0.6%.

• reduced the average case-mix weight for 2014 from 1.3464 to 1.0000. To offset the effect of resetting the case mix average to 1.000, CMS upwardly-adjusted the national, standardized 60-day episode payment rate by the same factor that it used to decrease the weights from $2,137.73 in 2013 to $2,869.27 in 2014.

• removed 170 diagnosis codes from assignment to diagnosis groups within HH PPS Grouper.

• begin using ICD-10-CM codes within HH PPS Grouper. On April 1, 2014, the “Protecting Access to Medicare Act of 2014” HR4302 was signed, a provision of which delayed the conversion of ICD-10 by one year, to October 1, 2015.

• reduced rebasing amounts for 2014 through 2017 by an aggregate of $80.95, which is 3.5% of 2010 rates or 2.75% of 2013 rates.

On October 30, 2014, CMS issued a final rule (effective January 1, 2015) regarding payment rates for home health services provided during 2015. The net impact of all policies in the rule is a reduction in Medicare payments of 0.3%. CMS estimates that freestanding proprietary agencies will have a 0.9% reduction in Medicare reimbursement compared with 2014 levels. The final rule includes the following elements:

• The national, standardized 60-day episode payment rate increased from $2,869.27 in 2014 to $2,961.38 in 2015. This is a net 3.2% increase in standardized rate, due to application of (1) a wage index budget neutrality factor (+.24%) and (2) a case mix budget neutrality factor (+ 3.66%) to the 2014 standard rate which is offset by a recalibration of the case mix, then subtracting the rebasing adjustment of -$80.95 (2.82% of 2014 rates), then applying the net market basket adjustment of +2.1% (Market Basket=+2.6%, Productivity Adjustment=-0.5%).

• The 2013 Office of Management and Budget ("OMB") core-based statistical area (“CBSA”) designations for calculating wage indexes were adopted. The final rule would transition the HHA wage index using a 50/50 blend of the existing CBSA designations and the new CBSA designations outlined in a February 28, 2013, Office of Management and Budget bulletin, respectively. In this process, 37 counties will shift from urban to rural and 105 counties will shift from rural to urban.

• The face-to-face narrative requirement was eliminated. CMS will only consider medical records from the patient’s certifying physician or discharging facility in determining initial eligibility for Medicare’s home health benefit.

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Physician claims for certification/re-certification of eligibility (not the face-to-face encounter visit) will be considered a non-covered service if the HHA claim was non-covered because the patient was ineligible for the home health benefit.

• The scheduling and administration of therapy reassessments was modified to every 30 calendar days as opposed to tracking and counting therapy visits, especially for multiple-discipline therapy episodes.

• The 3% rural add-on will only apply to counties that are classified as rural under the 2013 CBSA designations. Nationally, 37 counties will shift from urban to rural and pick up the rural add-on, and 105 counties will shift from rural to urban and will lose the rural add-on, but may offset some of that loss by a positive increase in wage index.

• CMS also made several minor policy changes, which will not affect reimbursement.

On April 14, 2015, legislation was passed, which limits any increase in home health payments to 1% for fiscal year 2018, and extended the 3% rural home health safeguard for two years through December 31, 2017.

Hospice Services

On August 22, 2014, CMS released its final rule for hospice for fiscal year 2015, which increased Medicare reimbursement payments by 1.4% over fiscal year 2014. The 1.4% increase consists of a 2.9% inflationary market basket update offset by a 0.7% reduction related to the wage index changes and the sixth year of CMS's seven-year phase-out of its wage index budget neutrality adjustment factor, a 0.5% reduction for the productivity adjustment, and a 0.3% reduction to the market basket as defined by PPACA. The following table shows the hospice Medicare payment rates for fiscal year 2015, which began on October 1, 2014 and will end September 30, 2015:

Description	Rate per patient day
Routine Home Care	$	159.34
Continuous Home Care	$	929.91
Full Rate = 24 hours of care
$38.75 = hourly rate
Inpatient Respite Care	$	164.81
General Inpatient Care	$	708.77

On April 30, 2015, CMS issued a proposed rule that would update the Medicare hospice payment rates and wage index for fiscal year 2016, which is estimated to be an increase in payment rates of 1.3%. CMS is proposing two routine home care rates, in a budget-neutral manner, to provide separate payment rates for the first 60 days of care and care beyond 60 days. In addition to the two routine home care rates, CMS is proposing a service intensity add-on payment that would help to promote and compensate for the provision of skilled visits at end of life. As proposed, fiscal year 2016 will be the seventh and final year of the Budget Neutrality Adjustment Factor for hospice. CMS is proposing to update the aggregate hospice cap to $27,624.41 for fiscal year 2016.

Community-Based Services

Community-based services are care services, which are primarily performed by a paraprofessional personnel, and include assistance to the elderly, chronically ill, and disabled patients with activities of daily living. Revenue is generated on an hourly basis and our current primary payors are TennCare Managed Care Organization and Medicaid. Approximately 83% of our net service revenue in this segment was generated in Tennessee.

Facility-Based Services

On December 26, 2013, President Obama signed into law the Bipartisan Budget Act of 2013 (Public Law 113-67). This new law prevents a scheduled payment reduction for physicians and other practitioners who treat Medicare patients from taking effect on January 1, 2014. Included in the legislation are the following changes to LTACH reimbursement:

• Medicare discharges from LTACHs will continue to be paid at full LTACH PPS rates if:

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• the patient spent at least three days in a short-term care hospital (“STCH”) intensive care unit (“ICU”) during a STCH stay that immediately preceded the LTACH stay, or

• the patient was on a ventilator for more than 96 hours in the LTACH (based on the MS-LTACH DRG assigned) and had a STCH stay immediately preceding the LTACH stay.

• Also, the LTACH discharge cannot have a principal diagnosis that is psychiatric or rehabilitation.

• All other Medicare discharges from LTACHs will be paid at a new “site neutral” rate, which is the lesser of:

• the IPPS comparable per diem amount determined using the formula in the short-stay outlier regulation at 42 C.F.R. § 412.529(d)(4) plus applicable outlier payments, or

• 100% of the estimated cost of the services involved.

• The above new payment policy will not be effective until LTACH cost reporting periods beginning on or after October 1, 2015, and the site neutral payment rate will be phased-in over three years.

• For cost reporting periods beginning on or after October 1, 2015, discharges paid at the site neutral payment rate or by a Medicare Advantage plan (Part C) will be excluded from the LTACH average length-of-stay (“ALOS”) calculation.

• For cost reporting periods beginning in fiscal year 2016 and later, CMS will notify LTACHs of their “LTACH discharge payment percentage” (i.e., the number of discharges not paid at the site neutral payment rate divided by the total number of discharges).

• For cost reporting periods beginning in fiscal year 2020 and later, LTACHs with less than 50% of their discharges paid at the full LTACH PPS rates will be switched to payment under the IPPS for all discharges in subsequent cost reporting periods. However, CMS will set up a process for LTACHs to seek reinstatement of LTACH PPS rates for applicable discharges.

• MedPAC will study the impact of the above changes on quality of care, use of hospice and other post-acute care settings, different types of LTACHs and growth in Medicare spending on LTACHs. MedPAC is to submit a report to Congress with any recommendations by June 30, 2019. The report is to also include MedPAC’s assessment of whether the 25 Percent rule should continue to be applied.

• 25 Percent rule relief for freestanding LTACHs, HWHs and satellite facilities will be extended without interruption for cost reporting periods beginning on or after December 29, 2007 through December 28, 2016. Grandfathered HWHs will be permanently exempt from the 25 Percent rule. CMS must report to Congress by December 18, 2015 on whether the 25 Percent rule should continue to be applied.

• The moratorium on new LTACH facilities and increases in LTACH beds will be renewed for the period from April 1, 2014 to September 30, 2017. Although the introductory language only refers to a moratorium extension for LTACH bed increases, the amendment to the Medicare, Medicaid, and SCHIP Extension Act (“MMSEA”) would extend both moratoriums. No exceptions will apply during this extension of the moratoriums. The original rule renewed the moratorium for the period beginning January 1, 2015; however a provision within HR4302 accelerated the moratorium period beginning on April 1, 2014.

• Not later than October 1, 2015, CMS will establish a new functional status quality measure for change in mobility of ventilator patients.

• As part of the fiscal year 2015 or 2016 rulemaking, CMS is to study payment rates and regulations that apply to the special category of neoplastic disease LTACHs and may adjust such payment rates.

On August 4, 2014, CMS released its final rule for LTACH Medicare reimbursement for fiscal year 2015, which began on October 1, 2014 and will end on September 30, 2015. In the aggregate, payments for fiscal year 2014 will increase by 1.1% over fiscal year 2014 rates. The 1.1% increase consists of a 2.9% inflationary market basket update, offset by a 0.5% reduction for the productivity adjustment, and a 0.2% reduction to the market basket as defined by PPACA. LTACH payment rates will also be reduced by approximately 1.3% for the "one-time" budget neutrality adjustment factor under the last year of a three-year phase-in and increased by 0.2% for wage index budget neutrality adjustment.

On April 17, 2015, CMS issued a proposed rule to update fiscal year 2016 payment policies and rates under the IPPS and LTACH PPS rates, which would affect discharges occurring on or after October 1, 2015. CMS projects that LTACH PPS rates would decrease by 4.6%. This estimated decrease is primarily attributable to the statutory decrease in payment rates for site

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neutral LTACH PPS cases that do not meet the clinical criteria to qualify for higher LTACH rates. Cases that do qualify for higher LTACH PPS rates will see a payment rate increase of 1.9% (based on a market basket update of 2.7% adjusted by a multi-factor productivity adjustment of -0.6 percentage point and an additional adjustment of -0.2 percentage point in accordance with the Affordable Care Act).

None of the above described estimated changes to Medicare payments for home health, hospice and LTACHs for 2015 include the deficit reduction sequester cuts to Medicare that began on April 1, 2013, which reduced Medicare payments by 2% for patients whose service dates ended on or after April 1, 2013.

RESULTS OF OPERATIONS

Three months ended March 31, 2015

Consolidated financial statements

The following table summarizes our consolidated results of operations for the three months ended March 31, 2015 and 2014 (amounts in thousands, except percentages which are percentages of consolidated net service revenue, unless indicated otherwise):

	2015							2014						Increase (Decrease)			Percentage Change
Net service revenue	$	193,079						$	163,681					$	29,398		18.0	%
Cost of service revenue	114,426			59.3	%			97,334			59.5	%		17,092			17.6
Provision for bad debts	5,259			2.7				3,362			2.1			1,897			56.4
General and administrative expenses	59,298			30.7				54,579			33.3			4,719			8.6
Income tax expense	4,729			41.0		(1	)	2,923			41.8		(1)	1,806			61.8
Noncontrolling interest	2,017							1,027						990
Total non-operating income (expense)	(545		)					(388		)				(157		)
Net income attributable to LHC Group, Inc.’s common stockholders	$	6,805						$	4,068					$	2,737

(1) Effective tax rate as a percentage of income from continuing operations attributable to LHC Group, Inc.’s common stockholders.

