10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

þ   For the fiscal year ended December 31, 2011

¨   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: 1-8351

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	31-0791746 (I.R.S. Employer Identification Number)
2600 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio (Address of principal executive offices)	45202-4726 (Zip Code)
(513) 762-6900 (Registrant’s Telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Name of each exchange on which registered
Capital Stock –  Par Value $1 Per Share	New York Stock Exchange

Securities registered pursuant to Section 12(b) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ    No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ¨    No þ

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 þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, if definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  Yes o    No þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ    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 definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One): Large accelerated filer þ    Accelerated filer ¨    Non-accelerated filer ¨    Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨ No þ

The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the average bid and asked price of said stock on the New York Stock Exchange – Composite Transaction Listing on June 30, 2011 ($65.37 per share), was $1,360,861,743.

At February 15, 2012, 19,148,645 shares of Chemed Capital Stock (par value $1 per share) were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Document	Where Incorporated
2011 Annual Report to Stockholders (specified portions) Proxy Statement for Annual Meeting to be held May 21, 2012	Parts I, II, and IV Part III

CHEMED CORPORATION

2011 FORM 10-K ANNUAL REPORT

Table of Contents

PART I
Item 1.	Business	1
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	25
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	27
PART II
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Selected Financial Data	32
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 8.	Financial Statements and Supplementary Data	32
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	32
Item 9A.	Controls and Procedures	32
Item 9B.	Other Information	32
		33
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	33
Item 11.	Executive Compensation	33
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	33
Item 13.	Certain Relationships and Related Transactions and Director Independence	34
Item 14.	Principal Accountant Fees and Services	34
PART IV
Item 15.	Exhibits and Financial Statement Schedules	35

Item 1.  Business

General

Chemed Corporation (the Company or Chemed) was incorporated in Delaware in 1970 as a subsidiary of W.R. Grace & Co. and succeeded to the business of W.R. Grace & Co.’s Special Products Group as of April 30, 1971 and remained a subsidiary of W.R. Grace & Co. until March 10, 1982.

Chemed purchases, operates and divests subsidiaries engaged in diverse business activities for the purposes of maximizing shareholder value.  The Company’s operating businesses are managed on a decentralized basis.  There are few integrated business functions (such as sales, marketing or purchasing).  Chemed’s corporate office management participates in and is ultimately responsible for significant capital allocation decisions, investment activities, financial reporting, tax, legal and the selection of the key executives of each of the operating businesses.  Since its inception, the Company has engaged in twelve significant acquisitions or divestitures of diverse business units.

During 2011, Chemed conducted its business operations in two segments: the Vitas segment (Vitas) and the Roto-Rooter segment (Roto-Rooter).  Vitas Healthcare Corporation provides hospice services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers.  Roto-Rooter provides plumbing and drain cleaning services to both residential and commercial customers.

Forward Looking Statements

This Annual Report contains or incorporates by reference certain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The Company intends such statements to be subject to the safe harbors created by that legislation.  Such statements involve risks and uncertainties that could cause actual results of operations to differ materially from these forward looking statements.

Financial Information about Industry Segments

The required segment and geographic data for the Company’s continuing operations (as described below) for three years ended December 31, 2009, 2010 and 2011 are shown in Note 5 of the Notes to Consolidated Financial Statements on pages 16-18 of the 2011 Annual Report to Stockholders and are incorporated herein by reference.

Description of Business by Segment

The information called for by this item is included within Note 5 of the Notes to Consolidated Financial Statements appearing on pages 16-18 of the 2011 Annual Report to Stockholders is incorporated herein by reference.

Product and Market Development

Each segment of the Company’s business engages in a continuing program for the development and marketing of new services and products.  While new products and services and new market development are important factors for the growth of each active segment of the Company’s business, the Company does not expect that any new products and services or marketing effort, including those in the development stage, will require the investment of a material amount of the Company’s assets.

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Raw Materials

The principal raw materials needed for the Company’s manufacturing operations are purchased from United States sources.  Product sales from goods manufactured by Roto-Rooter represent less than 3% of Chemed’s total service revenues and sales.  No segment of the Company experienced any material raw material shortages during 2011, although such shortages may occur in the future.  Products manufactured and sold by the Company’s Roto-Rooter segment generally may be reformulated to avoid the adverse impact of specific raw material shortage.

Patents, Service Marks and Licenses

The Roto-Rooter trademarks and service marks have been used and advertised since 1935 by Roto-Rooter Corporation, a wholly owned indirect subsidiary of the Company.  The Roto-Rooter marks are among the most highly recognized trademarks and service marks in the United States.  The Company considers the Roto-Rooter marks to be a valuable asset and a significant factor in the marketing of Roto-Rooter’s franchises, products and services and the products and services provided by its franchises.

“Vitas” and “Innovative Hospice Care” are trademarks and servicemarks of Vitas Healthcare Corporation.  The Company and its subsidiaries also own certain trade secrets including training manuals, cost information, customer information and software source codes.  Certain states require certificates of need to conduct hospice operations.  In those states, we consider certificates of need valuable assets.

Competition

Roto-Rooter

All aspects of the sewer, drain, and pipe cleaning and plumbing repair businesses are highly competitive.  Competition is, however, fragmented in most markets with local and regional firms providing the primary competition.  The principal methods of competition are advertising, range of services provided, name recognition, emergency-service availability, speed and quality of customer service, service guarantees, and pricing.

No individual customer or market group is critical to the total sales of this segment.

Vitas

Hospice care in the United States is competitive.  Because programs for hospice services are generally uniform, Vitas competes primarily on the basis of its ability to deliver quality, responsive services.  Vitas is one of the nation’s largest provider of hospice services in a market dominated primarily by small, non-profit, community-based hospices.  Approximately 36% of all hospices are not-for-profit.  Because the hospice care market is highly fragmented, Vitas competes with a large number of organizations.

Vitas also competes with a number of national and regional hospice providers, including Gentiva Health Services, Inc., hospitals, nursing homes, home health agencies and other health care providers.  Many providers offer home care to patients who are terminally ill, and some actively market palliative care and hospice-like programs.  In addition, various health care companies have diversified into the hospice market.  Some of these health care companies have greater financial resources than Vitas.

Relatively few barriers to entry exist in the majority of markets served by Vitas.  Accordingly, other companies that are not currently providing hospice care may enter these markets and expand the variety of services they offer to include hospice.

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Research and Development

The Company engages in a continuous program directed toward the development of new services, products and processes, the improvement of existing services, products and processes, and the development of new and different uses of existing products.  The research and development expenditures from continuing operations have not been nor are they expected to be material.

Government Regulations

Roto-Rooter

Roto-Rooter’s franchising activities are subject to various federal and state franchising laws and regulations, including the rules and regulations of the Federal Trade Commission (the “FTC”) regarding the offering or sale of franchises.  The rules and regulations of the FTC require that Roto-Rooter provide all the prospective franchises with specific information regarding the franchise program and Roto-Rooter in the form of a detailed franchise offering circular.  In addition, a number of states require Roto-Rooter to register its franchise offering prior to offering or selling franchises in the state.  Various state laws also provide for certain rights in favor of franchisees, including (i) limitations on the franchisor’s ability to terminate a franchise except for good cause, (ii) restrictions on the franchisor’s ability to deny renewal of a franchise, (iii) circumstances under which the franchisor may be required to purchase certain inventory of franchisees when a franchise is terminated or not renewed in violation of such laws, and (iv) provisions relating to arbitration.  Roto-Rooter’s ability to engage in the plumbing repair business is also subject to certain limitations and restrictions imposed by state and local licensing laws and regulations.

Vitas

General.  The health care industry and Vitas’ hospice programs are subject to extensive federal and state regulation.  Vitas’ hospices are licensed as required under state law as either hospices or home health agencies, or both, depending on the regulatory requirements of each particular state.  In addition, Vitas’ hospices are required to meet certain conditions of participation to be eligible to receive payments as hospices under Medicare and Medicaid programs.  All of Vitas’ hospices, other than those currently in development, are certified for participation as hospices in the Medicare program, and are also eligible to receive payments as hospices from the Medicaid program in each of the states in which Vitas operates.  Vitas’ hospices are subject to periodic survey by governmental authorities or private accrediting entities to assure compliance with state licensing, certification and accreditation requirements.

Medicare Conditions of Participation.  Federal regulations require that a hospice program satisfy certain Conditions Of Participation (“COP”) to be certified and receive Medicare payment for the services it provides.  Failure to comply with the conditions of participation may result in sanctions, up to and including decertification from the Medicare program.  See “Surveys and Audits” below.

The Medicare COP for hospice programs include the following:

Governing Body.  Each hospice must have a governing body that assumes full responsibility for the policies and the overall operation of the hospice and for ensuring that all services are provided in a manner consistent with accepted standards of practice.  The governing body must designate one individual who is responsible for the day-to-day management of the hospice.

Medical Director.  Each hospice must have a medical director who is a physician and who assumes responsibility for overseeing the medical component of the hospice’s patient care program.

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Direct Provision of Core Services.  Medicare limits those services for which the hospice may use individual independent contractors or contract agencies to provide care to patients.  Specifically, substantially all nursing, social work, and counseling services must be provided directly by hospice employees meeting specific educational and professional standards.  During periods of peak patient loads or under extraordinary circumstances, the hospice may be permitted to use contract workers, but the hospice must agree in writing to maintain professional, financial and administrative responsibility for the services provided by those individuals or entities.

Professional Management of Non-Core Services.  A hospice may arrange to have non-core services such as therapy services, home health aide services, medical supplies or drugs provided by a non-employee or outside entity.  If the hospice elects to use an independent contractor to provide non-core services, however, the hospice must retain professional management responsibility for the arranged services and ensure that the services are furnished in a safe and effective manner by qualified personnel, and in accordance with the patient’s plan of care.

Plan of Care.  The patient’s attending physician, the medical director or the designated hospice physician, and interdisciplinary team must establish an individualized written plan of care prior to providing care to any hospice patient.  The plan must assess the patient’s needs and identify services to be provided to meet those needs and must be reviewed and updated at specified intervals.

Continuation of Care.  A hospice may not discontinue or reduce care provided to a Medicare beneficiary if the individual becomes unable to pay for that care.

Informed Consent.  The hospice must obtain the informed consent of the hospice patient, or the patient’s legal representative, that specifies the type of care services that may be provided as hospice care.

Training.  A hospice must provide ongoing training for its employees.

Quality Assurance.  A hospice must conduct ongoing and comprehensive self-assessments of the quality and appropriateness of care it provides and that its contractors provide under arrangements to hospice patients.

Interdisciplinary Team.  A hospice must designate an interdisciplinary team to provide or supervise hospice care services.  The interdisciplinary team develops and updates plans of care, and establishes policies governing the day-to-day provision of hospice services.  The team must include at least a physician, registered nurse, social worker and spiritual or other counselor.  A registered nurse must be designated to coordinate the plan of care.

Volunteers.  Hospice programs are required to recruit and train volunteers to provide patient care services or administrative services.  Volunteer services must be provided in an amount equal to at least five percent of the total patient care hours provided by all paid hospice employees and contract staff.

Licensure.  Each hospice and all hospice personnel must be licensed, certified or registered in accordance with applicable federal, state and local laws and regulations.

Central Clinical Records.  Hospice programs must maintain clinical records for each hospice patient that are organized in such a way that they may be easily retrieved.  The clinical records must be complete and accurate and protected against loss, destruction, and unauthorized use.

Surveys and Audits.  Hospice programs are subject to periodic survey by federal and state regulatory authorities and private accrediting entities to ensure compliance with applicable licensing and certification requirements and accreditation standards.  Regulators conduct periodic surveys of hospice programs and provide reports containing statements of deficiencies for alleged failure to comply with various regulatory requirements.  Survey reports and statements of deficiencies are common in the healthcare industry.  In most cases, the hospice program and regulatory authorities will agree upon any steps to be taken to bring the hospice into compliance with applicable regulatory requirements.  In some cases, however, a state or federal regulatory authority may take a

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number of adverse actions against a hospice program, including the imposition of fines, temporary suspension of admission of new patients to the hospice’s service or, in extreme circumstances, decertification from participation in the Medicare or Medicaid programs or revocation of the hospice’s license.

From time to time Vitas receives survey reports containing statements of deficiencies.  Vitas reviews such reports and takes appropriate corrective action.  Vitas believes that its hospices are in material compliance with applicable licensure and certification requirements.  If a Vitas hospice were found to be out of compliance and actions were taken against a Vitas hospice, they could materially adversely affect the hospice’s ability to continue to operate, to provide certain services and to participate in the Medicare and Medicaid programs, which could materially adversely affect Vitas.

Billing Audits/ Claims Reviews.  The Medicare program and its fiscal intermediaries and other payors periodically conduct pre-payment or post-payment reviews and other reviews and audits of health care claims, including hospice claims.  There is pressure from state and federal governments and other payors to scrutinize health care claims to determine their validity and appropriateness.  In order to conduct these reviews, the payor requests documentation from Vitas and then reviews that documentation to determine compliance with applicable rules and regulations, including the eligibility of patients to receive hospice benefits, the appropriateness of the care provided to those patients and the documentation of that care.  Vitas’ claims have been subject to review and audit.  We make appropriate provisions in our accounting records to reduce our revenue for anticipated denial of payment related to these audits and reviews.  We believe our hospice programs comply with all payor requirements at the time of billing.  However, we cannot predict whether future billing reviews or similar audits by payors will result in material denials or reductions in revenue.

Certificate of Need Laws and Other Restrictions.  Some states, including Florida, have certificate of need or similar health planning laws that apply to hospice care providers.  These states may require some form of state agency review or approval prior to opening a new hospice program, to adding or expanding hospice services, to undertaking significant capital expenditures or under other specified circumstances.   Approval under these certificate of need laws is generally conditioned on the showing of a demonstrable need for services in the community.  Vitas may seek to develop, acquire or expand hospice programs in states having certificate of need laws.  To the extent that state agencies require Vitas to obtain a certificate of need or other similar approvals to expand services at existing hospice programs or to make acquisitions or develop hospice programs in new or existing geographic markets, Vitas’ plans could be adversely affected by a failure to obtain such certificate or approval.  In addition, competitors may seek administratively or judicially to challenge such an approval or proposed approval by the state agency.  Such a challenge, whether or not ultimately successful, could adversely affect Vitas.

Limitations on For-Profit Ownership.  A few states have laws that restrict the development and expansion of for-profit hospice programs.  For example, in New York, a hospice generally cannot be owned by a corporation that has another corporation as a stockholder.  These types of restrictions could affect Vitas’ ability to expand into New York, or in other jurisdictions with similar restrictions.

Limits on the Acquisition or Conversion of Non-Profit Health Care Organizations.  A number of states have enacted laws that restrict the ability of for-profit entities to acquire or otherwise assume the operations of a non-profit health care provider.  Some states may require government review, public hearings, and/or government approval of transactions in which a for-profit entity proposes to purchase certain non-profit healthcare organizations.  Heightened scrutiny of these transactions may significantly increase the costs associated with future acquisitions of non-profit hospice programs in some states, otherwise increase the difficulty in completing those acquisitions or prevent them entirely.  Vitas cannot assure that it will not encounter regulatory or governmental obstacles in connection with any proposed acquisition of non-profit hospice programs in the future.

Professional Licensure and Participation Agreements.  Many hospice employees are subject to federal and state laws and regulations governing the ethics and practice of their profession, including physicians, physical,

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speech and occupational therapists, social workers, home health aides, pharmacists and nurses.  In addition, those professionals who are eligible to participate in the Medicare, Medicaid or other federal health care programs as individuals must not have been excluded from participation in those programs at any time.

State Licensure of Hospice.  Each of Vitas’ hospices must be licensed in the state in which it operates.  State licensure rules and regulations require that Vitas’ hospices maintain certain standards and meet certain requirements, which may vary from state to state.  Vitas believes that its hospices are in material compliance with applicable licensure requirements.  If a Vitas hospice were found to be out of compliance and actions were taken against a Vitas hospice, they could materially adversely affect the hospice’s ability to continue to operate, to provide certain services and to participate in the Medicare and Medicaid programs, which could materially adversely affect Vitas.

Overview of Government Payments—General.  Over 90% of Vitas’ revenue consisted of payments from the Medicare and Medicaid programs.  Such payments are made primarily on a “per diem” basis.  Under the per diem reimbursement methodology, Vitas is essentially at risk for the cost of eligible services provided to hospice patients.  Profitability is therefore largely dependent upon Vitas’ ability to manage the costs of providing hospice services to patients.  Increases in operating costs, such as labor and supply costs that are subject to inflation and other increases, without a compensating increase in Medicare and Medicaid rates, could have a material adverse effect on Vitas’ business in the future.  The Medicare and Medicaid programs are increasing pressure to control health care costs and to decrease or limit increases in reimbursement rates for health care services.  As with most government programs, the Medicare and Medicaid programs are subject to statutory and regulatory changes, possible retroactive and prospective rate and payment adjustments, administrative rulings, freezes and funding reductions, all of which may adversely affect the level of program payments and could have a material adverse effect on Vitas’ business.  Vitas’ levels of revenues and profitability are subject to the effect of legislative and regulatory changes, including possible reductions in coverage or payment rates, or changes in methods of payment, by the Medicare and Medicaid programs.

Overview of Government Payments – Medicare

Medicare Eligibility Criteria.  To receive Medicare payment for hospice services, the hospice medical director and, if the patient has one, the patient’s attending physician, must certify and describe in a brief narrative that the patient has a life expectancy of six months or less if the illness runs its normal course.  This determination is made based on the physician’s clinical judgement.  Due to the uncertainty of such prognoses, however, it is likely and expected that some percentage of hospice patients will not die within six months of entering a hospice program.  The Medicare program (among other third-party payers) recognizes that terminal illnesses often do not follow an entirely predictable course, and therefore the hospice benefit remains available to beneficiaries so long as the hospice physician or the patient’s attending physician continues to certify that the patient’s life expectancy remains six months or less.  Specifically, the Medicare hospice benefit provides for two initial 90-day benefit periods followed by an unlimited number of 60-day periods.  In order to qualify for hospice care, a Medicare beneficiary must elect hospice care and waive any right to other Medicare benefits related to his or her terminal illness.  A Medicare beneficiary may revoke his or her election of the Medicare hospice benefit at any time and resume receiving regular Medicare benefits.  The patient may elect the hospice benefit again at a later date so long as he or she remains eligible.  Increased regulatory scrutiny of compliance with the Medicare six-month eligibility rule has impacted the hospice industry.  The Medicare program, however, has reaffirmed that Medicare hospice beneficiaries are not limited to six months of coverage and that there is no limit on how long a Medicare beneficiary can continue to receive hospice benefits and services, provided that the beneficiary continues to meet the eligibility criteria under the Medicare hospice program.

Levels of Care.  Medicare pays for hospice services on a prospective payment system basis under which Vitas receives an established payment rate for each day that it provides hospice services to a Medicare beneficiary.  These rates are subject to annual adjustments for inflation and vary based upon the geographic location where the

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services are provided.  The rate Vitas receives depends on which of the following four levels of care is being provided to the beneficiary:

Routine Home Care.  The routine home care rate is paid for each day that a patient is in a hospice program and is not receiving one of the other categories of hospice care.  The routine home care rate does not vary based upon the volume or intensity of services provided by the hospice program.

General Inpatient Care.  The general inpatient care rate is paid when a patient requires inpatient services for a short period for pain control or symptom management which cannot be managed in other settings.  General inpatient care services must be provided in a Medicare or Medicaid certified hospital or long-term care facility or at a freestanding inpatient hospice facility with the required registered nurse staffing.

Continuous Home Care.  Continuous home care, which Vitas refers to as “Intensive Comfort Care”, is provided to patients while at home, during periods of crisis when intensive monitoring and care, primarily nursing care, is required in order to achieve palliation or management of acute medical symptoms.  Continuous home care requires a minimum of 8 hours of care within a 24-hour day, which begins and ends at midnight.  The care must be predominantly nursing care provided by either a registered nurse or licensed practical nurse.  While the published Medicare continuous home care rates are daily rates, Medicare actually pays for continuous home care in fifteen minute increments.  This fifteen minute rate is calculated by dividing the daily rate by 96.

Respite Care.  Respite care permits a hospice patient to receive services on an inpatient basis for a short period of time in order to provide relief for the patient’s family or other caregivers from the demands of caring for the patient.  A hospice can receive payment for respite care for a given patient for up to five consecutive days at a time, after which respite care is reimbursed at the routine home care rate.

Medicare Payment for Physician Services.  Payment for direct patient care physician services delivered by hospice physicians is billed separately by the hospice to the Medicare fiscal intermediary and paid at the lesser of the actual charge or the Medicare allowable charge for these services.  This payment is in addition to the per diem rates Vitas receives for hospice care.  Payment for hospice physicians’ administrative and general supervisory activities is included in the daily rates discussed above.  Payments for attending physician professional services (other than services furnished by hospice physicians) are not paid to the hospice, but rather are paid directly to the attending physician by the Medicare fiscal intermediary.  For fiscal 2011, 2% of Vitas’ net revenue was attributable to physician services.

Medicare Limits on Hospice Care Payments.  Medicare payments for hospice services are subject to two additional limits or “caps”.  Each of Vitas’ hospice programs is separately subject to both of these “caps”.  Both of these “caps” are determined on an annual basis for the period running from November 1 through October 31 of each year.

First, under a Medicare rule known as the “80-20” rule applicable to the Medicare inpatient services, if the number of inpatient care days furnished by a hospice to Medicare beneficiaries exceeds 20% of the total days of hospice care furnished by such hospice to Medicare beneficiaries, Medicare payments to the hospice for inpatient care days exceeding the cap are reduced to the routine home care rate. Vitas has never exceeded the inpatient cap.

Second, Medicare payments to a hospice are also subject to a separate cap based on overall average payments per admission.  Any payments exceeding this overall hospice cap must be refunded by the hospice.  This cap was set at $24,527.69 per admission for the twelve-month period ended on October 31, 2011, and is adjusted annually to account for inflation.  Vitas’ hospices may be subject to future payment reductions or recoupments as the result of this cap.  As of December 31, 2011 we reversed $786,000 which primarily relates to one program which is Vitas’ largest hospice, for the 2011 Medicare cap year measurement period.  We recorded a cap liability in the fourth quarter of 2011 of $2.6 million for three programs for the first quarter of the 2012 Medicare cap year

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measurement period.  We also reversed the remaining Medicare cap liability for our Phoenix program due to the expiration for the period under review.

Medicare Managed Care Programs.  The Medicare program has entered into contracts with managed care companies to provide managed care benefits to Medicare beneficiaries who elect to participate in managed care programs.  These managed care programs are commonly referred to as Medicare HMOs, Medicare + Choice or Medicare risk products.  Vitas provides hospice care to Medicare beneficiaries who participate in these managed care programs, and Vitas is paid for services provided to these beneficiaries in the same way and at the same rates as those of other Medicare beneficiaries who are not in a Medicare managed care program.  Under current Medicare policy, Medicare pays the hospice directly for services provided to these managed care program participants and then reduces the standard per-member, per-month payment that the managed care program otherwise receives.

Overview of Government Payments – Medicaid

Medicaid Coverage and Reimbursements.  State Medicaid programs are another source of Vitas’ net patient revenue.  Medicaid is a state-administered program financed by state funds and matching federal funds to provide medical assistance to the indigent and certain other eligible persons.  In 1986, hospice services became an optional state Medicaid benefit.  For those states that elect to provide a hospice benefit, the Medicaid program is required to pay the hospice at rates at least equal to the rates provided under Medicare and calculated using the same methodology.  States maintain flexibility to establish their own hospice election procedures and to limit the number and duration of benefit periods for which they will pay for hospice services.  Reimbursement from state Medicaid programs in 2011 accounted for 5% of Vitas’ revenues.

Nursing Home Residents.  For Vitas’ patients who receive nursing home care under a state Medicaid program and who elect hospice care under Medicare or Medicaid, Vitas contracts with nursing homes for the nursing homes’ provision of room and board services.  In addition to the applicable Medicare or Medicaid hospice daily or hourly rate, the state generally must pay Vitas an amount equal to at least 95% of the Medicaid daily nursing home rate for room and board services furnished to the patient by the nursing home.  Under Vitas’ standard nursing home contracts, Vitas pays the nursing home for these room and board services at the Medicaid daily nursing home rate.

Adjustments to Medicare and Medicaid Payment Rates.  Payment rates under the Medicare and Medicaid programs are adjusted annually based upon the Hospital Market Basket Index and the Consumer Price Index; however, the adjustments have historically been less than actual inflation.  On October 1, 2008 the base rates increased by 2.5%.  This rate increased by approximately 1% in February 2009.  On October 1, 2009 the base rates increased by 1.4%.  On October 1, 2010 the base rates increased by 1.8%.  On October 1, 2011 the base rates increased by 2.5%.  These base rates are further modified by the Hospice Wage Index to reflect local differences in wages according to the revised wage index.  It is possible that there will be further modifications to the rate structure under which the Medicare or Medicaid programs pay for hospice care services.  Any future reductions in the rate of increase in Medicare and Medicaid payments may have an adverse impact on Vitas’ net patient service revenue and profitability.

Other Healthcare Regulations

Federal and State Anti-Kickback Laws and Safe Harbor Provisions.  The federal Anti-Kickback Law makes it a felony to knowingly and willingly offer, pay, solicit or receive any form of remuneration in exchange for referring, recommending, arranging, purchasing, leasing or ordering items or services covered by a federal health care program including Medicare or Medicaid.  The Anti-Kickback Law applies regardless of whether the remuneration is provided directly or indirectly, in cash or in kind.  Although the Anti-Kickback statute does not prohibit all financial transactions or relationships that providers of healthcare items or services may have with each other, interpretations of the law have been very broad.  Under current law, courts and federal regulatory authorities have stated that this law is violated if even one purpose (as opposed to the sole or primary purpose) of the arrangement is to induce referrals.

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Violations of the Anti-Kickback Law carry potentially severe penalties including imprisonment of up to five years, criminal fines of up to $25,000 per act, civil money penalties of up to $50,000 per act, and additional damages of up to three times the amounts claimed or remuneration offered or paid.  Federal law also authorizes exclusion from the Medicare and Medicaid programs for violations of the Anti-Kickback Law.

The Anti-Kickback Law contains several statutory exceptions to the broad prohibition.  In addition, Congress authorized the Office of Inspector General (“OIG”) to publish numerous “safe harbors” that exempt some practices from enforcement action under the Anti-Kickback Law and related laws.  These statutory exceptions and regulatory safe harbors protect various bona fide employment relationships, contracts for the rental of space or equipment, personal service arrangements, and management contracts, among other things, provided that certain conditions set forth in the statute or regulations are satisfied.  The safe harbor regulations, however, do not comprehensively describe all lawful relationships between healthcare providers and referral sources, and the failure of an arrangement to satisfy all of the requirements of a particular safe harbor does not mean that the arrangement is unlawful.  Failure to comply with the safe harbor provisions, however, may mean that the arrangement will be subject to scrutiny.

Many states, including states where Vitas does business, have adopted similar prohibitions against payments that are intended to induce referrals of patients, regardless of the source of payment.  Some of these state laws lack explicit “safe harbors” that may be available under federal law.  Sanctions under these state anti-kickback laws may include civil money penalties, license suspension or revocation, exclusion from the Medicare or Medicaid programs, and criminal fines or imprisonment.  Little precedent exists regarding the interpretation or enforcement of these statutes.

Vitas is required under the Medicare conditions of participation and some state licensing laws to contract with numerous healthcare providers and practitioners, including physicians, hospitals and nursing homes, and to arrange for these individuals or entities to provide services to Vitas’ patients.  In addition, Vitas has contracts with other suppliers, including pharmacies, ambulance services and medical equipment companies.  Some of these individuals or entities may refer, or be in a position to refer, patients to Vitas, and Vitas may refer, or be in a position to refer, patients to these individuals or entities.  These arrangements may not qualify for a safe harbor.  Vitas from time to time seeks guidance from regulatory counsel as to the changing and evolving interpretations and the potential applicability of these anti-kickback laws to its programs, and in response thereto, takes such actions as it deems appropriate.  The Company generally believes that Vitas’ contracts and arrangements with providers, practitioners and suppliers do not violate applicable anti-kickback laws.  However, the Company cannot assure that such laws will ultimately be interpreted in a manner consistent with Vitas’ practices.

HIPAA Anti-Fraud Provisions.  HIPAA includes several revisions to existing health care fraud laws by permitting the imposition of civil monetary penalties in cases involving violations of the anti-kickback statute or contracting with excluded providers.  In addition, HIPAA created new statutes making it a federal felony to engage in fraud, theft, embezzlement, or the making of false statements with respect to healthcare benefit programs, which include private, as well as government programs.  In addition, federal enforcement officials have the ability to exclude from the Medicare and Medicaid programs any investors, officers and managing employees associated with business entities that have committed healthcare fraud, even if the investor, officer or employee had no actual knowledge of the fraud.

OIG Fraud Alerts, Advisory Opinions and Other Program Guidance.  In 1976, Congress established the OIG to, among other things, identify and eliminate fraud, abuse and waste in HHS programs.  To identify and resolve such problems, the OIG conducts audits, investigations and inspections across the country and issues public pronouncements identifying practices that may be subject to heightened scrutiny.  In the last several years, there have been a number of hospice related audits and reviews conducted.  These reviews and recommendations have included:

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●      Ensuring that Medicare hospice eligibility determinations are made in accordance with the Medicare regulations; and

●      Revising the annual cap on hospice benefits to better reflect the cost of care provided.

From time to time, various federal and state agencies, such as HHS and the OIG, issue a variety of pronouncements, including fraud alerts, the OIG’s Annual Work Plan and other reports, identifying practices that may be subject to heightened governmental scrutiny.  The Company cannot predict what, if any, changes may be implemented in coverage, reimbursement, or enforcement policies as a result of these OIG reviews and recommendations.

On April 7, 2005 the Company announced the Office of Inspector General (“OIG”) for the Department of Health and Human Services served Vitas with civil subpoenas relating to Vitas’ alleged failure to appropriately bill Medicare and Medicaid for hospice services.  As part of this investigation, the OIG selected medical records for 320 past and current patients from Vitas’ three largest programs for review.  It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications, and discharges.  During the third quarter of 2005 and again in May 2006, the OIG requested additional information of the Company.  The court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florida with prejudice in July 2007.  The plaintiffs appealed this dismissal, which the Court of Appeals affirmed.  The government continues to investigate the complaint’s allegations.  In March 2009, we received a letter from the government reiterating the basis of their investigation.

In May 2009, Vitas received an administrative subpoena from the U.S. Department of Justice requesting Vitas deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas  programs concerning hospice services provided for the period January 1, 2003 to the date of the letter.  In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review.  In February 2010, VITAS received a companion civil investigative demand (“CID”) from the State of Texas Attorney General’s Office, seeking related documents.  In September 2010, it received a second CID and a second administrative subpoena seeking related documents.  In April 2011, the U.S. Attorney provided the Company with a copy of a qui tam complaint filed under seal in U.S. District Court for the Northern District of Texas.  The Court unsealed this complaint in November 2011.  The U.S. Attorney and the Attorney General for the State of Texas filed a notice in November 2011 that they had decided not to intervene at that time in the case.  They continue to investigate its allegations.  It was brought by Michael Rehfeldt, a former VITAS San Antonio program general manager, against VITAS, the program’s former Regional Vice President Keith Becker, its former Medical Director Justo Cisneros, and their current employers: WellMed Medical Management, Care Level Management LLC, and Inspiris Inc.  It alleges admission and recertification of inappropriate patients, backdating revocations, and conspiring with HMO defendants to admit inappropriate patients to hospice.  In June 2011, the U.S. Attorney provided the Company with a partially unsealed second qui tam complaint filed under seal in the U.S. District Court for the Western District of Texas.  In June 2011, the U.S. Attorney also provided the Company with a partially unsealed third qui tam complaint filed under seal in the Northern District of Illinois, Eastern Division.  We are conferring with the U.S. Attorney regarding the Company’s defenses to each complaint’s allegations.  We can neither predict the outcome of this investigation nor estimate our potential liability or range of potential loss, if any.  We believe that we are in compliance with Medicare and Medicaid rules and regulations applicable to hospice providers.

The costs to comply with either of these investigations were not material for any period presented.  Regardless of outcome, responding to the subpoenas and the lawsuits can adversely affect us through defense costs, diversion of our time and related publicity.