Net service revenue

The following table sets forth each of our segment’s revenue growth or loss, admissions, census, episodes, patient days, and billable hours for the three months ended March 31, 2015 and the related change from the same period in 2014 (amounts in thousands, except admissions, census, episode data, patient days and billable hours):

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	Same Store(1)		De Novo(2)		Organic(3)		Organic Growth (Loss) %		Acquired(4)		Total		Total Growth (Loss) %
Home health services
Revenue	$	133,603	$	—	$	133,603	4.5	%	$	12,989	$	146,592	14.7	%
Revenue Medicare	$	102,933	$	—	$	102,933	2.9		$	10,741	$	113,674	13.7
New Admissions	32,819		—		32,819		6.2		3,146		35,965		16.3
New Medicare Admissions	22,520		—		22,520		6.5		2,355		24,875		17.7
Average Census	33,239		—		33,239		0.8		3,211		36,450		10.5
Average Medicare Census	24,804		—		24,804		(0.5	)	2,431		27,235		9.2
Home Health Episodes	42,499		—		42,499		0.3		4,185		46,684		10.2
Hospice services
Revenue	$	15,425	$	—	$	15,425	1.3		$	1,426	$	16,851	10.7
Revenue Medicare	$	14,268	$	—	$	14,268	0.8		$	1,347	$	15,615	10.3
New Admissions	1,369		—		1,369		11.1		112		1,481		20.2
New Medicare Admissions	1,182		—		1,182		11.0		103		1,285		20.7
Average Census	1,240		—		1,240		1.4		117		1,357		11.0
Average Medicare Census	1,144		—		1,144		1.8		112		1,256		11.7
Patient days	111,617		—		111,617		1.4		10,562		122,179		11.0
Community-based services
Revenue	$	1,415	$	103	$	1,518	71.3	%	$	8,255	$	9,773	1,003.0	%
Billable hours	62,224		3,017		65,241		58.9	%	228,775		294,016		616.0	%
Facility-based services
LTACHs
Revenue	$	19,192	$	—	$	19,192	1.0		—		$	19,192	1.0
Patient days	16,162		—		16,162		(1.8	)	—		16,162		(1.8	)

(1) Same store — location that has been in service with us for greater than 12 months.

(2) De Novo — internally developed location that has been in service with us for 12 months or less.

(3) Organic — combination of same store and de novo.

(4) Acquired — purchased location that has been in service with us for 12 months or less.

Total organic revenue and admissions increased in our home health services segment and hospice services segment due to the combination of an increase in patients on census and the successful execution of same store growth strategies.

Organic growth is primarily generated by population growth in areas covered by mature agencies, agencies five years old or older, and by increased market share in acquired and developing agencies. Historically, acquired agencies have the highest growth in admissions and average census in the first 24 months after acquisition, and have the highest contribution to organic growth, measured as a percentage of growth, in the second full year of operation after the acquisition.

Cost of service revenue

The following table summarizes cost of service revenue (amounts in thousands, except percentages, which are percentages of the segment’s respective net service revenue):

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	Three Months Ended March 31,
	2015				2014
Home health services
Salaries, wages and benefits	$	77,653	53.0	%	$	67,966	53.2	%
Transportation	4,864		3.3		4,794		3.7
Supplies and services	3,029		2.1		3,040		2.4
Total	$	85,546	58.4	%	$	75,800	59.3	%
Hospice services
Salaries, wages and benefits	$	7,092	42.1	%	$	6,130	40.2	%
Transportation	693		4.1		665		4.4
Supplies and services	2,314		13.7		2,102		13.8
Total	$	10,099	59.9	%	$	8,897	58.4	%
Community-based services
Salaries, wages and benefits	$	6,786	69.4	%	$	621	70.0	%
Transportation	60		0.6		14		1.6
Supplies and services	54		0.6		9		1.0
Total	$	6,900	70.6	%	$	644	72.6	%
Facility-based services
Salaries, wages and benefits	$	7,678	38.6	%	$	7,890	39.9	%
Transportation	56		0.3		66		0.3
Supplies and services	4,147		20.9		4,037		20.4
Total	$	11,881	59.8	%	$	11,993	60.6	%

Consolidated cost of service revenue for the three months ended March 31, 2015 was $114.4 million, or 59.3% of net service revenue, compared to $97.3 million, or 59.5% of net service revenue, for the same period in 2014. The increase in consolidated cost of service revenue was primarily due to an increase in the number of service providers resulting from acquisitions since March 31, 2014. Cost of service revenue for the home health services, hospice services, and community-based services segments increased $8.2 million, $1.0 million, and $5.9 million, respectively, due to such acquisitions. Savings associated with the implementation of the fleet program offset costs in the home health services segment. Facility-based services consolidated cost of service revenue decreased in direct correlation to the decrease in volume.

Provision for bad debts

Consolidated provision for bad debts for the three months ended March 31, 2015 was $5.3 million, or 2.7% of net service revenue, compared to $3.4 million, or 2.1% of net service revenue, for the same period in 2014. The increase of provision for bad debts was directly attributable to an increase in net service revenue and an increase in reserve rates among various aging patient claims.

Provision for bad debts increased in the home health services segment due to additional reserves being recorded for patient claims related to prior period patient care associated with two commercial payors.  These adjustments are an isolated occurrence and negotiations between parties are ongoing. Provision for bad debts decreased in the facility-based segment due to prior year's expense having reserves related to recovery audit contractor audits.

General and administrative expenses

The following table summarizes general and administrative expenses (amounts in thousands, except percentages, which are percentages of the segment’s respective net service revenue):

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	Three Months Ended March 31,
	2015				2014
Home health services
General and administrative	$	44,492	30.4	%	$	42,663	33.4	%
Depreciation and amortization	1,962		1.3		1,531		1.2
Total	$	46,454	31.7	%	$	44,194	34.6	%
Hospice services
General and administrative	$	4,567	27.1	%	$	4,196	27.6	%
Depreciation and amortization	321		1.9		248		1.6
Total	$	4,888	29.0	%	$	4,444	29.2	%
Community-based services
General and administrative	$	2,174	22.2	%	$	310	35.0	%
Depreciation and amortization	43		0.4		13		1.4
Total	2,217		22.6	%	$	323	36.4	%
Facility-based services
General and administrative	$	5,349	26.9	%	$	5,285	26.7	%
Depreciation and amortization	390		2.0		333		1.7
Total	$	5,739	28.9	%	$	5,618	28.4	%

Consolidated general and administrative expenses for the three months ended March 31, 2015 was $59.3 million, or 30.7% of net service revenue, compared to $54.6 million, or 33.3% of net service revenue, for the same period in 2014. The increase in consolidated general and administrative expenses was primarily due to an increase in the number of service providers resulting from acquisitions since March 31, 2014. General and administrative expenses for the home health services, hospice services, and community-based services segments increased $4.8 million, $0.6 million, and $1.7 million, respectively, due to such acquisitions. Savings associated with the prior year closures offset costs in the home health services segment. Facility-based services general and administrative expenses increased due to the implementation of management roles in sales, and administrative support staff.

Depreciation and amortization expense increased in the home health services segment due to the capitalization of Point of Care licenses. In 2014, we successfully completed the roll out of our Point of Care technology. These licenses are depreciated over their estimated useful life, which is 36 months. Facility-based services depreciation increased due to the purchases of wound pumps, which occurred during the latter part of 2014.

Income tax expense

Consolidated income tax expense for the three months ended March 31, 2015 was $4.7 million compared to $2.9 million for the same period in 2014. Income tax expense increased in direct correlation to the increase in income before income taxes and noncontrolling interest.

Noncontrolling interest

Consolidated noncontrolling interest for the three months ended March 31, 2015 was $2.0 million compared to $1.0 million for the same period in 2014. Noncontrolling interest increased due to the overall increase in same store admissions and census, and overall operational efficiencies gained through the joint ventures use of our Point of Care platform.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our principal source of liquidity for operating activities is the collection of patient accounts receivable, most of which are collected from governmental and third party commercial payors. We also have the ability to obtain additional liquidity, if necessary, through our credit facility, which provides for aggregate borrowings, including outstanding letters of credit, up to $225 million.

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Our reported cash flows from operating activities are affected by various external and internal factors, including the following:

• Operating Results — Our net income has a significant effect on our operating cash flows. Any significant increase or decrease in our net income could have a material effect on our operating cash flows.

• Timing of Acquisitions — We use our operating cash flows for acquisitions. When the acquisitions occur at or near the end of a period, our cash outflows significantly increase.

• Timing of Payroll — Our employees are paid bi-weekly on Fridays; therefore, operating cash flows decline in reporting periods that end on a Friday.

• Medical Insurance Plan Funding — We are self-funded for medical insurance purposes. Any significant changes in the amount of insurance claims submitted could have a direct effect on our operating cash flows.

• Medical Supplies — A significant expense associated with our business is the cost of medical supplies. Any increase in the cost of medical supplies, or in the use of medical supplies by our patients, could have a material effect on our operating cash flows.

The following table summarizes changes in cash (amounts in thousands):

	Three Months Ended March 31,
	2015			2014
Net cash provided by (used in):
Operating activities	$	22,604		$	6,103
Investing activities	(3,525		)	(62,679		)
Financing activities	(15,569		)	45,957

The acquisitions of Deaconess and Elk Valley during 2014 had an impact on our cash flows, increasing our working capital, decreasing cash used in investing activities as there were no similar acquisitions in 2015, and decreasing cash provided by financing activities as we paid down debt in 2015 versus borrowing to fund acquisitions.

Accounts Receivable and Allowance for Uncollectible Accounts

For home health services, hospice services, and community-based services, we calculate the allowance for uncollectible accounts as a percentage of total patient receivables. The percentage changes depending on the payor and increases as the patient receivables age. For facility-based services, we calculate the allowance for uncollectible accounts based on a claim by claim review.

As of March 31, 2015, our allowance for uncollectible accounts, as a percentage of patient accounts receivable, was approximately 17.6%, or $21.0 million, compared to 16.0% or $18.6 million at December 31, 2014. Days sales outstanding as of March 31, 2015 and December 31, 2014 was 46 and 47 days, respectively.

The following table sets forth as of March 31, 2015, the aging of accounts receivable (based on the end of episode date) (amounts in thousands):

Payor	0-90		91-180		181-365		Over 365		Total
Medicare	$	50,868	$	9,171	$	5,261	$	3,042	$	68,342
Medicaid	2,767		633		628		156		4,184
Other	27,597		6,559		7,189		5,155		46,500
Total	$	81,232	$	16,363	$	13,078	$	8,353	$	119,026

The following table sets forth as of December 31, 2014, the aging of accounts receivable (based on the end of episode date) (amounts in thousands):

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Payor	0-90		91-180		181-365		Over 365		Total
Medicare	$	51,919	$	7,945	$	6,142	$	2,131	$	68,137
Medicaid	2,039		761		666		250		3,716
Other	27,375		6,253		6,164		4,435		44,227
Total	$	81,333	$	14,959	$	12,972	$	6,816	$	116,080

Indebtedness

As of March 31, 2015, we had $170.9 million available for borrowing under our credit facility with $47.0 million drawn under our credit facility and $7.1 million of letters of credit outstanding. At December 31, 2014, we had $60.0 million drawn and $7.1 million of letters of credit outstanding under our credit facility.

For a discussion on our Credit Agreement with Capital One National Association, see Note 5 of the Notes to Condensed Consolidated Financial Statements, which is incorporated herein by reference.

A letter of credit fee equal to the applicable Eurodollar rate multiplied-by the face amount of the letter of credit is charged upon the issuance and on each anniversary date while the letter of credit is outstanding. The agent’s standard up-front fee and other customary administrative charges will also be due upon issuance of the letter of credit along with a renewal fee on each anniversary date of such issuance while the letter of credit is outstanding. Borrowings accrue interest under the Credit Agreement at either the Base Rate or the Eurodollar rate are subject to the applicable margins set forth below:

Leverage Ratio	Eurodollar Margin		Base Rate Margin		Commitment Fee Rate
≤1.00:1.00	1.75	%	0.75	%	0.225	%
>1.00:1.00 ≤ 1.50:1.00	2.00	%	1.00	%	0.25	%
>1.50:1.00 ≤ 2.00:1.00	2.25	%	1.25	%	0.300	%
>2.00:1.00	2.50	%	1.50	%	0.375	%

Our Credit Agreement contains customary affirmative, negative and financial covenants. For example, without prior approval of our bank group, we are restricted in incurring additional debt, disposing of assets, making investments, allowing fundamental changes to our business or organization, and making certain payments in respect of stock or other ownership interests, such as dividends and stock repurchases, up to $50 million. Under our Credit Agreement, we are also required to meet certain financial covenants with respect to minimum fixed charge coverage and leverage ratios.