Federal False Claims Acts.  The federal law includes several criminal and civil false claims provisions, which provide that knowingly submitting claims for items or services that were not provided as represented may result in the imposition of multiple damages, administrative civil money penalties, criminal fines, imprisonment,

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and/or exclusion from participation in federally funded healthcare programs, including Medicare and Medicaid.  In addition, the OIG may impose extensive and costly corporate integrity requirements upon a healthcare provider that is the subject of a false claims judgement or settlement.  These requirements may include the creation of a formal compliance program, the appointment of a government monitor, and the imposition of annual reporting requirements and audits conducted by an independent review organization to monitor compliance with the terms of the agreement and relevant laws and regulations.

The Civil False Claims Act prohibits the known filing of a false claim or the known use of false statements to obtain payments.  Penalties for violations include fines ranging from $5,500 to $11,000, plus treble damages, for each claim filed.  Provisions in the Civil False Claims Act also permit individuals to bring actions against individuals or businesses in the name of the government as so called “qui tam” relators.  If a qui tam relator’s claim is successful, he or she is entitled to share the government’s recovery.

Both direct enforcement activity by the government and quit tam actions have increased significantly in recent years and have increased the risk that a healthcare company may have to defend a false claims action, pay fines or be excluded from the Medicare and/or Medicaid programs as a result of an investigation arising out of this type of an action.  Because of the complexity of the government regulations applicable to the healthcare industry, the Company cannot assure that Vitas will not be the subject of other actions under the False Claims Act.

State False Claims Laws.  Several states in which Vitas currently operates have adopted state false claims laws that mirror to some degree the federal false claims laws.  While these statutes vary in scope and effect, the penalties for violating these false claims laws include administrative, civil and/or criminal fines and penalties, imprisonment, and the imposition of multiple damages.

The Stark Law and State Physician Self-Referral Laws.  Section 1877 of the Social Security Act, commonly known as the “Stark Law”, prohibits physicians from referring Medicare or Medicaid patients for “designated health services” to entities in which they hold an ownership or investment interest or with whom they have a compensation arrangement, subject to a number of statutory and regulatory exceptions.  Penalties for violating the Stark Law are severe and include:

●      Denial of payment;

●      Civil monetary penalties of $15,000 per referral or $1,000,000 for “circumvention schemes;”

●      Assessments equal to 200% of the dollar value of each such service provided; and

●      Exclusion from the Medicare and Medicaid programs.

Hospice care itself is not specifically listed as a designated health service; however, certain services that Vitas provides, or in the future may provide, are among the services identified as designated health services for purposes of the self-referral laws.  The Company cannot assure that future regulatory changes will not result in hospice services becoming subject to the Stark Law’s ownership, investment or compensation prohibitions in the future.

Many states where Vitas operates have laws similar to the Stark Law, but with broader effect because they apply regardless of the source of payment for care.  Penalties similar to those listed above as well as the loss of state licensure may be imposed in the event of a violation of these state self-referral laws.  Little precedent exists regarding the interpretation or enforcement of these statutes.

Civil Monetary Penalties.  The Civil Monetary Penalties Statute provides that civil penalties ranging between $10,000 and $50,000 per claim or act may be imposed on any person or entity that knowingly submits improperly filed claims for federal health benefits or that offers or makes payment to induce a beneficiary or

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provider to reduce or limit the use of health care services or to use a particular provider or supplier.  Civil monetary penalties may be imposed for violations of the anti-kickback statute and for the failure to return known overpayments, among other things.

Prohibition on Employing or Contracting with Excluded Providers.  The Social Security Act and federal regulations state that individuals or entities that have been convicted of a criminal offense related to the delivery of an item or service under Medicare or Medicaid programs or that have been convicted, under state and federal law, of a criminal offense relating to neglect or abuse of residents in connection with the delivery of a healthcare item or service cannot participate in any federal health care programs, including Medicare and Medicaid.  Additionally, individuals and entities convicted of fraud, that have had their licenses revoked or suspended, or that have failed to provide services of adequate quality also may be excluded from the Medicare and Medicaid programs.  Federal regulations prohibit Medicare providers, including hospice programs, from submitting claims for items or services or their related costs if an excluded provider furnished those items or services.  The OIG maintains a list of excluded persons and entities.   Nonetheless, it is possible that Vitas might unknowingly bill for services provided by an excluded person or entity with whom it contracts.  The penalty for contracting with an excluded provider may range from civil monetary penalties of $50,000 and damages of up to three times the amount of payment that was inappropriately received.

Corporate Practice of Medicine and Fee Splitting.  Most states have laws that restrict or prohibit anyone other than a licensed physician, including business entities such as corporations, from employing physicians and/or prohibit payments or fee-splitting arrangements between physicians and corporations or unlicensed individuals.  Penalties for violations of corporate practice of medicine and fee-splitting laws vary from state to state, but may include civil or criminal penalties, the restructuring or termination of the business arrangements between the physician and unlicensed individual or business entity, or even the loss of the physician’s license to practice medicine.  These laws vary widely from state to state both in scope and origin (e.g. statute, regulation, Attorney General opinion, court ruling, agency policy) and in most instances have been subject to only limited interpretation by the courts or regulatory bodies.

Vitas employs or contracts with physicians to provide medical direction and patient care services to its patients.  Vitas has made efforts in those states where certain contracting or fee arrangements are restricted or prohibited to structure those arrangements, including its palliative care offerings, in compliance with the applicable laws and regulations.  Despite these efforts, however, the Company cannot assure that agency officials charged with enforcing these laws will not interpret Vitas’ contracts with employed or independent contractor physicians as violating the relevant laws or regulations.  Future determinations or interpretations by individual states with corporate practice of medicine or fee splitting restrictions may force Vitas to restructure its arrangements with physicians in those locations.

Health Information Practices.  There currently are numerous legislative and regulatory initiatives at both the state and federal levels that address patient privacy concerns.  In particular, federal regulations issued under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) require Vitas to protect the privacy and security of patients’ individual health information.  HIPAA does not automatically preempt applicable state laws and regulations concerning Vitas’ use, disclosure and maintenance of patient health information, which means that Vitas is subject to a complex regulatory scheme that, in many instances, requires Vitas to comply with both federal and state laws and regulations.

Additional Federal and State Regulation. Federal and state governments also regulate various aspects of the hospice industry.  In particular, Vitas’ operations are subject to federal and state health regulatory laws covering professional services, the dispensing of drugs and certain types of hospice activities.  Some of Vitas’ employees are subject to state laws and regulations governing the ethics and professional practice of medicine, respiratory therapy, pharmacy and nursing.

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Compliance with Health Regulatory Laws.  Vitas maintains an internal regulatory compliance review program and from time to time retains regulatory counsel for guidance on compliance matters.  The Company cannot assure, however, that Vitas’ practices, if reviewed, would be found to be in compliance with applicable health regulatory laws, as such laws ultimately may be interpreted, or that any non-compliance with such laws would not have a material adverse effect, including an effect on its brand reputation, on Vitas.

Environmental Matters

Roto-Rooter’s operations are subject to various federal, state, and local laws and regulations regarding environmental matters and other aspects of the operation of a sewer and drain cleaning, HVAC and plumbing services business.  For certain other activities, such as septic tank and grease trap pumping, Roto-Rooter is subject to state and local environmental health and sanitation regulations.

At December 31, 2011, the Company’s accrual for its estimated liability for potential environmental cleanup and related costs arising from the sale of DuBois Chemicals Inc. (“DuBois”) amounted to $1.7 million.  Of this balance, $901,000 is included in other liabilities and $826,000 is included in other current liabilities.  The Company is contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million.  On the basis of a continuing evaluation of the Company’s potential liability, and in consultation with the Company’s environmental attorney, management believes that it is not probable this additional liability will be paid.  Accordingly, no provision for this contingent liability has been recorded.  Although it is not presently possible to reliably project the timing of payments related to the Company’s potential liability for environmental costs, management believes that any adjustments to its recorded liability will not materially adversely affect its financial position or results of operations.

The Company, to the best of its knowledge, is currently in compliance in all material respects with the environmental laws and regulations affecting its operations.  Such environmental laws, regulations and enforcement proceedings have not required the Company to make material increases in or modifications to its capital expenditures and they have not had a material adverse effect on sales or net income.  Capital expenditures for the purpose of complying with environmental laws and regulations during 2012 and 2013 with respect to continuing operations are not expected to be material in amount; there can be no assurance, however, that presently unforeseen legislative enforcement actions will not require additional expenditures.

Employees

On December 31, 2011, Chemed Corporation had a total of 13,733 employees.

Available Information

The Company’s Internet address is www.chemed.com .  The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are electronically available through the SEC (http://www.sec.gov) or the Company’s website as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC.

Annual reports, press releases, Board Committee charters, Code of Ethics, Corporate governance guidelines and other printed materials may be obtained from the website or from Chemed Investor Relations without charge by writing to 2600 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio 45202 or by calling 800-2CHEMED or 513-762-6429.

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Item 1A.  Risk Factors

You should carefully consider the risks described below.  They are not the only ones facing the Company.  Other risks and uncertainties not currently known to us or that we deem to be immaterial may also materially and adversely affect our business, financial condition, or results of operations.

GENERAL

We have incurred debt to finance the operations of the Company.

The Company has debt service obligations that may restrict our operating flexibility.  We cannot assure you that our cash flow from operations will be sufficient to service our debt, which may require us to borrow additional funds, or restructure or otherwise refinance our debt.  In addition, the Company has the ability to expand its debt and borrowing capacity subject to various restrictions and covenants defined by its creditors.  The interest rate the Company pays will fluctuate from time to time based upon a number of factors including current LIBOR rates and Company operating performance.  Significant changes in these factors could result in a material change in the Company’s interest expense.

Our indebtedness could have important consequences for our business.  Among other things, our indebtedness may:

●       Limit our ability to obtain additional financing;

●       Limit our flexibility in planning for, or reacting to, changes in the markets in which we compete;

●       Place us at a competitive disadvantage relative to our competitors with less indebtedness;

●       Increase our exposure to interest rate increases due to variable interest rates on certain borrowings;

●       Limit our ability to complete future acquisitions;

●       Limit our ability to make capital expenditures;

●       Render us more vulnerable to general adverse economic and industry conditions; and

●       Require us to dedicate a substantial portion of our cash flow to service and repay our debt.

Servicing our indebtedness will require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

Our ability to repay or to refinance our indebtedness and to pay interest on our indebtedness will depend on our operating performance, which may be affected by factors beyond our control.  These factors could include operating difficulties, increased operating costs, our competitors’ actions and regulatory developments.  Our ability to meet our debt service and other obligations may depend in significant part on the extent to which we successfully implement our business strategy.  We cannot assure you that we will be able to implement our strategy fully or that the anticipated results of our strategy will be realized.  Current credit market conditions may make it difficult for us to obtain new financing or refinance our current debt on terms and conditions acceptable to us.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional equity capital or restructure our debt.  We cannot assure you that our cash flows and capital resources will be sufficient to make scheduled payments of

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principal and interest on our indebtedness in the future or that alternative measures would successfully meet our debt service obligations.

As certain of our obligations under our credit facilities and certain other borrowings could bear interest at floating rates, an increase in interest rates could further increase our debt service costs and adversely affect our cash flows.

We have debt that is convertible into shares based on the Company’s stock price.  This could significantly dilute the ownership percentage of current stockholders.

The agreements and instruments governing our outstanding debt contain restrictions and limitations that could significantly impact our ability to operate our business and adversely affect the price of our Capital Stock.

The operating and financial restrictions and covenants in our instruments of indebtedness restrict our ability to:

●       Incur additional debt;

●       Issue and sell capital stock of subsidiaries;

●       Sell assets;

●       Engage in transactions with affiliates;

●       Restrict distributions from subsidiaries;

●       Incur liens;

●       Engage in business other than permitted businesses;

●       Engage in sale/leaseback transactions;

●       Engage in mergers or consolidations;

●       Make capital expenditures;

●       Make guarantees;

●       Make investments and acquisitions;

●       Enter into operating leases;

●       Hedge interest rates; and

●       Prepay other debt.

Moreover, if we are unable to meet the terms of the financial covenants or if we breach any of these covenants, a default could result under one or more of these agreements.  A default, if not waived by our lenders, could accelerate repayment of our outstanding indebtedness.  If acceleration occurs, we may not be able to repay our

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debt and it is unlikely that we would be able to borrow sufficient additional funds to refinance such debt on acceptable terms.  In the event of any default under our credit facilities, the lenders thereunder could elect to declare all outstanding borrowings, together with accrued and unpaid interest and other fees, to be due and payable, and to require us to apply all of our available cash to repay these borrowings, any of which would be an event of default.

We depend on our management team and the loss of their service could have a material adverse effect on our business, financial condition and results of operations.

Our success depends to a large extent upon the continued services of our executive management team.  The loss of key personnel could have a material adverse effect on our business, financial condition, results of operations and cash flows. Additionally, we cannot assure you that we will be able to attract or retain other skilled personnel in the future.

Environmental compliance costs and liabilities could increase our expenses and adversely affect our financial condition.

Our operations are subject to numerous environmental, health and safety laws and regulations that prohibit or restrict the discharge of pollutants into the environment and regulate employee exposure to hazardous substance in the workplace.  Failure to comply with these laws could subject us to material costs and liabilities, including civil and criminal fines, costs to cleanup contamination we cause and, in some circumstances, costs to cleanup contamination we discover on our own property but did not cause.

Because we use and generate hazardous materials in some of our operations, we are potentially subject to material liabilities relating to the cleanup of contamination and personal injury claims.  In addition, we have retained certain environmental liabilities in connection with the sale of former businesses.  We are currently funding the cleanup of historical contamination at one of our former properties and contributing to the cleanup of third-party sites as a result of our sale of our former subsidiary DuBois Chemicals Inc.  Although we have established a reserve for these liabilities, actual cleanup costs may exceed our current estimates due to factors beyond our control, such as the discovery of additional contamination or the enforcement of more stringent cleanup requirements.  New laws and regulations or their stricter enforcement, the discovery of presently unknown conditions or the receipt of additional claims for indemnification could require us to incur costs or become the basis for new or increased liabilities including impairment of our brand that could have a material adverse effect on our business, financial condition and results of operations.

We are subject to certain anti-takeover statutes that might make it more difficult to effect a change in control of the Company.

We are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.  The application of Section 203 could have the effect of delaying or preventing a change of control that could be advantageous to stockholders.

An adverse ruling against us in certain litigation could have an adverse effect on our financial condition and results of operations.

We are involved in litigation incidental to the conduct of our business currently and from time to time.  The damages claimed against us in some of these cases are substantial.

See the “Legal Proceedings” sections of this 10-K for discussion of particular matters.

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We cannot assure you that we will prevail in pending cases.  Regardless of the outcome, such litigation is costly to manage, investigate and defend, and the related defense costs, diversion of management’s time and related publicity may adversely affect the conduct of our business and the results of our operations.

ROTO-ROOTER

We face intense competition from numerous, fragmented competitors.  If we do not compete effectively, our business may suffer.

We face intense competition from numerous competitors, many of whom have less leverage than we do.  The sewer, drain and pipe cleaning, and plumbing repair businesses are highly fragmented, with the bulk of the industries consisting of local and regional competitors.  We compete primarily on the basis of advertising, range of services provided, name recognition, availability of emergency service, speed and quality of customer service, service guarantees and pricing.  Our competitors may succeed in developing new or enhanced products and services more successful than ours and in marketing and selling existing and new products and services better than we do.  In addition, new competitors may emerge.  We cannot make any assurances that we will continue to be able to compete successfully with any of these companies.

Our operations are subject to numerous laws and regulations, exposing us to potential claims and compliance costs that could adversely affect our business.

We are subject to federal, state and local laws and regulations relating to franchising, insurance and other aspects of our business.  These are discussed in greater detail under “Government Regulations” in the Description of Business section hereof.  If we fail to comply with existing or future laws and regulations, we may be subject to governmental or judicial fines and sanctions.  Our franchising activities are subject to various federal and state franchising laws and regulations, including the rules and regulations of the Federal Trade Commission (the “FTC”) regarding the offering or sale of franchises.  The rules and regulations of the FTC require us to provide all of our prospective franchisees with specific information regarding us and our franchise program in the form of a detailed franchise offering circular.  In addition, a number of states require us to register our franchise offering prior to offering or selling franchises in such states.  Various state laws also provide for certain rights in favor of franchisees, including (i) limitations on the franchisor’s ability to terminate a franchise except for good cause, (ii) restrictions on the franchisor’s ability to deny renewal of a franchise, (iii) circumstances under which the franchisor may be required to purchase certain inventory of franchisees when a franchise is terminated or not renewed in violation of such laws and (iv) provisions relating to arbitration.  The ability to engage in the plumbing repair business is also subject to certain limitations and restrictions imposed by the state and local licensing laws and regulations.   We cannot predict what legislation or regulations affecting our business will be enacted in the future, how existing or future laws or regulations will be enforced, administered and interpreted, or the amount of future expenditures that may be required to comply with these laws or regulations.  Compliance costs associated with governmental regulations could have a material adverse effect on our business, financial condition and results of operations.

Roto-Rooter’s loss of key management personnel or its inability to hire and retain skilled employees could adversely affect its business, financial condition and results of operations.

Roto-Rooter’s future success significantly depends upon the continued service of its senior management personnel.  The loss of one or more of Roto-Rooter’s key senior management personnel or its inability to hire and retain new skilled employees could negatively impact its ability to maintain or increase customer calls and jobs, a key aspect of its growth strategy, and could adversely affect its future operating results.

Competition for skilled employees, particularly related to licensed plumbers, is intense, and the process of locating and recruiting skilled employees with the combination of qualifications and attributes required to adequately perform plumbing duties can be difficult and lengthy.  We cannot assure you that Roto-Rooter will be successful in attracting, retaining or training highly skilled personnel.  Roto-Rooter’s business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees.

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Cybersecurity

In the normal course of business, our information technology systems hold sensitive customer information including names, addresses and partial credit card information.  Additionally, we utilize those same systems to perform our day-to-day activities, such as receiving customer calls, dispatching technicians to jobs and maintaining an accurate record of all transactions.  We have not experienced any attacks on our information technology systems that compromised customer data or the Company’s proprietary data.  We maintain our information technology systems with up to date safeguard protection against cyber-attacks including passive intrusion protection, firewalls and virus detection software.  Additionally, on a quarterly basis, we test our information technology systems using the latest cyber-attack software and methods to learn how a successful attack may be made.  We remedy any issues encountered during these tests.  However, these safeguards do not ensure that a significant cyber-attack could not occur.  A successful attack on our information technology systems could have significantly negative consequences to the business including liability for compromised customer information and business interruption.

VITAS

Vitas is highly dependent on payments from Medicare and Medicaid.  If there are changes in the rate or methods governing these payments, Vitas’ net patient service revenue and profits could materially decline.

In excess of 90% of Vitas’ net patient service revenue consists of payments from the Medicare and Medicaid programs.  Such payments are made primarily on a “per diem” basis, subject to annual reimbursement caps.  Because Vitas receives a per diem fee to provide eligible services to all patients, Vitas’ profitability is largely dependent upon its ability to manage the costs of providing hospice services to patients.  Increases in operating costs, such as labor and supply costs that are subject to inflation, without a compensating increase in Medicare and Medicaid rates, could have a material adverse effect on Vitas’ business in the future.  Medicare and Medicaid currently adjust the various hospice payment rates annually based primarily on the increase or decrease of the hospital wage index basket, regionally adjusted.  However, the increases may be less than actual inflation.  Vitas’ profitability could be negatively impacted if this adjustment were eliminated or reduced, or if Vitas’ costs of providing hospice services increased more than the annual adjustment.  In addition, cost pressures resulting from shorter patient lengths of stay and the use of more expensive forms of palliative care, including drugs and drug delivery systems, could negatively impact Vitas’ profitability.  Many payors are increasing pressure to control health care costs.  In addition, both public and private payors are increasing pressure to decrease, or limit increases in, reimbursement rates for health care services.  Vitas’ levels of revenue and profitability will be subject to the effect of possible reductions in coverage or payment rates by third-party payors, including payment rates from Medicare and Medicaid.

Each state that maintains a Medicaid program has the option to provide reimbursement for hospice services at reimbursement rates generally required to be at least as much as Medicare rates.  All states in which Vitas operates cover Medicaid hospice services; however, we cannot assure you that the states in which Vitas is presently operating or states into which Vitas could expand operations will continue to cover Medicaid hospice services.  In addition, the Medicare and Medicaid programs are subject to statutory and regulatory changes, retroactive and prospective rate and payment adjustments, administrative rulings, freezes and funding reductions, all of which may adversely affect the level of program payments and could have a material adverse effect on Vitas’ business.  We cannot assure that Medicare and/or Medicaid payments to hospices will not decrease.  Reductions in amounts paid by government programs for services or changes in methods or regulations governing payments could cause Vitas’ net patient service revenue and profits to materially decline.

Approximately 23% of Vitas’ hospice patients reside in nursing homes. Changes in the laws and regulations regarding payments for hospice services and “room and board” provided to Vitas’ hospice patients residing in nursing homes could reduce its net patient service revenue and profitability.

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For Vitas’ hospice patients receiving nursing home care under certain state Medicaid programs who elect hospice care under Medicare and Medicaid, the state generally must pay Vitas, in addition to the applicable Medicare or Medicaid hospice per diem rate, an amount equal to at least 95% of the Medicaid per diem nursing home rate for “room and board” furnished to the patient by the nursing home.  Vitas contracts with various nursing homes for the nursing homes’ provision of certain “room and board” services that the nursing homes would otherwise provide Medicaid nursing home patients.  Vitas bills and collects from the applicable state Medicaid program an amount equal to approximately 95% of the amount that would otherwise have been paid directly to the nursing home under the state’s Medicaid plan.  Under Vitas’ standard nursing home contracts, it pays the nursing home for these “room and board” services at approximately 100% of the Medicaid per diem nursing home rate.

The reduction or elimination of Medicare and Medicaid payments for hospice patients residing in nursing homes would reduce Vitas’ net patient service revenue and profitability.  In addition, changes in the way nursing homes are reimbursed for “room and board” services provided to hospice patients residing in nursing homes could affect Vitas’ ability to serve patients in nursing homes.

If Vitas is unable to maintain relationships with existing patient referral sources or to establish new referral sources, Vitas’ growth and profitability could be adversely affected.

Vitas’ success is heavily dependent on referrals from physicians, long-term care facilities, hospitals and other institutional health care providers, managed care companies, insurance companies and other patient referral sources in the communities that its hospice locations serve, as well as on its ability to maintain good relations with these referral sources.  Vitas’ referral sources may refer their patients to other hospice care providers or not to a hospice provider at all.  Vitas’ growth and profitability depend significantly on its ability to establish and maintain close working relationships with these patient referral sources and to increase awareness and acceptance of hospice care by its referral sources and their patients.  We cannot assure you that Vitas will be able to maintain its existing relationships or that it will be able to develop and maintain new relationships in existing or new markets.  Vitas’ loss of existing relationships or its failure to develop new relationships could adversely affect its ability to expand or maintain its operations and operate profitably.  Moreover, we cannot assure you that awareness or acceptance of hospice care will increase or remain at current levels.

Vitas operates in an industry that is subject to extensive government regulation and claims reviews, and changes in law and regulatory interpretations could reduce its net patient service revenue and profitability and adversely affect its financial condition and results of operations.

The healthcare industry is subject to extensive federal, state and local laws, rules and regulations relating to, among others:

●       Payment for services;

●       Conduct of operations, including fraud and abuse, anti-kickback prohibitions, self-referral prohibitions and false claims;

●       Privacy and security of medical records;

●       Employment practices; and

●       Various state approval requirements, such as facility and professional licensure, certificate of need, compliance surveys and other certification or recertification requirements.

Changes in these laws, rules and regulations or in interpretations thereof could reduce Vitas’ net patient service revenue and profitability.  Vitas’ ability to comply with such regulations is a key factor in determining the

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success of its business.  See the “Government Regulations” section of this 10-K for a greater description of these matters.

Fraud and Abuse Laws.  Vitas contracts with a significant number of health care providers and practitioners, including physicians, hospitals and nursing homes and arranges for these entities to provide services to Vitas’ patients.  Some of these health care providers and practitioners may refer, or be in a position to refer, patients to Vitas (or Vitas may refer patients to them).  These arrangements may not qualify for a safe harbor.  Vitas from time to time seeks guidance from regulatory counsel as to the changing and evolving interpretations and the potential applicability of the Anti-Kickback Law to its programs, and in response thereto, takes such actions as it deems appropriate.  Vitas generally believes that its contracts and arrangements with providers, practitioners and suppliers should not be found to violate the Anti-Kickback Law.  However, we cannot assure you that such laws will ultimately be interpreted in a manner consistent with Vitas’ practices.

Several health care reform proposals have included an expansion of the Anti-Kickback Law to include referrals of any patients regardless of payor source, which is similar to the scope of certain laws that have been enacted at the state level.  In addition, a number of states in which Vitas operates have laws, which vary from state to state, prohibiting certain direct or indirect remuneration or fee-splitting arrangements between health care providers, regardless of payor source, for the referral of patients to a particular provider.

The federal Ethics in Patient Referral Act, Section 1877 of the Social Security Act (commonly known as the “Stark Law”) prohibits physicians from referring Medicare or Medicaid patients for “designated health services” to entities in which they hold an ownership or investment interest or with whom they have a compensation arrangement, subject to certain statutory or regulatory exceptions.  We cannot assure you that future statutory or regulatory changes will not result in hospice services being subject to the Stark Law’s ownership, investment, compensation or referral prohibitions.  Several states in which Vitas operates have similar laws which likewise are subject to change.  Any such changes could adversely affect the business, financial condition and operating results of Vitas.

Further, under separate statutes, submission of claims for items or services that are “not provided as claimed” may lead to civil money penalties, criminal fines and imprisonment and/or exclusion from participation in Medicare, Medicaid and other federally funded state health care programs.  These false claims statutes include the federal False Claims Act, which allows any person to bring suit on behalf of the federal government, known as a qui tam action, alleging false or fraudulent Medicare or Medicaid claims or other violations of the statute and to share in any amounts paid by the entity to the government in fines or settlement.  See the discussion of the governmental investigations pending against Vitas under Other Healthcare Regulations, above.

Certificate of Need Laws.  Many states, including Florida, have certificate of need laws or other similar health planning laws that apply to hospice care providers.  These states may require some form of state agency review or approval prior to opening a new hospice program, to adding or expanding hospice services, to undertaking significant capital expenditures or under other specified circumstances.  Approval under these certificate of need laws is generally conditioned on the showing of a demonstrable need for services in the community.  Vitas may seek to develop, acquire or expand hospice programs in states having certificate of need laws.  To the extent that state agencies require Vitas to obtain a certificate of need or other similar approvals to expand services at existing hospice programs or to make acquisitions or develop hospice programs in new or existing geographical markets, Vitas’ plans could be adversely affected by a failure to obtain a certificate or approval.  In addition, competitors may seek administratively or judicially to challenge such an approval or proposed approval by the state agency.  Such a challenge, whether or not ultimately successful, could adversely affect Vitas.

Other Federal and State Regulations. The federal government and all states regulate various aspects of the hospice industry and Vitas’ business.  In particular, Vitas’ operations are subject to federal and state health regulatory laws, including those covering professional services, the dispensing of drugs and certain types of hospice activities.  Certain of Vitas’ employees are subject to state laws and regulations governing professional practice.

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Vitas’ operations are subject to periodic survey by governmental authorities and private accrediting entities to assure compliance with applicable state licensing, and Medicare and Medicaid certification and accreditation standards, as the case may be.  From time to time in the ordinary course of business, Vitas receives survey reports noting deficiencies for alleged failure to comply with applicable requirements.  Vitas reviews such reports and takes appropriate corrective action.  The failure to effect such action could result in one of Vitas’ hospice programs being terminated from the Medicare hospice program.  Any termination of one or more of Vitas’ hospice locations from the Medicare hospice program could adversely affect Vitas’ net patient service revenue and profitability and adversely affect its financial condition and results of operations.   The failure to obtain, renew or maintain any of the required regulatory approvals, certifications or licenses could materially adversely affect Vitas’ business and could prevent the programs involved from offering products and services to patients.  In addition, laws and regulations often are adopted to regulate new products, services and industries.  We cannot assure you that either the states or the federal government will not impose additional regulations on Vitas’ activities, which might materially adversely affect Vitas, including impairing the value of its brand.

Claims Review.  The Medicare and Medicaid programs and their fiscal intermediaries and other payors periodically conduct pre-payment or post-payment reviews and other reviews and audits of health care claims, including hospice claims.  As a result of such reviews or audits, Vitas could be required to return any amounts found to be overpaid, or amounts found to be overpaid could be recouped through reductions in future payments.  There is pressure from state and federal governments and other payors to scrutinize health care claims to determine their validity and appropriateness.  Vitas’ claims have been subject to review and audit.  We cannot assure you that reviews and/or similar audits of Vitas’ claims will not result in material recoupments, denials or other actions that could have a material adverse effect on Vitas’ business, financial condition and results of operations.  See the discussion of OIG investigations pending against Vitas under Other Health Care Regulations, above.

Regulation and Provision of Continuous Home Care.  Vitas provides continuous home care to patients requiring such care.  Continuous home care is provided to patients while at home, during periods of crisis when intensive monitoring and care, primarily nursing care, is required in order to achieve palliation or management of acute medical symptoms.  Continuous home care requires a minimum of 8 hours of care within a 24-hour day, which begins and ends at midnight.  The care must be predominantly nursing care provided by either a registered nurse or licensed practical nurse.

Continuous home care can be challenging for a hospice to provide for a number of reasons, including the need to have available sufficient skilled and trained staff to furnish such care, the need to manage the staffing and provision of such care, and a shortage of nurses that can make it particularly difficult to attract and retain nurses that are required to furnish a majority of such care.  Medicare reimbursement for continuous home care has been calculated by multiplying the applicable continuous home care hourly rate by the number of hours of care provided.  If the care was provided for less than one hour, Medicare requires reporting in 15-minute increments of care provided, with no rounding.

Medicare reimbursement for continuous home care is subject to a number of requirements posing further challenges for a hospice providing such care.  For example, if a patient requires skilled interventions for palliation or symptom management that can be accomplished in less than 8 aggregate hours within the 24-hour period, if the majority of care can be accomplished by someone other than a registered nurse or a licensed practical nurse (e.g., if a majority of care is furnished by a home health aide or homemaker), or if for any reason less than 8 hours of direct care are provided (such as when a patient dies before 8 AM even if 7 or more hours of care has been provided), the care rendered cannot be reimbursed by Medicare at the continuous home care rate (although the care instead may be eligible for Medicare reimbursement at the reduced routine home care day rate).  As a result of such requirements, Vitas may incur the costs of providing services intended to be continuous home care services yet be unable to bill or be reimbursed for such services at the continuous home care rate.  We cannot assure you that challenges in providing continuous home care will not cause Vitas’ net patient service revenue and profits to materially decline or that reviews and/or similar audits of Vitas’ claims will not result in material recoupments, denials or other actions that could have a material adverse effect on Vitas’ business, financial condition and results of operations.

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Compliance.  Vitas maintains an internal regulatory compliance review program and from time to time retains regulatory counsel for guidance on compliance matters.  We cannot assure you, however, that Vitas’ practices, if reviewed, would be found to be in compliance with applicable health regulatory laws, as such laws ultimately may be interpreted, or that any non-compliance with such laws would not have a material adverse effect on Vitas.

Federal and state legislative and regulatory initiatives could require Vitas to expend substantial sums on acquiring, implementing and supporting new information systems, which could negatively impact its profitability.

There are currently numerous legislative and regulatory initiatives at both the state and federal levels that address patient privacy concerns.  We cannot predict the total financial or other impact of the regulations on Vitas’ operations.  In addition, although Vitas’ management believes it is in compliance with the requirement of patient privacy regulations, we cannot assure you that Vitas will not be found to have violated state and federal laws, rules or guidelines surrounding patient privacy.  Compliance with current and future HIPAA requirements or any other federal or state privacy initiatives could require Vitas to make substantial investments, which could negatively impact its profitability and cash flows.

Vitas’ growth strategies may not be successful, which could adversely affect its business.

A significant element of Vitas’ growth strategy is expected to include expansion of its business in new and existing markets.  This aspect of Vitas’ growth strategy may not be successful, which could adversely impact its growth and profitability.  We cannot assure you that Vitas will be able to:

●    Identify markets that meet its selection criteria for new hospice locations;

●    Hire and retain qualified management teams to operate each of its new hospice locations;

●    Manage a large and geographically diverse group of hospice locations;

●    Become Medicare and Medicaid certified in new markets;

●    Generate sufficient hospice admissions in new markets to operate profitably in these new markets;

●    Compete effectively with existing hospices in new markets; or

●    Obtain state licensure and/or a certificate of need from appropriate state agencies in new markets.

In addition to growing existing locations and developing new hospice locations, Vitas’ growth is expected to include expansion through acquisition of other hospices.  We cannot assure you that Vitas’ acquisition strategy will be successful.  The success of Vitas’ acquisition strategy depends upon a number of factors, including:

●    Its ability to identify suitable acquisition candidates;

●    Its ability to negotiate favorable acquisition terms, including purchase price, which may be adversely affected due to increased competition with other buyers;

●    The availability of financing on favorable terms, or at all;

●    Its ability to integrate effectively the systems and operations of acquired hospices;

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●    Its ability to retain key personnel of acquired hospices; and

●    Its ability to obtain required regulatory approvals.

Acquisitions involve a number of other risks, including diversion of management’s attention from other business concerns and assuming known or unknown liabilities of acquired hospices, including liabilities for failure to comply with health care laws and regulations.  Integrating acquired hospices may place significant strains on Vitas’ current operating and financial systems and controls.  Vitas may not successfully overcome these risks or any other problems encountered in connection with its acquisition strategy.

In addition, since 1990, Vitas has acquired hospice programs, some of which involved acquisitions of hospice programs from not-for-profit entities.  Vitas believes that acquisitions of not-for-profit programs are generally more complex than acquisitions from for-profit entities and that a substantial number of acquisition opportunities are likely to involve acquisitions from not-for-profit entities.  Such acquisitions are subject to provisions of the Internal Revenue Code and, in certain states, state attorney general powers, which have been interpreted to require that the consideration paid for the assets purchased be at fair market value and, where applicable, that any fees paid for services be reasonable.  In many states there is no mechanism for state attorney general pre-clearance of transactions to assure that applicable standards have been met.  Entities that acquired not-for-profit hospices could face potential liability if the acquisition transaction is not structured to comply with Internal Revenue Code and state law requirements, and in some cases the transaction could be enjoined or subject to rescission.  The acquisition of not-for-profit businesses, including the fairness of the purchase price paid, has received increasing regulatory scrutiny by state attorneys general and other regulatory authorities.  Although Vitas believes that reasonable actions have been taken to date to establish the fair market value of assets purchased in prior acquisitions of hospice operations from not-for-profit entities and the reasonableness of fees paid for services, we cannot assure you that such transactions or any future similar transactions will not be challenged or that, if challenged, the results of such challenge would not have a material adverse effect on Vitas’ business.

Vitas’ loss of key management personnel or its inability to hire and retain skilled employees could adversely affect its business, financial condition and results of operations.

Vitas’ future success significantly depends upon the continued service of its senior management personnel.  The loss of one or more of Vitas’ key senior management personnel or its inability to hire and retain new skilled employees could negatively impact Vitas’ ability to maintain or increase patient referrals, a key aspect of its growth strategy, and could adversely affect its future operating results.

Competition for skilled employees is intense, and the process of locating and recruiting skilled employees with the combination of qualifications and attributes required to care effectively for terminally ill patients and their families can be difficult and lengthy.  We cannot assure you that Vitas will be successful in attracting, retaining or training highly skilled nursing, management, community education, operations, admissions and other personnel.  Vitas’ business could be disrupted and its growth and profitability negatively impacted if it is unable to attract and retain skilled employees.

A nationwide shortage of qualified nurses could adversely affect Vitas’ profitability, growth and ability to continue to provide quality, responsive hospice services to its patients as nursing wages and benefits increase.

The substantial majority of Vitas’ workforce is nurses.  Vitas depends on qualified nurses to provide quality, responsive hospice services to its patients.  The current nationwide shortage of qualified nurses impacts some of the markets in which Vitas provides hospice services.  In response to this shortage, Vitas has adjusted its wages and benefits to recruit and retain nurses and to engage contract nurses.  Vitas’ inability to attract and retain qualified nurses could adversely affect its ability to provide quality, responsive hospice services to its patients and its ability to increase or maintain patient census in those markets.  Increases in the wages and benefits required to attract and retain qualified nurses or an increase in reliance on contract nurses could negatively impact profitability.

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Vitas may not be able to compete successfully against other hospice providers, and competitive pressures may limit its ability to maintain or increase its market position and adversely affect its profitability, financial condition and results of operations.

Hospice care in the United States is highly competitive.  In many areas in which Vitas’ hospices are located, they compete with a large number of organizations, including:

●       Community-based hospice providers;

●       National and regional companies;

●       Hospital-based hospice and palliative care programs;

●       Physician groups;

●       Nursing homes;

●       Home health agencies;

●       Infusion therapy companies; and

●       Nursing agencies.

Various health care companies have diversified into the hospice market.  Other companies, including hospitals and health care organizations that are not currently providing hospice care, may enter the markets Vitas serves and expand the variety of services offered to include hospice care.  We cannot assure you that Vitas will not encounter increased competition in the future that could limit its ability to maintain or increase its market position, including competition from parties in a position to impact referrals to Vitas.  Such increased competition could have a material adverse effect on Vitas’ business, financial condition and results of operations.

Changes in rates or methods of payment for Vitas’ services could adversely affect its revenues and profits.

Managed care organizations have grown substantially in terms of the percentage of the population they cover and their control over an increasing portion of the health care economy.  Managed care organizations have continued to consolidate to enhance their ability to influence the delivery of health care services and to exert pressure to control health care costs.  Vitas has a number of contractual arrangements with managed care organizations and other similar parties.

Vitas provides hospice care to many Medicare beneficiaries who receive their non-hospice health care services from health maintenance organizations (“HMOs”) under Medicare risk contracts.  Under such contracts between HMOs and the federal Department of Health and Human Services, the Medicare payments for hospice services are excluded from the per-member, per-month payment from Medicare to HMOs and instead are paid directly by Medicare to the hospices.  As a result, Vitas’ payments for Medicare beneficiaries enrolled in Medicare risk HMOs are processed in the same way with the same rates as other Medicare beneficiaries.  We cannot assure, however, that payment for hospice services will continue to be excluded from HMO payment under Medicare risk contracts and similar Medicare managed care plans or that if not excluded, managed care organization or other large third-party payors would not use their power to influence and exert pressure on health care providers to reduce costs in a manner that could have a material adverse effect on Vitas’ business, financial condition and results of operations.

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Liability claims may have an adverse effect on Vitas, and its insurance coverage may be inadequate.

Participants in the hospice industry are subject to lawsuits alleging negligence, product liability or other similar legal theories, many of which involve large claims and significant defense costs.  From time to time, Vitas is subject to such and other types of lawsuits.  See the description below under Legal Proceedings.  The ultimate liability for claims, if any, could have a material adverse effect on its financial condition or operating results.  Although Vitas currently maintains liability insurance intended to cover the claims, we cannot assure you that the coverage limits of such insurance policies will be adequate or that all such claims will be covered by the insurance.  In addition, Vitas’ insurance policies must be renewed annually and may be subject to cancellation during the policy period.  While Vitas has been able to obtain liability insurance in the past, such insurance varies in cost, is difficult to obtain and may not be available in the future on terms acceptable to Vitas, if at all.

A successful claim in excess of the insurance coverage could have a material adverse effect on Vitas.  Claims, regardless of their merit or eventual outcome, also may have a material adverse effect on Vitas’ business and reputation due to the costs of litigation, diversion of management’s time and related publicity.

Vitas procures professional liability coverage on a claims-made basis.  The insurance contracts specify that coverage is available only during the term of each insurance contract.  Vitas’ management intends to renew or replace the existing claims-made policy annually but such coverage is difficult to obtain, may be subject to cancellation and may be written by carriers that are unable, or unwilling to pay claims.  During fiscal 2001, Vitas was notified that one of its prior carriers was ordered into rehabilitation, and in early fiscal 2002, into liquidation, creating the possibility that certain prior year claims could be underinsured or uninsured.  Certain claims have been asserted where the coverage would be the responsibility of this prior carrier and/or other carriers that may not have the financial wherewithal to satisfy the claims.  Additionally, some risks and liabilities, including claims for punitive damages, are not covered by insurance.

Cybersecurity

In the normal course of business, our information technology systems hold sensitive patient information including patient demographic data, eligibility for various medical plans including Medicare and Medicaid and protected health information.  Additionally, we utilize those same systems to perform our day-to-day activities, such as receiving referrals, assigning medical teams to patients, documenting medical information and maintaining an accurate record of all transactions.  We have not experienced any attacks on our information technology systems that have compromised patient data or the Company’s proprietary data.  We maintain our information technology systems with up to date safeguard protection against cyber-attacks including passive intrusion protection, firewalls and virus detection software.  Additionally, on a quarterly basis, we test our information technology systems using the latest cyber-attack software and methods to learn how a successful attack may be made.  We remedy any issues encountered during these tests.  As discussed previously, we are subject to and comply with HIPPA regulations.  However, these safeguards do not ensure that a significant cyber-attack could not occur.  A successful attack on our information technology systems could have significantly negative consequences to the business including liability for compromised patient information and business interruption.

Item 1B.  Unresolved Staff Comments

None.

Item 2.  Properties

The Company’s corporate offices and the headquarters for the Roto-Rooter Group are located in Cincinnati, Ohio.  Roto-Rooter has manufacturing and distribution center facilities in West Des Moines, Iowa and has 105 leased and owned office and service facilities in 29 states.  Vitas headquartered in Miami, operates 52 programs from 158 leased facilities and 34 inpatient units in 18 states and the District of Columbia.

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All “owned” property is held in fee and is subject to the security interests of the holders of our debt instruments.  The leased properties have lease terms ranging from one year to seven years.  Management does not foresee any difficulty in renewing or replacing the remainder of its current leases.  The Company considers all of its major operating properties to be maintained in good operating condition and to be generally adequate for present and anticipated needs.

Item 3.  Legal Proceedings

Vitas is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White.  This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives.  The case seeks payment of penalties, interest and Plaintiffs’ attorney fees.  Vitas contests these allegations.  In December 2009, the trial court denied plaintiff’s motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court’s denial on the off-the-clock and sales representation exemption claims.  Plaintiffs have filed an appeal of this decision.  We are unable to estimate our potential liability or potential range of loss, if any, with respect to this case.

On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter Services Company and Chemed.  They also seek payment of penalties, interest and Plaintiffs’ attorney fees.  The Company contests these allegations.  In September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements agreeing to arbitrate claims arising out of their employment.  We are unable to estimate our potential liability, if any, related to this case.

On November 14, 2011 Luann and Michael Cosgrove and Dawn Mills filed a class action lawsuit against Roto-Rooter in Minnesota State District Court for the 4th Judicial District alleging unnecessary excavation work in Minnesota.  We removed the case to federal court.  Plaintiffs seek damages, injunctive relief, attorney fees and interest.  Roto-Rooter contests these allegations.  This lawsuit is in its early stage and we are unable to estimate our potential liability, if any, with respect to these allegations.

On January 12, 2012, the Greater Pennsylvania Carpenters Pension Fund filed a putative class action lawsuit in the United States District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Tim O’Toole.  It alleges violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants.  The suit, Greater Pennsylvania Carpenters Pension Fund v. Chemed Corp., et al., Civil Action No. 1:12-cv-28 (S.D. Ohio), concerns the VITAS hospice segment of the Company's business.   Plaintiff seeks, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and November 16, 2011, compensatory damages in an unspecified amount and attorneys' fees and expenses, arising from defendants' failure to disclose an alleged fraudulent scheme to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.   Defendants believe the allegations are without merit, and intend to defend vigorously against them.

Regardless of outcome, such litigation can adversely affect the Company through defense costs, diversion of management’s time, and related publicity.  In the normal course of business, we are a party to various claims and legal proceedings.  We record a reserve for these matters when an adverse outcome is probable and the amount of the potential liability is reasonably estimable.

See also the OIG matters pending against Vitas under Other Health Care Regulations, above.

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Item 4.  Mine Safety Disclosures

               None

Executive Officers of the Company

Name	Age	Office	First Elected
Kevin J. McNamara	58	President and Chief Executive Officer	August 2, 1994 (1)
Timothy S. O’Toole	56	Executive Vice President	May 18, 1992 (2)
Spencer S. Lee	56	Executive Vice President	May 15, 2000 (3)
David P. Williams	51	Executive Vice President and Chief Financial Officer	March 5, 2004 (4)
Arthur V. Tucker, Jr.	62	Vice President and Controller	February 1, 1989 (5)

(1)   Mr. K. J. McNamara is President and Chief Executive Officer of the Company and has held these positions since August 1994 and May 2001, respectively.  Previously, he served as an Executive Vice President, Secretary and General Counsel of the Company, since November 1993, August 1986 and August 1986, respectively.  He previously held the position of Vice President of the Company, from August 1986 to May 1992.

(2)   Mr. T.S. O’Toole is an Executive Vice President of the Company and has held this position since May 1992.  He is also Chief Executive Officer of Vitas, a wholly owned subsidiary of the Company, and has held this position since February 24, 2004.  Previously, from May 1992 to February 24, 2004, he also served the Company as Treasurer.

(3)   Mr. S. S. Lee is an Executive Vice President of the Company and has held this position since May 15, 2000.  Mr. Lee is also Chairman and Chief Executive Officer of Roto-Rooter Services Company, a wholly owned subsidiary of the Company, and has held this position since January 1999.  Previously, he served as a Senior Vice President of Roto-Rooter Services Company from May 1997 to January 1999.

(4)   Mr. D. P. Williams is an Executive Vice President and the Chief Financial Officer of the company and has held these positions since August 10, 2007 and March 5, 2004, respectively.  Mr. Williams is also Senior Vice President and Chief Financial Officer of Roto-Rooter Group, Inc., and has held these positions since January 1999.

(5)   Mr. A. V. Tucker, Jr. is a Vice President and Controller of the Company and has held these positions since February 1989.  From May 1983 to February 1989, he held the position of Assistant Controller of the Company.

Each executive officer holds office until the annual election at the next annual organizational meeting of the Board of Directors of the Company which is scheduled to be held on May 21, 2012.

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PART II

Item 5.  Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s Capital Stock (par value $1 per share) is traded on the New York Stock Exchange under the symbol CHE.  The range of the high and low sale prices on the New York Stock Exchange and dividends paid per share for each quarter of 2010 and 2011 are set forth below.

	Closing				Dividends Paid
	High		Low		Per Share
2010
First Quarter	$	57.18	$	46.41	$	.12
Second Quarter		58.34		51.31		.12
Third Quarter		57.30		49.52		.14
Fourth Quarter		64.66		55.41		.14
2011
First Quarter	$	66.71	$	61.96	$	.14
Second Quarter		72.02		63.94		.14
Third Quarter		67.08		50.64		.16
Fourth Quarter		60.68		48.24		.16

Future dividends are necessarily dependent upon the Company’s earnings and financial condition, compliance with certain debt covenants and other factors not presently determinable.

As of February 15, 2012, there were approximately 2,274 stockholders of record of the Company’s Capital Stock.  This number only includes stockholders of record and does not include stockholders with shares beneficially held in nominee name or within clearinghouse positions of brokers, banks or other institutions.

During 2011, the number of shares of Capital Stock repurchased by the Company, the weighted average price paid for each share, the cumulative shares repurchased under each program and the dollar amounts remaining under each program were as follows:

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Company Purchase of Shares of Capital Stock

	Total Number Of Shares Repurchased		Weighted Average Price Paid Per Share		Cumulative Shares Repurchased Under The Program		Dollar Amount Remaining Under The Program
April 2007 Program
January 1 through January 31, 2011		300,513	$	63.62		3,654,157	$	24,543
February 1 through February 28, 2011		377		65.03		3,654,534		-
March 1 through March 31, 2011		-		-		3,654,534	$	-
First Quarter Total -- April 2007 Program		300,890	$	63.62
February 2011 Program
January 1 through January 31, 2011		-	$	-		-	$	-
February 22, 2011 Authorization		-	$	-		-		100,000,000
February 1 through February 28, 2011		40,623	$	65.03		40,623		97,358,313
March 1 through March 31, 2011		-	$	-		40,623	$	97,358,313
First Quarter Total – February 2011 Program		40,623	$	65.03
April 1 through April 30, 2011		-	$	-		40,623	$	97,358,313
May 1 through May 31, 2011		-	$	-		40,623		97,358,313
June 1 through June 30, 2011		-	$	-		40,623	$	97,358,313
Second Quarter Total – February 2011 Program		-	$	-
July 1 through July 31, 2011		41,112	$	60.15		81,735	$	94,885,576
August 1 through August 31, 2011		710,172	$	55.51		791,907		55,460,568
September 1 through September 30, 2011		778,746	$	55.02		1,570,653	$	12,615,182
Third Quarter Total – February 2011 Program		1,530,030	$	55.39
October 1 through October 31, 2011		230,970	$	53.94		1,801,623	$	155,820
November 7, 2011 Authorization		-		-		-		100,000,000
November 1 through November 30, 2011		247,712		49.88		2,049,335		87,800,735
December 1 through December 31, 2011		252,288		49.68		2,301,623	$	75,268,254
Fourth Quarter Total – February 2011 Program		730,970	$	51.09

On February 22, 2011, our Board of Directors authorized $100 million under the newly established February 2011 Repurchase Program.

On November 7, 2011, our Board of Directors authorized an additional $100 million under the February 2011 Repurchase Program.

As of December 31, 2011, the number of stock options outstanding under the Company’s equity compensation plans, the weighted average exercise price of outstanding options, and the number of securities remaining available for issuance were as follows:

29

EQUITY COMPENSATION PLAN INFORMATION

Plan Category	Number of securities to be issued upon exercise of outstanding warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans [excluding securities reflected in column (a)] (c)
Equity Compensation plans approved by stockholders		2,624,523	$	52.56		1,420,134
Equity Compensation plans not approved by stockholders (1)		14,000		29.20		-
TOTAL		2,638,523	$	52.44		1,420,134

(1)   In May 1999 the Board of Directors adopted the 1999 Long-Term Employee Incentive Plan without stockholder approval.  This plan permits the Company to grant up to 500,000 shares of non-qualified options and stock awards to a broad base of salaried and hourly employees (excluding officers and directors) of the Company.  Except for the exclusion of officers and directors, this plan has the same general terms and provisions as the 2006 Stock Incentive Plan.  In addition, pursuant to this plan no individual may be granted more than 50,000 stock options in a calendar year, the aggregate number of the shares of Capital Stock which may be issued pursuant to stock incentives in the form of Stock Awards shall not be more than 270,000, and no stock incentives shall be granted under the plan after May 17, 2009.

Comparative Stock Performance

The graph below compares the yearly percentage change in the Company’s cumulative total stockholder return on Capital Stock (as measured by dividing (i) the sum of (A) the cumulative amount of dividends for the period December 31, 2006, to December 31, 2011, assuming dividend reinvestment, and (B) the difference between the Company’s share price at December 31, 2006 and December 31, 2011; by (ii) the share price at December 31, 2006) with the cumulative total return, assuming reinvestment of dividends, of the (1) S&P 500 Stock Index and (2) Dow Jones Industrial Diversified Index.

30

 

31

Item 6.  Selected Financial Data

The information called for by this Item for the five years ended December 31, 2011 is set forth on page 34 of the 2011 Annual Report to Stockholders and is incorporated herein by reference.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information called for by this Item is set forth on pages 38 through 52 of the 2011 Annual Report to Stockholders and is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

The Company’s primary market risk exposure relates to interest rate risk exposure through its variable interest line of credit.  At December 31, 2011 the Company had no variable rate debt outstanding.  For each $10 million dollars borrowed under the credit facility, an increase or decrease of 100 basis points (1% point), increases or decreases the Company’s annual interest expense by $100,000.

The Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques.

The market value of the Company’s long-term debt at December 31, 2011 is approximately $175.8 million versus a carrying value of $166.8 million.

Item 8.  Financial Statements and Supplementary Data

The consolidated financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated February 27, 2012, appearing on pages 1 through 31 of the 2011 Annual Report to Stockholders, along with the Supplementary Data (Unaudited Summary of Quarterly Results) appearing on pages 32-33, are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, under the supervision of and with the participation of the Company’s President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President and Controller, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report.  Based on such evaluation, the Company’s President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President and Controller have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective and are reasonably designed to ensure that all material information relating to the Company required to be included in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to management, including the President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President and Controller, as appropriate, to allow timely decisions regarding required disclosure.

32

Management’s Report on Internal Control Over Financial Reporting

Refer to Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm on pages 1 and 2 of the Company’s 2011 Annual Report to Stockholders, which are incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act during the Company’s fiscal quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B.  Other Information

Not applicable.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

The directors of the Company are:

Kevin J. McNamara

Joel F. Gemunder

Patrick P. Grace

Thomas C. Hutton

Walter L. Krebs

Andrea R. Lindell

Thomas P. Rice

Donald E. Saunders

George J. Walsh III

Frank E. Wood

The additional information required under this Item is set forth in the Company’s 2012 Proxy Statement and in Part I hereof under the caption “Executive Officers of the Registrant” and is incorporated herein by reference.

The Company has adopted a Code of Ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer, directors and employees.  A copy of this Code of Ethics is incorporated with this report as Exhibit 14 and it is also posted on the Company’s Web site, www.chemed.com.

Item 11.  Executive Compensation

Information required under this Item is set forth in the Company’s 2012 Proxy Statement, which is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required under this Item is set forth in the Company’s 2012 Proxy Statement, which is incorporated herein by reference.

33

Item 13.  Certain Relationships and Related Transactions and Director Independence

Information required under this Item is set forth in the Company’s 2012 Proxy Statement, which is incorporated herein by reference.

A description of related party transactions is shown in Note 20 of the Notes to Consolidated Financial Statements on page 27 of the 2011 Annual Report to Stockholders and is incorporated herein by reference.

Item 14.  Principal Accountant Fees and Services

Audit Fees

PricewaterhouseCoopers LLP billed the Company $1,570,000 for 2010 and $1,616,000 for 2011.  These fees were for professional services rendered for the integrated audit of the Company’s annual financial statements and of its internal control over financial reporting, review of the financial statements included in the Company’s Forms 10-Q and review of documents filed with the SEC.

Audit-Related Fees

PricewaterhouseCoopers LLP billed the Company $133,000 and $127,000 for 2010 and 2011, respectively, for audit-related services.  These services were related to the audit of one of Vitas’ Florida subsidiaries.

Tax Fees

No such services were rendered in 2010 or 2011.

All Other Fees

For 2010, $30,000 was billed for Consulting Services.  No such other services were rendered for 2011.

The Audit Committee has adopted a policy which requires the Committee’s pre-approval of audit and non-audit services performed by the independent auditor to assure that the provision of such services does not impair the auditor’s independence.  The Audit Committee pre-approved all of the audit and non-audit services rendered by PricewaterhouseCoopers LLP as listed above.

34

PART IV

Item 15	Exhibits and Financial Statement Schedule
Exhibits
3.1	Certificate of Incorporation of Chemed Corporation.*
3.2	Certificate of Amendment to Certificate of Incorporation.*
3.3	By-Laws of Chemed Corporation.*
10.1	1999 Stock Incentive Plan.*,**
10.2	1999 Long-Term Employee Incentive Plan as amended through May 20, 2002.*,**
10.3	2002 Stock Incentive Plan.*,**
10.4	2002 Executive Long-Term Incentive Plan, as amended May 18, 2004.*,**
10.5	2004 Stock Incentive Plan.*,**
10.6	2006 Stock Incentive Plan, as amended August 11, 2006.*,**
10.7	2010 Stock Incentive Plan.*,**
10.8	Repurchase Agreement dated May 8, 2007 by and among Chemed Corporation, J.P. Morgan Securities Inc. and Citigroup Global Markets, Inc.*
10.9	Convertible Senior Note Indenture dated May 14, 2007 for 1.875% Convertible Senior Notes due 2014 by and among Chemed Corporation, the Subsidiary Guarantors and LaSalle Bank NA, as Trustee.*
10.10	Employment Agreement with David P. Williams dated December 1, 2006.*,**
10.11	First Amendment to Employment Agreement with David P. Williams dated July 9, 2009.*,**
10.12	Employment Agreement with Timothy S. O’Toole dated May 6, 2007.*,**
10.13	First Amendment to Employment Agreement with Timothy S. O’Toole dated July 9, 2009.*,**
10.14	Employment Agreement with Kevin J. McNamara dated May 3, 2008.*,**
10.15	First Amendment to Employment Agreement with Kevin J. McNamara dated July 9, 2009.*,**
10.16	Registration Rights Agreement, dated May 14, 2007 by and among Chemed Corporation, J.P. Morgan Securities, Inc. and Citigroup Global Markets Inc.*

35

10.17	Confirmation of Convertible Note Hedge, dated May 8, 2007 between Chemed Corporation and J.P. Morgan Chase Bank, NA.*
10.18	Confirmation of Convertible Note Hedge, dated May 8, 2007 between Chemed Corporation and Citibank, NA.*
10.19	Form of Convertible Note Warrant Transaction, dated May 8, 2007 between Chemed Corporation and Citibank NA.*
10.20	Form of Convertible Note Warrant Transaction, dated May 8, 2007 between Chemed Corporation and J.P. Morgan Chase Bank, NA.*
10.21	Excess Benefits Plan, as restated and amended, effective June 1, 2001.*,**
10.22	Amendment No. 1 to Excess Benefits Plan, effective July 1, 2001.*,**
10.23	Amendment No. 2 to Excess Benefits Plan, effective November 7, 2003.*,**
10.24	Non-Employee Directors’ Deferred Compensation Plan.*,**
10.25	Chemed/Roto-Rooter Savings & Retirement Plan, effective January 1, 1999.*,**
10.26	First Amendment to Chemed/Roto-Rooter Savings & Retirement Plan, effective September 6, 2000.*,**
10.27	Second Amendment to Chemed/Roto-Rooter Savings & Retirement Plan, effective January 1, 2001.*,**
10.28	Third Amendment to Chemed/Roto-Rooter Savings & Retirement Plan, effective December 12, 2001.*,**
10.29	Directors Emeriti Plan.*,**
10.30	Chemed Corporation Change in Control Severance Plan, as amended July 9, 2009.*,**
10.31	Chemed Corporation Senior Executive Severance Policy, as amended July 9, 2009.*,**
10.32	Roto-Rooter Deferred Compensation Plan No. 1, as amended January 1, 1998.*,**
10.33	Roto-Rooter Deferred Compensation Plan No. 2.*,**
10.34	Form of Restricted Stock Award.*,**
10.35	Form of Stock Option Grant.*,**
10.36	Amended and Restated Credit Agreement - $350,000,000 Revolving Credit Facility, originally dated May 2, 2007, by and among JP Morgan Chase Bank, NA and Chemed Corporation as of March 1, 2011, exhibits and schedules thereto.

36

12	Computation of Ratio of Earnings to Fixed Charges.
13	2011 Annual Report to Stockholders.
14	Policies on Business Ethics of Chemed Corporation.*
21	Subsidiaries of Chemed Corporation.
23	Consent of Independent Registered Public Accounting Firm.
24	Powers of Attorney.
31.1	Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
31.2	Certification by David P. Williams pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
31.3	Certification by Arthur V. Tucker, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
32.1	Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by David P. Williams pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3	Certification by Arthur V. Tucker, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document*
101.SCH	XBRL Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*
*	This exhibit is being filed by means of incorporation by reference (see Index to Exhibits on page E-1).  Each other exhibit is being filed with this Annual Report on Form 10-K.
**	Management contract or compensatory plan or arrangement.

Financial Statement Schedule

See Index to Financial Statements and Financial Statement Schedule on page S-1.

37

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

February 27, 2012	CHEMED CORPORATION
		By	Kevin J. McNamara
		Kevin J. McNamara
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title		Date
/s/ Kevin J. McNamara Kevin J. McNamara	President and Chief Executive Officer and a Director (Principal Executive Officer)		February 27, 2012
/s/ David P. Williams David P. Williams	Executive Vice President and Chief Financial Officer (Principal Financial Officer)		February 27, 2012
/s/ Arthur V. Tucker, Jr. Arthur V. Tucker, Jr.	Vice President and Controller (Principal Accounting Officer)		February 27, 2012
Joel F. Gemunder* Patrick P. Grace* Thomas C. Hutton* Walter L. Krebs* Andrea R. Lindell*	Thomas P. Rice* Donald E. Saunders* George J Walsh III* Frank E. Wood*	- - Directors	February 27, 2012

* Naomi C. Dallob by signing her name hereto signs this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission

February 27, 2012	/s/ Naomi C. Dallob
Date	Naomi C. Dallob
	(Attorney-in-Fact)

38

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

2009, 2010 AND 2011

	Page(s)
Chemed Corporation Consolidated Financial Statements and Financial Statement Schedule
Report of Independent Registered Public Accounting Firm	2*
Consolidated Statement of Income	3*
Consolidated Balance Sheet	4*
Consolidated Statement of Cash Flows	5*
Consolidated Statement of Changes in Stockholders’ Equity	6*
Notes to Consolidated Financial Statements	7-31*
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule	S-2
Schedule II - Valuation and Qualifying Accounts	S-3

*              Indicatespage numbers in Chemed Corporation 2011 Annual Report to Stockholders

The consolidated financial statements of Chemed Corporation listed above, appearing in the 2011 Annual Report to Stockholders, are incorporated herein by reference.  The Financial Statement Schedule should be read in conjunction with the consolidated financial statements listed above.  Schedules not included have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto as listed above.

S-1

Report of Independent Registered Public Accounting

Firm on Financial Statement Schedule

To the Board of Directors and Stockholders of Chemed Corporation:

Our audits of the consolidated financial statements and the effectiveness of internal control over financial reporting referred to in our report dated February 27, 2012 appearing in the 2011 Annual Report to Stockholders of Chemed Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 15 of this Form 10-K.  In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Cincinnati, Ohio

February 27, 2012

S-2

										SCHEDULE II
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
DR/(CR)
				ADDITIONS
				(CHARGED)
				CREDITED			(CHARGED)
	BALANCE AT			TO COSTS			CREDITED					BALANCE
	BEGINNING			AND			TO OTHER			DEDUCTIONS		AT END
DESCRIPTION	OF PERIOD			EXPENSES			ACCOUNTS			(a)		OF PERIOD
Allowances for doubtful
accounts (b)
For the year 2011	$	(13,332	)	$	(8,686	)	$	(786	)	$	11,280	$	(11,524	)
For the year 2010	$	(12,595	)	$	(9,118	)	$	(472	)	$	8,853	$	(13,332	)
For the year 2009	$	(10,320	)	$	(10,861	)	$	(656	)	$	9,242	$	(12,595	)
Allowances for doubtful
accounts - notes
receivable (c)
For the year 2011	$	(368	)	$	123		$	(60	)	$	-	$	(305	)
For the year 2010	$	(408	)	$	40		$	-		$	-	$	(368	)
For the year 2009	$	(482	)	$	28		$	44		$	2	$	(408	)

(a)	With respect to allowances for doubtful accounts, deductions include accounts considered uncollectible or
	written off, payments, companies divested, etc.
(b)	Classified in consolidated balance sheet as a reduction of accounts receivable.
(c)	Classified in consolidated balance sheet as a reduction of other assets.