Our Credit Agreement also contains customary events of default. These include bankruptcy and other insolvency events, cross-defaults to other debt agreements, a change in control involving us or any subsidiary guarantor, and the failure to comply with certain covenants.

At March 31, 2015, we were in compliance with all covenants contained in the Credit Agreement governing our credit facility.

Contingencies

For a discussion of contingencies, see Note 8 of the Notes to Condensed Consolidated Financial Statements, which is incorporated herein by reference.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

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Critical Accounting Policies

For a discussion of critical accounting policies, see Note 2 of the Notes to Condensed Consolidated Financial Statements, which is incorporated herein by reference.

Accounts Receivable and Allowances for Uncollectible Accounts

We report accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and primarily consist of amounts due from Medicare, other third-party payors, and patients. To provide for accounts receivable that could become uncollectible in the future, we establish an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value.

The collection of outstanding receivables is our primary source of cash collections and is critical to our operating performance. Because Medicare is our primary payor, the credit risk associated with receivables from other payors is limited. We believe the credit risk associated with our Medicare accounts, which represent approximately 55% of our patient accounts receivable as of March 31, 2015 and December 31, 2014, respectively, is limited due to (i) the historical collections from Medicare and (ii) the fact that Medicare is a U.S. government payor. We do not believe that there are any other significant concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The amount of the provision for bad debts is based upon our assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Quarterly, we perform a detailed review of historical writeoffs and recoveries as well as recent collection trends. Uncollectible accounts are written off when we have exhausted collection efforts and concluded the account will not be collected.

Although our estimated reserves for uncollectible accounts are based on historical experience and the most current collection trends, this process requires significant judgment and interpretation of the observed trends and the actual collections could differ from our estimates.

Insurance

We retain significant exposure for our employee health insurance, workers compensation, employment practices and professional liability insurance programs. Our insurance programs require us to estimate potential payments on filed claims and/or claims incurred but not reported. Our estimates are based on information provided by the third-party plan administrators, historical claim experience, expected costs of claims incurred but not paid and expected costs associated with settling claims. Each month we review the insurance-related recoveries and liabilities to determine if any adjustments are required.

Our employee health insurance program is self-funded, with stop-loss coverage on claims that exceed $0.2 million for any individually covered employee or employee family member. We are responsible for workers’ compensation claims up to $0.5 million per individual incident.

Malpractice, employment practices and general liability claims for incidents which may give rise to litigation have been asserted against us by various claimants. The claims are in various stages of processing and some may ultimately be brought to trial. We are aware of incidents that have occurred through March 31, 2015 that may result in the assertion of additional claims. We currently carry professional, general liability and employment practices insurance coverage (on a claims made basis) for this exposure. We also carry D&O coverage (also on a claims made basis) for potential claims against our directors and officers, including securities actions, with a deductible of $1.0 million per security claims and $0.5 million on other claims.

We estimate our liabilities related to these programs using the most current information available. As claims develop, we may need to change the recorded liabilities and change our estimates. These changes and adjustments could be material to our financial statements, results of operations and financial condition.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As of March 31, 2015, we had $4.0 million of cash. Cash in excess of requirements is deposited in highly liquid money market instruments with maturities less than 90 days. Because of the short maturities of these instruments, we would not expect our operating results or cash flows to be materially affected by the effect of a sudden change in market interest rates on our portfolio. In 2015, the FDIC will insure each depositor up to $250,000 in coverage at each separately chartered insured

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depository institution. At times, cash in banks is in excess of the FDIC insurance limit. The Company has not experienced any loss as a result of those deposits in excess of the FDIC insurance limit and does not expect any in the future.

Our exposure to market risk relates to changes in interest rates for borrowings under our credit facility. Our credit facility is a revolving credit facility and, as such, we borrow, repay and re-borrow amounts as needed, changing the average daily balance outstanding under our credit facility.

ITEM 4.    CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to ensure that information that we are required to disclose in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective as of March 31, 2015.

Changes in Internal Controls Over Financial Reporting

There have not been any changes in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act, during the quarterly period ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

For a discussion of legal proceedings, see Note 8 of the Notes to Condensed Consolidated Financial Statements, which is incorporated herein by reference.

ITEM 1A.    RISK FACTORS.

There have been no material changes from the information included in Part I, Item 1A. “Risk Factors” of the Company’s 2014 Form 10-K.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In October 2010, the Company’s Board of Directors authorized a program to repurchase shares of the Company’s common stock, par value $0.01 per share, from time to time, in an amount not to exceed $50.0 million (“Stock Repurchase Program”). The Company anticipates that it will finance any future repurchases under the Stock Repurchase Program with cash from general corporate funds, or draws under its credit facility, the terms of which allow us to purchase up to $50.0 million of the Company’s common stock after June 18, 2014, without obtaining approval from the bank group that holds the Company’s debt. The Company may repurchase shares of its common stock in open market purchases or in privately negotiated transactions in accordance with applicable securities laws, rules and regulations. The timing and extent to which the Company repurchases its shares will depend upon market conditions and other corporate considerations. During the three months ended March 31, 2015, no shares were repurchased. The remaining dollar value of shares authorized to be purchased under the Share Repurchase Program was $22.5 million as of March 31, 2015.

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ITEM 6.    EXHIBITS.

2.1	Stock Purchase Agreement dated February 1, 2014, between Deaconess HomeCare, LLC and LHC Group, Inc. (previously filed as Exhibit 10.1 to the Form 8-K file February 3, 2014), as amended by that certain Amendment to Stock Purchase Agreement dated March 31, 2014, between Deaconess Homecare, LLC and LHC Group, Inc. (previously filed as Exhibit 2.1 to the Form 8-K filed on April 1, 2014).
3.1	Certificate of Incorporation of LHC Group, Inc. (previously filed as an Exhibit 3.1 to the Form S-1/A (File No. 333-120792) on February 14, 2005).
3.2	Bylaws of LHC Group, Inc. as amended on December 31, 2007 (previously filed as Exhibit 3.2 to the Form 10-Q on May 9, 2008).
4.1	Specimen Stock Certificate of LHC Group’s Common Stock, par value $0.01 per share (previously filed as Exhibit 4.1 to the Form S-1/ A (File No. 333-120792) on February 14, 2005).
10.1	Amendment to LHC Group, Inc. Second Amended and Restated 2005 Non-Employee Directors Compensation Plan, effective January 20, 2015.
31.1	Certification of Keith G. Myers, Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Dionne E. Viator, Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer of LHC Group, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

*    This exhibit is furnished to the SEC as an accompanying document and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, and the document will not be deemed incorporated by reference into any filing under the Securities Act of 1933.

32

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.

	LHC GROUP, INC.
Date: May 7, 2015	/s/ Dionne E. Viator
	Dionne E. Viator
	Executive Vice President and Chief Financial Officer       (Principal financial officer)

33

EX-10.1

AMENDMENT TO THE LHC GROUP, INC.

SECOND AMENDED AND RESTATED

2005 NON-EMPLOYEE DIRECTORS COMPENSATION PLAN

This Amendment to the LHC Group, Inc. Second Amended and Restated 2005 Non-Employee Directors Compensation Plan (the “Plan”), has been adopted by the Board of Directors of LHC Group, Inc. (the “Company”), to be effective as of January 20, 2015.

1.The Plan is hereby amended by deleting Section 8.2 in its entirety and replacing it with the following:

“8.2.DURATION OF THE PLAN. The Plan shall remain in effect until January 20, 2025, unless terminated earlier by the Board.”

2.Except as specifically set forth herein, the terms of the Plan shall remain in full force and effect as prior to this amendment.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer as of the date first above written.

LHC GROUP, INC.

By: /s/ Joshua L. Proffitt

Name: Joshua L. Proffitt

Title: Executive Vice President

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Keith G. Myers, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of LHC Group, Inc.;

2. 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;

3. 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;

4. 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

5. 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 7, 2015

/s/ Keith G. Myers

Keith G. Myers

Chief Executive Officer (Principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dionne E. Viator, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of LHC Group, Inc.;

2. 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;

3. 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;

4. 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

5. 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 7, 2015

/s/ Dionne E. Viator

Dionne E. Viator

Executive Vice President and Chief Financial Officer

(Principal financial officer)

EX-32.1

Exhibit 32.1

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 LHC Group, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Keith G. Myers, Chief Executive Officer of the Company, and Dionne E. Viator, Chief Financial 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:

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 7, 2015

/s/ Keith G. Myers

Keith G. Myers

Chief Executive Officer

(Principal executive officer)

/s/ Dionne E. Viator

Dionne E. Viator

Executive Vice President and Chief Financial Officer

(Principal financial officer)

XML

Shareholders' Equity - Nonvested Stock Activity (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Nonvested shares outstanding, Number of Shares, Beginning Balance	524,287
Granted, Number of Shares	191,065
Vested, Number of Shares	(146,424)
Nonvested shares outstanding, Number of Shares, Ending Balance	568,928
Nonvested shares outstanding, Weighted average grant date fair value, Beginning Balance	$ 22.56
Granted, Weighted average grant date fair value	$ 33.80
Vested, Weighted average grant date fair value	$ 22.82
Nonvested shares outstanding, Weighted average grant date fair value, Ending Balance	$ 26.26

XML

Acquisitions and Disposals - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Business Acquisition [Line Items]
Cash paid for acquisitions, primarily goodwill and intangible assets	$ 567,000	$ 61,159,000
Fair Value of the acquired intangible assets	400,000
Goodwill	$ 200,000
Home health services
Business Acquisition [Line Items]
Number of entities acquired	1
Community-based services
Business Acquisition [Line Items]
Number of entities acquired	1

XML

Allowance for Uncollectible Accounts (Tables)

3 Months Ended

Mar. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Allowance for Uncollectible Accounts

The following table summarizes the activity in the allowance for uncollectible accounts for the three months ended March 31, 2015 (amounts in thousands):

Balance as of December 31, 2014	$	18,582
Additions	5,259
Deductions	(2,856		)
Balance as of March 31, 2015	$	20,985

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Settlement amount	$ 7.9
Period of joint venture buy/sell option	30 days

XML

Debt - Additional Information (Detail) (USD $)	9 Months Ended	0 Months Ended
	Sep. 30, 2014	Jun. 18, 2014	Mar. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Maximum principal borrowing amount		225,000,000
Letter of credit, sub-limit amount		15,000,000
Credit facility scheduled to expire	Jun. 18, 2019
Line of credit facility, description	(a) the Federal Funds Rate in effect on such day plus 0.5% (b) the Prime Rate in effect on such day and (c) the Eurodollar Rate for a one month interest period on such day plus 1.0%, plus a margin ranging from 0.75% to 1.5% per annum or Eurodollar rate plus a margin ranging from 1.75% to 2.5% per annum. Swing line loans bear interest at the Base Rate.
Line of credit facility drawn			47,000,000	60,000,000
Letter of credit outstanding			7,100,000
Available credit under agreement			$ 170,900,000
Minimum
Debt Instrument [Line Items]
Commitment fee rates for unused commitments		0.225%
Maximum
Debt Instrument [Line Items]
Commitment fee rates for unused commitments		0.375%
Federal funds rate
Debt Instrument [Line Items]
Line of credit facility interest rate		0.50%
Eurodollar
Debt Instrument [Line Items]
Line of credit facility interest rate	2.167%	1.00%
Line of credit facility, borrowing outstanding		15
Eurodollar | Minimum
Debt Instrument [Line Items]
Line of credit facility interest rate		1.75%
Eurodollar | Maximum
Debt Instrument [Line Items]
Line of credit facility interest rate		2.50%
Base rate
Debt Instrument [Line Items]
Line of credit facility interest rate	4.25%
Base rate | Minimum
Debt Instrument [Line Items]
Line of credit facility interest rate		0.75%
Base rate | Maximum
Debt Instrument [Line Items]
Line of credit facility interest rate		1.50%

XML

Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates.