S-3

INDEX TO EXHIBITS

		Page Number
		or
		Incorporation by Reference
Exhibit		File No. and	Previous
Number		Filing Date	Exhibit No.
3.1	Certificate of Incorporation of	Form S-3	4.1
	Chemed Corporation	Reg. No. 33-44177
		11/26/91
3.2	Certificate of Amendment to	Form 8-K	3.1
	Certificate of Incorporation	5/16/06
3.3	By-Laws of Chemed Corporation	Form 8-K	3.1
	as amended November 10, 2009	11/13/09
10.1	1999 Stock Incentive Plan	Form 10-K	10.11
		3/29/00, **
10.2	1999 Long Term Employee	Form 10-K	10.16
	Incentive Plan as amended	3/28/03, **
	through May 20, 2002
10.3	2002 Stock Incentive Plan	Form 10-K	10.17
		3/28/03, **
10.4	2002 Executive Long-Term	Form 10-Q	10.16
	Incentive Plan, as amended	8/19/04, **
	May 18, 2004
10.5	2004 Stock Incentive Plan	Proxy Statement	A
		3/25/04, **
10.6	2006 Stock Incentive Plan,	Form 10-Q	10.1
	as amended August 11, 2006	8/14/06, **
10.7	2010 Stock Incentive Plan	Form 8-K	99.1
		5/18/10, **
10.8	Repurchase Agreement dated	Form 8-K	1.1
	May 8, 2007 by and among	5/17/07
	Chemed Corporation, J.P.
	Morgan Securities Inc. and
	Citigroup Global Markets, Inc.
10.9	Convertible Senior Note	Form 8-KA	4.1
	Indenture dated May 14, 2007	5/22/07
	for 1.875% Convertible Senior
	Notes due 2014 by and among
	Chemed Corporation, the
	Subsidiary Guarantors and
	LaSalle Bank NA, as Trustee.
10.10	Employment Agreement with David	Form 8-K	10.01
	P. Williams dated December 1, 2006.	12/1/06, **

1

		Page Number
		or
		Incorporation by Reference
Exhibit		File No. and	Previous
Number		Filing Date	Exhibit No.
10.11	First Amendment to Employment	Form 10-Q	10.02
	Agreement with David P. Williams	7/31/09, **
	dated July 9, 2009.
10.12	Employment Agreement with	Form 8-K	10.02
	Timothy S. O’Toole dated	5/7/07, **
	May 6, 2007.
10.13	First Amendment to Employment	Form 10-Q	10.3
	Agreement with Timothy S.	7/31/09, **
	O’Toole dated July 9, 2009.
10.14	Employment Agreement with	Form 8-K	10.01
	Kevin J. McNamara dated	5/6/08, **
	May 3, 2008.
10.15	First Amendment to Employment	Form 10-Q	10.1
	Agreement with Kevin J.	7/31/09, **
	McNamara dated July 9, 2009.
10.16	Registration Rights Agreement,	Form 8-K	10.5
	dated May 14, 2007 by and among	5/17/07
	Chemed Corporation, J.P. Morgan
	Securities, Inc. and Citigroup
	Global Markets Inc.
10.17	Confirmation of Convertible Note	Form 8-K	10.1
	Hedge, dated May 8, 2007 between	5/17/07
	Chemed Corporation and J.P. Morgan
	Chase Bank, NA.
10.18	Confirmation of Convertible Note	Form 8-K	10.2
	Hedge, dated May 8, 2007 between	5/17/07
	Chemed Corporation and Citibank,
	NA.
10.19	Form of Convertible Note Warrant	Form 8-K	10.4
	Transaction, dated May 8, 2007	5/17/07
	between Chemed Corporation and
	Citibank, NA.
10.20	Form of Convertible Note Warrant	Form 8-K	10.5
	Transaction, dated May 8, 2007	5/17/07
	between Chemed Corporation and
	J.P. Morgan Chase Bank, NA.
10.21	Excess Benefits Plan, as restated	Form 10-K	10.24
	and amended, effective June 1, 2001	3/12/04, **
10.22	Amendment No. 1 to Excess Benefits	Form 10-K	10.25
	Plan, effective July 1, 2002	3/12/04, **

2

		Page Number
		or
		Incorporation by Reference
Exhibit		File No. and	Previous
Number		Filing Date	Exhibit No.
10.23	Amendment No. 2 to Excess Benefits	Form 10-K	10.26
	Plan, effective November 7, 2003	3/12/04, **
10.24	Non-Employee Directors' Deferred	Form 10-K	10.10
	Compensation Plan	3/24/88, **
10.25	Chemed/Roto-Rooter Savings &	Form 10-K	10.25
	Retirement Plan, effective	3/25/99, **
	January 1, 1999
10.26	First Amendment to Chemed/	Form 10-K	10.22
	Roto-Rooter Savings & Retirement	3/28/02, **
	Plan effective September 6, 2000
10.27	Second Amendment to Chemed/	Form 10-K	10.23
	Roto-Rooter Savings & Retirement	3/28/02, **
	Plan effective January 1, 2001
10.28	Third Amendment to Chemed/	Form 10-K	10.24
	Roto-Rooter Savings & Retirement	3/28/02, **
	Plan effective December 12, 2001
10.29	Directors Emeriti Plan	Form 10-Q	10.11
		5/12/88, **
10.30	Change in Control Severance	Form 10-Q	10.05
	Plan as amended July 9, 2009.	7/31/09, **
10.31	Senior Executive Severance	Form 10-Q	10.04
	Policy as amended July 9, 2009.	7/31/09, **
10.32	Roto-Rooter Deferred Compensation	Form 10-K	10.37
	Plan No. 1, as amended January 1,	3/28/01, **
	1998
10.33	Roto-Rooter Deferred Compensation	Form 10-K	10.38
	Plan No. 2	3/28/01, **
10.34	Form of Restricted Stock Award	Form 10-K	10.50
		3/28/05, **
10.35	Form of Stock Option Grant	Form 10-K	10.51
		3/28/05, **
10.36	Amended and Restated Credit	Form 10-Q	10.1
	Agreement - $350,000,000 Revolving	4/29/11
	Credit Facility, originally dated
	May 2, 2007, by and among JP Morgan
	Chase Bank, N.A. and Chemed
	Corporation as of March 1, 2011,
	Exhibits and schedules thereto.

3

		Page Number
		or
		Incorporation by Reference
Exhibit		File No. and	Previous
Number		Filing Date	Exhibit No.
12	Computation of Ratio of Earnings	*
	to Fixed Charges
13	2011 Annual Report to Stockholders	*
14	Policies on Business Ethics of	Form 10-K	14
	Chemed Corporation	3/12/04
21	Subsidiaries of Chemed Corporation	*
23	Consent of Independent Registered	*
	Public Accounting Firm
24	Powers of Attorney	*
31.1	Certification by Kevin J. McNamara	*
	pursuant to Rule 13a-14(a)/15d-14(a)
	of the Exchange Act of 1934.
31.2	Certification by David P. Williams	*
	pursuant to Rule 13a-14(a)/15d-14(a)
	of the Exchange Act of 1934.
31.3	Certification by Arthur V. Tucker, Jr.	*
	pursuant to Rule 13a-14(a)/15d-14(a)
	of the Exchange Act of 1934.
32.1	Certification by Kevin J. McNamara	*
	pursuant to Section 906 of the
	Sarbanes-Oxley Act of 2002
32.2	Certification by David P. Williams	*
	pursuant to Section 906 of the
	Sarbanes-Oxley Act of 2002
32.3	Certification by Arthur V. Tucker,	*
	Jr. pursuant to Section 906 of
	the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document	*
101.SCH	XBRL Extension Schema	*
101.CAL	XBRL Taxonomy Extension Calculation	*
	Linkbase
101.LAB	XBRL Taxonomy Extension Label	*
	Linkbase
101.PRE	XBRL Taxonomy Extension Presentation	*
	Linkbase

* Filed herewith.

** Management contract or compensatory plan or arrangement.

4

EX-12

EXHIBIT 12

CHEMED CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
	2007			2008			2009			2010			2011
Pretax income from continuing operations	$	98,161		$	115,404		$	120,620		$	133,831		$	140,556
Additions:
Fixed charges		21,554			18,983			18,840			19,139			21,231
Amortization of capitalized interest		4			5			5			331			438
Deductions:
Capitalized interest		(951	)		(659	)		(258	)		-			-
Adjusted income	$	118,768		$	133,733		$	139,207		$	153,301		$	162,225
Fixed Charges:
Interest expense	$	14,921		$	12,123		$	11,599		$	11,959		$	13,888
Capitalized interest		951			659			258			-			-
Interest component of rental expense		5,682			6,201			6,983			7,180			7,343
Fixed charges	$	21,554		$	18,983		$	18,840		$	19,139		$	21,231
Ratio of earnings to fixed charges (a)		5.5	x		7.0	x		7.4	x		8.0	x		7.6	x

(a)  For purposes of computing the ratio of earnings to fixed charges, pretax income from continuing operations has been added to fixed charges and adjusted for capitalized interest to derive adjusted income.  Fixed charges consist of interest expense on debt (including the amortization of deferred financing costs), capitalized interest, prepayment penalties on the early extinguishment of debt and one-third (the proportion deemed representative of the interest component) of rental expense.  Fixed charge amounts include interest from both continuing and discontinued operations.

EX-13

Exhibit 13

Chemed Corporation and Subsidiary Companies

Financial Review

Contents

Report of Independent Registered Public Accounting Firm	2
Consolidated Statement of Income	3
Consolidated Balance Sheet	4
Consolidated Statement of Cash Flows	5
Consolidated Statement of Changes in Stockholders’ Equity	6
Notes to Consolidated Financial Statements	7
Unaudited Summary of Quarterly Results	32
Selected Financial Data	34
Unaudited Consolidating Statements of Income	35
Management’s Discussion and Analysis of Financial Conditions and Results of Operations	38
Officers’ and Directors’ Listing and Corporate Information	IBC

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

    The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as that term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorization of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 

The Company’s management, including the President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President and Controller, has conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2011, based on the framework established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management concluded that internal control over financial reporting was effective as of December 31, 2011, based on criteria in Internal Control—Integrated Framework issued by COSO.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, as stated in their report which appears on page 2.

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Chemed Corporation and Subsidiary Companies

Report of Independent Registered Public Accounting Firm

Tothe Board of Directors and Stockholders of Chemed Corporation:

In our opinion, the accompanying consolidated balance sheets and the related consolidatedstatementsof income, changes in stockholders' equity and cash flows present fairly, in all material respects, the financial position of Chemed Corporation and its subsidiariesat December 31, 2011and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011,in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.  Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed 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.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Cincinnati, OH

February 27, 2012

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CONSOLIDATED STATEMENT OF INCOME
Chemed Corporation and Subsidiary Companies
(in thousands, except per share data)
For the Years Ended December 31,	2011			2010			2009
Continuing Operations
Service revenues and sales	$	1,355,970		$	1,280,545		$	1,190,236
Cost of services provided and goods sold (excluding depreciation)		970,484			906,016			834,574
Selling, general and administrative expenses		202,260			201,964			197,426
Depreciation		25,247			24,386			21,535
Amortization		4,252			4,657			6,367
Other operating expenses (Note 7)		-			-			3,989
Total costs and expenses		1,202,243			1,137,023			1,063,891
Income from operations		153,727			143,522			126,345
Interest expense		(13,888	)		(11,959	)		(11,599	)
Other income--net (Note 11)		717			2,268			5,874
Income before income taxes		140,556			133,831			120,620
Income taxes (Note 12)		(54,577	)		(52,000	)		(46,583	)
Income from continuing operations		85,979			81,831			74,037
Discontinued Operations, Net of Income Taxes (Note 9)		-			-			(253	)
Net Income	$	85,979		$	81,831		$	73,784
Earnings Per Share (Note 16)
Income from continuing operations	$	4.19		$	3.62		$	3.30
Net Income	$	4.19		$	3.62		$	3.29
Average number of shares outstanding		20,523			22,587			22,451
Diluted Earnings Per Share (Note 16)
Income from continuing operations	$	4.10		$	3.55		$	3.26
Net Income	$	4.10		$	3.55		$	3.24
Average number of shares outstanding		20,945			23,031			22,742
The Notes to Consolidated Financial Statements are integral parts of this statement.

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CONSOLIDATED BALANCE SHEET
Chemed Corporation and Subsidiary Companies
(in thousands, except shares and per share data)
December 31,	2011			2010
Assets
Current assets
Cash and cash equivalents (Note 10)	$	38,081		$	49,917
Accounts receivable less allowances of  $11,524 (2010 - $13,332)		77,924			112,999
Inventories		8,668			7,728
Current deferred income taxes (Note 12)		12,540			15,098
Prepaid income taxes		2,131			770
Prepaid expenses		11,409			10,285
Total current assets		150,753			196,797
Investments of deferred compensation plans held in trust (Notes 15 and 17)		31,629			28,304
Properties and equipment, at cost, less accumulated depreciation (Note 13)		82,951			79,292
Identifiable intangible assets less accumulated amortization of  $28,904 (2010 - $27,438) (Note 6)		58,262			57,858
Goodwill		460,633			458,343
Other assets		11,677			9,567
Total Assets	$	795,905		$	830,161
Liabilities
Current liabilities
Accounts payable	$	48,225		$	55,829
Income taxes (Note 12)		90			1,161
Accrued insurance		37,147			36,492
Accrued compensation		41,087			39,719
Other current liabilities		18,851			16,141
Total current liabilities		145,400			149,342
Deferred income taxes (Note 12)		29,463			25,085
Long-term debt (Note 3)		166,784			159,208
Deferred compensation liabilities (Note 15)		30,693			27,851
Other liabilities		9,881			6,626
Total Liabilities		382,221			368,112
Commitments and contingencies (Notes 14 and 19)
Stockholders' Equity
Capital stock - authorized 80,000,000 shares $1 par; issued 30,936,925 shares
(2010 - 30,381,863 shares)		30,937			30,382
Paid-in capital		398,094			365,007
Retained earnings		546,757			473,316
Treasury stock - 11,880,051 shares (2010 - 9,103,185 shares), at cost		(564,091	)		(408,615	)
Deferred compensation payable in Company stock (Note 15)		1,987			1,959
Total Stockholders' Equity		413,684			462,049
Total Liabilities and Stockholders' Equity	$	795,905		$	830,161
The Notes to Consolidated Financial Statements are integral parts of this statement.

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CONSOLIDATED STATEMENT OF CASH FLOWS
Chemed Corporation and Subsidiary Companies
(in thousands)
For the Years Ended December 31,	2011			2010			2009
Cash Flows from Operating Activities
Net income	$	85,979		$	81,831		$	73,784
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		29,499			29,043			27,902
Provision for uncollectible accounts receivable		8,563			9,078			10,833
Stock option expense		8,376			7,762			8,639
Amortization of discount on covertible notes		7,576			7,081			6,617
Provision for deferred income taxes (Note 12)		7,242			(2,409	)		4,979
Noncash portion of long-term incentive compensation		2,595			4,161			4,385
Amortization of debt issuance costs		1,137			654			632
Discontinued operations (Note 9)		-			-			253
Changes in operating assets and liabilities, excluding amounts acquired in business combinations:
Decrease/(increase) in accounts receivable		26,896			(68,656	)		33,754
Decrease/(increase) in inventories		(940	)		(151	)		29
Decrease/(increase) in prepaid expenses		(1,124	)		332			(455	)
Increase/(decrease) in accounts payable and other current liabilities		(1,397	)		13,810			(8,109	)
Increase in income taxes		2,708			4,825			623
Increase in other assets		(4,009	)		(4,398	)		(1,678	)
Increase in other liabilities		4,548			5,999			272
Excess tax benefit on share-based compensation		(3,854	)		(3,357	)		(1,955	)
Other sources		548			407			327
Net cash provided by operating activities		174,343			86,012			160,832
Cash Flows from Investing Activities
Capital expenditures		(29,592	)		(25,639	)		(21,496	)
Business combinations, net of cash acquired (Note 8)		(3,664	)		(9,469	)		(1,919	)
Other uses		(858	)		(592	)		573
Net cash used by investing activities		(34,114	)		(35,700	)		(22,842	)
Cash Flows from Financing Activities
Purchases of treasury stock (Note 21)		(147,886	)		(109,330	)		(4,225	)
Dividends paid		(12,538	)		(11,881	)		(8,157	)
Proceeds from exercise of stock options (Note 4)		8,036			5,327			545
Excess tax benefit on share-based compensation		3,854			3,357			1,955
Debt issuance costs		(2,657	)		-			-
Increase/(decrease) in cash overdraft payable		(826	)		(581	)		2,891
Repayment of long-term debt (Note 3)		-			-			(14,669	)
Net change in revolving line of credit		-			-			(8,200	)
Other sources/(uses)		(48	)		297			658
Net cash used by financing activities		(152,065	)		(112,811	)		(29,202	)
Increase/(decrease) in cash and cash equivalents		(11,836	)		(62,499	)		108,788
Cash and cash equivalents at beginning of year		49,917			112,416			3,628
Cash and cash equivalents at end of year	$	38,081		$	49,917		$	112,416
The Notes to Consolidated Financial Statements are integral parts of this statement.

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CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
Chemed Corporation and Subsidiary Companies
(in thousands, except per share data)												Deferred
												Compensation
									Treasury			Payable in
	Capital		Paid-in			Retained			Stock-			Company
	Stock		Capital			Earnings			at Cost			Stock			Total
Balance at December 31, 2008	$	29,515	$	313,516		$	337,739		$	(285,977	)	$	2,038		$	396,831
Net income		-		-			73,784			-			-			73,784
Dividends paid ($.36 per share)		-		-			(8,157	)		-			-			(8,157	)
Stock awards and exercise of stock options (Note 4)		376		21,741			-			(7,305	)		-			14,812
Purchases of treasury stock (Note 21)		-		-			-			(742	)		-			(742	)
Other		-		633			-			83			(82	)		634
Balance at December 31, 2009		29,891		335,890			403,366			(293,941	)		1,956			477,162
Net income		-		-			81,831			-			-			81,831
Dividends paid ($.52 per share)		-		-			(11,881	)		-			-			(11,881	)
Stock awards and exercise of stock options (Note 4)		491		28,541			-			(10,615	)		-			18,417
Purchases of treasury stock (Note 21)		-		-			-			(104,139	)		-			(104,139	)
Other		-		576			-			80			3			659
Balance at December 31, 2010		30,382		365,007			473,316			(408,615	)		1,959			462,049
Net income		-		-			85,979			-			-			85,979
Dividends paid ($.60 per share)		-		-			(12,538	)		-			-			(12,538	)
Stock awards and exercise of stock options (Note 4)		555		33,218			-			(11,576	)		-			22,197
Purchases of treasury stock (Note 21)		-		-			-			(143,970	)		-			(143,970	)
Other		-		(131	)		-			70			28			(33	)
Balance at December 31, 2011	$	30,937	$	398,094		$	546,757		$	(564,091	)	$	1,987		$	413,684
The Notes to Consolidated Financial Statements are integral parts of this statement.

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Chemed Corporation and Subsidiary Companies

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Chemed Corporation and Subsidiary Companies

1.    Summary of Significant Accounting Policies

NATURE OF OPERATIONS

We operate through our two wholly-owned subsidiaries: VITAS Healthcare Corporation (“VITAS”) and Roto-Rooter Group, Inc. (“Roto-Rooter”). VITAS focuses on hospice care that helps make terminally ill patients' final days as comfortable as possible. Through its team of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter provides plumbing and drain cleaning services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Chemed Corporation and its wholly owned subsidiaries.  All significant intercompany transactions have been eliminated.

We have analyzed the provisions of the Financial Accounting Standards Board (“FASB”) authoritative guidance on the consolidation of variable interest entities relative to our contractual relationships with Roto-Rooter’s independent contractors and franchisees.  The guidance requires the primary beneficiary of a Variable Interest Entity (“VIE”) to consolidate the accounts of the VIE.  Based upon the guidance provided by the FASB, we have concluded that neither the independent contractors nor the franchisees are VIEs.

CASH EQUIVALENTS

Cash equivalents comprise short-term, highly liquid investments, including money market funds that have original maturities of three months or less.

ACCOUNTS AND LOANS RECEIVABLE

Accounts and loans receivable are recorded at the principal balance outstanding less estimated allowances for uncollectible accounts.  For the Roto-Rooter segment, allowances for trade accounts receivable are generally provided for accounts more than 90 days past due, although collection efforts continue beyond that time.  Due to the small number of loans receivable outstanding, allowances for loan losses are determined on a case-by-case basis.  For the VITAS segment, allowances for accounts receivable are provided on accounts based on expected collection rates by payer types. The expected collection rate is based on both historical averages and known current trends.  Final write-off of overdue accounts or loans receivable is made when all reasonable collection efforts have been made and payment is not forthcoming.  We closely monitor our receivables and periodically review procedures for granting credit to attempt to hold losses to a minimum.

As of December 31, 2011, VITAS has approximately $720,000 in unbilled revenue included in accounts receivable (December 31, 2010 - $2.8 million).  The unbilled revenue at VITAS relates to hospice programs currently undergoing focused medical reviews (“FMR”).  During FMR, surveyors working on behalf of the U.S. Federal government review certain patient files for compliance with Medicare regulations.  During the time the patient file is under review, we are unable to bill for care provided to those patients.  We make appropriate provisions to reduce our accounts receivable balance for any governmental or other payer reviews resulting in denials of patient service revenue.  We believe our hospice programs comply with all payer requirements at the time of billing.  However, we cannot predict whether future billing reviews or similar audits by payers will result in material denials or reductions in revenue.

       CONCENTRATION OF RISK

As of December 31, 2011 and 2010, approximately 51% and 72%, respectively, of VITAS’ total accounts receivable balance were due from Medicare and 34% and 20%, respectively, of VITAS’ total accounts receivable balance were due from various state Medicaid programs.  Combined accounts receivable from Medicare and Medicaid represent 76% of the net accounts receivable in the accompanying consolidated balance sheet as of December 31, 2011.

As further described in Note 20, we have agreements with one vendor to provide specified pharmacy services for VITAS and its hospice patients.  In 2011 and 2010, respectively, purchases made from this vendor represent over 90% of all pharmacy services used by VITAS.

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Chemed Corporation and Subsidiary Companies

INVENTORIES

Substantially all of the inventories are either general merchandise or finished goods.  Inventories are stated at the lower of cost or market.  For determining the value of inventories, cost methods that reasonably approximate the first-in, first-out (“FIFO”) method are used.

DEPRECIATION AND PROPERTIES AND EQUIPMENT

Depreciation of properties and equipment is computed using the straight-line method over the estimated useful lives of the assets.  Leasehold improvements are amortized over the lesser of the remaining lease terms (excluding option terms) or their useful lives.  Expenditures for maintenance, repairs, renewals and betterments that do not materially prolong the useful lives of the assets are expensed as incurred. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and the resulting gain or loss is reflected currently in income.

Expenditures for major software purchases and software developed for internal use are capitalized and depreciated using the straight-line method over the estimated useful lives of the assets.  For software developed for internal use, external direct costs for materials and services and certain internal payroll and related fringe benefit costs are capitalized in accordance with the FASB’s authoritative guidance on accounting for the costs of computer software developed or obtained for internal use.

The weighted average lives of our property and equipment at December 31, 2011, were:

Buildings and building improvements	10.1	yrs.
Transportation equipment	14.4
Machinery and equipment	5.6
Computer software	5.0
Furniture and fixtures	4.7

GOODWILL AND INTANGIBLE ASSETS

Identifiable, definite-lived intangible assets arise from purchase business combinations and are amortized using either an accelerated method or the straight-line method over the estimated useful lives of the assets.  The selection of an amortization method is based on which method best reflects the economic pattern of usage of the asset.  The weighted average lives of our identifiable, definite-lived intangible assets at December 31, 2011, were:

Covenants not to compete	6.4	yrs.
Reacquired franchise rights	6.7
Referral networks	10.0
Customer lists	13.3

The date of our annual goodwill and indefinite-lived intangible asset impairment analysis is October 1.  The VITAS trade name is considered to have an indefinite life.  We also capitalize the direct costs of obtaining licenses to operate either hospice programs or plumbing operations subject to a minimum capitalization threshold.  These costs are amortized over the life of the license using the straight line method.  Certificates of Need (CON), which are required in certain states for hospice operations, are generally granted without expiration and thus, we believe them to be indefinite-lived assets subject to impairment testing.

For valuing the VITAS tradename, we perform a discounted cash flow analysis on the expected theoretical royalty cash stream from the VITAS tradename.  For valuing capitalized CON costs, we perform a discounted cash flow analysis on the expected income from the operating unit projecting income on a “with and without” basis.  This method compares the expected income stream from the operating unit with a theoretical income stream assuming that the applicable state did not have a CON requirement.  The difference in the discounted income streams is attributed as being the fair value of the CON.   Based on these calculations, neither the VITAS tradename nor the capitalized CON costs are impaired.

We consider that Roto-Rooter Corp. (RRC), Roto-Rooter Services Co. (RRSC) and VITAS are appropriate reporting units for testing goodwill impairment.  We consider RRC and RRSC separate reporting units but one operating segment.  This is appropriate as they each have their own set of general ledger accounts that can be analyzed at “one level below an operating segment” per the definition of a reporting unit in FASB guidance.

In September 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-08 – Goodwill Impairment Testing which provides additional guidance related to the impairment testing of goodwill.  ASU No. 2011-08 allows an

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Chemed Corporation and Subsidiary Companies

entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.  An entity will no longer be required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.  The revised guidance is effective for fiscal years beginning after December 15, 2011, but early adoption is permitted.  We adopted the new guidelines for our impairment test conducted as of October 1, 2011.  Based on our review of qualitative factors, such as financial performance of the reporting units and the macro-economic environment, we determined it was more likely than not that the fair value of each of our reporting units exceeded their respective recorded values. Accordingly, we concluded that the two-step quantitative goodwill impairment test is not necessary.

LONG-LIVED ASSETS

If we believe a triggering event may have occurred that indicates a possible impairment of our long-lived assets, we perform an estimate and valuation of the future benefits of our long-lived assets (other than goodwill, the VITAS trade name and capitalized CON costs) based on key financial indicators. If the projected undiscounted cash flows of a major business unit indicate that property and equipment or identifiable, definite-lived intangible assets have been impaired, a write-down to fair value is made.

OTHER ASSETS

Debt issuance costs are included in other assets.  Issuance costs related to revolving credit agreements are amortized using the straight line method, over the life of the agreement.  All are other issuance costs are amortized using the effective interest method over the life of the debt.

REVENUE RECOGNITION

Both the VITAS segment and Roto-Rooter segment recognize service revenues and sales when the earnings process has been completed.  Generally, this occurs when services are provided or products are delivered.  Sales of Roto-Rooter products, including drain cleaning machines and drain cleaning solution, comprise less than 3% of our total service revenues and sales for each of the three years in the period ended December 31, 2011.

CHARITY CARE

VITAS provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines that the patient does not have the financial wherewithal to make payment.  There is no revenue or associated accounts receivable in the accompanying consolidated financial statements related to charity care.

The cost of providing charity care during the years ended December 31, 2011, 2010 and 2009, was $7.3 million, $7.2 million and $6.3 million, respectively.  The cost of charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care.

SALES TAX

The Roto-Rooter segment collects sales tax from customers when required by state and federal laws.  We record the amount of sales tax collected net in the accompanying consolidated statement of income.

GUARANTEES

In the normal course of business, Roto-Rooter enters into various guarantees and indemnifications in our relationships with customers and others.  These arrangements include guarantees of services for periods ranging from one day to one year and product satisfaction guarantees.  Mainly due to our technicians being commission-based, guarantees and indemnifications do not materially impact our financial condition, results of operations or cash flows.  Therefore, no liability for guarantees has been recorded as of December 31, 2011 or 2010.

OPERATING EXPENSES

Cost of services provided and goods sold (excluding depreciation) includes salaries, wages and benefits of service providers and field personnel, material costs, medical supplies and equipment, pharmaceuticals, insurance costs, service vehicle costs and other expenses directly related to providing service revenues or generating sales.  Selling, general and administrative expenses include salaries, wages, stock option expense and benefits of selling, marketing and administrative employees, advertising expenses, communications and branch telephone expenses, office rent and operating costs, legal, banking and professional fees and other administrative costs.  The cost associated with VITAS sales personnel is included in cost of services provided and goods sold (excluding depreciation).

ADVERTISING

We expense the production costs of advertising the first time the advertising takes place.  The costs of telephone directory listings are expensed when the directories are placed in circulation.  These directories are generally in

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Chemed Corporation and Subsidiary Companies

circulation for approximately one year, at which point they are typically replaced by the publisher with a new directory.  We generally pay for directory placement assuming it is in circulation for one year.  If the directory is in circulation for less than or greater than one year, we receive a credit or additional billing, as necessary.  We do not control the timing of when a new directory is placed in circulation.  Advertising expense in continuing operations for the year ended December 31, 2011, was $27.2 million (2010 – $27.7 million; 2009 - $27.0 million).

COMPUTATION OF EARNINGS PER SHARE

Earnings per share are computed using the weighted average number of shares of capital stock outstanding.  Diluted earnings per share reflect the dilutive impact of our outstanding stock options and nonvested stock awards.  Stock options whose exercise price is greater than the average market price of our stock are excluded from the computation of diluted earnings per share.

STOCK-BASED COMPENSATION PLANS

Stock-based compensation cost is measured at the grant date, based on the fair value of the award and recognized as expense over the employee’s requisite service period on a straight-line basis.

INSURANCE ACCRUALS

For our Roto-Rooter segment and Corporate Office, we self-insure for all casualty insurance claims (workers’ compensation, auto liability and general liability).  As a result, we closely monitor and frequently evaluate our historical claims experience to estimate the appropriate level of accrual for self-insured claims.  Our third-party administrator (“TPA”) processes and reviews claims on a monthly basis.  Currently, our exposure on any single claim is capped at $500,000.  In developing our estimates, we accumulate historical claims data for the previous 10 years to calculate loss development factors (“LDF”) by insurance coverage type.  LDFs are applied to known claims to estimate the ultimate potential liability for known and unknown claims for each open policy year.  LDFs are updated annually.  Because this methodology relies heavily on historical claims data, the key risk is whether the historical claims are an accurate predictor of future claims exposure.  The risk also exists that certain claims have been incurred and not reported on a timely basis.  To mitigate these risks, in conjunction with our TPA, we closely monitor claims to ensure timely accumulation of data and compare claims trends with the industry experience of our TPA.

For the VITAS segment, we self-insure for workers’ compensation claims.  Currently, VITAS’ exposure on any single claim is capped at $750,000. For VITAS’ self-insurance accruals for workers’ compensation, the valuation methods used are similar to those used internally for our other business units.

Our casualty insurance liabilities are recorded gross before any estimated recovery for amounts exceeding our stop loss limits.  Estimated recoveries from insurance carriers are recorded as accounts receivable.

TAXES ON INCOME

Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on the date of enactment.

We are subject to income taxes in Canada, U.S. federal and most state jurisdictions.  Significant judgment is required to determine our provision for income taxes.  Our financial statements reflect expected future tax consequences of such uncertain positions assuming the taxing authorities’ full knowledge of the position and all relevant facts.

CONTINGENCIES

We are subject to various lawsuits and claims in the normal course of our business.  In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary.  We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable.  We record legal fees associated with legal and regulatory actions as the costs are incurred.  We disclose material loss contingencies that are probable but not reasonably estimable and those that are at least reasonably possible.

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ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.  Disclosures of aftertax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments.

RECLASSIFICATIONS

Certain reclassifications have been made to prior-year amounts to conform to current year classifications.  In 2011 we reclassified capitalized direct costs of obtaining licenses to operate plumbing locations and hospice programs from other long-term assets to intangible assets.

2. Hospice Revenue Recognition

VITAS recognizes revenue at the estimated realizable amount due from third-party payers, which are primarily Medicare and Medicaid.  Payers may deny payment for services in whole or in part on the basis that such services are not eligible for coverage and do not qualify for reimbursement.  We estimate denials each period and make adequate provision in the financial statements.  The estimate of denials is based on historical trends and known circumstances and does not vary materially from period to period on an aggregate basis.  Medicare billings are subject to certain limitations, as described below.

The allowance for doubtful accounts for VITAS comprises the following (in thousands):

	Medicare			Medicaid			Commercial			Other			Total
Beginning Balance January 1, 2010	$	6,268		$	2,535		$	1,630		$	505		$	10,938
Bad debt provision		2,918			2,922			1,745			314			7,899
Write-offs		(2,218	)		(2,653	)		(2,152	)		(436	)		(7,459	)
Other/Contractual adjustments		-			-			-			423			423
Ending Balance December 31, 2010		6,968			2,804			1,223			806			11,801
Bad debt provision		315			4,323			2,245			172			7,055
Write-offs		(2,368	)		(4,030	)		(1,915	)		(1,282	)		(9,595	)
Other/Contractual adjustments		2			-			16			724			742
Ending Balance December 31, 2011	$	4,917		$	3,097		$	1,569		$	420		$	10,003

VITAS is subject to certain limitations on Medicare payments for services.  Specifically, if the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of hospice care such program provided to all Medicare patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate.  None of VITAS’ hospice programs exceeded the payment limits on inpatient services in 2011, 2010 or 2009.

VITAS is also subject to a Medicare annual per-beneficiary cap (“Medicare cap”).  Compliance with the Medicare cap is measured by comparing the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number between November 1 of each year and October 31 of the following year with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year.

We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare cap.  Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions.  However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the period that will require repayment to the Federal government under the Medicare cap and record the amount as a reduction to service revenue.

During the year ended December 31, 2011, we reversed Medicare cap liability for amounts recorded in the fourth quarter of 2010 for two programs’ projected 2011 measurement period liability. This reversal was partially offset by the Medicare cap liability for three programs’ projected 2012 measurement period liability.   For the year ended December 31, 2010, we recorded pretax charges in continuing operations for the estimated Medicare cap liability for two programs’

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projected liability through year end for the 2011 measurement period.  The majority of the liability relates to one program which is VITAS’ largest hospice.  This amount was subsequently reversed during the 2011 fiscal year due to increased admission trends.  Shown below is the Medicare cap liability activity for the years ended December 31, 2011 and 2010 (in thousands):

	2011			2010
Beginning Balance January 1,	$	1,371		$	1,981
Expense - 2012 measurement period		2,578			-
Reversal - 2011 measurement period		(786	)		-
Expense - 2011 measurement period		-			1,110
Reversal - 2010 measurement period		-			(1,720	)
Other		(198	)		-
Ending Balance December 31,	$	2,965		$	1,371

3.      Long-Term Debt and Lines of Credit

As of December 31, 2011, we have long-term debt of $166.8 million (December 31, 2010 - $159.2 million).  This long-term debt is related in its entirety to our Convertible Notes that are due in full in 2014.

2011 REFINANCING

On March 1, 2011, we replaced our existing credit agreement with our Revolving Credit Facility (“2011 Credit Agreement”).  Terms of the 2011 Credit Agreement consist of a five-year, $350 million revolving credit facility.  This 2011 Credit Agreement has a floating interest rate that is currently LIBOR plus 175 basis points (2.11% at December 31, 2011).  The 2011 Credit Agreement also includes a $150 million expansion feature.  Debt issuance costs written-off related to the previous existing credit agreement are not material.

CONVERTIBLE NOTES

In May 2007, we issued $200 million of Senior Convertible Notes due 2014 (the “Notes”) at a price of $1,000 per Note, less an underwriting fee of $27.50 per Note.  We received approximately $194 million in net proceeds from the sale of the Notes after paying underwriting fees, legal and other expenses.  We pay interest on the Notes on May 15 and November 15 of each year, beginning on November 15, 2007. The Notes mature on May 15, 2014. The Notes are guaranteed on an unsecured senior basis by each of our subsidiaries that are a borrower or a guarantor under any senior credit facility, as defined in the Indenture.  The Notes were convertible, under certain circumstances, into our Capital Stock at an initial conversion rate of 12.3874 shares per $1,000 principal amount of Notes.  This conversion rate is equivalent to an initial conversion price of approximately $80.73 per share. Prior to March 1, 2014, holders may convert their Notes under certain circumstances. On and after March 1, 2014, the Notes will be convertible at any time prior to the close of business three days prior to the stated maturity date of the Notes. Upon conversion of a Note, if the conversion value is $1,000 or less, holders will receive cash equal to the lesser of $1,000 or the conversion value of the number of shares of our Capital Stock. If the conversion value exceeds $1,000, in addition to this, holders will receive shares of our Capital Stock for the excess amount.  The Indenture contains customary terms and covenants that upon certain events of default, including without limitation, failure to pay when due any principal amount, a fundamental change or certain cross defaults in other agreements or instruments, occurring and continuing; either the trustee or the holders of 25% in aggregate principal amount of the Notes may declare the principal of the Notes and any accrued and unpaid interest through the date of such declaration immediately due and payable. In the case of certain events of bankruptcy or insolvency relating to any significant subsidiary or to us, the principal amount of the Notes and accrued interest automatically becomes due and payable.

The conversion rate on the Notes is adjusted upon certain corporate events including a quarterly dividend payment in excess of $0.06 per share.  We have increased the dividend per share periodically since issuing the Notes.  This has the effect of changing the conversion rate to 12.5589 ($79.62 per share) at December 31, 2011.

Pursuant to the FASB’s guidance on accounting for derivative instruments indexed to, and potentially settled in a company’s own stock as well as the guidance on the meaning of “indexed to a company’s own stock,” the Notes are accounted for as convertible debt in the accompanying consolidated balance sheet and the embedded options within the Notes have not been accounted for as separate derivatives.  FASB’s guidance requires all such convertible debentures to be separately accounted for as debt and equity pieces of the instrument.  At inception of the convertible instrument, cash flows related to the convertible instrument are to be discounted using a market rate of interest.

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Chemed Corporation and Subsidiary Companies

The following amounts are included in our consolidated balance sheet related to the Notes (in thousands):

	December 31,
	2011			2010
Principal amount of convertible debentures	$	186,956		$	186,956
Unamortized debt discount		(20,172	)		(27,748	)
Carrying amount of convertible debentures	$	166,784		$	159,208
Additional paid in capital (net of tax)	$	31,310		$	31,310

In conjunction with the Notes, we entered into a purchased call transaction and a warrant transaction (written call) with JPMorgan Chase, National Association and Citibank, N.A. (the "Counterparties").  The purchased call options cover approximately 2,477,000 shares of our Capital Stock, which under most circumstances represents the maximum number of shares of Capital Stock that underlie the Notes.  Concurrently with entering into the purchased call options, we entered into warrant transactions with each of the Counterparties. Pursuant to the warrant transactions, we sold to the Counterparties warrants to purchase in the aggregate approximately 2,477,000 shares of our Capital Stock. In most cases, the sold warrants may not be exercised prior to the maturity of the Notes.

The purchased call options and sold warrants are separate contracts with the Counterparties, are not part of the terms of the Notes and do not affect the rights of holders under the Notes. A holder of the Notes will not have any rights with respect to the purchased call options or the sold warrants.  The purchased call options are expected to reduce the potential dilution upon conversion of the Notes if the market value per share of the Capital Stock at the time of exercise is greater than the conversion price of the Notes at time of exercise. The sold warrants have an exercise price of $105.44 and are expected to result in some dilution should the price of our Capital Stock exceed this exercise price.

Our net cost for these transactions was approximately $27.3 million.  Pursuant to FASB’s authoritative guidance, the purchased call option and the sold warrants are accounted for as equity transactions.  Therefore, our net cost was recorded as a decrease in stockholders’ equity in the accompanying consolidated balance sheet.

The following amounts comprise interest expense included in our consolidated income statement (in thousands):

	December 31,
	2011		2010		2009
Cash interest expense	$	5,175	$	4,224	$	4,350
Non-cash amortization of debt discount		7,576		7,081		6,617
Amortization of debt costs		1,137		654		632
Total interest expense	$	13,888	$	11,959	$	11,599

The unamortized debt discount is amortized using the effective interest method over the remaining life of the Notes.  The effective rate on the Notes after adoption of the standard is 6.875%. The average interest rate for our long-term debt was 1.9% for the years ended December 31, 2011 and 2010.

Capitalized interest was not material for any of the periods shown.  Summarized below are the total amounts of interest paid during the years ended December 31 (in thousands):

2011	$	4,754
2010		4,113
2009		4,667

DEBT COVENANTS

Collectively, the 2011 Credit Agreement and the Notes require us to meet certain restrictive non-financial and financial covenants. We are in compliance with all non-financial debt covenants as of December 31, 2011.  The restrictive financial covenants are defined in the 2011 Credit Agreement and include maximum leverage ratios, minimum fixed charge coverage and consolidated net worth ratios, limits on operating leases and minimum asset value limits.  We are in compliance with the financial debt covenants as of December 31, 2011, as follows:

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Description	Requirement	Chemed
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj.
EBITDA)	< 3.50 to 1.00	1.09 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash
Flow/Consolidated Fixed Charges)	> 1.50 to 1.00	2.47 to 1.00
Annual Operating Lease Commitment	< $30.0 million	$19.8 million

We have issued $29.5 million in standby letters of credit as of December 31, 2011, mainly for insurance purposes.  Issued letters of credit reduce our available credit under the revolving credit agreement.  As of December 31, 2011, we have approximately $320.5 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the expansion feature.

4. Stock-Based Compensation Plans

We have six stock incentive plans under which 8,450,000 shares can be issued to key employees through a grant of stock awards and/or options to purchase shares.  The Compensation/Incentive Committee (“CIC”) of the Board of Directors administers these plans.  All options granted under these plans provide for a purchase price equal to the market value of the stock at the date of grant.  The latest plan, covering a total of 1,750,000 shares, was adopted in May 2010.  The plans are not qualified, restricted or incentive plans under the U.S. Internal Revenue Code.  The terms of each plan differ slightly; however, stock options issued under the plans generally have a maximum term of 10 years.  Under one plan, adopted in 1999, up to 500,000 shares may be issued to employees who are not our officers or directors.

    We grant stock options and restricted stock awards to our officers, other key employees and directors to better align their long-term interests with those of our shareholders.  We grant stock options at an exercise price equal to the market price of our stock on the date of grant.  Options generally vest evenly annually over a three-year period and have a contractual life of 10 years.  Restricted stock awards generally cliff vest over a three-or four year period.  Immediately vesting stock awards are generally granted to our non-employee directors annually at the time of our Annual Meeting.

  In February 2011, the CIC granted 35,713 restricted stock awards to certain key employees.  These shares cliff vest in February 2015.  In May 2011, the CIC granted 6,928 unrestricted shares to stock to the Company’s outside directors.

The following table summarizes total stock option and stock award activity during 2011:

	Stock Options									Stock Awards
				Weighted Average				Aggregate					Weighted
						Remaining		Intrinsic					Average
	Number of			Exercise		Contractual		Value		Number of			Grant-Date
	Options			Price		Life (Years)		(thousands)		Shares			Price
Outstanding at January 1, 2011		2,586,646		$	47.19						151,620		$	48.00
Granted		513,100			65.17						125,741			64.74
Exercised/Vested		(433,321	)		36.22						(58,238	)		57.61
Canceled/ Forfeited		(27,902	)		51.99						(4,000	)		44.02
Outstanding at December 31, 2011		2,638,523			52.44		6.6	$	12,748		215,123			55.25
Vested and expected to vest
at December 31, 2011		2,630,500			52.45		6.6		12,724	n.a.			n.a.
Exercisable at December 31, 2011		1,630,660			49.22		5.5		11,506	n.a.			n.a.

We estimate the fair value of stock options using the Black-Scholes valuation model, consistent with the provisions of the FASB’s and the Securities and Exchange Commission’s (“SEC”) guidance.  We determine expected term, volatility, dividend yield and forfeiture rate based on our historical experience.  We believe that historical experience is the best indicator of these factors.  Prior to 2011, we separated the participants into two groups for purposes of calculating the fair value of options.  Beginning in 2011, we valued all participants’ options as a single group because segregation of data did not provide significantly different results for determining compensation expense for stock options.  Data for 2010 and 2009 have been combined to present the weighted average information of previously segregated data.  The assumptions we used to value the 2011, 2010 and 2009 grants are as follows:

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Chemed Corporation and Subsidiary Companies

	2011		2010		2009
Stock price on date of issuance	$	65.17	$	52.76	$	44.02
Grant date fair value per share	$	19.08	$	15.21	$	14.04
Number of options granted		513,100		515,100		508,600
Expected term (years)		4.9		5.1		5.1
Risk free rate of return		2.35%		2.43%		1.74%
Volatility		32.8%		33.5%		35.0%
Dividend yield		1.0%		1.5%		0.6%
Forfeiture rate		-		1.6%		2.0%

Other data for stock option and stock award activity include (in thousands, except per-share amounts):

	Years Ended December 31,
	2011		2010		2009
Total compensation cost of stock-based compensation
plans charged against income	$	14,237	$	14,961	$	15,726
Total income tax benefit recognized in income for stock
based compensation plans		5,232		5,499		5,780
Total intrinsic value of stock options exercised		12,925		10,096		5,079
Total intrinsic value of stock awards vested during the period		3,757		8,437		5,604
Per-share weighted averaged grant-date fair value of
stock awards granted		64.74		57.13		44.54

Other data for stock options and stock awards for 2011 include (dollar amounts in thousands):

	Stock		Stock
	Options		Awards
Total unrecognized compensation related to nonvested options and awards at end of year	$	9,851	$	5,995
Weighted average period over which unrecognized compensation cost of nonvested options
and awards to be recognized (years)		1.8		1.8
Actual income tax benefit realized from options exercised during the year	$	4,764	n.a.

EXECUTIVE LONG-TERM INCENTIVE PLAN (“LTIP”)

Our shareholders approved in May 2002 the adoption of the LTIP covering our officers and certain key employees.  The CIC periodically approves a pool of shares to be awarded based on stock price targets, EBITDA targets, time-based vesting and a discretionary component for the LTIP.

The CIC established price targets and pools of unrestricted shares to be granted if the closing stock price reaches the target price for 30 of 60 consecutive trading days during the specified three-year period:

	February 2011 Price Targets for the			May 2009 Price Targets for the
	three years ending February 18, 2014			three years ending February 28, 2012
Price target	$79.00	$85.00	$90.00	$54.00	$58.00	$62.00
Number of shares in the pool	25,000	25,000	25,000	22,500	33,750	33,750
Shares awarded:
From the pool	-	-	-	22,500	33,750	33,750
Discretionary shares	-	-	-	5,400	7,350	7,350
Total shares	-	-	-	27,900	41,100	41,100
Pretax cost of award (in thousands)	n.a.	n.a.	n.a.	$1,799	$2,935	$3,012
Date of award	n.a.	n.a.	n.a.	April 2010	December 2010	January 2011

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The CIC also established cumulative adjusted EBITDA Earnings Targets for three-year and four year periods and pools of unrestricted shares to be granted upon the attainment of either target:

	Cumulative EBITDA Targets
	November 2009	May 2007
Beginning measurement date	January 1, 2010	January 1, 2007
Three-year EBITDA Target (in thousands)	$640,000	$465,000
Four-year EBITDA target (in thousands)	825,000	604,000
Shares in EBITDA pool	80,000	80,000
Shares awarded:
From the pool	-	80,000
Discretionary shares	-	16,200
Total shares	-	96,200
Pretax cost of award (in thousands)	-	$5,007
Date of award	n.a.	November 2009

The above pretax costs of the LTIP awards include related payroll taxes and savings plan contributions and are included in the “Selling, general and administrative expenses” line of the consolidated income statement.

In February 2011, the CIC approved a time-based LTIP award of 42,000 shares of restricted stock to certain key employees.  The restricted shares cliff vest four years from the date of issuance.  The cumulative compensation expense related to the restricted award is $2.7 million and will be recognized ratably over the 4 year vesting period.  We assumed no forfeitures in determining the cumulative compensation expense of the grant.  In November 2009, the CIC established a discretionary pool of 37,000 shares of capital stock.

EMPLOYEE STOCK PURCHASE PLAN (“ESPP”)

The ESPP allows eligible participants to purchase our shares through payroll deductions at current market value.  We pay administrative and broker fees associated with the ESPP.  Shares purchased for the ESPP are purchased on the open market and credited directly to participants’ accounts.  In accordance with the FASB’s guidance, the ESPP is non-compensatory.

5.      Segments and Nature of the Business

Our segments include the VITAS segment and the Roto-Rooter segment.  Relative contributions of each segment to service revenues and sales were 73% and 27%, respectively, in 2011 and 72% and 28%, respectively, in 2010.  The vast majority of our service revenues and sales from continuing operations are generated from business within the United States.

The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the RRSC and RRC operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics.  The characteristics of these operating segments and the basis for aggregation are reviewed annually.  Accordingly, the reportable segments are defined as follows:

●   The VITAS segment provides hospice services for patients with terminal illnesses.  This type of care is aimed at making the terminally ill patient’s end of life as comfortable and pain-free as possible.  Hospice care is typically available to patients who have been initially certified or re-certified as terminally ill (i.e., a prognosis of six months or less) by their attending physician, if any, and the hospice physician.  VITAS offers all levels of hospice care in a given market, including routine home care, inpatient care and continuous care.  Over 90% of VITAS’ revenues are derived through the Medicare and Medicaid reimbursement programs.

●   The Roto-Rooter segment provides repair and maintenance services to residential and commercial accounts using the Roto-Rooter registered service marks. Such services include plumbing and sewer, drain and pipe cleaning. They are delivered through company-owned and operated territories, independent contractor-operated territories and franchised locations. This segment also manufactures and sells products and equipment used to provide such services.

●   We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”.  Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation.  Corporate

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investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements.

Segment data for our continuing operations are set forth below (in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Revenues by Type of Service
VITAS
Routine homecare	$	718,658		$	666,562		$	615,408
Continuous care		158,466			153,050			141,272
General inpatient		110,742			105,588			97,356
Estimated BNAF		-			-			1,950
Medicare cap		(1,594	)		610			(1,643	)
Total segment		986,272			925,810			854,343
Roto-Rooter
Sewer and drain cleaning		138,932			135,704			136,503
Plumbing repair and maintenance		177,363			168,625			151,072
Independent contractors		26,711			22,943			21,620
HVAC repair and maintenance		3,410			4,183			4,031
Other products and services		23,282			23,280			22,667
Total segment		369,698			354,735			335,893
Total service revenues and sales	$	1,355,970		$	1,280,545		$	1,190,236
Aftertax Segment Earnings/(Loss)
VITAS	$	80,358		$	79,796		$	71,696
Roto-Rooter		34,879			31,678			33,040
Total		115,237			111,474			104,736
Corporate		(29,258	)		(29,643	)		(30,699	)
Discontinued operations		-			-			(253	)
Net income	$	85,979		$	81,831		$	73,784
Interest Income
VITAS	$	4,293		$	4,852		$	4,581
Roto-Rooter		2,176			2,661			2,587
Total		6,469			7,513			7,168
Corporate		91			175			83
Intercompany eliminations		(6,134	)		(7,244	)		(6,828	)
Total interest income	$	426		$	444		$	423
Interest Expense
VITAS	$	229		$	131		$	374
Roto-Rooter		358			233			186
Total		587			364			560
Corporate		13,301			11,595			11,039
Total interest expense	$	13,888		$	11,959		$	11,599
Income Tax Provision
VITAS	$	48,835		$	48,601		$	43,637
Roto-Rooter		21,353			19,547			20,372
Total		70,188			68,148			64,009
Corporate		(15,611	)		(16,148	)		(17,426	)
Total income tax provision	$	54,577		$	52,000		$	46,583

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Chemed Corporation and Subsidiary Companies

	For the Years Ended December 31,
	2011		2010		2009
Identifiable Assets
VITAS	$	504,677	$	531,247	$	476,621
Roto-Rooter		212,234		205,601		191,254
Total		716,911		736,848		667,875
Corporate		78,994		93,313		151,595
Total identifiable assets	$	795,905	$	830,161	$	819,470
Additions to Long-Lived Assets
VITAS	$	24,298	$	17,492	$	14,945
Roto-Rooter		9,426		18,035		8,067
Total		33,724		35,527		23,012
Corporate		72		18		448
Total additions to long-lived assets	$	33,796	$	35,545	$	23,460
Depreciation and Amortization
VITAS	$	18,480	$	18,900	$	17,973
Roto-Rooter		8,729		8,289		8,509
Total		27,209		27,189		26,482
Corporate		2,290		1,854		1,420
Total depreciation and amortization	$	29,499	$	29,043	$	27,902

6.      Intangible Assets

Amortization of definite-lived intangible assets from continuing operations for the years ended December 31, 2011, 2010, 2009 was $1.5 million, $2.1 million and $4.0 million, respectively.  The following is a schedule by year of projected amortization expense for definite-lived intangible assets (in thousands):

2012	$	1,487
2013		1,487
2014		508
2015		277
2016		242
Thereafter		307

The balance in identifiable intangible assets comprises the following (in thousands):

	Gross		Accumulated			Net Book
	Asset		Amortization			Value
December 31, 2011
Referral networks	$	21,729	$	(18,647	)	$	3,082
Covenants not to compete		9,286		(8,885	)		401
Customer lists		1,222		(1,118	)		104
Reacquired franchise rights		974		(254	)		720
Subtotal - definite-lived intangibles		33,211		(28,904	)		4,307
VITAS trade name		51,300		-			51,300
Operating licenses		2,655		-			2,655
Total	$	87,166	$	(28,904	)	$	58,262
December 31, 2010
Referral networks	$	21,140	$	(17,427	)	$	3,713
Covenants not to compete		9,211		(8,814	)		397
Customer lists		1,223		(1,089	)		134
Reacquired franchise rights		974		(108	)		866
Subtotal - definite-lived intangibles		32,548		(27,438	)		5,110
VITAS trade name		51,300		-			51,300
Operating licenses		1,448		-			1,448
Total	$	85,296	$	(27,438	)	$	57,858

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Chemed Corporation and Subsidiary Companies

7. Other Operating Expenses

There were no other operating expenses from continuing operations for the periods ended December 31, 2011 and 2010.  For the twelve-month period ended December 31, 2009, we recorded pretax expenses of $4.0 million related to the costs of a contested proxy solicitation.

8.      Business Combinations

On April 29, 2011, our VITAS segment completed an acquisition of the operating assets of Family Comfort Hospice which is based in Alabama.  This acquisition adds three central Alabama locations serving ten counties to VITAS’ network of hospice programs.  We made no acquisitions within the Roto-Rooter segment.  The purchase price of this acquisition is allocated as follows (in thousands):

Working capital	$	382
Identifiable intangible assets		951
Goodwill		2,320
Other assets and liabilities - net		11
	$	3,664

During 2010, we completed four business combinations within the Roto-Rooter segment for $9.5 million in cash to increase our market penetration in Kansas City, Missouri, St. Louis, Missouri, Jefferson City, Missouri and Spokane Washington.  We made no acquisitions within the VITAS segment during 2010.  The purchase price of these acquisitions was allocated as follows (in thousands):

Working capital	$	268
Identifiable intangible assets		589
Goodwill		8,225
Other assets and liabilities - net		387
	$	9,469

During 2009, we completed two business combinations within the Roto-Rooter segment for $1.9 million in cash to increase our market penetration in Detroit, Michigan and Grand Rapids, Michigan.  We made no acquisitions within the VITAS segment during 2009.

The unaudited pro forma results of operations, assuming purchase business combinations completed in 2011 and 2010 were completed on January 1, 2010, do not materially impact the accompanying consolidated financial statements.  The results of operations of each of the above business combinations are included in our results of operations from the date of the respective acquisition.

9.      Discontinued Operations

Discontinued operations comprise (in thousands, except per share amounts):

	For the Years Ended December 31,
	2011		2010		2009
Adjustment to accruals of operations discontinued in prior years:
Casualty insurance costs	$	-	$	-	$	(400	)
Loss before income taxes		-		-		(400	)
All other income taxes		-		-		147
Total adjustments		-		-		(253	)
Total discontinued operations	$	-	$	-	$	(253	)
Earnings/(loss) per share	$	-	$	-	$	(0.01	)
Diluted earnings/(loss) per share	$	-	$	-	$	(0.02	)

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Chemed Corporation and Subsidiary Companies

In December 2009, we recorded a $400,000 pretax charge for residual casualty insurance claims related to our discontinued operations.

At December 31, 2011 and 2010, the accrual for our estimated liability for potential environmental cleanup and related costs arising from the sale of DuBois amounted to $1.7 million.  Of the 2011 balance, $826,000 is included in other current liabilities and $901,000 is included in other liabilities (long-term).   The estimated timing of payments of these liabilities follows (in thousands):

2012	$	826
2013		300
Thereafter		601
	$	1,727

We are contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million.  On the basis of a continuing evaluation of the potential liability, we believe it is not probable this additional liability will be paid.  Accordingly, no provision for this contingent liability has been recorded.  The potential liability is not insured, and the recorded liability does not assume the recovery of insurance proceeds.  Also, the environmental liability has not been discounted because it is not possible to reliably project the timing of payments.  We believe that any adjustments to our recorded liability will not materially adversely affect our financial position, results of operations or cash flows.

10.          Cash Overdrafts and Cash Equivalents

Included in accounts payable are cash overdrafts of $10.3 million and $11.1 million as of December 31, 2011 and 2010, respectively.

From time to time throughout the year, we invest excess cash in money market funds or repurchase agreements directly with major commercial banks. We do not physically hold the collateral for repurchase agreements, but the term is less than 10 days.  We closely monitor the creditworthiness of the institutions with which we invest our overnight funds and the quality of the collateral underlying those investments. We had $32.5 million in cash equivalents as of December 31, 2011.  There was $45.5 million in cash equivalents as of December 31, 2010.  The weighted average rate of return for our cash equivalents was 0.1% in both 2011 and 2010.

11.          Other Income—Net

Other income—net from continuing operations comprises the following (in thousands):

	For the Years Ended December31,
	2011			2010			2009
Market value gains on assets held in deferred
compensation trust	$	798		$	2,210		$	5,802
Loss on disposal of property and equipment		(441	)		(425	)		(369	)
Interest income		426			444			423
Other - net		(66	)		39			18
Total other income	$	717		$	2,268		$	5,874

The offset for market value gains or losses on assets held in deferred compensation trust is recorded in selling, general and administrative expenses.

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Chemed Corporation and Subsidiary Companies

12.      Income Taxes

The provision for income taxes comprises the following (in thousands):

	For the Years Ended December 31,
	2011		2010			2009
Continuing Operations:
Current
U.S. federal	$	40,762	$	46,789		$	36,182
U.S. state and local		5,961		6,981			4,960
Foreign		612		639			462
Deferred
U.S. federal, state and local		7,227		(2,418	)		4,980
Foreign		15		9			(1	)
Total	$	54,577	$	52,000		$	46,583
Discontinued Operations:
Current U.S. federal	$	-	$	-		$	(65	)
Current U.S. state and local		-		-			(5	)
Deferred U.S. federal, state and local		-		-			(77	)
Total	$	-	$	-		$	(147	)

A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands):

	December 31,
	2011			2010
Accrued liabilities	$	27,687		$	26,334
Stock compensation expense		12,200			10,257
Allowance for uncollectible accounts receivable		1,905			2,695
State net operating loss carryforwards		1,633			1,379
Other		2,845			2,763
Deferred income tax assets		46,270			43,428
Amortization of intangible assets		(42,192	)		(40,135	)
Accelerated tax depreciation		(16,322	)		(10,499	)
Revenue recognition		(1,684	)		-
Currents assets		(1,315	)		(1,148	)
Other		(1,530	)		(1,397	)
Deferred income tax liabilities		(63,043	)		(53,179	)
Net deferred income tax liabilities	$	(16,773	)	$	(9,751	)

Included in other assets at December 31, 2011, are deferred income tax assets of $150,000 (2010 - $236,000).  At December 31, 2011 and 2010, state net operating loss carryforwards were $31.0 million and $26.0 million, respectively.  These net operating losses will expire, in varying amounts, between 2012 and 2031.  Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets.

After FASB’s adoption of FASB’s guidance on accounting for uncertain income taxes in 2007, we had approximately $1.3 million in unrecognized tax benefits.  The majority of this amount would affect our effective tax rate, if recognized in a future period.  The years ended December 31, 2008 and forward remain open for review for Federal income tax purposes.  The earliest open year relating to any of our material state jurisdictions is the fiscal year ended December 31, 2006. During the next twelve months, we do not anticipate a material net change in unrecognized tax benefits.

As permitted by this guidance, we classify interest related to our accrual for uncertain tax positions in separate interest accounts.  As of December 31, 2011 and 2010, we have approximately $252,000 and $114,000, respectively, accrued in interest payable related to uncertain tax positions.  These accruals are included in other current liabilities in the accompanying consolidated balance sheet.  Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material.

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Chemed Corporation and Subsidiary Companies

A roll forward of the significant changes to our unrecognized tax benefits is as follows (in thousands):

	2011			2010			2009
Balance at January 1,	$	704		$	1,010		$	1,202
Unrecognized tax benefits due to positions taken in current year		2,038			119			136
Decrease due to settlement with taxing authorities		-			-			(214	)
Decrease due to expiration of statute of limitations		(130	)		(425	)		(93	)
Other		-			-			(21	)
Balance at December 31,	$	2,612		$	704		$	1,010

The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Income tax provision calculated using
the statutory rate of 35%	$	49,195		$	46,841		$	42,217
State and local income taxes,
less federal income tax effect		4,733			4,509			3,837
Nondeductible expenses		1,021			928			854
Impact of deferred compensation plans		(1	)		(27	)		(190	)
Other --net		(371	)		(251	)		(135	)
Income tax provision	$	54,577		$	52,000		$	46,583
Effective tax rate		38.8	%		38.9	%		38.6	%

Summarized below are the total amounts of income taxes paid during the years ended December 31 (in thousands):

2011	$	44,343
2010		49,532
2009		40,872

Provision has not been made for additional taxes on $35.1 million of undistributed earnings of our domestic subsidiaries.  Should we elect to sell our interest in all of these businesses rather than to effect a tax-free liquidation, additional taxes amounting to approximately $12.9 million would be incurred based on current income tax rates.

13.      Properties and Equipment

A summary of properties and equipment follows (in thousands):

	December 31,
	2011			2010
Land	$	1,360		$	1,360
Buildings		40,424			32,788
Transportation equipment		19,412			18,837
Machinery and equipment		62,467			58,706
Computer software		44,805			47,203
Furniture and fixtures		58,317			51,277
Projects under development		2,875			1,817
Total properties and equipment		229,660			211,988
Less accumulated depreciation		(146,709	)		(132,696	)
Net properties and equipment	$	82,951		$	79,292

The net book value of computer software at December 31, 2011 and 2010, was $15.4 million and $18.9 million, respectively.  Depreciation expense for computer software was $5.6 million, $5.9 million and $4.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.

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Chemed Corporation and Subsidiary Companies

14.     Lease Arrangements

We have operating leases that cover our corporate office headquarters, various warehouse and office facilities, office equipment and transportation equipment. The remaining terms of these leases range from one year to eight years, and in most cases we expect that these leases will be renewed or replaced by other leases in the normal course of business. We have no significant capital leases as of December 31, 2011 or 2010.

The following is a summary of future minimum rental payments and sublease rentals to be received under operating leases that have initial or remaining noncancelable terms in excess of one year at December 31, 2011 (in thousands):

2012	$	19,797
2013		14,995
2014		12,030
2015		9,725
2016		5,155
Thereafter		2,146
Total minimum rental payments		63,848
Less: minimum sublease rentals		(69	)
Net minimum rental payments	$	63,779

Total rental expense incurred under operating leases for continuing operations follows (in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Total rental payments	$	22,199		$	21,777		$	21,219
Less sublease rentals		(170	)		(237	)		(270	)
Net rental expense	$	22,029		$	21,540		$	20,949

15.     Pension and Retirement Plans

Retirement obligations under various plans cover substantially all full-time employees who meet age and/or service eligibility requirements. The major plans providing retirement benefits to our employees are defined contribution plans.  Expenses charged to continuing operations for our retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

	For the Years Ended December 31,
	2011		2010		2009
$	9,408	$	11,444	$	15,143

These expenses include the impact of market gains and losses on assets held in deferred compensation plans.

We have excess benefit plans for key employees whose participation in the qualified plans is limited by U.S. Employee Retirement Income Security Act requirements. Benefits are determined based on theoretical participation in the qualified plans.  Benefits are only invested in mutual funds, and participants are not permitted to diversify accumulated benefits in shares of our stock. Trust assets invested in shares of our stock are included in treasury stock, and the corresponding liability is included in a separate component of stockholders’ equity. At December 31, 2011, these trusts held 97,428 shares or $2.0 million of our stock (2010 – 99,494 shares or $2.0 million).

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Chemed Corporation and Subsidiary Companies

16.     Earnings Per Share

The computation of earnings per share follows (in thousands, except per share data):

	Income from Continuing Operations						Net Income
For the Years Ended December 31,	Income		Shares		Earnings per Share		Income		Shares		Earnings per Share
2011
Earnings	$	85,979		20,523	$	4.19	$	85,979		20,523	$	4.19
Dilutive stock options		-		335				-		335
Nonvested stock awards		-		87				-		87
Diluted earnings	$	85,979		20,945	$	4.10	$	85,979		20,945	$	4.10
2010
Earnings	$	81,831		22,587	$	3.62	$	81,831		22,587	$	3.62
Dilutive stock options		-		348				-		348
Nonvested stock awards		-		96				-		96
Diluted earnings	$	81,831		23,031	$	3.55	$	81,831		23,031	$	3.55
2009
Earnings	$	74,037		22,451	$	3.30	$	73,784		22,451	$	3.29
Dilutive stock options		-		229				-		229
Nonvested stock awards		-		62				-		62
Diluted earnings	$	74,037		22,742	$	3.26	$	73,784		22,742	$	3.24

During 2011, 1.3 million stock options were excluded from the computation of diluted earnings per share as their exercise prices were greater than the average market price during most of the year.  During 2010, 970,900 stock options were also excluded.  During 2009, 819,917 stock options were also excluded.

Diluted earnings per share may be impacted in future periods as the result of the issuance of our $200 million Notes and related purchased call options and sold warrants.  Per FASB’s authoritative guidance on the effect of contingently convertible instruments on diluted earnings per share and convertible bonds with issuer option to settle for cash upon conversion, we will not include any shares related to the Notes in our calculation of diluted earnings per share until our average stock price for a quarter exceeds the current conversion price.  We would then include in our diluted earnings per share calculation those shares issuable using the treasury stock method.  The amount of shares issuable is based upon the amount by which the average stock price for the quarter exceeds the conversion price.  The purchased call option does not impact the calculation of diluted earnings per share, as it is always anti-dilutive. The sold warrants become dilutive when our average stock price for a quarter exceeds the strike price of the warrant.