Critical Accounting Policies

The Company’s most critical accounting policies relate to the principles of consolidation, revenue recognition and accounts receivable and allowances for uncollectible accounts.

Principles of Consolidation

The interim financial information includes all subsidiaries and entities controlled by the Company. Control is defined by the Company as ownership of a majority of the voting interest of an entity. The interim financial information includes entities in which the Company receives a majority of the entities’ expected residual returns and absorbs a majority of the entities’ expected losses. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s interim financial information.

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended    March 31,
Ownership type	2015		2014
Wholly-owned subsidiaries	54.6	%	49.2	%
Equity joint ventures	43.2		48.0
License leasing arrangements	1.3		1.9
Management services	0.9		0.9
	100.0	%	100.0	%

All significant intercompany accounts and transactions have been eliminated in the Company’s accompanying interim financial information. Business combinations accounted for under the acquisition method have been included in the interim financial information from the respective dates of acquisition.

The following describes the Company’s consolidation policy with respect to its various ventures excluding wholly-owned subsidiaries:

Equity Joint Ventures

The members of the Company’s equity joint ventures participate in profits and losses in proportion to their equity interests. The Company consolidates these entities as the Company has voting control over the entities.

License Leasing Arrangements

The Company, through wholly-owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing and hospice agencies. The Company owns 100% of the equity of these subsidiaries and consolidates them based on such ownership.

Management Services

The Company has various management services agreements under which the Company manages certain operations of agencies. The Company does not consolidate these agencies because the Company does not have an ownership interest in, and does not have an obligation to absorb losses of, the entities that own the agencies or the right to receive the benefits from those entities.

Revenue Recognition

The Company reports net service revenue at the estimated net realizable amount due from Medicare, Medicaid and other commercial or managed care insurance programs for services rendered. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance program. All such payors contribute to the net service revenue of the Company’s home health services, hospice services, community-based services, and facility-based services.

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Payor:	2015		2014
Medicare	74.7	%	78.7	%
Medicaid	1.4		1.3
Other	23.9		20.0
	100.0	%	100.0	%

The following table sets forth the percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Reporting segment:	2015		2014
Home health services	75.9	%	78.1	%
Hospice services	8.7		9.3
Community-based services	5.1		0.5
Facility-based services	10.3		12.1
	100.0	%	100.0	%

Medicare

Home Health

The Company’s home nursing Medicare patients are classified into one of 153 home health resource groups prior to receiving services. Based on the patient’s home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60-day period referred to as an episode. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period.

Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. In calculating net service revenue, management estimates the impact of these payment adjustments based on historical experience and records this estimate as the services are rendered using the expected level of services that will be provided.

Hospice Services

The Company is paid by Medicare under a per diem payment system. The Company receives one of four predetermined daily or hourly rates based upon the level of care the Company furnished. The Company records net service revenue from hospice services based on the daily or hourly rate and recognizes revenue as hospice services are provided.

Hospice payments are subject to an inpatient cap and an overall Medicare payment cap. The inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall Medicare payment cap relates to individual providers receiving reimbursements in excess of a “cap amount,” calculated by multiplying the number of beneficiaries during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. The Company monitors its limits on a provider-by-provider basis and records an estimate of its liability for reimbursements received in excess of the cap amount. Beginning with the cap year October 1, 2014, CMS implemented a new process requiring hospice providers to self-report their cap liabilities and remit applicable payment by March 31, 2016.

Facility-Based Services

The Company is reimbursed by Medicare for services provided under the LTACH prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient classified in that particular long-term care diagnosis-related group. For selected patients, the amount may be further adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for the Company’s LTACHs as services are provided.

Medicaid, managed care and other payors

The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as services are provided based on this fee schedule. The Company’s managed care and other payors reimburse the Company based upon a predetermined fee schedule or an episodic basis, depending on the terms of the applicable contract. Accordingly, the Company recognizes revenue from managed care and other payors in the same manner as the Company recognizes revenue from Medicare or Medicaid.

Accounts Receivable and Allowances for Uncollectible Accounts

The Company reports accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and consist of amounts due from Medicare, other third-party payors and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations of receivables is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 55% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The provision for bad debts is based upon the Company’s assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined the account will not be collected.

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is deducted from the final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% instead of 60% of the estimated reimbursement.

The Company’s services to the Medicare population are paid at prospectively set amounts that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and contracts with other payors provide for payments based upon a predetermined fee schedule or an episodic basis, depending on the terms of the applicable contract. The Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated contractual allowance when reporting net service revenue for each reporting period.

Other Significant Accounting Policies

Earnings Per Share

Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding plus potentially dilutive shares.

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended    March 31,
	2015	2014
Weighted average number of shares outstanding for basic per share calculation	17,322,791	17,148,043
Effect of dilutive potential shares:
Options	5,487	4,290
Nonvested stock	161,205	116,383
Adjusted weighted average shares for diluted per share calculation	17,489,483	17,268,716
Anti-dilutive shares	191,065	195,945

Recently Issued Accounting Pronouncements

On May 28, 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers, ("ASU 2014-9") which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-9 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-9 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

XML

Noncontrolling interest - Summary of Activity of Noncontrolling Interest-Redeemable (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Noncontrolling interest-redeemable, Beginning balance	$ 11,517
Net income attributable to noncontrolling interest-redeemable	1,610
Noncontrolling interest-redeemable distributions	(1,830)
Noncontrolling interest-redeemable, Ending balance	$ 11,297

XML

Significant Accounting Policies - Percentage of Net Service Revenue Earned by Category of Payor (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Significant Accounting Policies [Line Items]
Percentage of net service revenue	100.00%	100.00%
Medicare revenue
Significant Accounting Policies [Line Items]
Percentage of net service revenue	74.70%	78.70%
Medicaid revenue
Significant Accounting Policies [Line Items]
Percentage of net service revenue	1.40%	1.30%
Other revenue
Significant Accounting Policies [Line Items]
Percentage of net service revenue	23.90%	20.00%

XML

Significant Accounting Policies - Percentage of Net Service Revenue Earned by Type of Ownership or Relationship with Operating Entity (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	100.00%	100.00%
Wholly-owned subsidiaries
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	54.60%	49.20%
Equity joint ventures
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	43.20%	48.00%
License leasing arrangements
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	1.30%	1.90%
Management services
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	0.90%	0.90%

XML

Allowance for Uncollectible Accounts - Allowance for Uncollectible Accounts Activity and Ending Balances (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning balance	$ 18,582
Additions	5,259	3,362
Deductions	(2,856)
Ending balance	$ 20,985

XML

Significant Accounting Policies - Percentage of Net Service Revenue Contributed from Each Reporting Segment (Detail) (Sales Revenue, Segment)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	100.00%	100.00%
Home health services
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	75.90%	78.10%
Hospice Services
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	8.70%	9.30%
Community-based services
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	5.10%	0.50%
Facility-based services
Health Care Organization, Revenue [Abstract]
Percentage of net service revenue	10.30%	12.10%

XML

Significant Accounting Policies - Shares Used in Computation of Basic and Diluted Per Share Information (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Weighted average shares outstanding:
Weighted average number of shares outstanding for basic per share calculation	17,322,791	17,148,043
Effect of dilutive potential shares:
Options	5,487	4,290
Nonvested stock	161,205	116,383
Adjusted weighted average shares for diluted per share calculation	17,489,483	17,268,716
Anti-dilutive shares	191,065	195,945

XML

Organization

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

LHC Group, Inc. (the “Company”) is a health care provider specializing in the post-acute continuum of care primarily for Medicare beneficiaries. The Company provides home health services, hospice services, community-based services, and facility-based services, the latter primarily through long-term acute care hospitals (“LTACHs”). As of March 31, 2015, the Company, through its wholly- and majority-owned subsidiaries, equity joint ventures and controlled affiliates, operated 341 service providers in 29 states within the continental United States.

Unaudited Interim Financial Information

The condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014, and the related condensed consolidated statements of income for the three months ended March 31, 2015 and 2014, condensed consolidated statement of changes in equity for the three months ended March 31, 2015, condensed consolidated statements of cash flows for the three months ended March 31, 2015 and 2014 and related notes (collectively, these financial statements and the related notes are referred to herein as the “interim financial information”) have been prepared by the Company. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented. This report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2015, which includes information and disclosures not included herein.

XML

Significant Accounting Policies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015 PeriodicRate time Group
Summary Of Significant Accounting Policies [Line Items]
Number of Medicare home health resource groups	153
Number of days from date RAP paid to submit final Medicare bill	60 days
Low utilization adjustment visits	5
Selected hospice, periodic rate used to calculate revenue	1
Number of hospice, periodic rates used to calculate revenue	4
Minimum percentage of Medicare reimbursement from inpatient care services that subjects individual programs to inpatient cap	20.00%
Determination period for hospice Medicare inpatient reimbursement cap	12 months
Medicare credit risk for accounts receivable	55.00%
Reimbursement for initial episode of care	60.00%
Number of days from start of episode to submit final Medicare bill	120 days
Reimbursement for subsequent episodes of care	50.00%

XML

Stockholder's Equity - Shares of Common Stock Issued During 2014 Under Employee Stock Purchase Plan (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares available, Beginning balance	236,483
Shares issued during period (shares)	7,068
Shares available, Ending Balance	229,415
Shares issued during period (per share price)	$ 29.62

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash	$ 4,041	$ 531
Receivables:
Patient accounts receivable, less allowance for uncollectible accounts of $20,985 and $18,582, respectively	98,041	97,498
Other receivables	2,523	1,334
Amounts due from governmental entities	978	1,164
Total receivables, net	101,542	99,996
Deferred income taxes	12,713	11,381
Prepaid income taxes	615	3,093
Prepaid expenses	10,477	8,724
Other current assets	4,597	3,777
Receivable due from insurance carrier	0	7,850
Total current assets	133,985	135,352
Property, building and equipment, net of accumulated depreciation of $45,784 and $44,683, respectively	35,309	34,787
Goodwill	240,294	240,019
Intangible assets, net of accumulated amortization of $7,124 and $6,560, respectively	79,504	79,685
Other assets	1,872	1,896
Total assets	490,964	491,739
Current liabilities:
Accounts payable and other accrued liabilities	20,301	19,278
Salaries, wages, and benefits payable	30,711	22,466
Self-insurance reserve	7,923	6,559
Current portion of long-term debt	233	230
Amounts due to governmental entities	5,382	4,459
Legal settlement payable	0	7,850
Total current liabilities	64,550	60,842
Deferred income taxes	34,741	33,592
Income tax payable	3,415	3,415
Revolving credit facility	47,000	60,000
Long-term debt, less current portion	719	778
Total liabilities	150,425	158,627
Noncontrolling interest — redeemable	11,297	11,517
LHC Group, Inc. stockholders’ equity:
Common stock --- $0.01 par value; 40,000,000 shares authorized; 22,168,703 and 22,015,211 shares issued in 2015 and 2014, respectively	222	220
Treasury stock --- 4,767,570 and 4,734,363 shares at cost, respectively	(36,782)	(35,660)
Additional paid-in capital	110,549	108,708
Retained earnings	252,176	245,371
Total LHC Group, Inc. stockholders’ equity	326,165	318,639
Noncontrolling interest — non-redeemable	3,077	2,956
Total equity	329,242	321,595
Total liabilities and equity	$ 490,964	$ 491,739