The following table provides examples of how changes in our stock price impact the number of shares that would be included in our diluted earnings per share calculation at December 31, 2011.  It also shows the impact on the number of shares issuable upon conversion of the Notes and settlement of the purchased call options and sold warrants:

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Chemed Corporation and Subsidiary Companies

		Shares				Total Treasury		Shares Due			Incremental
		Underlying 1.875%				Method		to the Company			Shares Issued by
Share		Convertible		Warrant		Incremental		under Notes			the Company
Price		Notes		Shares		Shares (a)		Hedges			upon Conversion (b)
$	80.73		32,140		-		32,140		(34,382	)		(2,242	)
$	90.73		287,382		-		287,382		(307,433	)		(20,051	)
$	100.73		491,947		-		491,947		(526,270	)		(34,323	)
$	110.73		659,562		119,997		779,559		(705,580	)		73,979
$	120.73		799,411		318,107		1,117,518		(855,187	)		262,331
$	130.73		917,865		485,908		1,403,773		(981,905	)		421,868
a) Represents the number of incremental shares that must be included in the calculation of diluted shares under U.S. GAAP.
b) Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement
of the note hedges and warrants.

17.      Financial Instruments

FASB’s authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements.  Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities.  Level 2 measurements use significant other observable inputs.  Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions.  In recording the fair value of assets and liabilities, companies must use the most reliable measurement available.

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of

December 31, 2011 (in thousands):

			Fair Value Measure
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred compensation     plans held in trust	$	31,629	$	31,629	$	-	$	-
Long-term debt		166,784		175,755		-		-

For cash and cash equivalents, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments.

18.      Loans Receivable from Independent Contractors

At December 31, 2011, we had contractual arrangements with 64 independent contractors to provide plumbing repair and drain cleaning services under sublicensing agreements using the Roto-Rooter name in lesser-populated areas of the United States and Canada. The arrangements give the independent contractors the right to conduct a plumbing and drain cleaning business using the Roto-Rooter name in a specified territory in exchange for a royalty based on a percentage of labor sales, generally approximately 40%.  We also pay for certain telephone directory advertising in these areas, lease certain capital equipment and provide operating manuals to serve as resources for operating a plumbing and drain cleaning business.  The contracts are generally cancelable upon 90 days’ written notice (without cause) or upon a few days notice (with cause).  The independent contractors are responsible for running the businesses as they believe best.

Our maximum exposure to loss from arrangements with our independent contractors at December 31, 2011 is approximately $1.1 million (2010 - $1.1 million).  The exposure to loss is mainly the result of loans provided to the independent contractors.  In most cases, these loans are partially secured by receivables and equipment owned by the independent contractor.  The interest rates on the loans range from zero to 8% per annum, and the remaining terms of the loans range from 2.5 months to 5.4 years at December 31, 2011.  During the periods ended December 31, 2011, 2010 and 2009 we recorded the following from our independent contractors (in thousands):

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Chemed Corporation and Subsidiary Companies

	For the Years Ended December 31,
	2011		2010		2009
Revenues	$	26,711	$	22,943	$	21,620
Pretax profits		13,320		10,695		9,466

19.      Legal and Regulatory Matters

Litigation

On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed.  They also seek payment of penalties, interest and plaintiffs’ attorney fees.  We contest these allegations.  In September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment.  We are unable to estimate our potential liability, if any, with respect to this case.

VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White.  This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives.  The case seeks payment of penalties, interest and Plaintiffs’ attorney fees.  We contest these allegations.  In December 2009, the trial court denied Plaintiffs’ motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court’s denial on the off-the-clock and sales representation exemption claims.  Plaintiffs have filed an appeal of this decision.  We are unable to estimate our potential liability or potential range of loss, if any, with respect to this case.

On November 14, 2011 Luann and Michael Cosgrove and Dawn Mills filed a class action lawsuit against Roto-Rooter in Minnesota state district court for the 4th Judicial District alleging unnecessary excavation work in Minnesota.  We removed the case to federal court.  Plaintiffs seek damages, injunctive relief, attorney fees and interest.  We contest these allegations.  This lawsuit is in its early stage and we are unable to estimate our potential liability, if any, with respect to these allegations.

On January 12, 2012, the Greater Pennsylvania Carpenters Pension Fund filed a putative class action lawsuit in the United States District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Tim O’Toole.  It alleges violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants. The suit, Greater Pennsylvania Carpenters Pension Fund v. Chemed Corp., et al., Civil Action No. 1:12-cv-28 (S.D. Ohio), concerns the VITAS hospice segment of the Company's business.   Plaintiff seeks, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and November 16, 2011, compensatory damages in an unspecified amount and attorneys' fees and expenses, arising from defendants' failure to disclose an alleged fraudulent scheme to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.   Defendants believe the allegations are without merit, and intend to defend vigorously against them.

Regardless of outcome, defense of litigation adversely affects us through defense costs, diversion of our time and related publicity.

Regulatory Matters

In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter.  In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review.   In February 2010, VITAS received a companion civil investigative demand (“CID”) from the State of Texas Attorney General’s Office, seeking related documents. In September 2010, it received a second CID and a second administrative subpoena seeking related documents.  In April 2011, the U.S. Attorney provided the Company with a copy of qui tam complaint filed under seal in the U.S. District Court for the Northern District of Texas.  The Court unsealed this complaint in November 2011.  The U.S. Attorney and the Attorney General for the State of Texas filed a notice in November 2011 that they had decided not to intervene at that time in the case.  They continue to investigate its allegations.  It was brought by Michael Rehfelt, a former Vitas San Antonio program general manager, against Vitas, the program’s former Regional Vice President Keith Becker, its former Medical Director Justos Cisneros, and their current employers:  Wellmed Medical

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Chemed Corporation and Subsidiary Companies

Management, Care Level Management LLC, and Inspiris Inc.  It alleges admission and recertification of inappropriate patients, backdating revocations, and conspiring with HMO defendants to admit inappropriate patients to hospice.  In June 2011, the U.S. Attorney provided the Company with a partially unsealed second qui tam complaint filed under seal in the U.S. District court for the Western District of Texas.  In June 2011, the U.S. Attorney also provided the Company with a partially unsealed third qui tam complaint filed under seal in the Northern District of Illinois, Eastern Division.  We are conferring with the U.S. Attorney regarding the Company’s defenses to each complaint’s allegations.  We can neither predict the outcome of this investigation nor estimate our potential liability, if any.  We believe that we are in compliance with Medicare and Medicaid rules and regulations applicable to hospice providers.

In April 2005, the Office of Inspector General (“OIG”) for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS’ alleged failure to appropriately bill Medicare and Medicaid for hospice services.  As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS’ three largest programs for review.  It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges.  During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us.  The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florida with prejudice in July 2007.  The plaintiffs appealed this dismissal, which the Court of Appeals affirmed.  The government continues to investigate the complaint’s allegations.  In March 2009, we received a letter from the government reiterating the basis of their investigation.  We are unable to estimate our potential liability, if any, with respect to this matter.

The costs to comply with either of these investigations were not material for any period presented.  Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity.

20.      Related Party Transactions

VITAS has two pharmacy services agreements (“Agreements”) with Omnicare, Inc. and its subsidiaries ("OCR") whereby OCR provides specified pharmacy services for VITAS and its hospice patients in geographical areas served by both VITAS and OCR.  The Agreements renew automatically for one-year terms.  Either party may cancel the Agreements at the end of any term by giving 90 days prior written notice.  VITAS made purchases from OCR of $39.4 million, $36.1 million and $33.1 million for the years ended December 31, 2011, 2010 and 2009, respectively. VITAS’ accounts payable to OCR and its subsidiaries are not material at December 31, 2011 and 2010.

Mr. Joel F. Gemunder retired as President and Chief Executive Officer of OCR during the third quarter of 2010 and is a director of the Company.  Ms. Andrea Lindell is a director of both OCR and the Company.  We believe that the terms of these agreements are no more or less favorable to VITAS than we could negotiate with an unrelated party.

21.      Capital Stock Transactions

On November 7, 2011 our Board of Directors authorized an additional $100 million of stock repurchases under the February 2011 repurchase program.  On February 22, 2011, our Board of Directors authorized $100 million of stock repurchases under the newly established February 2011 repurchase program.  On December 27, 2010, our Board of Directors authorized an additional $70 million to the April 2007 stock repurchase program.  On May 19, 2008 our Board of Directors authorized an additional $56 million to the April 2007 stock repurchase program.  On April 26, 2007, our Board of Directors authorized a $150 million stock repurchase program.  We repurchased the following capital stock for the periods ended December 31, 2011, 2010 and 2009:

	For the Years Ended December 31,
	2011		2010		2009
Shares repurchased		2,602,513		1,648,047		15,900
Weighted average price per share	$	55.28	$	63.14	$	46.65

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Chemed Corporation and Subsidiary Companies

22.      Recent Accounting Statements

In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04 – Fair Value Measures.  ASU No. 2011-04 provides amendments to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in U.S. GAAP and IFRS.  The guidance is effective for fiscal years beginning after December 15, 2011.  There was no material impact to the Company’s financial statements as a result of ASU No. 2011-04.

In July 2011, the FASB issued ASU No. 2011-07 – Health Care Entities which provides additional guidance to health care entities related to the recognition of patient service revenue and related disclosures.  The additional guidance is effective for fiscal years beginning after December 15, 2011, but early adoption is permitted.  There was no material impact on the Company upon adoption of ASU No. 2011-07.

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Chemed Corporation and Subsidiary Companies

23.      Guarantor Subsidiaries

               Our 1.875% Senior Convertible Notes issued on May 14, 2007, are fully and unconditionally guaranteed on an unsecured, joint and severally liable basis by our 100% owned subsidiaries. The equity method has been used with respect to the parent company's (Chemed) investment in subsidiaries. No consolidating adjustment column is presented for the condensed consolidating statement of cash flow since there were no signficant consolidating entries for the periods presented. The following condensed, consolidating financial data present the composition of the parent company, the guarantor subsidiaries and the non-guarantor subsidiaries as of December 31, 2011 and 2010, and for the years ended December 31, 2011, 2010 and 2009 (in thousands):

December 31, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	32,470		$	(1,422	)	$	7,033		$	-		$	38,081
Accounts receivable, less allowances		606			76,816			502			-			77,924
Intercompany receivables		-			273,413			-			(273,413	)		-
Inventories		-			8,032			636			-			8,668
Current deferred income taxes		(650	)		13,059			131			-			12,540
Prepaid income taxes		(114	)		1,689			556			-			2,131
Prepaid expenses		503			10,757			149			-			11,409
Total current assets		32,815			382,344			9,007			(273,413	)		150,753
Investments of deferred compensation plans		-			-			31,629			-			31,629
Properties and equipment, at cost, less accumulated depreciation		11,641			68,755			2,555			-			82,951
Identifiable intangible assets less accumulated amortization		-			58,262			-			-			58,262
Goodwill		-			456,183			4,450			-			460,633
Other assets		7,616			1,552			2,509			-			11,677
Investments in subsidiaries		793,277			21,148			-			(814,425	)		-
Total assets	$	845,349		$	988,244		$	50,150		$	(1,087,838	)	$	795,905
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(683	)	$	48,490		$	418		$	-		$	48,225
Intercompany payables		269,042			-			4,371			(273,413	)		-
Income taxes		-			-			90			-			90
Accrued insurance		489			36,658			-			-			37,147
Accrued compensation		3,828			36,655			604			-			41,087
Other current liabilities		1,719			15,728			1,404			-			18,851
Total current liabilities		274,395			137,531			6,887			(273,413	)		145,400
Deferred income taxes		(12,330	)		51,601			(9,808	)		-			29,463
Long-term debt		166,784			-			-			-			166,784
Deferred compensation liabilities		-			-			30,693			-			30,693
Other liabilities		2,816			4,630			2,435			-			9,881
Stockholders' equity		413,684			794,482			19,943			(814,425	)		413,684
Total liabilities and stockholders' equity	$	845,349		$	988,244		$	50,150		$	(1,087,838	)	$	795,905

December 31, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	45,324		$	(1,571	)	$	6,164		$	-		$	49,917
Accounts receivable, less allowances		802			111,716			481			-			112,999
Intercompany receivables		-			172,426			-			(172,426	)		-
Inventories		-			7,191			537			-			7,728
Current deferred income taxes		(688	)		15,666			120			-			15,098
Prepaid income taxes		2,787			(1,809	)		(208	)		-			770
Prepaid expenses		782			9,244			259			-			10,285
Total current assets		49,007			312,863			7,353			(172,426	)		196,797
Investments of deferred compensation plans		-			-			28,304			-			28,304
Properties and equipment, at cost, less accumulated depreciation		12,513			64,743			2,036			-			79,292
Identifiable intangible assets less accumulated amortization		-			57,858			-			-			57,858
Goodwill		-			453,864			4,479			-			458,343
Other assets		6,049			1,343			2,175			-			9,567
Investments in subsidiaries		716,815			18,696			-			(735,511	)		-
Total assets	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	4,924		$	50,457		$	448		$	-		$	55,829
Intercompany payables		167,067			-			5,359			(172,426	)		-
Income taxes		(7,190	)		8,745			(394	)		-			1,161
Accrued insurance		906			35,586			-			-			36,492
Accrued compensation		4,235			35,016			468			-			39,719
Other current liabilities		1,549			13,447			1,145			-			16,141
Total current liabilities		171,491			143,251			7,026			(172,426	)		149,342
Deferred income taxes		(11,356	)		45,168			(8,727	)		-			25,085
Long-term debt		159,208			-			-			-			159,208
Deferred compensation liabilities		-			-			27,851			-			27,851
Other liabilities		2,992			3,123			511			-			6,626
Stockholders' equity		462,049			717,825			17,686			(735,511	)		462,049
Total liabilities and stockholders' equity	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161

29

Chemed Corporation and Subsidiary Companies

For the year ended December 31, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,328,425		$	27,545		$	-		$	1,355,970
Cost of services provided and goods sold		-			955,628			14,856			-			970,484
Selling, general and administrative expenses		21,895			172,368			7,997			-			202,260
Depreciation		945			23,496			806			-			25,247
Amortization		1,756			2,496			-			-			4,252
Total costs and expenses		24,596			1,153,988			23,659			-			1,202,243
Income/(loss) from operations		(24,596	)		174,437			3,886			-			153,727
Interest expense		(13,177	)		(587	)		(124	)		-			(13,888	)
Other (expense)/income - net		16,507			(16,591	)		801			-			717
Income/(loss) before income taxes		(21,266	)		157,259			4,563			-			140,556
Income tax (provision)/benefit		6,564			(59,407	)		(1,734	)		-			(54,577	)
Equity in net income of subsidiaries		100,681			3,001			-			(103,682	)		-
Net income	$	85,979		$	100,853		$	2,829		$	(103,682	)	$	85,979
For the year ended December 31, 2010					Guarantor			Non-Guarantor			Consolidating
		Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,254,856		$	25,689		$	-		$	1,280,545
Cost of services provided and goods sold		-			892,596			13,420			-			906,016
Selling, general and administrative expenses		23,262			170,223			8,479			-			201,964
Depreciation		860			22,732			794			-			24,386
Amortization		1,404			3,253			-			-			4,657
Total costs and expenses		25,526			1,088,804			22,693			-			1,137,023
Income/(loss) from operations		(25,526	)		166,052			2,996			-			143,522
Interest expense		(11,596	)		(363	)		-			-			(11,959	)
Other (expense)/income - net		15,520			(15,451	)		2,199			-			2,268
Income/(loss) before income taxes		(21,602	)		150,238			5,195			-			133,831
Income tax (provision)/benefit		6,859			(56,905	)		(1,954	)		-			(52,000	)
Equity in net income of subsidiaries		96,574			3,308			-			(99,882	)		-
Net income	$	81,831		$	96,641		$	3,241		$	(99,882	)	$	81,831
For the year ended December 31, 2009					Guarantor			Non-Guarantor			Consolidating
		Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,166,972		$	23,264		$	-		$	1,190,236
Cost of services provided and goods sold		-			822,788			11,786			-			834,574
Selling, general and administrative expenses		23,199			163,600			10,627			-			197,426
Depreciation		602			20,221			712			-			21,535
Amortization		1,222			5,145			-			-			6,367
Other operating expenses		3,989			-			-			-			3,989
Total costs and expenses		29,012			1,011,754			23,125			-			1,063,891
Income/(loss) from operations		(29,012	)		155,218			139			-			126,345
Interest expense		(11,040	)		(565	)		6			-			(11,599	)
Other (expense)/income - net		5,428			(5,422	)		5,868			-			5,874
Income/(loss) before income taxes		(34,624	)		149,231			6,013			-			120,620
Income tax (provision)/benefit		12,058			(56,543	)		(2,098	)		-			(46,583	)
Equity in net income of subsidiaries		96,603			4,043			-			(100,646	)		-
Income from continuing operations		74,037			96,731			3,915			(100,646	)		74,037
Discontinued Operations		(253	)		-			-			-			(253	)
Net income	$	73,784		$	96,731		$	3,915		$	(100,646	)	$	73,784

30

Chemed Corporation and Subsidiary Companies

For the year ended December 31, 2011				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	12,444		$	158,159		$	3,740		$	174,343
Cash Flow from Investing Activities:
Capital expenditures		(73	)		(28,145	)		(1,374	)		(29,592	)
Business combinations, net of cash acquired		-			(3,664	)		-			(3,664	)
Other sources/(uses) - net		(191	)		(730	)		63			(858	)
Net cash used by investing activities		(264	)		(32,539	)		(1,311	)		(34,114	)
Cash Flow from Financing Activities:
Purchases of treasury stock		(147,791	)		-			(95	)		(147,886	)
Dividends paid to shareholders		(12,538	)		-			-			(12,538	)
Proceeds from exercise of stock options		8,036			-			-			8,036
Realized excess tax benefit on share based compensation		3,854			-			-			3,854
Debt issuance costs		(2,657	)		-			-			(2,657	)
Change in cash overdrafts payable		9			(835	)		-			(826	)
Change in intercompany accounts		126,040			(124,636	)		(1,404	)		-
Other sources - net		13			-			(61	)		(48	)
Net cash provided/(used) by financing activities		(25,034	)		(125,471	)		(1,560	)		(152,065	)
Net increase/(decrease) in cash and cash equivalents		(12,854	)		149			869			(11,836	)
Cash and cash equivalents at beginning of year		45,324			(1,571	)		6,164			49,917
Cash and cash equivalents at end of period	$	32,470		$	(1,422	)	$	7,033		$	38,081
For the year ended December 31, 2010					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	2,862		$	81,781		$	1,369		$	86,012
Cash Flow from Investing Activities:
Capital expenditures		(18	)		(24,677	)		(944	)		(25,639	)
Business combinations, net of cash acquired		-			(9,469	)		-			(9,469	)
Other sources/(uses) - net		(157	)		(688	)		253			(592	)
Net cash used by investing activities		(175	)		(34,834	)		(691	)		(35,700	)
Cash Flow from Financing Activities:
Purchases of treasury stock		(109,326	)		-			(4	)		(109,330	)
Dividends paid to shareholders		(11,881	)		-			-			(11,881	)
Proceeds from exercise of stock options		5,327			-			-			5,327
Realized excess tax benefit on share based compensation		3,357			-			-			3,357
Change in cash overdrafts payable		1,645			(2,226	)		-			(581	)
Change in intercompany accounts		44,135			(45,071	)		936			-
Other sources - net		49			-			248			297
Net cash provided/(used) by financing activities		(66,694	)		(47,297	)		1,180			(112,811	)
Net increase/(decrease) in cash and cash equivalents		(64,007	)		(350	)		1,858			(62,499	)
Cash and cash equivalents at beginning of year		109,331			(1,221	)		4,306			112,416
Cash and cash equivalents at end of period	$	45,324		$	(1,571	)	$	6,164		$	49,917
For the year ended December 31, 2009				Guarantor			Non-Guarantor
	Parent				Subsidiaries			Subsidiaries		Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	950		$	153,387		$	6,495		$	160,832
Cash Flow from Investing Activities:
Capital expenditures		(448	)		(20,394	)		(654	)		(21,496	)
Business combinations, net of cash acquired		-			(1,919	)		-			(1,919	)
Other sources/(uses) - net		702			(312	)		183			573
Net cash provided/(used) by investing activities		254			(22,625	)		(471	)		(22,842	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		19			2,872			-			2,891
Change in intercompany accounts		140,674			(135,226	)		(5,448	)		-
Dividends paid to shareholders		(8,157	)		-			-			(8,157	)
Purchases of treasury stock		(4,225	)		-			-			(4,225	)
Proceeds from exercise of stock options		545			-			-			545
Realized excess tax benefit on share based compensation		1,955			-			-			1,955
Net decrease in revolving line of credit		(8,200	)		-			-			(8,200	)
Repayment of long-term debt		(14,500	)		(169	)		-			(14,669	)
Other sources/(uses) - net		(49	)		338			369			658
Net cash provided/(used) by financing activities		108,062			(132,185	)		(5,079	)		(29,202	)
Net increase/(decrease) in cash and cash equivalents		109,266			(1,423	)		945			108,788
Cash and cash equivalents at beginning of year		65			202			3,361			3,628
Cash and cash equivalents at end of period	$	109,331		$	(1,221	)	$	4,306		$	112,416

31

UNAUDITED SUMMARY OF QUARTERLY RESULTS
Chemed Corporation and Subsidiary Companies
(in thousands, except per share and footnote data)
	First			Second			Third			Fourth			Total
For the Year Ended December 31, 2011	Quarter			Quarter			Quarter			Quarter			Year
Total service revenues and sales	$	330,918		$	333,360		$	341,439		$	350,253		$	1,355,970
Gross profit (excluding depreciation)	$	93,460		$	93,763		$	96,376		$	101,887		$	385,486
Income from operations	$	30,548		$	35,842		$	41,311		$	46,026		$	153,727
Interest expense		(3,244	)		(3,461	)		(3,555	)		(3,628	)		(13,888	)
Other income/(expense)--net		2,102			714			(1,935	)		(164	)		717
Income before income taxes		29,406			33,095			35,821			42,234			140,556
Income taxes		(11,305	)		(12,809	)		(13,934	)		(16,529	)		(54,577	)
Net income (a)	$	18,101		$	20,286		$	21,887		$	25,705		$	85,979
Earnings Per Share (a)
Net income	$	0.86		$	0.96		$	1.06		$	1.34		$	4.19
Average number of shares outstanding		21,055			21,155			20,674			19,237			20,523
Diluted Earnings Per Share (a)
Net income	$	0.84		$	0.94		$	1.04		$	1.31		$	4.10
Average number of shares outstanding		21,568			21,637			21,055			19,556			20,945
(a) The following amounts are included in income during the respective quarter (in thousands):

	First			Second			Third			Fourth			Total
	Quarter			Quarter			Quarter			Quarter			Year
Pretax (cost)/benefit:
Stock option expense	$	(1,933	)	$	(2,562	)	$	(2,408	)	$	(1,473	)	$	(8,376	)
Noncash impact of change in accounting for convertible debt		(1,790	)		(1,825	)		(1,861	)		(1,898	)		(7,374	)
Long-term incentive compensation		(3,012	)		-			-			-			(3,012	)
Acquisition expenses		(70	)		(39	)		(2	)		(10	)		(121	)
Expenses of class action litigation		(495	)		(186	)		(770	)		(848	)		(2,299	)
Expenses incurred in connection with the Office
of Inspector General investigation		(511	)		(486	)		(212	)		21			(1,188	)
Total	$	(7,811	)	$	(5,098	)	$	(5,253	)	$	(4,208	)	$	(22,370	)
Aftertax (cost)/benefit:
Stock option expense	$	(1,223	)	$	(1,620	)	$	(1,523	)	$	(932	)	$	(5,298	)
Noncash impact of change in accounting for convertible debt		(1,132	)		(1,155	)		(1,177	)		(1,200	)		(4,664	)
Long-term incentive compensation		(1,880	)		-			-			-			(1,880	)
Acquisition expenses		(44	)		(23	)		(2	)		(6	)		(75	)
Expenses of class action litigation		(301	)		(113	)		(467	)		(516	)		(1,397	)
Expenses incurred in connection with the Office
of Inspector General investigation		(317	)		(301	)		(131	)		12			(737	)
Total	$	(4,897	)	$	(3,212	)	$	(3,300	)	$	(2,642	)	$	(14,051	)

32

UNAUDITED SUMMARY OF QUARTERLY RESULTS
Chemed Corporation and Subsidiary Companies
(in thousands, except per share and footnote data)
	First			Second			Third			Fourth			Total
For the Year Ended December 31, 2010	Quarter			Quarter			Quarter			Quarter			Year
Total service revenues and sales	$	308,813		$	314,995		$	320,451		$	336,286		$	1,280,545
Gross profit (excluding depreciation)	$	89,676		$	91,293		$	92,536		$	101,024		$	374,529
Income from operations	$	34,445		$	33,856		$	36,755		$	38,466		$	143,522
Interest expense		(2,952	)		(2,999	)		(2,995	)		(3,013	)		(11,959	)
Other income/(expense)--net		186			10			222			1,850			2,268
Income before income taxes		31,679			30,867			33,982			37,303			133,831
Income taxes		(12,321	)		(12,012	)		(12,994	)		(14,673	)		(52,000	)
Net income (a)	$	19,358		$	18,855		$	20,988		$	22,630		$	81,831
Earnings Per Share (a)
Net income	$	0.86		$	0.83		$	0.93		$	1.00		$	3.62
Average number of shares outstanding		22,593			22,644			22,597			22,534			22,587
Diluted Earnings Per Share (a)
Net income	$	0.84		$	0.82		$	0.91		$	0.98		$	3.55
Average number of shares outstanding		23,021			23,080			22,996			23,070			23,031
(a) The following amounts are included in income during the respective quarter (in thousands):
	First			Second			Third			Fourth			Total
	Quarter			Quarter			Quarter			Quarter			Year
Pretax (cost)/benefit:
Stock option expense	$	(2,051	)	$	(2,346	)	$	(1,968	)	$	(1,397	)	$	(7,762	)
Noncash impact of change in accounting for convertible debt		(1,655	)		(1,688	)		(1,721	)		(1,756	)		(6,820	)
Long-term incentive compensation		-			(1,799	)		-			(2,935	)		(4,734	)
Acquisition expenses		-			-			-			(324	)		(324	)
Expenses of class action litigation		-			(105	)		(322	)		(1,426	)		(1,853	)
Expenses incurred in connection with the Office
of Inspector General investigation		(160	)		(118	)		(112	)		(622	)		(1,012	)
Total	$	(3,866	)	$	(6,056	)	$	(4,123	)	$	(8,460	)	$	(22,505	)
Aftertax (cost)/benefit:
Stock option expense	$	(1,298	)	$	(1,484	)	$	(1,244	)	$	(883	)	$	(4,909	)
Noncash impact of change in accounting for convertible debt		(1,047	)		(1,068	)		(1,088	)		(1,110	)		(4,313	)
Long-term incentive compensation		-			(1,124	)		-			(1,833	)		(2,957	)
Acquisition expenses		-			-			-			(198	)		(198	)
Expenses of class action litigation		-			(63	)		(194	)		(869	)		(1,126	)
Expenses incurred in connection with the Office
of Inspector General investigation		(99	)		(74	)		(69	)		(385	)		(627	)
Total	$	(2,444	)	$	(3,813	)	$	(2,595	)	$	(5,278	)	$	(14,130	)

33

SELECTED FINANCIAL DATA
Chemed Corporation and Subsidiary Companies
(in thousands, except per share and footnote data, ratios, percentages and personnel)
	2011			2010			2009			2008			2007
Summary of Operations
Continuing operations (a)
Service revenues and sales	$	1,355,970		$	1,280,545		$	1,190,236		$	1,148,941		$	1,100,058
Gross profit (excluding depreciation)		385,486			374,529			355,662			338,394			332,992
Depreciation		25,247			24,386			21,535			21,581			20,118
Amortization		4,252			4,657			6,367			5,924			5,270
Income  from operations		153,727			143,522			126,345			132,857			122,755
Income from continuing operations (b)		85,979			81,831			74,037			68,369			60,440
Net income (b)		85,979			81,831			73,784			67,281			61,641
Earnings per share
Income from continuing operations	$	4.19		$	3.62		$	3.30		$	2.97		$	2.46
Net income		4.19			3.62			3.29			2.92			2.51
Average number of shares outstanding		20,523			22,587			22,451			23,058			24,520
Diluted earnings per share
Income from continuing operations	$	4.10		$	3.55		$	3.26		$	2.93		$	2.41
Net income		4.10			3.55			3.24			2.88			2.46
Average number of shares outstanding		20,945			23,031			22,742			23,374			25,077
Cash dividends per share	$	0.60		$	0.52		$	0.36		$	0.24		$	0.24
Financial Position--Year-End
Cash and cash equivalents	$	38,081		$	49,917		$	112,416		$	3,628		$	4,988
Working capital/(deficit)		5,353			47,455			62,174			(18,142	)		(13,427	)
Current ratio		1.04			1.32			1.46			0.88			0.91
Properties and equipment, at cost less
accumulated depreciation	$	82,951		$	79,292		$	75,358		$	76,962		$	74,513
Total assets		795,905			830,161			819,470			759,622			768,945
Long-term debt		166,784			159,208			152,127			158,210			163,715
Stockholders' equity		413,684			462,049			477,162			396,831			395,800
Other Statistics--Continuing Operations
Capital expenditures	$	29,592		$	25,639		$	21,496		$	26,094		$	26,640
Number of employees		13,733			13,058			12,308			11,884			11,783
(a) Continuing operations exclude VITAS of Arizona, discontinued in 2006, Service America, discontinued in 2004 and Patient Care discontinued in 2002
(b) The following amounts are included in income from continuing operations during the respective year (in thousands):
		2011			2010			2009			2008			2007
After-tax benefit/(cost):
Stock option expense	$	(5,298	)	$	(4,909	)	$	(5,464	)	$	(4,619	)	$	(2,962	)
Noncash impact of change in accounting for convertible debt		(4,664	)		(4,313	)		(3,988	)		(4,006	)		(2,335	)
Long-term incentive compensation		(1,880	)		(2,957	)		(3,134	)		-			(4,427	)
Costs related to litigation settlements		(1,397	)		(1,126	)		(534	)		-			(1,168	)
Expenses incurred in connection with the Office of Inspector
General investigation		(737	)		(627	)		(363	)		(28	)		(141	)
Acquisition expense		(75	)		(198	)		-			-			-
Expenses associated with contested proxy solicitation		-			-			(2,525	)		-			-
Non-taxable income on certain investments held in deferred
compensation trusts		-			-			1,211			-			-
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts		-			-			(455	)		(3,062	)		(46	)
Gain/(loss) on extinguishment of debt		-			-			-			2,934			(8,778	)
Loss on impairment of transportation equipment		-			-			-			(1,714	)		-
Unreserved prior-year's insurance claim		-			-			-			(358	)		-
Income tax credits or adjustments related to prior years		-			-			-			322			-
Gain on sale of property		-			-			-			-			724
Other		-			-			-			-			296
Total	$	(14,051	)	$	(14,130	)	$	(15,252	)	$	(10,531	)	$	(18,837	)

34

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2011
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate				Consolidated
2011
Service revenues and sales	$	986,272		$	369,698		$	-			$	1,355,970
Cost of services provided and goods sold		766,732			203,752			-				970,484
Selling, general and administrative expenses		75,698			102,528			24,034				202,260
Depreciation		16,583			8,130			534				25,247
Amortization		1,897			599			1,756				4,252
Total costs and expenses		860,910			315,009			26,324				1,202,243
Income/(loss) from operations		125,362			54,689			(26,324	)			153,727
Interest expense		(229	)		(358	)		(13,301	)			(13,888	)
Intercompany interest income/(expense)		3,998			2,136			(6,134	)			-
Other income/(expense)—net		62			(235	)		890				717
Income/(loss) before income taxes		129,193			56,232			(44,869	)			140,556
Income taxes		(48,835	)		(21,353	)		15,611				(54,577	)
Net income/(loss)	$	80,358		$	34,879		$	(29,258	)		$	85,979
(a) The following amounts are included in income from continuing operations (in thousands):
												Chemed
		VITAS			Roto-Rooter			Corporate				Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(8,376	)		$	(8,376	)
Noncash impact of change in accounting for convertible debt		-			-			(7,374	)			(7,374	)
Long-term incentive compensation		-			-			(3,012	)			(3,012	)
Expenses of class action litigation		-			(2,299	)		-				(2,299	)
Acquisition expense		(147	)		26			-				(121	)
Expenses incurred in connection with the Office of Inspector
General investigation		(1,188	)		-			-				(1,188	)
Total	$	(1,335	)	$	(2,273	)	$	(18,762	)		$	(22,370	)
		VITAS			Roto-Rooter			Corporate				Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(5,298	)		$	(5,298	)
Noncash impact of change in accounting for convertible debt		-			-			(4,664	)			(4,664	)
Long-term incentive compensation		-			-			(1,880	)			(1,880	)
Expenses of class action litigation		-			(1,397	)		-				(1,397	)
Acquisition expense		(91	)		16			-				(75	)
Expenses incurred in connection with the Office of Inspector
General investigation		(737	)		-			-				(737	)
Total	$	(828	)	$	(1,381	)	$	(11,842	)		$	(14,051	)

35

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2010
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2010
Service revenues and sales	$	925,810		$	354,735		$	-		$	1,280,545
Cost of services provided and goods sold		709,094			196,922			-			906,016
Selling, general and administrative expenses		73,755			100,731			27,478			201,964
Depreciation		16,161			7,775			450			24,386
Amortization		2,739			514			1,404			4,657
Total costs and expenses		801,749			305,942			29,332			1,137,023
Income/(loss) from operations		124,061			48,793			(29,332	)		143,522
Interest expense		(131	)		(233	)		(11,595	)		(11,959	)
Intercompany interest income/(expense)		4,632			2,612			(7,244	)		-
Other income/(expense)—net		(165	)		53			2,380			2,268
Income/(loss) before income taxes		128,397			51,225			(45,791	)		133,831
Income taxes		(48,601	)		(19,547	)		16,148			(52,000	)
Net income/(loss)	$	79,796		$	31,678		$	(29,643	)	$	81,831
(a) The following amounts are included in income from continuing operations (in thousands):

											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(7,762	)	$	(7,762	)
Noncash impact of change in accounting for convertible debt		-			-			(6,820	)		(6,820	)
Long-term incentive compensation		-			-			(4,734	)		(4,734	)
Expenses of class action litigation		-			(1,853	)		-			(1,853	)
Acquisition expense		(68	)		(256	)		-			(324	)
Expenses incurred in connection with the Office of Inspector
General investigation		(1,012	)		-			-			(1,012	)
Total	$	(1,080	)	$	(2,109	)	$	(19,316	)	$	(22,505	)
		VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(4,909	)	$	(4,909	)
Noncash impact of change in accounting for convertible debt		-			-			(4,313	)		(4,313	)
Long-term incentive compensation		-			-			(2,957	)		(2,957	)
Expenses of class action litigation		-			(1,126	)		-			(1,126	)
Acquisition expense		(42	)		(156	)		-			(198	)
Expenses incurred in connection with the Office of Inspector
General investigation		(627	)		-			-			(627	)
Total	$	(669	)	$	(1,282	)	$	(12,179	)	$	(14,130	)

36

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2009
(in thousands)(unaudited)
										Chemed
	VITAS				Roto-Rooter			Corporate		Consolidated
2009
Service revenues and sales	$	854,343		$	335,893		$	-		$	1,190,236
Cost of services provided and goods sold		653,212			181,362			-			834,574
Selling, general and administrative expenses		71,643			95,073			30,710			197,426
Depreciation		13,269			8,068			198			21,535
Amortization		4,704			441			1,222			6,367
Other operating expenses		-			-			3,989			3,989
Total costs and expenses		742,828			284,944			36,119			1,063,891
Income/(loss) from operations		111,515			50,949			(36,119	)		126,345
Interest expense		(374	)		(186	)		(11,039	)		(11,599	)
Intercompany interest income/(expense)		4,314			2,514			(6,828	)		-
Other income/(expense)—net		(122	)		135			5,861			5,874
Income/(loss) before income taxes		115,333			53,412			(48,125	)		120,620
Income taxes		(43,637	)		(20,372	)		17,426			(46,583	)
Income/(loss) from continuing operations		71,696			33,040			(30,699	)		74,037
Discontinued operations		-			-			(253	)		(253	)
Net income/(loss)	$	71,696		$	33,040		$	(30,952	)	$	73,784
(a) The following amounts are included in income from continuing operations (in thousands):
											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(8,639	)	$	(8,639	)
Noncash impact of change in accounting for convertible debt		-			-			(6,305	)		(6,305	)
Long-term incentive compensation		-			-			(5,007	)		(5,007	)
Expenses associated with contested proxy solicitation		-			-			(3,989	)		(3,989	)
Non-taxable income on certain investments held in deferred
compensation trusts		-			-			1,211			1,211
Costs related to litigation settlements		-			(882	)		-			(882	)
Expenses incurred in connection with the Office of Inspector
General investigation		(586	)		-			-			(586	)
Total	$	(586	)	$	(882	)	$	(22,729	)	$	(24,197	)
		VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(5,464	)	$	(5,464	)
Noncash impact of change in accounting for convertible debt		-			-			(3,988	)		(3,988	)
Long-term incentive compensation		-			-			(3,134	)		(3,134	)
Expenses associated with contested proxy solicitation		-			-			(2,525	)		(2,525	)
Non-taxable income on certain investments held in deferred
compensation trusts		-			-			1,211			1,211
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts		-			-			(455	)		(455	)
Costs related to litigation settlements		-			(534	)		-			(534	)
Expenses incurred in connection with the Office of Inspector
General investigation		(363	)		-			-			(363	)
Total	$	(363	)	$	(534	)	$	(14,355	)	$	(15,252	)

37

Chemed Corporation and Subsidiary Companies

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

We operate through our two wholly owned subsidiaries: VITAS Healthcare Corporation (“VITAS”) and Roto-Rooter Group, Inc. (“Roto-Rooter”). VITAS focuses on hospice care that helps make terminally ill patients' final days as comfortable as possible. Through its team of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter is focused on providing plumbing and drain cleaning services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

           The following is a summary of the key operating results for the years ended December 31, 2011, 2010 and 2009 (in thousands except percentages and per share amounts):

	2011			2010			2009
Consolidated service revenues and sales	$	1,355,970		$	1,280,545		$	1,190,236
Consolidated income from continuing operations	$	85,979		$	81,831		$	74,037
Diluted EPS from continuing operations	$	4.10		$	3.55		$	3.26
Adjusted EBITDA*	$	197,273		$	189,395		$	177,050
Adjusted EBITDA as a % of revenue*		14.5	%		14.8	%		14.9	%

*See page 51 for reconciliation to GAAP measures

Earnings before interest, taxes and depreciation and amortization (“EBITDA”) and Adjusted EBITDA are not measures derived in accordance with GAAP.  We use Adjusted EBITDA as a measure of earnings for our LTIP awards.  We also use adjusted EBITDA to determine compliance with certain debt covenants.  We provide EBITDA and Adjusted EBITDA to help readers evaluate our operating results, compare our operating performance with that of similar companies that have different capital structures and help evaluate our ability to meet future debt service, capital expenditure and working capital requirements.  Our EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP.  A reconciliation of our net income to our Adjusted EBITDA is presented in tables following the Critical Accounting Policy section.

2011 versus 2010

The increase in consolidated service revenues and sales from 2010 to 2011 was driven by a 6.5% increase at VITAS and a 4.2% increase at Roto-Rooter.  The increase at VITAS was the result of an increase in average daily census (“ADC”) of 5.5%, driven by an increase in admissions of 2.8%, combined with Medicare price increases of approximately 2.1%.  The increase at Roto-Rooter was driven by a 2.2% price and mix shift increase as well as a 2.0% increase in job count.  Consolidated income from continuing operations increased 5.1% over prior year mainly as a result of the increase in revenues, which allowed us to further leverage our current cost structure.  Diluted EPS from continuing operations increased as the result of increased earnings and a decrease in the number of shares outstanding.  Adjusted EBITDA increased 4.2% from 2010 to 2011 mainly as a result of increased earnings.

2010 versus 2009

The increase in consolidated service revenues and sales from 2009 to 2010 was driven by an 8.4% increase at VITAS and a 5.6% increase at Roto-Rooter.  The increase at VITAS was the result of an increase in ADC of 6.1%, driven by an increase in admissions of 5.6%, combined with Medicare price increases of approximately 1.3%.  The increase at Roto-Rooter was driven by a 7.3% price and mix shift increase as well as a 0.4% increase in job count.  Consolidated income from continuing operations increased 10.5% over prior year mainly as a result of the increase in revenues, which allowed us to further leverage our current cost structure.  Diluted EPS from continuing operations increased as the result of increased earnings.  Adjusted EBITDA increased 7.0% from 2009 to 2010 mainly as a result of increased earnings.

Impact of Current Market Conditions

We expect Roto-Rooter to achieve full-year 2012 revenue growth of 4.0% to 5.0%.  This is a result of increased pricing of approximately 2.0%, a favorable mix shift to higher revenue jobs, and job count growth estimated at 0% to 1.5%.  Adjusted EBITDA margin for 2012 is estimated in the range of 17.0% to 18.0%.

38

Chemed Corporation and Subsidiary Companies

We expect VITAS to achieve full-year 2012 revenue growth, prior to Medicare cap, of 5.0% to 8.0%.  Admissions are estimated to increase 2.5% to 4.0%. This revenue estimate includes the October 1, 2011, 2.5% increase in average hospice reimbursement rates.  We also expect VITAS to have estimated Medicare contractual billing limitations of $5.0 million.  Adjusted EBITDA margin, prior to Medicare cap, for 2012 is estimated to be in the range of 15.0% to 15.5%.

LIQUIDITY AND CAPITAL RESOURCES

Significant factors affecting our cash flows during 2011 and financial position at December 31, 2011, include the following:

·   Our continuing operations generated cash of $174.3 million;

·   We repurchased $147.9 million of our stock using cash on hand;

·   Accounts receivable decreased $26.9 million due to timing of receipts;

·   We spent $29.6 million on capital expenditures.

The ratio of total debt to total capital was 28.7% at December 31, 2011, compared with 25.6% at December 31, 2010. Our current ratio was 1.04 and 1.32 at December 31, 2011 and 2010, respectively.

Collectively, the 2011 Credit Agreement and the Notes require us to meet certain restrictive non-financial and financial covenants.  We are in compliance with all non-financial debt covenants as of December 31, 2011.  The restrictive financial covenants are defined in the 2011 Credit Agreement and include maximum leverage ratios, minimum fixed charge coverage and consolidated net worth ratios, limits on operating leases and minimum asset value limits.  We are in compliance with all financial debt covenants as of December 31, 2011, as follows:

Description	Requirement	Chemed
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj. EBITDA)	< 3.50 to 1.00	1.09 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges)	> 1.50 to 1.00	2.47 to 1.00
Annual Operating Lease Commitment	< $30.0 million	$19.8 million

We forecast to be in compliance with all debt covenants through fiscal 2012.

We have issued $29.5 million in standby letters of credit as of December 31, 2011, mainly for insurance purposes.  Issued letters of credit reduce our available credit under the revolving credit agreement.  As of December 31, 2011, we have approximately $320.5 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the $150 million expansion feature.  We believe our cash flow from operating activities and our unused eligible lines of credit are sufficient to fund our obligations and operate our business in the near and long term.  We continually evaluate cash utilization alternatives, including share repurchase, debt repurchase, acquisitions, and increased dividends to determine the most beneficial use of available capital resources.

39

Chemed Corporation and Subsidiary Companies

CASH FLOW

Our cash flows for 2011, 2010 and 2009 are summarized as follows (in millions):

	For the Years Ended December 31,
	2011			2010			2009
Net cash provided by operating activities	$	174.3		$	86.0		$	160.8
Capital expenditures		(29.6	)		(25.6	)		(21.5	)
Operating cash after capital expenditures		144.7			60.4			139.3
Purchase of treasury stock		(147.9	)		(109.3	)		(4.2	)
Repayment of long-term debt		-			-			(22.9	)
Business combinations		(3.7	)		(9.5	)		(1.9	)
Dividends paid		(12.5	)		(11.9	)		(8.2	)
Proceeds from exercise of stock options		8.0			5.3			0.5
Other--net		(0.4	)		2.5			6.2
(Decrease)/increase in cash and cash equivalents	$	(11.8	)	$	(62.5	)	$	108.8

COMMITMENTS AND CONTINGENCIES

We are subject to various lawsuits and claims in the normal course of our business.  In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary.  We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable.  We disclose the existence of regulatory and legal actions when we believe it is reasonably possible that a loss could occur in connection with the specific action.  In most instances, we are unable to make a reasonable estimate of any reasonably possible liability due to the uncertainty of the outcome and stage of litigation.  We record legal fees associated with legal and regulatory actions as the costs are incurred.

In connection with the sale of DuBois Chemicals, Inc. ("DuBois") in 1991, we provided allowances and accruals relating to several long-term costs, including income tax matters, lease commitments and environmental costs.  Additionally, we retained liability for casualty insurance claims for Service America and Patient Care that were incurred prior to the respective disposal dates, 2005 and 2002.  In the aggregate, we believe these allowances and accruals are adequate as of December 31, 2011.  Based on reviews of our environmental-related liabilities under the DuBois sale agreement, we have estimated our remaining liability to be $1.7 million. As of December 31, 2011, we are contingently liable for additional cleanup and related costs up to a maximum of $14.9 million.  We do not believe it is probable that we will be required to make any payment towards this contingent liability. Thus, no provision has been recorded in accordance with the applicable accounting guidance.

On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed.  They also seek payment of penalties, interest and plaintiffs’ attorney fees.  We contest these allegations.  In September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment.  We are unable to estimate our potential liability, if any, with respect to this case.

VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White.  This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives.  The case seeks payment of penalties, interest and Plaintiffs’ attorney fees.  We contest these allegations.  In December 2009, the trial court denied Plaintiffs’ motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court’s denial on the off-the-clock and sales representation exemption claims.  Plaintiffs have filed an appeal of this decision.  We are unable to estimate our potential liability or potential range of loss, if any, with respect to this case.

On November 14, 2011 Luann and Michael Cosgrove and Dawn Mills filed a class action lawsuit against  Roto-Rooter in Minnesota state district court for the 4th Judicial District alleging unnecessary excavation work in Minnesota.  We removed the case to federal court.  Plaintiffs seek damages, injunctive relief, attorney fees and interest.  We contest these allegations.  This lawsuit is in its early stage and we are unable to estimate our potential liability, if any, with respect to these allegations.

40

Chemed Corporation and Subsidiary Companies

On January 12, 2012, the Greater Pennsylvania Carpenters Pension Fund filed a putative class action lawsuit in the United States District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Tim O’Toole.  It alleges violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants.  The suit, Greater Pennsylvania Carpenters Pension Fund v. Chemed Corp., et al., Civil Action No. 1:12-cv-28 (S.D. Ohio), concerns the VITAS hospice segment of the Company's business.   Plaintiff seeks, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and November 16, 2011, compensatory damages in an unspecified amount and attorneys' fees and expenses, arising from defendants' failure to disclose an alleged fraudulent scheme to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.   Defendants believe the allegations are without merit, and intend to defend vigorously against them.

Regardless of outcome, defense of litigation adversely affects us through defense costs, diversion of our time and related publicity.

In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter.  In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review.   In February 2010, VITAS received a companion civil investigative demand (“CID”) from the state of Texas Attorney General’s Office, seeking related documents.  In September 2010, it received a second CID and a second administrative subpoena seeking related documents. In April 2011, the U.S. Attorney provided the Company with a copy of a qui tam complaint filed under seal in the U.S. District Court for the Northern District of Texas.    The Court unsealed this complaint in November 2011.  The U.S. Attorney and the Attorney General for the State of Texas filed a notice in November 2011 that they had decided not to intervene at that time in the case.  They continue to investigate its allegations.  It was brought by Michael Rehfelt, a former Vitas San Antonio program general manager, against Vitas, the program’s former Regional Vice President Keith Becker, its former Medical Director Justos Cisneros, and their current employers:  Wellmed Medical Management, Care Level Management LLC, and Inspiris Inc.  It alleges admission and recertification of inappropriate patients, backdating revocations, and conspiring with HMO defendants to admit inappropriate patients to hospice.  In June 2011, the U.S. Attorney provided the Company with a partially unsealed second qui tam complaint filed under seal in the U.S. District Court for the Western District of Texas.  In June 2011, the U.S. Attorney also provided the Company with a partially unsealed third qui tam complaint filed under seal in the Northern District of Illinois, Eastern Division.  We are conferring with the U.S. Attorney regarding the Company’s defenses to each complaint’s allegations.  We can neither predict the outcome of this investigation nor estimate our potential liability, if any.  We believe that we are in compliance with Medicare and Medicaid rules and regulations applicable to hospice providers.

In April 2005, the Office of Inspector General (“OIG”) for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS’ alleged failure to appropriately bill Medicare and Medicaid for hospice services.  As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS’ three largest programs for review.  It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges.  During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us.  The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florida with prejudice in July 2007.  The plaintiffs appealed this dismissal, which the Court of Appeals affirmed.  The government continues to investigate the complaint’s allegations.  In March 2009, we received a letter from the government reiterating the basis of their investigation.  We are unable to estimate our potential liability, if any, with respect to this matter.

The costs to comply with either of these investigations were not material for any period presented.  Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity.

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CONTRACTUAL OBLIGATIONS

The table below summarizes our debt and contractual obligations as of December 31, 2011 (in thousands):

			Less than						After
	Total		1 year		1-3 Years		4 -5 Years		5 Years
Long-term debt obligations (a)	$	186,956	$	-	$	186,956	$	-	$	-
Interest on long-term debt		8,763		3,505		5,258		-		-
Operating lease obligations		63,848		19,797		27,025		14,880		2,146
Purchase obligations (b)		48,225		48,225		-		-		-
Other long-term obligations (c)		37,261		-		3,284		3,284		30,693
Total contractual cash obligations	$	345,053	$	71,527	$	222,523	$	18,164	$	32,839
(a)  Represents the face value of the obligation.
(b) Purchase obligations primarily consist of accounts payable at December 31, 2011.
(c) Other long-term obligations comprise largely pension and excess benefit obligations.

RESULTS OF OPERATIONS

2011 Versus 2010 – Consolidated Results

Set forth below are the year-to-year changes in the components of the statement of operations relating to continuing operations for 2011 versus 2010 (in thousands, except percentages):

	Favorable/(Unfavorable)
	Amount			Percent
Service revenues and sales
VITAS	$	60,462			7	%
Roto-Rooter		14,963			4
Total		75,425			6
Cost of services provided and goods sold		(64,468	)		(7	)
Selling, general and administrative expenses		(296	)		-
Depreciation		(861	)		(4	)
Amortization		405			9
Income from operations		10,205			7
Interest expense		(1,929	)		(16	)
Other income--net		(1,551	)		(68	)
Income before income taxes		6,725			5
Income taxes		(2,577	)		(5	)
Income from continuing operations	$	4,148			5

Our service revenues and sales for the year ended December 31, 2011 increased $75.4 million or 5.9% over the comparable prior year.  The VITAS segment accounted for $60.4 million of the increase and Roto-Rooter accounted for  $15.0 million of the increase.

The VITAS segment revenue increase is the result of the following (dollars in thousands):

	Amount			Percent
Routine homecare	$	52,096			8	%
Continuous care		5,416			4
General inpatient		5,154			5
Medicare cap		(2,204	)		(361	)
Total revenues	$	60,462			7

The increase in VITAS’ revenue from 2010 to 2011 was a result of increased ADC of 5.5% driven by an increase in admissions of 2.8%, combined with Medicare price increases of approximately 2.1%.  The ADC increase was driven by a

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5.7% increase in routine homecare, an increase of 1.2% in continuous care, and a 3.5% increase in general inpatient.  ADC is a key measure we use to monitor volume growth in our hospice programs.  Changes in total program admissions, discharges and average length of stay for our patients are the main drivers of changes in ADC.  The Medicare cap amount recorded in 2011 relates to the reversal of $786,000, net of Medicare cap liability for the 2011 measurement period recorded in the fourth quarter of 2010 offset by $2.6 million in Medicare cap liability for three programs’ projected 2012 measurement period liability.  We also reversed the remaining Medicare cap liability for our Phoenix program due to expiration for the period under review.

The Roto-Rooter segment revenue increase is the result of the following (dollars in thousands):

	Amount			Percent
Plumbing	$	8,738			5	%
Sewer and drain cleaning		3,228			2
Contractor operations		3,768			16
Other		(771	)		(3	)
Total revenues	$	14,963			4

Plumbing revenues for 2011 increased from 2010 due to a 4.4% increase in the number of jobs performed and a 0.9% increase in the average price per job.   Sewer and drain cleaning revenues for 2011 increased from 2010 due to a 1.7% increase in the average price per job and an increase of  0.9% in the number of jobs performed.  Contractor operations revenue increased 16.4% as a result of performance by recent acquisitions and higher job count.

The consolidated gross margin was 28.4% in 2011 versus 29.2% in 2010.  On a segment basis, VITAS’ gross margin was 22.3% in 2011 and 23.4% in 2010.  Roto-Rooter’s gross margin was 44.9% in 2011 and 44.5% in 2010.  The decrease in VITAS’ gross margin is attributable to higher labor costs for admissions and Medicare compliance personnel and the opening of new operations, both new locations and new inpatient units, which carry significant start-up costs as capacity begins to ramp up.

Selling, general and administrative expenses (“SG&A”) for 2011 comprise (in thousands):

	2011		2010
SG&A expenses before long-term incentive
compensation and the impact of market gains
of deferred compensation plans	$	198,449	$	195,020
Long-term incentive compensation		3,012		4,734
Impact of market value gains on liabilities
held in deferred compensation trusts		799		2,210
Total SG&A expenses	$	202,260	$	201,964

 Normal salary increases and revenue related expenses between periods account for the 1.8% increase in SG&A expenses before long-term incentive compensation and the impact of market gains of deferred compensation plans

 Depreciation expense increased $861,000 (3.5%) in 2011 mainly due to the installation of patient capture software at our VITAS segment in the second quarter of 2010.

 Interest expense increased $1.9 million (16.1%) from 2010 to 2011 primarily as a result of higher costs of our expanded revolving line of credit starting in the first quarter of 2011.

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Other income-net for 2011 and 2010 comprise (in thousands):

	2011			2010
Market value gains on assets held in deferred
compensation trusts	$	799		$	2,210
Loss on disposal of property and equipment		(441	)		(425	)
Interest income		426			444
Other		(67	)		39
Total other income	$	717		$	2,268

Our effective tax rate was 38.8% in 2011 compared to 38.9% in 2010.

Income from continuing operations for both periods include the following aftertax adjustments that increased/ (reduced) aftertax earnings (in thousands):

	2011			2010
VITAS
Costs associated with the OIG investigation	$	(737	)	$	(627	)
Acquisition expense		(91	)		(42	)
Roto-Rooter
Costs related to litigation settlements		(1,397	)		(1,126	)
Acquisition expense		16			(156	)
Corporate
Long-term incentive compensation		(1,880	)		(2,957	)
Noncash impact of change in accounting of convertible debt		(4,664	)		(4,313	)
Stock option expense		(5,298	)		(4,909	)
Total	$	(14,051	)	$	(14,130	)

2011 Versus 2010 – Segment Results

The change in net income for 2011 versus 2010 is due to (in thousands, except percentages):

	Increase/(Decrease)
	Amount		Percent
VITAS	$	562		1	%
Roto-Rooter		3,201		10
Corporate		385		1
	$	4,148		5

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RESULTS OF OPERATIONS

2010 Versus 2009 – Consolidated Results

Set forth below are the year-to-year changes in the components of the statement of operations relating to continuing operations for 2010 versus 2009 (in thousands, except percentages):

	Favorable/(Unfavorable)
	Amount			Percent
Service revenues and sales
VITAS	$	71,467			8	%
Roto-Rooter		18,842			6
Total		90,309			8
Cost of services provided and goods sold		(71,442	)		(9	)
Selling, general and administrative expenses		(4,538	)		(2	)
Depreciation		(2,851	)		(13	)
Amortization		1,710			27
Other expenses		3,989			100
Income from operations		17,177			14
Interest expense		(360	)		(3	)
Other income –net		(3,606	)		(61	)
Income before income taxes		13,211			11
Income taxes		(5,417	)		(12	)
Income from continuing operations	$	7,794			11

Our service revenues and sales for the year ended December 31, 2010, increased $90.3 million or 7.6% over the comparable prior year.  The VITAS segment accounted for $71.5 million of the increase and Roto-Rooter accounted for  $18.8 million of the increase.

The VITAS segment revenue increase is the result of the following (dollars in thousands):

	Amount			Percent
Routine homecare	$	51,154			8	%
Continuous care		11,778			8
General inpatient		8,232			9
Estimated BNAF		(1,950	)		(100	)
Medicare cap		2,253			137
Total revenues	$	71,467			8

The increase in VITAS’ revenue from 2009 to 2010 was a result of increased ADC of 6.1% driven by an increase in admissions of 5.6%, combined with Medicare price increases of approximately 1.3%.  The ADC increase was driven by a 6.1% increase in routine homecare, an increase of 5.3% in continuous care, and a 6.9% increase in general inpatient.  ADC is a key measure we use to monitor volume growth in our hospice programs.  Changes in total program admissions, discharges and average length of stay for our patients are the main drivers of changes in ADC.  The $1.95 million in Budget Neutrality Adjustment Factor (“BNAF”) was recorded in the first quarter of 2009 but related to hospice care provided in the fourth quarter of 2008 and did not recur in 2010. The Medicare cap amount recorded in 2010 relates to the reversal of $1.7 million, net of Medicare cap liability for the 2010 measurement period recorded in the fourth quarter of 2009 offset by $1.1 million in Medicare cap liability for three programs’ projected 2011 measurement period liability.

The Roto-Rooter segment revenue increase is the result of the following (dollars in thousands):

	Amount			Percent
Plumbing	$	17,553			12	%
Sewer and drain cleaning		(799	)		(1	)
Contractor operations		1,323			6
Other		765			3
Total revenues	$	18,842			6

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Plumbing revenues for 2010 increased from 2009 due to a 10.2% increase in the average price per job and an increase of 3.7% in the number of jobs performed.  The increase in the plumbing price per job was driven by a combination of increased pricing and favorable job mix shift to more expensive jobs such as excavation.  Our excavation job count increased by 21.5% compared to 2009.  The average revenue per job for excavation work is approximately 5.5 times greater than other plumbing jobs.  Sewer and drain cleaning revenues for 2010 decreased from 2009 due to a 1.1% decrease in jobs performed partially offset by a 2.4% increase in the average price per job.  Contractor operations revenue increased 6.1% as a result of acquisitions and higher job count. The increase in other revenues is attributable to an increase in product sales.

The consolidated gross margin was 29.2% in 2010 versus 29.9% in 2009.  On a segment basis, VITAS’ gross margin was 23.4% in 2010 and 23.5% in 2009.  Roto-Rooter’s gross margin was 44.5% in 2010 and 46.0% in 2009.  VITAS gross margin was essentially flat compared to 2009.  Roto-Rooter’s gross margin decreased as a result of higher casualty and medical insurance expense as well as the continued mix shift to excavation which has higher revenue per job but slightly lower gross margin percentage per job.

Selling, general and administrative expenses (“SG&A”) for 2010 comprise (in thousands):

	2010		2009
SG&A expenses before long-term incentive
compensation and the impact of market gains
of deferred compensation plans	$	195,020	$	187,828
Long-term incentive compensation		4,734		5,007
Impact of market value gains on liabilities
held in deferred compensation trusts		2,210		4,591
Total SG&A expenses	$	201,964	$	197,426

 Normal salary increases and revenue related expenses between periods account for the 3.8% increase in SG&A expenses before long-term incentive compensation and the impact of market gains of deferred compensation plans.

 Depreciation expense increased $2.9 million (13.6%) in 2010 mainly due to the installation of patient capture software at our VITAS segment in the second quarter of 2010.

 There were no other operating expenses for 2010.  Other operating expenses for 2009 of $4.0 million are related to the expenses of a contested proxy solicitation.

 Interest expense increased $360,000 (3.1%) from 2009 to 2010 mainly due to an increase in bond discount amortization related to accounting for our convertible notes.

Other income-net for 2010 and 2009 comprise (in thousands):

	2010			2009
Market value gains on assets held in deferred
compensation trusts	$	2,210		$	4,591
Loss on disposal of property and equipment		(425	)		(369	)
Interest income		444			423
Gain on settlement of company-owned life
insurance		-			1,211
Other		39			18
Total other income	$	2,268		$	5,874

Our effective tax rate was 38.9% in 2010 compared to 38.6% in 2009.

In December 2009, we recorded a $400,000 pretax charge for retrospective casualty insurance claims related to our discontinued operations.  There was no such charge in 2010.

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Income from continuing operations for both periods include the following aftertax adjustments that increased/ (reduced) aftertax earnings (in thousands):

	2010			2009
VITAS
Costs associated with the OIG investigation	$	(627	)	$	(363	)
Acquisition expense		(42	)		-
Roto-Rooter
Costs related to litigation settlements		(1,126	)		(534	)
Acquisition expense		(156	)		-
Corporate
Long-term incentive compensation		(2,957	)		(3,134	)
Noncash impact of change in accounting for convertible debt		(4,313	)		(3,988	)
Stock option expense		(4,909	)		(5,464	)
Expenses associated with contested proxy solicitation		-			(2,525	)
Impact of non-deductible losses and non-taxable gains on
investments held in deferred compensation trusts		-			756
Total	$	(14,130	)	$	(15,252	)

2010 Versus 2009 – Segment Results

The change in net income for 2010 versus 2009 is due to (in thousands, except percentages):

	Increase/(Decrease)
	Amount			Percent
VITAS	$	8,100			11	%
Roto-Rooter		(1,362	)		(4	)
Corporate		1,056			3
Discontinued operations		253			100
	$	8,047			11

CRITICAL ACCOUNTING POLICIES

Revenue Recognition

For both the Roto-Rooter and VITAS segments, service revenues and sales are recognized when the earnings process has been completed.  Generally, this occurs when services are provided or products are delivered. Sales of Roto-Rooter products, including drain cleaning machines and drain cleaning solution, comprise less than 3% of our total service revenues and sales for each of the three years in the period ended December 31, 2011.

VITAS recognizes revenue at the estimated net realizable amount due from third-party payers, which are primarily Medicare and Medicaid.  Payers may deny payment for services in whole or in part on the basis that such services are not eligible for coverage and do not qualify for reimbursement.  We estimate denials each period and make adequate provision in the financial statements.  The estimate of denials is based on historical trends and known circumstances and generally does not vary materially from period to period on an aggregate basis.  Medicare billings are subject to certain limitations, as described below.

VITAS is subject to certain limitations on Medicare payments for services.  Specifically, if the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of Medicare hospice care such program provides to all patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate.  We have never had a program reach the inpatient cap.  None of our hospice programs are expected to be within 30% of the inpatient cap for the 2010 measurement period while the majority of our programs have expected cushion in excess of 75% of the inpatient cap.  Due to the significant cushion at each program, we do not anticipate it to be reasonably likely that any program will be subject to the inpatient cap in the foreseeable future.

VITAS is also subject to a Medicare annual per-beneficiary cap.  Compliance with the Medicare cap is measured by comparing the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number between November 1 of each year and October 31 of the following year with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs during the relevant period.

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We actively monitor each of our hospice programs, by provider number, as to their specific admissions, discharge rate and median length of stay data in an attempt to determine whether they are likely to exceed the Medicare cap.  Should we determine that a provider number is likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective action to influence the patient mix or to increase patient admissions.  However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the period that will require repayment to the Federal government under the Medicare cap and record that amount as a reduction in service revenue.

Our estimate of the Medicare cap liability is particularly sensitive to allocations made by our fiscal intermediary relative to patient transfers between hospices.  We are allocated a percentage of the Medicare cap based on the total days a patient spent in hospice care.  The allocation for patient transfers cannot be determined until a patient dies.  As the number of days a patient spends in hospice is based on a future event, this allocation process may take several years.  Therefore, we use only first time Medicare admissions in our estimate of the Medicare cap billing limitation.  This method assumes that credit received for patients who transfer into our program will be offset by credit lost from patients who transfer out of our program.  If the actual relationship of transfers in and transfers out for a given measurement period proves to be different for any program at or near a billing limitation, our estimate of the liability would increase or decrease on a dollar-for-dollar basis.  While our method has historically been materially accurate, each program can vary during a given measurement period.