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Segment Information - Segment Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Net service revenue	$ 193,079	$ 163,681
Cost of service revenue	114,426	97,334
Provision for bad debts	5,259	3,362
General and administrative expenses	59,298	54,579
Operating income	14,096	8,406
Interest expense	(545)	(388)
Income before income taxes and noncontrolling interest	13,551	8,018
Income tax expense	4,729	2,923
Net income	8,822	5,095
Less net income attributable to noncontrolling interests	2,017	1,027
Net income attributable to LHC Group, Inc.’s common stockholders	6,805	4,068
Total assets	490,964	468,100	491,739
Home health services
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Net service revenue	146,592	127,793
Cost of service revenue	85,546	75,800
Provision for bad debts	4,476	2,623
General and administrative expenses	46,454	44,194
Operating income	10,116	5,176
Interest expense	(430)	(307)
Income before income taxes and noncontrolling interest	9,686	4,869
Income tax expense	3,657	2,270
Net income	6,029	2,599
Less net income attributable to noncontrolling interests	1,521	607
Net income attributable to LHC Group, Inc.’s common stockholders	4,508	1,992
Total assets	385,653	400,911
Community-based services
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Net service revenue	9,773	887
Cost of service revenue	6,900	644
Provision for bad debts	180	31
General and administrative expenses	2,217	323
Operating income	476	(111)
Interest expense	(6)	(3)
Income before income taxes and noncontrolling interest	470	(114)
Income tax expense	45	23
Net income	425	(137)
Less net income attributable to noncontrolling interests	(20)	0
Net income attributable to LHC Group, Inc.’s common stockholders	445	(137)
Total assets	32,971	1,544
Hospice Services
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Net service revenue	16,851	15,222
Cost of service revenue	10,099	8,897
Provision for bad debts	347	105
General and administrative expenses	4,888	4,444
Operating income	1,517	1,776
Interest expense	(60)	(39)
Income before income taxes and noncontrolling interest	1,457	1,737
Income tax expense	620	346
Net income	837	1,391
Less net income attributable to noncontrolling interests	246	201
Net income attributable to LHC Group, Inc.’s common stockholders	591	1,190
Total assets	34,019	28,919
Facility-based services
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Net service revenue	19,863	19,779
Cost of service revenue	11,881	11,993
Provision for bad debts	256	603
General and administrative expenses	5,739	5,618
Operating income	1,987	1,565
Interest expense	(49)	(39)
Income before income taxes and noncontrolling interest	1,938	1,526
Income tax expense	407	284
Net income	1,531	1,242
Less net income attributable to noncontrolling interests	270	219
Net income attributable to LHC Group, Inc.’s common stockholders	1,261	1,023
Total assets	$ 38,321	$ 36,726

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Statement of Stockholders' Equity [Abstract]
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest	$ 1.6

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Goodwill and Intangibles- Summary of Changes in Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Finite And Infinite Lived Intangible Assets [Line Items]
Indefinite-lived assets, carrying amount	$ 74,176	$ 73,790
Definite-lived assets, gross carrying amount	12,452	12,455
Intangible assets, gross carrying amount	86,628	86,245
Definite-lived assets, accumulated amortization	(7,124)	(6,560)
Intangible assets, accumulated amortization ending balance	(7,124)	(6,560)
Definite-lived assets, net carrying amount	5,328	5,895
Intangible assets, net carrying amount	79,504	79,685
Certificates of need/licenses
Finite And Infinite Lived Intangible Assets [Line Items]
Indefinite-lived assets, carrying amount	19,321	19,058
Trade names
Finite And Infinite Lived Intangible Assets [Line Items]
Indefinite-lived assets, carrying amount	54,855	54,732
Definite-lived assets, gross carrying amount	8,228	8,230
Definite-lived assets, accumulated amortization	(3,276)	(2,797)
Definite-lived assets, net carrying amount	4,952	5,433
Trade names | Minimum
Finite And Infinite Lived Intangible Assets [Line Items]
Estimated useful life	2 months	2 months
Trade names | Maximum
Finite And Infinite Lived Intangible Assets [Line Items]
Estimated useful life	5 years	5 years
Non-compete agreements
Finite And Infinite Lived Intangible Assets [Line Items]
Definite-lived assets, gross carrying amount	4,224	4,225
Definite-lived assets, accumulated amortization	(3,848)	(3,763)
Definite-lived assets, net carrying amount	$ 376	$ 462
Non-compete agreements | Minimum
Finite And Infinite Lived Intangible Assets [Line Items]
Estimated useful life	4 months	3 months
Non-compete agreements | Maximum
Finite And Infinite Lived Intangible Assets [Line Items]
Estimated useful life	3 years	3 years

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Goodwill and Intangibles (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Recorded Goodwill by Reporting Unit

The changes in recorded goodwill by reporting unit for the three months ended March 31, 2015 were as follows (amounts in thousands):

	Home health reporting unit			Hospice reporting unit		Community - based reporting unit		Facility-based reporting unit		Total
Balance as of December 31, 2014	$	196,296		$	14,793	$	17,339	$	11,591	$	240,019
Goodwill from acquisitions	138			—		205		—		343
Goodwill related to noncontrolling interests	14			—		22		—		36
Goodwill related to disposal	(104		)	—		—		—		(104		)
Balance as of March 31, 2015	$	196,344		$	14,793	$	17,566	$	11,591	$	240,294

Summary of Changes in Intangible Assets

Intangible assets consisted of the following as of March 31, 2015 and December 31, 2014 (amounts in thousands):

	March 31, 2015
	Estimated useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived assets:
Trade names	Indefinite	$	54,855	$	—		$	54,855
Certificates of need/licenses	Indefinite	19,321		—			19,321
Indefinite-lived balance at end of period		$	74,176	$	—		$	74,176
Definite-lived assets:
Trade names	2 months — 5 years	$	8,228	$	(3,276	)	$	4,952
Non-compete agreements	4 month — 3 years	4,224		(3,848		)	376
Definite-lived balance at end of period		$	12,452	$	(7,124	)	$	5,328
Balance as of March 31, 2015		$	86,628	$	(7,124	)	$	79,504

	December 31, 2014
	Estimated useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived assets:
Trade names	Indefinite	$	54,732	$	—		$	54,732
Certificates of need/licenses	Indefinite	19,058		—			19,058
Indefinite-lived balance at end of period		$	73,790	$	—		$	73,790
Definite-lived assets:
Trade names	2 months — 5 years	$	8,230	$	(2,797	)	$	5,433
Non-compete agreements	3 months — 3 years	4,225		(3,763		)	462
Definite-lived balance at end of period		$	12,455	$	(6,560	)	$	5,895
Balance as of December 31, 2014		$	86,245	$	(6,560	)	$	79,685

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Goodwill and Intangibles - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Indefinite-lived Intangible Assets [Line Items]
Intangible assets, net carrying amount	$ 79,504	$ 79,685
Home health services
Indefinite-lived Intangible Assets [Line Items]
Intangible assets, net carrying amount	66,100
Hospice Services
Indefinite-lived Intangible Assets [Line Items]
Intangible assets, net carrying amount	5,100
Community-based services
Indefinite-lived Intangible Assets [Line Items]
Intangible assets, net carrying amount	7,300
Facility-based services
Indefinite-lived Intangible Assets [Line Items]
Intangible assets, net carrying amount	$ 1,000

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Noncontrolling interest (Tables)

3 Months Ended

Mar. 31, 2015

Noncontrolling Interest [Abstract]

Summary of Activity of Noncontrolling Interest-Redeemable

The following table summarizes the activity of noncontrolling interest-redeemable for the three months ended March 31, 2015 (amounts in thousands):

Balance as of December 31, 2014	$	11,517
Net income attributable to noncontrolling interest-redeemable	1,610
Noncontrolling interest-redeemable distributions	(1,830		)
Balance as of March 31, 2015	$	11,297

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating activities:
Net income	$ 8,822	$ 5,095
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	2,716	2,125
Provision for bad debts	5,259	3,362
Stock-based compensation expense	991	1,048
Deferred income taxes	(183)	395
Impairment of intangibles and other	79	0
Loss on disposal of assets	284	0
Changes in operating assets and liabilities, net of acquisitions:
Receivables	(7,026)	956
Prepaid expenses and other assets	(2,549)	(39)
Prepaid income taxes	2,478	248
Accounts payable and accrued expenses	10,624	(6,428)
Net amounts due to/from governmental entities	1,109	(659)
Net cash provided by operating activities	22,604	6,103
Investing activities:
Purchases of property, building and equipment	(2,958)	(1,520)
Cash paid for acquisitions, primarily goodwill and intangible assets	(567)	(61,159)
Net cash (used in) investing activities	(3,525)	(62,679)
Financing activities:
Proceeds from line of credit	0	60,000
Payments on line of credit	(13,000)	(12,000)
Proceeds from employee stock purchase plan	210	184
Payments on debt	(57)	(37)
Noncontrolling interest distributions	(2,242)	(1,768)
Excess tax benefits from vesting of stock awards	642	112
Redemption of treasury shares	(1,122)	(727)
Sale of noncontrolling interest	0	193
Net cash provided by (used in) financing activities	(15,569)	45,957
Change in cash	3,510	(10,619)
Cash at beginning of period	531	14,014
Cash at end of period	4,041	3,395
Supplemental disclosures of cash flow information:
Interest paid	447	370
Income taxes paid	$ 1,787	$ 2,413

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Patient accounts receivable, allowance for uncollectible accounts	$ 20,985	$ 18,582
Property, building and equipment, accumulated depreciation	45,784	44,683
Intangible assets, accumulated amortization	$ 7,124	$ 6,560
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	40,000,000	40,000,000
Common stock, issued	22,168,703	22,015,211
Treasury stock at cost, shares	4,767,570	4,734,363

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Allowance for Uncollectible Accounts

3 Months Ended

Mar. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Allowance for Uncollectible Accounts

Allowance for Uncollectible Accounts

The following table summarizes the activity in the allowance for uncollectible accounts for the three months ended March 31, 2015 (amounts in thousands):

Balance as of December 31, 2014	$	18,582
Additions	5,259
Deductions	(2,856		)
Balance as of March 31, 2015	$	20,985

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 04, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	LHCG
Entity Registrant Name	LHC Group, Inc
Entity Central Index Key	0001303313
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,968,180

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of the Company’s cash, receivables, accounts payable and accrued liabilities approximate their fair values because of their short maturity. The estimated fair value of intangible assets acquired was calculated using level 3 inputs based on the present value of anticipated future benefits. For the three months ended March 31, 2015, the carrying value of the Company’s long-term debt approximates fair value as the interest rates approximate current rates.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Net service revenue	$ 193,079	$ 163,681
Cost of service revenue	114,426	97,334
Gross margin	78,653	66,347
Provision for bad debts	5,259	3,362
General and administrative expenses	59,298	54,579
Operating income	14,096	8,406
Interest expense	(545)	(388)
Income before income taxes and noncontrolling interest	13,551	8,018
Income tax expense	4,729	2,923
Net income	8,822	5,095
Less net income attributable to noncontrolling interests	2,017	1,027
Net income attributable to LHC Group, Inc.’s common stockholders	$ 6,805	$ 4,068
Earnings Per Share, Basic and Diluted [Abstract]
Net income attributable to LHC group, Inc.'s common stockholders	$ 0.39	$ 0.24
Weighted average shares outstanding:
Basic	17,322,791	17,148,043
Diluted	17,489,483	17,268,716

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Debt

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Debt

5. Debt

Credit Facility

On June 18, 2014, the Company entered into a Credit Agreement (the “Credit Agreement”) with Capital One, National Association, which provides a senior, secured revolving line of credit commitment with a maximum principal borrowing limit of $225.0 million and a letter of credit sub-limit equal to $15.0 million. The Credit Agreement replaced the Third Amended and Restated Credit Agreement with Capital One, National Association, dated August 31, 2012. The expiration date of the Credit Agreement is June 18, 2019. Revolving loans under the Credit Agreement bear interest at either a (1) Base Rate, which is defined as a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate in effect on such day plus 0.5% (b) the Prime Rate in effect on such day and (c) the Eurodollar Rate for a one month interest period on such day plus 1.0%, plus a margin ranging from 0.75% to 1.5% per annum or (2) Eurodollar rate plus a margin ranging from 1.75% to 2.5% per annum. Swing line loans bear interest at the Base Rate. The Company is limited to 15 Eurodollar borrowings outstanding at the same time. The Company is required to pay a commitment fee for the unused commitments at rates ranging from 0.225% to 0.375% per annum depending upon the Company’s consolidated Leverage Ratio, as defined in the Credit Agreement. The Base Rate at March 31, 2015 was 4.25% and the Eurodollar rate was 2.17%.

As of March 31, 2015 and December 31, 2014, respectively, the Company had $47.0 million and $60.0 million drawn and letters of credit totaling $7.1 million outstanding under its credit facilities with Capital One, National Association.

As of March 31, 2015, the Company had $170.9 million available for borrowing under the Credit Agreement with Capital One, National Association.

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Goodwill and Intangibles

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles

Goodwill and Intangibles

The changes in recorded goodwill by reporting unit for the three months ended March 31, 2015 were as follows (amounts in thousands):

	Home health reporting unit			Hospice reporting unit		Community - based reporting unit		Facility-based reporting unit		Total
Balance as of December 31, 2014	$	196,296		$	14,793	$	17,339	$	11,591	$	240,019
Goodwill from acquisitions	138			—		205		—		343
Goodwill related to noncontrolling interests	14			—		22		—		36
Goodwill related to disposal	(104		)	—		—		—		(104		)
Balance as of March 31, 2015	$	196,344		$	14,793	$	17,566	$	11,591	$	240,294

Intangible assets consisted of the following as of March 31, 2015 and December 31, 2014 (amounts in thousands):

	March 31, 2015
	Estimated useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived assets:
Trade names	Indefinite	$	54,855	$	—		$	54,855
Certificates of need/licenses	Indefinite	19,321		—			19,321
Indefinite-lived balance at end of period		$	74,176	$	—		$	74,176
Definite-lived assets:
Trade names	2 months — 5 years	$	8,228	$	(3,276	)	$	4,952
Non-compete agreements	4 month — 3 years	4,224		(3,848		)	376
Definite-lived balance at end of period		$	12,452	$	(7,124	)	$	5,328
Balance as of March 31, 2015		$	86,628	$	(7,124	)	$	79,504

	December 31, 2014
	Estimated useful life	Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived assets:
Trade names	Indefinite	$	54,732	$	—		$	54,732
Certificates of need/licenses	Indefinite	19,058		—			19,058
Indefinite-lived balance at end of period		$	73,790	$	—		$	73,790
Definite-lived assets:
Trade names	2 months — 5 years	$	8,230	$	(2,797	)	$	5,433
Non-compete agreements	3 months — 3 years	4,225		(3,763		)	462
Definite-lived balance at end of period		$	12,455	$	(6,560	)	$	5,895
Balance as of December 31, 2014		$	86,245	$	(6,560	)	$	79,685

Intangible assets of $66.1 million, net of accumulated amortization, were related to the home health services segment, $5.1 million were related to the hospice services segment, $7.3 million were related to the community-based services segment, and $1.0 million were related to the facility-based services segment as of March 31, 2015.

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Stockholder's Equity (Tables)

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Nonvested Stock Activity

The following table represents the nonvested stock activity for the three months ended March 31, 2015:

	Number of shares		Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2014	524,287		$	22.56
Granted	191,065		$	33.80
Vested	(146,424	)	$	22.82
Nonvested shares outstanding as of March 31, 2015	568,928		$	26.26

Shares of Common Stock Issued During 2014 Under Employee Stock Purchase Plan

The table below details the shares of common stock issued during 2015:

	Number of shares	Per share price
Shares available as of December 31, 2014	236,483
Shares issued during three months ended March 31, 2015	7,068	$	29.62
Shares available as of March 31, 2015	229,415

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Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

During the first quarter of 2015, the Company had a change in the composition of segments due to the community-based services meeting the criteria of qualitative thresholds established by ASC 280, Segment Reporting. Prior-period segment data has been restated to reflect the newly reportable segment in which community-based services were previously included in home-based services.

The Company’s reportable segments consist of home health services, community-based services, hospice services and facility-based services. The accounting policies of the segments are the same as those described in the summary of significant accounting policies, as described in Note 2 of the Notes to Condensed Consolidated Financial Statements.

The following tables summarize the Company’s segment information for the three months ended March 31, 2015 and 2014 (amounts in thousands):

	Three Months Ended March 31, 2015
	Home health services			Hospice services			Community-based services			Facility-based services			Total
Net service revenue	$	146,592		$	16,851		$	9,773		$	19,863		$	193,079
Cost of service revenue	85,546			10,099			6,900			11,881			114,426
Provision for bad debts	4,476			347			180			256			5,259
General and administrative expenses	46,454			4,888			2,217			5,739			59,298
Operating income	10,116			1,517			476			1,987			14,096
Interest expense	(430		)	(60		)	(6		)	(49		)	(545		)
Income before income taxes and noncontrolling interest	9,686			1,457			470			1,938			13,551
Income tax expense	3,657			620			45			407			4,729
Net income	6,029			837			425			1,531			8,822
Less net income attributable to noncontrolling interests	1,521			246			(20		)	270			2,017
Net income attributable to LHC Group, Inc.’s common stockholders	$	4,508		$	591		$	445		$	1,261		$	6,805
Total assets	$	385,653		$	34,019		$	32,971		$	38,321		$	490,964

	Three Months Ended March 31, 2014
	Home health services			Hospice services			Community-based services			Facility-based services			Total
Net service revenue	$	127,793		$	15,222		$	887		$	19,779		$	163,681
Cost of service revenue	75,800			8,897			644			11,993			97,334
Provision for bad debts	2,623			105			31			603			3,362
General and administrative expenses	44,194			4,444			323			5,618			54,579
Operating income (loss)	5,176			1,776			(111		)	1,565			8,406
Interest expense	(307		)	(39		)	(3		)	(39		)	(388		)
Income (loss) before income taxes and noncontrolling interest	4,869			1,737			(114		)	1,526			8,018
Income tax expense	2,270			346			23			284			2,923
Net income (loss)	2,599			1,391			(137		)	1,242			5,095
Less net income attributable to noncontrolling interests	607			201			—			219			1,027
Net income (loss) attributable to LHC Group, Inc.’s common stockholders	$	1,992		$	1,190		$	(137	)	$	1,023		$	4,068
Total assets	$	400,911		$	28,919		$	1,544		$	36,726		$	468,100

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Contingencies

The Company is involved in various legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, management believes the outcome of pending litigation will not have a material adverse effect, after considering the effect of the Company’s insurance coverage, on the Company’s interim financial information.

On June 13, 2012, a putative shareholder securities class action was filed against the Company and its Chairman and Chief Executive Officer in the United States District Court for the Western District of Louisiana, styled City of Omaha Police & Fire Retirement System v. LHC Group, Inc., et al., Case No. 6:12-cv-1609-JTT-CMH. The action was filed on behalf of LHC shareholders who purchased shares of the Company’s common stock between July 30, 2008 and October 26, 2011. Plaintiff generally alleges that the defendants caused false and misleading statements to be issued in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (“the Exchange Act”) and Rule 10b-5 promulgated thereunder and that the Company’s Chairman and Chief Executive Officer is a control person under Section 20(a) of the Exchange Act. On November 2, 2012, Lead Plaintiff City of Omaha Police & Fire Retirement System filed an Amended Complaint for Violations of the Federal Securities Laws (“the Amended Complaint”) on behalf of the same putative class of LHC shareholders as the original Complaint. In addition to claims under Sections 10(b) and 20(a) of the Exchange Act, the Amended Complaint added a claim against the Chairman and Chief Executive Officer for violation of Section 20A of the Exchange Act. The Company believes these claims are without merit. On December 17, 2012, the Company and the Chairman and Chief Executive Officer filed a motion to dismiss the Amended Complaint, which was denied by Order dated March 15, 2013. On June 16, 2014, following mediation, the parties entered into a Stipulation of Settlement. On August 5, 2014, the District Court entered an Order Preliminarily Approving Settlement and Providing for Notice. The District Court held a final fairness hearing on December 11, 2014 and issued two Report and Recommendations on February 11, 2015 approving the settlement plan of allocation and Lead Plantiff's fees and expenses. On March 3, 2015, the District Court entered its Judgments adopting the Report and Recommendation previously issued and dismissing the action with prejudice. The time for appeal has passed and no appeals were filed. This matter is now concluded. The Company's insurance carrier has funded the entire $7.9 million settlement amount.

On October 18, 2013, a derivative complaint was filed by a purported Company shareholder against certain of the Company’s current and former executive officers, employees and members of its Board of Directors in the United States District Court for the Western District of Louisiana, styled Plummer v. Myers, et al., Case No. 6:13-cv-2899-JTT-CMH. The action was brought derivatively on behalf of the Company, which is also named as a nominal defendant. Plaintiff generally alleges that the individual defendants breached their fiduciary duties owed to the Company. The complaint also alleges claims for insider selling and unjust enrichment against the Company’s Chairman and Chief Executive Officer and the Company’s former President and Chief Operating Officer.

On December 30, 2013, a related derivative complaint was filed by a purported Company shareholder against certain of the Company’s current and former executive officers, employees and members of its Board of Directors in the United States District Court of the Western District of Louisiana, styled McCormack v. Myers, et al., Case No. 6:13-cv-3301-JTT-CMH. The action was brought derivatively on the Company’s behalf and the Company was also named as a nominal defendant. Plaintiff generally alleges that the individual defendants breached their fiduciary duties owed to the Company and wasted corporate assets. Plaintiff also alleges that the Company’s Chairman and Chief Executive Officer caused false and misleading statements to be issued in violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and that the Company’s Directors are control persons under Section 20(a) of the Exchange Act. The complaint also alleges claims for insider selling, misappropriation of information and unjust enrichment against the Company’s Chairman and Chief Executive Officer and the Company’s former President and Chief Operating Officer.

On March 25, 2014, the McCormack derivative action was consolidated with the Plummer derivative action described above and stayed pending the conclusion of expert discovery in the related City of Omaha shareholder securities class action described above. The parties are presently discussing future case scheduling. The Company believes these claims are without merit and intends to defend this consolidated lawsuit vigorously. The Company cannot predict the outcome or effect of this consolidated lawsuit, if any, on the Company’s financial condition and results of operations.

Except as discussed above, we are not aware of any pending or threatened investigations involving allegations of potential wrongdoing.

Any negative findings in the above described lawsuits could result in substantial financial penalties or awards against the Company. At this time, the Company cannot predict the ultimate outcome of these matters or the potential range of damages, if any.

Joint Venture Buy/Sell Provisions

Most of the Company’s joint ventures include a buy/sell option that grants to the Company and its joint venture partners the right to require the other joint venture party to either purchase all of the exercising member’s membership interests or sell to the exercising member all of the non-exercising member’s membership interest, at the non-exercising member’s option, within 30 days of the receipt of notice of the exercise of the buy/sell option. In some instances, the purchase price is based on a multiple of the historical or future earnings before income taxes and depreciation and amortization of the equity joint venture at the time the buy/sell option is exercised. In other instances, the buy/sell purchase price will be negotiated by the partners and subject to a fair market valuation process. The Company has not received notice from any joint venture partners of their intent to exercise the terms of the buy/sell agreement nor has the Company notified any joint venture partners of its intent to exercise the terms of the buy/sell agreement.

Compliance

The laws and regulations governing the Company’s operations, along with the terms of participation in various government programs, regulate how the Company does business, the services offered and its interactions with patients and the public. These laws and regulations, and their interpretations, are subject to frequent change. Changes in existing laws or regulations, or their interpretations, or the enactment of new laws or regulations could materially and adversely affect the Company’s operations and financial condition.

The Company is subject to various routine and non-routine governmental reviews, audits and investigations. In recent years, federal and state civil and criminal enforcement agencies have heightened and coordinated their oversight efforts related to the health care industry, including referral practices, cost reporting, billing practices, joint ventures and other financial relationships among health care providers. Violation of the laws governing the Company’s operations, or changes in the interpretation of those laws, could result in the imposition of fines, civil or criminal penalties and/or termination of the Company’s rights to participate in federal and state-sponsored programs and suspension or revocation of the Company’s licenses. The Company believes that it is in material compliance with all applicable laws and regulations.

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As of March 31, 2015, an unrecognized tax benefit of $3.4 million was recorded in income tax payable, which, if recognized, would decrease the Company’s effective tax rate. All of the Company’s unrecognized tax benefit is due to the settlement with the United States of America, which was announced September 30, 2011. On July 30, 2014, the Internal Revenue Service (“IRS”) issued a notice of proposed adjustment asserting that a portion of the original tax deduction claimed by the Company associated with the settlement with the United States of America should be disallowed. The Company is currently appealing this proposed adjustment with IRS Appeals. The Company intends to vigorously defend its original position of the deductibility of the full settlement amount on its 2011 tax return.

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Stockholder's Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Stockholder's Equity

Stockholder’s Equity

Equity Based Awards

The 2010 Long Term Incentive Plan (the “2010 Incentive Plan”) is administered by the Compensation Committee of the Company’s Board of Directors. A total of 1,500,000 shares of the Company’s common stock were reserved and 499,037 shares are currently available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee of the Board of Directors. The Compensation Committee determines the exercise price for non-statutory stock options. The exercise price for any option cannot be less than the fair market value of the Company’s common stock as of the date of grant.

Share Based Compensation

Nonvested Stock

During the three months ended March 31, 2015, the Company’s independent directors were granted 16,200 nonvested shares of common stock under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan. The shares were drawn from the 1,500,000 shares of common stock reserved for issuance under the 2010 Incentive Plan. The shares vest 100% on the one year anniversary date. During the three months ended March 31, 2015, employees were granted 174,865 nonvested shares of common stock pursuant to the 2010 Incentive Plan. The shares vest over a five year period, conditioned on continued employment. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date. The weighted average grant date fair value of nonvested shares of common stock granted during the three months ended March 31, 2015 was $33.80.

The following table represents the nonvested stock activity for the three months ended March 31, 2015:

	Number of shares		Weighted average grant date fair value
Nonvested shares outstanding as of December 31, 2014	524,287		$	22.56
Granted	191,065		$	33.80
Vested	(146,424	)	$	22.82
Nonvested shares outstanding as of March 31, 2015	568,928		$	26.26

During the three months ended March 31, 2015, an independent director of the Company received a share based award, which will be settled in cash at March 1, 2016. The amount of such cash payment will equal the fair market value of 1,800 shares on the settlement date.

As of March 31, 2015, there was $12.4 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.54 years. The total fair value of shares of common stock vested during the three months ended March 31, 2015 and 2014 was $3.3 million. The Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight line basis for shares of common stock that vest over time. The Company recorded $1.0 million of compensation expense related to nonvested stock grants in the three months ended March 31, 2015 and 2014.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan. In 2013, the Company adopted the Amended and Restated Employee Stock Purchase Plan, which reserved an additional 250,000 shares of common stock to the plan.

The table below details the shares of common stock issued during 2015:

	Number of shares	Per share price
Shares available as of December 31, 2014	236,483
Shares issued during three months ended March 31, 2015	7,068	$	29.62
Shares available as of March 31, 2015	229,415

Stock Options

As of March 31, 2015, 15,000 options were issued and exercisable. During the three months ended March 31, 2015, no options were exercised or forfeited and no options were granted.

Treasury Stock

In conjunction with the vesting of the nonvested shares of common stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the three months ended March 31, 2015, the Company redeemed 33,207 shares of common stock valued at $1.1 million, related to these tax obligations.

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Noncontrolling interest

3 Months Ended

Mar. 31, 2015

Noncontrolling Interest [Abstract]

Noncontrolling interest

Noncontrolling interest

Noncontrolling Interest-Redeemable

A majority of the Company’s equity joint venture agreements include a provision that requires the Company to purchase the noncontrolling partner’s interest upon the occurrence of certain triggering events, such as death or bankruptcy of the partner or the partner’s exclusion from the Medicare or Medicaid programs. These triggering events and the related repurchase provisions are specific to each individual equity joint venture; if the repurchase provision is triggered in any one equity joint venture, the remaining equity joint ventures would not be impacted. Upon the occurrence of a triggering event, the Company would be required to purchase the noncontrolling partner’s interest at either the fair value or the book value at the time of purchase, as stated in the applicable joint venture agreement. The Company has never been required to purchase the noncontrolling interest of any of its equity joint venture partners, and the Company believes the likelihood of a triggering event occurring is remote. According to authoritative guidance, redeemable noncontrolling interests must be reported outside of permanent equity on the consolidated balance sheet in instances where there is a repurchase provision with a triggering event that is outside the control of the Company.

The following table summarizes the activity of noncontrolling interest-redeemable for the three months ended March 31, 2015 (amounts in thousands):

Balance as of December 31, 2014	$	11,517
Net income attributable to noncontrolling interest-redeemable	1,610
Noncontrolling interest-redeemable distributions	(1,830		)
Balance as of March 31, 2015	$	11,297

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Goodwill and Intangibles - Schedule of Changes in Recorded Goodwill by Reporting Unit (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Goodwill [Roll Forward]
Balance at beginning of period	$ 240,019
Goodwill from acquisitions	343
Goodwill related to noncontrolling interests	36
Goodwill related to disposal	(104)
Balance at end of period	240,294
Home health reporting unit
Goodwill [Roll Forward]
Balance at beginning of period	196,296
Goodwill from acquisitions	138
Goodwill related to noncontrolling interests	14
Goodwill related to disposal	(104)
Balance at end of period	196,344
Hospice reporting unit
Goodwill [Roll Forward]
Balance at beginning of period	14,793
Goodwill from acquisitions	0
Goodwill related to noncontrolling interests	0
Goodwill related to disposal	0
Balance at end of period	14,793
Community-based reporting unit
Goodwill [Roll Forward]
Balance at beginning of period	17,339
Goodwill from acquisitions	205
Goodwill related to noncontrolling interests	22
Goodwill related to disposal	0
Balance at end of period	17,566
Facility-based reporting unit
Goodwill [Roll Forward]
Balance at beginning of period	11,591
Goodwill from acquisitions	0
Goodwill related to noncontrolling interests	0
Goodwill related to disposal	0
Balance at end of period	$ 11,591

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Percentage of Net Service Revenue Earned by Type of Ownership or Relationship with Operating Entity

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended    March 31,
Ownership type	2015		2014
Wholly-owned subsidiaries	54.6	%	49.2	%
Equity joint ventures	43.2		48.0
License leasing arrangements	1.3		1.9
Management services	0.9		0.9
	100.0	%	100.0	%

Percentage of Net Service Revenue Earned by Category of Payor

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Payor:	2015		2014
Medicare	74.7	%	78.7	%
Medicaid	1.4		1.3
Other	23.9		20.0
	100.0	%	100.0	%

Percentage of Net Service Revenue Contributed from Each Reporting Segment

The following table sets forth the percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Reporting segment:	2015		2014
Home health services	75.9	%	78.1	%
Hospice services	8.7		9.3
Community-based services	5.1		0.5
Facility-based services	10.3		12.1
	100.0	%	100.0	%

Shares Used in Computation of Basic and Diluted Per Share Information

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended    March 31,
	2015	2014
Weighted average number of shares outstanding for basic per share calculation	17,322,791	17,148,043
Effect of dilutive potential shares:
Options	5,487	4,290
Nonvested stock	161,205	116,383
Adjusted weighted average shares for diluted per share calculation	17,489,483	17,268,716
Anti-dilutive shares	191,065	195,945

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

The following tables summarize the Company’s segment information for the three months ended March 31, 2015 and 2014 (amounts in thousands):

	Three Months Ended March 31, 2015
	Home health services			Hospice services			Community-based services			Facility-based services			Total
Net service revenue	$	146,592		$	16,851		$	9,773		$	19,863		$	193,079
Cost of service revenue	85,546			10,099			6,900			11,881			114,426
Provision for bad debts	4,476			347			180			256			5,259
General and administrative expenses	46,454			4,888			2,217			5,739			59,298
Operating income	10,116			1,517			476			1,987			14,096
Interest expense	(430		)	(60		)	(6		)	(49		)	(545		)
Income before income taxes and noncontrolling interest	9,686			1,457			470			1,938			13,551
Income tax expense	3,657			620			45			407			4,729
Net income	6,029			837			425			1,531			8,822
Less net income attributable to noncontrolling interests	1,521			246			(20		)	270			2,017
Net income attributable to LHC Group, Inc.’s common stockholders	$	4,508		$	591		$	445		$	1,261		$	6,805
Total assets	$	385,653		$	34,019		$	32,971		$	38,321		$	490,964

	Three Months Ended March 31, 2014
	Home health services			Hospice services			Community-based services			Facility-based services			Total
Net service revenue	$	127,793		$	15,222		$	887		$	19,779		$	163,681
Cost of service revenue	75,800			8,897			644			11,993			97,334
Provision for bad debts	2,623			105			31			603			3,362
General and administrative expenses	44,194			4,444			323			5,618			54,579
Operating income (loss)	5,176			1,776			(111		)	1,565			8,406
Interest expense	(307		)	(39		)	(3		)	(39		)	(388		)
Income (loss) before income taxes and noncontrolling interest	4,869			1,737			(114		)	1,526			8,018
Income tax expense	2,270			346			23			284			2,923
Net income (loss)	2,599			1,391			(137		)	1,242			5,095
Less net income attributable to noncontrolling interests	607			201			—			219			1,027
Net income (loss) attributable to LHC Group, Inc.’s common stockholders	$	1,992		$	1,190		$	(137	)	$	1,023		$	4,068
Total assets	$	400,911		$	28,919		$	1,544		$	36,726		$	468,100

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Stockholder's Equity - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Document Fiscal Year Focus	2015
Stockholders' Equity Note [Abstract]
Common stock reserved and available for issuance	1,500,000
Common stock shares available for grant	499,037
Percentage of directors' stock grant vested on one year anniversary date	100.00%
Period of Vested Shares	5 years
Granted, Weighted average grant date fair value	$ 33.80
Share based award, settled in cash	1,800
Total unrecognized compensation cost related to nonvested shares of common stock granted	$ 12,400,000
Weighted average period of cost recognized	3 years 6 months 13 days
Total fair value of shares of common stock vested	3,300,000
Compensation expense related to nonvested stock grants	1,000,000
Price of shares issued under Employee Stock Purchase Plan as a percentage of FMV	95.00%
Number of shares reserved for the Employee Stock Purchase Plan	250,000
Additional shares authorized for issuance	250,000
Stock options issued and exercisable	15,000
Options exercised	0
Options granted	0
Shares redeemed to satisfy personal tax obligations	33,207
Treasury shares redeemed to pay income tax	$ 1,122,000
Options forfeited	0
Director
Stockholders' Equity Note [Abstract]
Non vested stock grants to Independent director	16,200
Director Period of Vested Shares	1 year
Employee
Stockholders' Equity Note [Abstract]
Nonvested stock grants to employees	174,865

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Total		Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Noncontrolling Interest Non Redeemable
Beginning balance, Amount at Dec. 31, 2014	$ 321,595		$ 220	$ (35,660)	$ 108,708	$ 245,371	$ 2,956
Beginning balance, Treasury Shares at Dec. 31, 2014	(4,734,363)			(4,734,363)
Beginning balance, Shares at Dec. 31, 2014			22,015,211
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	7,212	[1]				6,805	407
Acquired noncontrolling interest	126						126
Noncontrolling interest distributions	(412)						(412)
Nonvested stock compensation	991				991
Issuance of vested stock			146,424
Treasury shares redeemed to pay income tax	(1,122)			(1,122)
Treasury shares redeemed to pay income tax, Shares	(33,207)			(33,207)
Excess tax benefits — vesting nonvested stock	642				642
Issuance of common stock under Employee Stock Purchase Plan	210		2		208
Issuance of common stock under Employee Stock Purchase Plan, Shares	7,068		7,068
Ending balance, Amount at Mar. 31, 2015	$ 329,242		$ 222	$ (36,782)	$ 110,549	$ 252,176	$ 3,077
Ending balance, Treasury Shares at Mar. 31, 2015	(4,767,570)			(4,767,570)
Ending balance, Shares at Mar. 31, 2015			22,168,703

[1] Net income excludes net income attributable to noncontrolling interest-redeemable of $1.6 million during the three months ending March 31, 2015. Noncontrolling interest-redeemable is reflected outside of permanent equity on the condensed consolidated balance sheets. See Note 9 of the Notes to Condensed Consolidated Financial Statements.

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Acquisitions and Disposals

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisitions and Disposals

3. Acquisitions and Disposals

The Company acquired the majority-ownership of one home health agency and one community-based services agency during the three months ended March 31, 2015. The total aggregate purchase price for the Company’s acquisition was $0.6 million, which was paid in cash. The purchase price was determined based on the Company’s analysis of comparable acquisitions and the target market’s potential future cash flows.

Acquired intangible assets consist of a Medicare license, Medicaid license, and trade name. The fair value of the acquired intangible assets was $0.4 million, which is preliminary pending the final valuation of those assets.

The Company's home health services segment and community-based services segment each recognized goodwill of $0.2 million. Goodwill generated from the acquisitions was recognized based on the expected contributions of each acquisition to the overall corporate strategy. The Company expects its portion of goodwill to be fully tax deductible. The acquisition was accounted for under the acquisition method of accounting, and, accordingly, the accompanying interim financial information includes the results of operations of the acquired entity from the date of acquisition.

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Organization - Additional Information (Detail)	Mar. 31, 2015 State ServiceProvider
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of service providers operated	341
Number of states in which Company operates	29

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Tax payable as an unrecognized tax benefit	$ 3.4

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenue and expenses during the reporting period. Actual results could differ from those estimates.

Critical Accounting Policies

Critical Accounting Policies

The Company’s most critical accounting policies relate to the principles of consolidation, revenue recognition and accounts receivable and allowances for uncollectible accounts.

Principles of Consolidation

Principles of Consolidation

The interim financial information includes all subsidiaries and entities controlled by the Company. Control is defined by the Company as ownership of a majority of the voting interest of an entity. The interim financial information includes entities in which the Company receives a majority of the entities’ expected residual returns and absorbs a majority of the entities’ expected losses. Third party equity interests in the consolidated joint ventures are reflected as noncontrolling interests in the Company’s interim financial information.

The following table summarizes the percentage of net service revenue earned by type of ownership or relationship the Company had with the operating entity:

	Three Months Ended    March 31,
Ownership type	2015		2014
Wholly-owned subsidiaries	54.6	%	49.2	%
Equity joint ventures	43.2		48.0
License leasing arrangements	1.3		1.9
Management services	0.9		0.9
	100.0	%	100.0	%

All significant intercompany accounts and transactions have been eliminated in the Company’s accompanying interim financial information. Business combinations accounted for under the acquisition method have been included in the interim financial information from the respective dates of acquisition.

The following describes the Company’s consolidation policy with respect to its various ventures excluding wholly-owned subsidiaries:

Equity Joint Ventures

The members of the Company’s equity joint ventures participate in profits and losses in proportion to their equity interests. The Company consolidates these entities as the Company has voting control over the entities.

License Leasing Arrangements

The Company, through wholly-owned subsidiaries, leases home health licenses necessary to operate certain of its home nursing and hospice agencies. The Company owns 100% of the equity of these subsidiaries and consolidates them based on such ownership.

Management Services

The Company has various management services agreements under which the Company manages certain operations of agencies. The Company does not consolidate these agencies because the Company does not have an ownership interest in, and does not have an obligation to absorb losses of, the entities that own the agencies or the right to receive the benefits from those entities.

Revenue Recognition

Revenue Recognition

The Company reports net service revenue at the estimated net realizable amount due from Medicare, Medicaid and other commercial or managed care insurance programs for services rendered. The Company assesses the patient's ability to pay for their healthcare services at the time of patient admission based on the Company's verification of the patient's insurance coverage under the Medicare, Medicaid, and other commercial or managed care insurance program. All such payors contribute to the net service revenue of the Company’s home health services, hospice services, community-based services, and facility-based services.

The following table sets forth the percentage of net service revenue earned by category of payor for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Payor:	2015		2014
Medicare	74.7	%	78.7	%
Medicaid	1.4		1.3
Other	23.9		20.0
	100.0	%	100.0	%

The following table sets forth the percentage of net service revenue contributed from each reporting segment for the three months ended March 31, 2015 and 2014:

	Three Months Ended    March 31,
Reporting segment:	2015		2014
Home health services	75.9	%	78.1	%
Hospice services	8.7		9.3
Community-based services	5.1		0.5
Facility-based services	10.3		12.1
	100.0	%	100.0	%

Medicare

Home Health

The Company’s home nursing Medicare patients are classified into one of 153 home health resource groups prior to receiving services. Based on the patient’s home health resource group, the Company is entitled to receive a standard prospective Medicare payment for delivering care over a 60-day period referred to as an episode. The Company recognizes revenue based on the number of days elapsed during an episode of care within the reporting period.

Final payments from Medicare may reflect one of four retroactive adjustments to ensure the adequacy and effectiveness of the total reimbursement: (a) an outlier payment if the patient’s care was unusually costly; (b) a low utilization adjustment if the number of visits was fewer than five; (c) a partial payment if the patient transferred to another provider before completing the episode; or (d) a payment adjustment based upon the level of therapy services required in the population base. In calculating net service revenue, management estimates the impact of these payment adjustments based on historical experience and records this estimate as the services are rendered using the expected level of services that will be provided.

Hospice Services

The Company is paid by Medicare under a per diem payment system. The Company receives one of four predetermined daily or hourly rates based upon the level of care the Company furnished. The Company records net service revenue from hospice services based on the daily or hourly rate and recognizes revenue as hospice services are provided.

Hospice payments are subject to an inpatient cap and an overall Medicare payment cap. The inpatient cap relates to individual programs receiving more than 20% of its total Medicare reimbursement from inpatient care services and the overall Medicare payment cap relates to individual providers receiving reimbursements in excess of a “cap amount,” calculated by multiplying the number of beneficiaries during the period by a statutory amount that is indexed for inflation. The determination for each cap is made annually based on the 12-month period ending on October 31 of each year. The Company monitors its limits on a provider-by-provider basis and records an estimate of its liability for reimbursements received in excess of the cap amount. Beginning with the cap year October 1, 2014, CMS implemented a new process requiring hospice providers to self-report their cap liabilities and remit applicable payment by March 31, 2016.

Facility-Based Services

The Company is reimbursed by Medicare for services provided under the LTACH prospective payment system. Each patient is assigned a long-term care diagnosis-related group. The Company is paid a predetermined fixed amount intended to reflect the average cost of treating a Medicare patient classified in that particular long-term care diagnosis-related group. For selected patients, the amount may be further adjusted based on length of stay and facility-specific costs, as well as in instances where a patient is discharged and subsequently re-admitted, among other factors. The Company calculates the adjustment based on a historical average of these types of adjustments for claims paid. Similar to other Medicare prospective payment systems, the rate is also adjusted for geographic wage differences. Revenue is recognized for the Company’s LTACHs as services are provided.

Medicaid, managed care and other payors

The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each service provided. Therefore, revenue is recognized for Medicaid services as services are provided based on this fee schedule. The Company’s managed care and other payors reimburse the Company based upon a predetermined fee schedule or an episodic basis, depending on the terms of the applicable contract. Accordingly, the Company recognizes revenue from managed care and other payors in the same manner as the Company recognizes revenue from Medicare or Medicaid.

Accounts Receivable and Allowances for Uncollectible Accounts

Accounts Receivable and Allowances for Uncollectible Accounts

The Company reports accounts receivable net of estimated allowances for uncollectible accounts and adjustments. Accounts receivable are uncollateralized and consist of amounts due from Medicare, other third-party payors and patients. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The credit risk for other concentrations of receivables is limited due to the significance of Medicare as the primary payor. The Company believes the credit risk associated with its Medicare accounts, which have historically exceeded 55% of its patient accounts receivable, is limited due to (i) the historical collection rate from Medicare and (ii) the fact that Medicare is a U.S. government payor. The Company does not believe that there are any other concentrations of receivables from any particular payor that would subject it to any significant credit risk in the collection of accounts receivable.

The provision for bad debts is based upon the Company’s assessment of historical and expected net collections, business and economic conditions and trends in government reimbursement. Uncollectible accounts are written off when the Company has determined the account will not be collected.

A portion of the estimated Medicare prospective payment system reimbursement from each submitted home nursing episode is received in the form of a request for anticipated payment (“RAP”). The Company submits a RAP for 60% of the estimated reimbursement for the initial episode at the start of care. The full amount of the episode is billed after the episode has been completed. The RAP received for that particular episode is deducted from the final payment. If a final bill is not submitted within the greater of 120 days from the start of the episode, or 60 days from the date the RAP was paid, any RAP received for that episode will be recouped by Medicare from any other Medicare claims in process for that particular provider. The RAP and final claim must then be resubmitted. For subsequent episodes of care contiguous with the first episode for a particular patient, the Company submits a RAP for 50% instead of 60% of the estimated reimbursement.

The Company’s services to the Medicare population are paid at prospectively set amounts that can be determined at the time services are rendered. The Company’s Medicaid reimbursement is based on a predetermined fee schedule applied to each individual service it provides. The Company’s managed care contracts and contracts with other payors provide for payments based upon a predetermined fee schedule or an episodic basis, depending on the terms of the applicable contract. The Company is able to calculate its actual amount due at the patient level and adjust the gross charges down to the actual amount at the time of billing. This negates the need to record an estimated contractual allowance when reporting net service revenue for each reporting period.

Earnings Per Share

Earnings Per Share

Basic per share information is computed by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding during the period, under the treasury stock method. Diluted per share information is also computed using the treasury stock method, by dividing the relevant amounts from the condensed consolidated statements of income by the weighted-average number of shares outstanding plus potentially dilutive shares.

The following table sets forth shares used in the computation of basic and diluted per share information:

	Three Months Ended    March 31,
	2015	2014
Weighted average number of shares outstanding for basic per share calculation	17,322,791	17,148,043
Effect of dilutive potential shares:
Options	5,487	4,290
Nonvested stock	161,205	116,383
Adjusted weighted average shares for diluted per share calculation	17,489,483	17,268,716
Anti-dilutive shares	191,065	195,945

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

On May 28, 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers, ("ASU 2014-9") which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-9 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-9 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.