During the year ended December 31, 2011, we reversed Medicare cap liability for amounts recorded in the fourth quarter of 2010 for two programs’ projected 2011 measurement period liability. This reversal was partially offset by the Medicare cap liability for three programs’ projected 2012 measurement period liability.   For the year ended December 31, 2010, we recorded pretax charges in continuing operations for the estimated Medicare cap liability for two programs’ projected liability through year end for the 2011 measurement period.  The majority of the liability relates to one program which is VITAS’ largest hospice.  This amount was subsequently reversed during the 2011 fiscal year due to increased admission trends.  Shown below is the Medicare cap liability activity for the years end December 31, 2011 and 2010 (in thousands):

	2011			2010
Beginning Balance January 1,	$	1,371		$	1,981
Expense - 2012 measurement period		2,578			-
Reversal - 2011 measurement period		(786	)		-
Expense - 2011 measurement period		-			1,110
Reversal - 2010 measurement period		-			(1,720	)
Other		(198	)		-
Ending Balance December 31,	$	2,965		$	1,371

Insurance Accruals

For the Roto-Rooter segment and Chemed’s Corporate Office, we self-insure for all casualty insurance claims (workers’ compensation, auto liability and general liability).  As a result, we closely monitor and frequently evaluate our historical claims experience to estimate the appropriate level of accrual for self-insured claims.  Our third-party administrator (“TPA”) processes and reviews claims on a monthly basis.  Currently, our exposure on any single claim is capped at $500,000.  In developing our estimates, we accumulate historical claims data for the previous 10 years to calculate loss development factors (“LDF”) by insurance coverage type.  LDFs are applied to known claims to estimate the ultimate potential liability for known and unknown claims for each open policy year.  LDFs are updated annually.  Because this methodology relies heavily on historical claims data, the key risk is whether the historical claims are an accurate predictor of future claims exposure.  The risk also exists that certain claims have been incurred and not reported on a timely basis.  To mitigate these risks, in conjunction with our TPA, we closely monitor claims to ensure timely accumulation of data and compare claims trends with the industry experience of our TPA.

For the VITAS segment, we self-insure for workers’ compensation claims.  Currently, VITAS’ exposure on any single claim is capped at $750,000.  For VITAS’ self-insurance accruals for workers’ compensation, the valuation methods used are similar to those used internally for our other business units.

Our casualty insurance liabilities are recorded gross before any estimated recovery for amounts exceeding our stop loss limits.  Estimated recoveries from insurance carriers are recorded as accounts receivable.  Claims experience adjustments to our casualty and workers’ compensation accrual for the years ended December 31, 2011, 2010 and 2009 were net, pretax debits/(credits) of $(17,000), $165,000 and ($1.9 million), respectively.
 

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As an indication of the sensitivity of the accrued liability to reported claims, our analysis indicates that a 1% across-the-board increase or decrease in the amount of projected losses for all of our continuing operations would increase or decrease the accrued insurance liability at December 31, 2011, by $2.1 million or 5.7%.  While the amount recorded represents our best estimate of the casualty and workers’ compensation insurance liability, we have calculated, based on historical claims experience, the actual loss could reasonably be expected to increase or decrease by approximately $2.9 million as of December 31, 2011.

Income Taxes

Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on the date of enactment.

We are subject to income taxes in the Federal and most state jurisdictions.  We are periodically audited by various taxing authorities.  Significant judgment is required to determine our provision for income taxes.  We adopted FASB’s authoritative guidance on accounting for uncertainty in income taxes, which prescribes a comprehensive model for how to recognize, measure, present and disclose in financial statements uncertain tax positions taken or expected to be taken on a tax return.  Upon adoption of this guidance, the financial statements reflect expected future tax consequences of such uncertain positions assuming the taxing authorities’ full knowledge of the position and all relevant facts.

Goodwill and Intangible Assets

Identifiable, definite-lived intangible assets arise from purchase business combinations and are amortized using either an accelerated method or the straight-line method over the estimated useful lives of the assets.  The selection of an amortization method is based on which method best reflects the economic pattern of usage of the asset.

The date of our annual goodwill and indefinite-lived intangible asset impairment analysis is October 1.  The VITAS trade name is considered to have an indefinite life.  We also capitalize the direct costs of obtaining licenses to operate either hospice programs or plumbing operations subject to a minimum capitalization threshold.  These costs are amortized over the life of the license using the straight line method.  Certificates of Need (CON), which are required in certain states for hospice operations, are generally granted without expiration and thus, we believe them to be indefinite-lived assets subject to impairment testing.

For valuing the VITAS tradename, we perform a discounted cash flow analysis on the expected theoretical royalty cash stream from the VITAS tradename.  For valuing capitalized CON costs, we perform a discounted cash flow analysis on the expected income from the operating unit projecting income on a “with and without” basis.  This method compares the expected income stream from the operating unit with a theoretical income stream assuming that the applicable state did not have a CON requirement.  The difference in the discounted income streams is attributed as being the fair value of the CON.   Based on these calculations, neither the VITAS tradename nor the capitalized CON costs are impaired.

The valuations performed relative to the VITAS tradename and capitalized CON costs are particularly sensitive to our projections of future revenue and net income.  Additionally, the rate at which we would lose market share in a given program if a state repealed its CON requirements is a key assumption in our capitalized CON cost valuation model.

We consider that RRC, RRSC and VITAS are appropriate reporting units for testing goodwill impairment.  We consider RRC and RRSC as separate reporting units but one operating segment.  This is appropriate as they each have their own set of general ledger accounts that can be analyzed at “one level below an operating segment” per the definition of a reporting unit in FASB guidance.

In September 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-08 – Goodwill Impairment Testing which provides additional guidance related to the impairment testing of goodwill.  ASU No. 2011-08 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.  An entity will no longer be required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.  The revised guidance is effective for fiscal years beginning after December 15, 2011, but early adoption is permitted.  Our most recent quantitative analysis, performed as of October 1, 2010, indicated that the enterprise value our reporting units substantially exceeded their carrying value.  We adopted the new guidelines for our impairment test conducted as of October 1, 2011.  Based on our review of qualitative factors, such as financial performance of the reporting units and the macro-economic environment, we determined

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it was more likely than not that the fair value of each of our reporting units exceeded their respective recorded values.  Accordingly, we concluded that the two-step quantitative goodwill impairment test is not necessary.

Stock-based Compensation Plans

Stock-based compensation cost is measured at the grant date, based on the fair value of the award and recognized as expense over the employee’s requisite service period on a straight-line basis. We estimate the fair value of stock options using the Black-Scholes valuation model, consistent with the guidance provided by the FASB and the SEC.  We determine expected term, volatility, dividend yield and forfeiture rate based on our historical experience.  We believe that historical experience is the best indicator of these factors.

Contingencies

We are subject to various lawsuits and claims in the normal course of our business.  In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary.  We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable.  We record legal fees associated with legal and regulatory actions as the costs are incurred.  We disclose material loss contingencies that probable but not reasonably estimable and those that are at least reasonably possible.

RECENT ACCOUNTING STATEMENTS

In May 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-04 - Fair Value Measures. ASU No. 2011-04 provides amendments to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in U.S. GAAP and IFRS. The guidance is effective for fiscal years beginning after December 15, 2011. There was no material impact to the Company's financial statements as a result of ASU No. 2011-04.

In July 2011, the FASB issued ASU No. 2011-07 - Health Care Entities which provides additional guidance to health care entities related to the recognition of patient service revenue and related disclosures. The additional guidance is effective for fiscal years beginning after December 15, 2011, but early adoption is permitted. There was no material impact on the Company upon adoption of ASU No. 2011-07.

50

Consolidating Summary of Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)														Chemed
2011	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	80,358			$	34,879			$	(29,258	)		$	85,979
Add/(deduct):
Interest expense			229				358				13,301				13,888
Income taxes			48,835				21,353				(15,611	)			54,577
Depreciation			16,583				8,130				534				25,247
Amortization			1,897				599				1,756				4,252
EBITDA			147,902				65,319				(29,278	)			183,943
Add/(deduct):
Long-term incentive compensation			-				-				3,012				3,012
Litigation settlement costs			-				2,299				-				2,299
Legal expenses of OIG investigation			1,188				-				-				1,188
Acquisition Expense			147				(26	)			-				121
Stock option expense			-				-				8,376				8,376
Advertising cost adjustment			-				(1,240	)			-				(1,240	)
Interest income			(295	)			(40	)			(91	)			(426	)
Intercompany interest/(expense)			(3,998	)			(2,136	)			6,134				-
Adjusted EBITDA		$	144,944			$	64,176			$	(11,847	)		$	197,273
														Chemed
2010	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	79,796			$	31,678			$	(29,643	)		$	81,831
Add/(deduct):
Interest expense			131				233				11,595				11,959
Income taxes			48,601				19,547				(16,148	)			52,000
Depreciation			16,161				7,775				450				24,386
Amortization.			2,739				514				1,404				4,657
EBITDA			147,428				59,747				(32,342	)			174,833
Add/(deduct):
Long-term incentive compensation			-				-				4,734				4,734
Litigation settlement costs			-				1,853				-				1,853
Legal expenses of OIG investigation			1,012				-				-				1,012
Acquisition Expense			68				256				-				324
Stock option expense			-				-				7,762				7,762
Advertising cost adjustment			-				(679	)			-				(679	)
Interest income			(220	)			(49	)			(175	)			(444	)
Intercompany interest/(expense)			(4,632	)			(2,612	)			7,244				-
Adjusted EBITDA		$	143,656			$	58,516			$	(12,777	)		$	189,395
														Chemed
2009	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	71,696			$	33,040			$	(30,952	)		$	73,784
Add/(deduct):
Discontinued operations			-				-				253				253
Interest expense			374				186				11,039				11,599
Income taxes			43,637				20,372				(17,426	)			46,583
Depreciation			13,269				8,068				198				21,535
Amortization			4,704				441				1,222				6,367
EBITDA			133,680				62,107				(35,666	)			160,121
Add/(deduct):
Long-term incentive compensation			-				-				5,007				5,007
Non-taxable income from certain investments held in
deferred compensation trusts			-				-				(1,211	)			(1,211	)
Litigation settlement costs			-				882				-				882
Expenses associated with contested proxy solicitation			-				-				3,989				3,989
Legal expenses of OIG investigation			586				-				-				586
Stock option expense			-				-				8,639				8,639
Advertising cost adjustment			-				(540	)			-				(540	)
Interest income			(267	)			(73	)			(83	)			(423	)
Intercompany interest/(expense)			(4,314	)			(2,514	)			6,828				-
Adjusted EBITDA		$	129,685			$	59,862			$	(12,497	)		$	177,050

51

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
	Three Months Ended December 31,								Year Ended December 31,
OPERATING STATISTICS	2011				2010				2011				2010
Net revenue ($000)
Homecare	$	188,782			$	176,517			$	718,658			$	666,562
Inpatient		27,882				27,344				110,742				105,588
Continuous care		40,516				39,463				158,466				153,050
Total before Medicare cap allowance	$	257,180			$	243,324			$	987,866			$	925,200
Medicare cap allowance		(2,620	)			(1,056	)			(1,594	)			610
Total	$	254,560			$	242,268			$	986,272			$	925,810
Net revenue as a percent of total
before Medicare cap allowance
Homecare		73.4		%		72.6		%		72.7		%		72.0	%
Inpatient		10.8				11.2				11.2				11.4
Continuous care		15.8				16.2				16.1				16.6
Total before Medicare cap allowance		100.0				100.0				100.0				100.0
Medicare cap allowance		(1.0	)			(0.4	)			(0.2	)			0.1
Total		99.0		%		99.6		%		99.8		%		100.1	%
Average daily census (days)
Homecare		9,582				8,851				9,285				8,476
Nursing home		3,092				3,193				3,069				3,207
Routine homecare		12,674				12,044				12,354				11,683
Inpatient		443				436				449				434
Continuous care		607				600				603				596
Total		13,724				13,080				13,406				12,713
Total Admissions		15,191				14,776				60,162				58,526
Total Discharges		15,289				15,038				60,393				57,817
Average length of stay (days)		79.0				80.8				78.8				78.1
Median length of stay (days)		14.0				15.0				14.0				14.0
ADC by major diagnosis
Neurological		34.0		%		33.9		%		34.4		%		33.6	%
Cancer		17.8				18.3				17.7				18.4
Cardio		11.3				11.7				11.5				11.9
Respiratory		6.4				6.6				6.7				6.6
Other		30.5				29.5				29.7				29.5
Total		100.0		%		100.0		%		100.0		%		100.0	%
Admissions by major diagnosis
Neurological		19.4		%		19.5		%		19.4		%		18.8	%
Cancer		34.4				34.4				33.5				34.5
Cardio		10.8				11.0				10.8				11.3
Respiratory		7.6				7.4				8.3				8.0
Other		27.8				27.7				28.0				27.4
Total		100.0		%		100.0		%		100.0		%		100.0	%
Direct patient care margins
Routine homecare		53.2		%		54.0		%		52.3		%		52.4	%
Inpatient		13.1				14.4				12.9				13.6
Continuous care		19.9				22.6				20.3				21.4
Homecare margin drivers (dollars per patient day)
Labor costs	$	52.92			$	51.97			$	53.63			$	52.57
Drug costs		8.31				7.89				8.19				7.81
Home medical equipment		6.78				6.55				6.69				7.12
Medical supplies		2.79				2.67				2.80				2.56
Inpatient margin drivers (dollars per patient day)
Labor costs	$	320.43			$	305.19			$	312.78			$	299.54
Continuous care margin drivers (dollars per patient day)
Labor costs	$	559.11			$	533.32			$	552.38			$	531.69
Bad debt expense as a percent of revenues		0.6		%		0.7		%		0.7		%		0.9	%
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments		36.7				38.2			N.A.				N.A.
Days of revenue outstanding- including unapplied Medicare payments		22.3				36.5			N.A.				N.A.

52

Chemed Corporation and Subsidiary Companies

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 REGARDING FORWARD-LOOKING INFORMATION

In addition to historical information, this report contains forward-looking statements and performance trends that are based upon assumptions subject to certain known and unknown risks, uncertainties, contingencies and other factors. Such forward-looking statements and trends include, but are not limited to, the impact of laws and regulations on our operations, our estimate of future effective income tax rates and the recoverability of deferred tax assets. Variances in any or all of the risks, uncertainties, contingencies, and other factors from our assumptions could cause actual results to differ materially from these forward-looking statements and trends. Our ability to deal with the unknown outcomes of these events, many of which are beyond our control, may affect the reliability of our projections and other financial matters.

53

EX-21

EXHIBIT 21

SUBSIDIARIES OF CHEMED CORPORATION

The following is a list of subsidiaries of the Company as of December 31, 2011: Other subsidiaries which have been omitted from the list would not, when considered in the aggregate, constitute a significant subsidiary.  Each of the companies is incorporated under the laws of the state following its name.  The percentage given for each company represents the percentage of voting securities of such company owned by the Company or, where indicated, subsidiaries of the Company as of December 31, 2011.

All of the majority owned companies listed below are included in the consolidated financial statements as of December 31, 2011.

Chemed RT, Inc. (Delaware, 100%)

Comfort Care Holdings Co. (Nevada, 100%)

Consolidated HVAC, Inc. (Ohio, 100% by Roto-Rooter Services Company)

Jet Resource, Inc. (Delaware, 100%)

Nurotoco of Massachusetts, Inc. (Massachusetts, 100% by Roto-Rooter Services Company)

Nurotoco of New Jersey, Inc. (Delaware, 80% by Roto-Rooter Services Company)

Roto RT, Inc. (Delaware, 100% by Roto-Rooter Group, Inc.)

Roto-Rooter Canada, Ltd. (British Columbia, 100% by Roto-Rooter Services Company)

Roto-Rooter Corporation (Iowa, 100% by Roto-Rooter Group, Inc.)

Roto-Rooter Development Company (Delaware, 100% by Roto-Rooter Corporation)

Roto-Rooter Group, Inc. (Delaware, 100%)

Roto-Rooter Services Company (Iowa, 100% by Roto-Rooter Group, Inc.)

RR Plumbing Services Corporation (New York, 49% by Roto-Rooter Services Company; included within the consolidated financial statements as a consolidated subsidiary)

R.R. UK, Inc. (Delaware, 100% by Roto-Rooter Group, Inc.)

VITAS Care Solutions, Inc. (Delaware, 100% by VITAS Hospice Services L.L.C.)

VITAS Healthcare Corporation (Delaware, 100% by Comfort Care Holdings Co.)

VITAS Hospice Services, L.L.C. (Delaware, 100% by VITAS Healthcare Corporation)

VITAS Healthcare Corporation of California (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS Healthcare Corporation of Illinois (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS Healthcare Corporation of Florida (Florida, 100% by VITAS Hospice Services, L.L.C.)

VITAS Healthcare Corporation of Ohio (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS Healthcare Corporation of Atlantic (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS Healthcare of Texas, L.P.  (Texas, 99% by VITAS Holding Corporation, the limited partner, 1% by VITAS Hospice Services, L.L.C., the general partner)

VITAS Healthcare Corporation Midwest (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS Healthcare Corporation of Georgia (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS HME Solutions, Inc. (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS of North Florida, Inc. (Florida, 100% by VITAS Hospice Services, L.L.C.)

VITAS Holdings Corporation (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS RT, Inc. (Delaware, 100% by VITAS Hospice Services, L.L.C.)

VITAS Solutions, Inc. (Delaware, 100% by VITAS Hospice Services, L.L.C.)

Hospice Care Incorporated (Delaware, 100% by VITAS Hospice Services, L.L.C.)

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-145555) and on Form S-8 (Nos. 002- 87202, 002-80712, 033-65244, 033-61063, 333-109104, 333-118714, 333-34525, 333-87071, 333-134107, 333-87073 and 333-167733) of Chemed Corporation of our report dated February 27, 2012 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2011 Annual Report to Stockholders of Chemed Corporation, which is incorporated in this Annual Report on Form 10-K.  We also consent to the incorporation by reference of our report dated February 27, 2012 relating to the financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Cincinnati, Ohio

February 27, 2012

EX-24

EXHIBIT 24

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Joel F. Gemunder
	Joel F. Gemunder

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Patrick P. Grace
	Patrick P. Grace

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Thomas C. Hutton
	Thomas C. Hutton

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	Thomas P. Rice
	/s/ Thomas P. Rice

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Donald E. Saunders
	Donald E. Saunders

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ George J. Walsh III
	George J. Walsh III

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Frank E. Wood
	Frank E. Wood

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Walter L. Krebs
	Walter L. Krebs

POWER OF ATTORNEY

The undersigned director of CHEMED CORPORATION ("Company") hereby appoints KEVIN J. MCNAMARA and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and all amendments thereto, to be filed with the Securities and Exchange Commission.  Each of such attorneys-in-fact is appointed with full power to act without the other.

Dated: February 17, 2012
	/s/ Andrea R. Lindell
	Andrea R. Lindell

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, Kevin J. McNamara, certify that:

1. I have reviewed this annual report on Form 10-K of Chemed Corporation (“registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of 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 annual report, fairly present in all material respects the financial condition, results of operations, and cash flow of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers 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 Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls or 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 other 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 officers 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 registrant’s board of directors or persons performing the equivalent function:

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.

Dated: February ­­27, 2012
	/s/ Kevin J. McNamara
	Kevin J. McNamara
	(President and Chief Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, David P. Williams, certify that:

1. I have reviewed this annual report on Form 10-K of Chemed Corporation (“registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of 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 annual report, fairly present in all material respects the financial condition, results of operations, and cash flow of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers 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 Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls or 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 other 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 officers 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 registrant’s board of directors or persons performing the equivalent function:

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.

Dated: February 27, 2012
	/s/ David P. Williams
	David P. Williams
	(Executive Vice President and Chief Financial Officer)

EX-31.3

EXHIBIT 31.3

CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, Arthur V. Tucker, Jr., certify that:

1. I have reviewed this annual report on Form 10-K of Chemed Corporation (“registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of 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 annual report, fairly present in all material respects the financial condition, results of operations, and cash flow of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers 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 Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls or 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 other 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 officers 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 registrant’s board of directors or persons performing the equivalent function:

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.

Dated: February 27, 2012
	/s/ Arthur V. Tucker, Jr.
	Arthur V. Tucker, Jr.
	(Vice President and Controller)

EX-32.1

EXHIBIT 32.1

CERTIFICATION BY KEVIN J. MCNAMARA

PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as President and Chief Executive Officer of Chemed Corporation (“Company”), does hereby certify that:

1) The Company’s Annual Report on Form 10-K for the year ending December 31, 2011 (“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.

Dated: February 27, 2012
	/s/ Kevin J. McNamara
	Kevin J. McNamara
	(President and Chief Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION DAVID P. WILLIAMS

PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Executive Vice President and Chief Financial Officer of Chemed Corporation (“Company”), does hereby certify that:

1) The Company’s Annual Report on Form 10-K for the year ending December 31, 2011 (“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.

Dated: February 27, 2012
	/s/ David P. Williams
	David P. Williams
	(Executive Vice President and Chief Financial Officer)

EX-32.3

EXHIBIT 32.3

CERTIFICATION BY ARTHUR V. TUCKER, JR.

PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Vice President and Controller of Chemed Corporation (“Company”), does hereby certify that:

1) The Company’s Annual Report on Form 10-K for the year ending December 31, 2011 (“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.

Dated: February 27, 2012
	/s/ Arthur V. Tucker, Jr.
	Arthur V. Tucker, Jr.
	(Vice President and Controller)

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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2011

VITAS Segment During 2011 [Member]

Business Acquisition, Purchase Price Allocation

Working capital	$	382
Identifiable intangible assets		951
Goodwill		2,320
Other assets and liabilities - net		11
	$	3,664

Roto-Rooter [Member]

Business Acquisition, Purchase Price Allocation

Working capital	$	268
Identifiable intangible assets		589
Goodwill		8,225
Other assets and liabilities - net		387
	$	9,469

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Hospice Revenue Recognition (Schedule Of Allowance For Doubtful Accounts) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Beginning Balance	$ 11,801	$ 10,938
Bad debt provision	7,055	7,899
Write-offs	(9,595)	(7,459)
Other/Contractual adjustments	742	423
Ending Balance	10,003	11,801
Percentage of medicare beneficiaries exceeds	20.00%
Medicare [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Beginning Balance	6,968	6,268
Bad debt provision	315	2,918
Write-offs	(2,368)	(2,218)
Other/Contractual adjustments	2
Ending Balance	4,917	6,968
Medicaid [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Beginning Balance	2,804	2,535
Bad debt provision	4,323	2,922
Write-offs	(4,030)	(2,653)
Ending Balance	3,097	2,804
Commercial [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Beginning Balance	1,223	1,630
Bad debt provision	2,245	1,745
Write-offs	(1,915)	(2,152)
Other/Contractual adjustments	16
Ending Balance	1,569	1,223
Other [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Beginning Balance	806	505
Bad debt provision	172	314
Write-offs	(1,282)	(436)
Other/Contractual adjustments	724	423
Ending Balance	$ 420	$ 806

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Loans Receivable From Independent Contractors (Tables)

12 Months Ended

Dec. 31, 2011

Loans Receivable From Independent Contractors [Abstract]

Schedule Of Independent Contractors

	For the Years Ended December 31,
	2011	2010	2009
Revenues	$      26,711	$     22,943	$     21,620
Pretax profits	13,320	10,695	9,466

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Intangible Assets (Schedule Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	$ 87,166	$ 85,296
Accumulated amortization	(28,904)	(27,438)
VITAS trade name	51,300	51,300
Net book value, total	58,262	57,858
Referral Networks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	21,729	21,140
Accumulated amortization	(18,647)	(17,427)
Net Book Value	3,082	3,713
Covenants Not To Compete [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	9,286	9,211
Accumulated amortization	(8,885)	(8,814)
Net Book Value	401	397
Customer Lists [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	1,222	1,223
Accumulated amortization	(1,118)	(1,089)
Net Book Value	104	134
Reacquired Franchise Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	974	974
Accumulated amortization	(254)	(108)
Net Book Value	720	866
Subtotal - Definite-Lived Intangibles [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	33,211	32,548
Accumulated amortization	(28,904)	(27,438)
Net Book Value	4,307	5,110
Operating Licenses [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Asset	2,655	1,448
Net Book Value	$ 2,655	$ 1,448

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Hospice Revenue Recognition (Medicare Cap Liability) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Hospice Revenue Recognition [Abstract]
Beginning Balance January 1,	$ 1,371	$ 1,981
Expense - 2012 measurement period	2,578
Reversal - 2011 measurement period	(786)
Expense - 2011 measurement period		1,110
Reversal - 2010 measurement period		(1,720)
Other	(198)
Ending Balance December 31,	$ 2,965	$ 1,371

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Other Income - Net (Schedule Of Other Income - Net From Continuing Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Other Income - Net [Abstract]
Market value gains on assets held in deferred compensation trust	$ 798	$ 2,210	$ 5,802
Loss on disposal of property and equipment	(441)	(425)	(369)
Interest income	426	444	423
Other - net	(66)	39	18
Total other income	$ 717	$ 2,268	$ 5,874

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Schedule Of Computation Of Earnings Per Share

	Income from Continuing Operations						Net Income
For the Years Ended December 31,	Income		Shares		Earnings per Share		Income		Shares		Earnings per Share
2011
Earnings	$	85,979		20,523	$	4.19	$	85,979		20,523	$	4.19
Dilutive stock options		-		335				-		335
Nonvested stock awards		-		87				-		87
Diluted earnings	$	85,979		20,945	$	4.10	$	85,979		20,945	$	4.10
2010
Earnings	$	81,831		22,587	$	3.62	$	81,831		22,587	$	3.62
Dilutive stock options		-		348				-		348
Nonvested stock awards		-		96				-		96
Diluted earnings	$	81,831		23,031	$	3.55	$	81,831		23,031	$	3.55
2009
Earnings	$	74,037		22,451	$	3.30	$	73,784		22,451	$	3.29
Dilutive stock options		-		229				-		229
Nonvested stock awards		-		62				-		62
Diluted earnings	$	74,037		22,742	$	3.26	$	73,784		22,742	$	3.24

Changes In Stock Price Impact On Number Of Shares Included In Diluted Earnings Per Share And Issuable Upon Conversion Of Notes

		Shares				Total Treasury		Shares Due			Incremental
		Underlying 1.875%				Method		to the Company			Shares Issued by
Share		Convertible		Warrant		Incremental		under Notes			the Company
Price		Notes		Shares		Shares (a)		Hedges			upon Conversion (b)
$	80.73		32,140		-		32,140		(34,382	)		(2,242	)
$	90.73		287,382		-		287,382		(307,433	)		(20,051	)
$	100.73		491,947		-		491,947		(526,270	)		(34,323	)
$	110.73		659,562		119,997		779,559		(705,580	)		73,979
$	120.73		799,411		318,107		1,117,518		(855,187	)		262,331
$	130.73		917,865		485,908		1,403,773		(981,905	)		421,868
a) Represents the number of incremental shares that must be included in the calculation of diluted shares under U.S. GAAP.
b) Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement of the note hedges and warrants.

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Summary Of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2011

Summary Of Significant Accounting Policies [Abstract]

Schedule Of Weighted Average Lives Of Property And Equipment

Buildings and building improvements	10.1	yrs.
Transportation equipment	14.4
Machinery and equipment	5.6
Computer software	5.0
Furniture and fixtures	4.7

Schedule Of Weighted Average Lives Of Identifiable, Definite-Lived Intangible Assets

Covenants not to compete	6.4	yrs.
Reacquired franchise rights	6.7
Referral networks	10.0
Customer lists	13.3

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Income Taxes [Line Items]
Deferred income tax assets included in other asset	$ 150,000	$ 236,000
Net operating loss carryforwards	31,000,000	26,000,000
Unrecognized tax benefits	2,612,000	704,000	1,010,000	1,202,000	1,300,000
Accrued interest payable related to uncertain tax positions	252,000	114,000
Undistributed earnings of domestic subsidiaries	35,100,000
Maximum [Member]
Income Taxes [Line Items]
Net operating losses expiration date	2031
Minimum [Member]
Income Taxes [Line Items]
Net operating losses expiration date	2012
Undistributed Domestic Earnings [Member]
Income Taxes [Line Items]
Additional taxes if interest in all businesses is sold rather than to effect a tax-free liquidation	$ 12,900,000

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Business Combinations (Business Acquisition, Purchase Price Allocation) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2010	Apr. 29, 2011 Family Comfort Hospice [Member]
Business Acquisition [Line Items]
Working capital	$ 268	$ 382
Identifiable intangible assets	589	951
Goodwill	8,225	2,320
Other assets and liabilities - net	387	11
Assets total	$ 9,469	$ 3,664

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Lease Arrangements (Schedule Of Total Rental Expense Incurred Under Operating Leases For Continuing Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Lease Arrangements [Abstract]
Total rental payments	$ 22,199	$ 21,777	$ 21,219
Less sublease rentals	(170)	(237)	(270)
Net rental expense	$ 22,029	$ 21,540	$ 20,949

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Long-Term Debt And Lines Of Credit (Debt Amounts Included In Consolidated Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Long-Term Debt And Lines Of Credit [Abstract]
Principal amount of convertible debentures	$ 186,956	$ 186,956
Unamortized debt discount	(20,172)	(27,748)
Carrying amount of convertible debentures	166,784	159,208
Additional paid in capital (net of tax)	$ 31,310	$ 31,310

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Discontinued Operations (Schedule Of Estimated Timing Of Payments Of Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Discontinued Operations [Abstract]
2012	$ 826
2013	300
Thereafter	601
Total estimated timing of payments of liabilities related to discontinued operations	$ 1,727

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Properties And Equipment (Schedule Of Properties And Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Properties And Equipment [Abstract]
Land	$ 1,360	$ 1,360
Buildings	40,424	32,788
Transportation equipment	19,412	18,837
Machinery and equipment	62,467	58,706
Computer software	44,805	47,203
Furniture and fixtures	58,317	51,277
Projects under development	2,875	1,817
Total properties and equipment	229,660	211,988
Less accumulated depreciation	(146,709)	(132,696)
Net properties and equipment	$ 82,951	$ 79,292

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Income Taxes (Summary Of Temporary Differences That Give Rise To Deferred Tax Assets/ (Liabilities)) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Abstract]
Accrued liabilities	$ 27,687	$ 26,334
Stock compensation expense	12,200	10,257
Allowance for uncollectible accounts receivable	1,905	2,695
State net operating loss carryforwards	1,633	1,379
Other	2,845	2,763
Deferred income tax assets	46,270	43,428
Amortization of intangible assets	(42,192)	(40,135)
Accelerated tax depreciation	(16,322)	(10,499)
Revenue recognition	(1,684)
Currents assets	(1,315)	(1,148)
Other	(1,530)	(1,397)
Deferred income tax liabilities	(63,043)	(53,179)
Net deferred income tax liabilities	$ (16,773)	$ (9,751)

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Lease Arrangements (Narrative) (Details)	12 Months Ended
	Dec. 31, 2011 years
Maximum [Member]
Operating Leased Assets [Line Items]
Lease arrangements, remaining terms of leases under operating lease, years	8
Minimum [Member]
Operating Leased Assets [Line Items]
Lease arrangements, remaining terms of leases under operating lease, years	1

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Cash Overdrafts And Cash Equivalents (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Cash overdrafts included in accounts payable	$ 10.3	$ 11.1
Cash equivalents	$ 32.5	$ 45.5
Cash equivalents weighted average rate of return	0.10%	0.10%
Maximum [Member]
Repurchase agreement period, days	10 days

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Other Operating Expenses (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2009
Other Operating Expenses [Abstract]
Pretax expenses	$ 3,989

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Loans Receivable From Independent Contractors

12 Months Ended

Dec. 31, 2011

Loans Receivable From Independent Contractors [Abstract]

Loans Receivable From Independent Contractors

18.   Loans Receivable from Independent Contractors

At December 31, 2011, we had contractual arrangements with 64 independent contractors to provide plumbing repair and drain cleaning services under sublicensing agreements using the Roto-Rooter name in lesser-populated areas of the United States and Canada. The arrangements give the independent contractors the right to conduct a plumbing and drain cleaning business using the Roto-Rooter name in a specified territory in exchange for a royalty based on a percentage of labor sales, generally approximately 40%.  We also pay for certain telephone directory advertising in these areas, lease certain capital equipment and provide operating manuals to serve as resources for operating a plumbing and drain cleaning business.  The contracts are generally cancelable upon 90 days' written notice (without cause) or upon a few days notice (with cause).  The independent contractors are responsible for running the businesses as they believe best.

Our maximum exposure to loss from arrangements with our independent contractors at December 31, 2011 is approximately $1.1 million (2010 - $1.1 million).  The exposure to loss is mainly the result of loans provided to the independent contractors.  In most cases, these loans are partially secured by receivables and equipment owned by the independent contractor.  The interest rates on the loans range from zero to 8% per annum, and the remaining terms of the loans range from 2.5 months to 5.4 years at December 31, 2011.  During the periods ended December 31, 2011, 2010 and 2009 we recorded the following from our independent contractors (in thousands):

	For the Years Ended December 31,
	2011	2010	2009
Revenues	$      26,711	$     22,943	$     21,620
Pretax profits	13,320	10,695	9,466

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Guarantor Subsidiaries (Tables)

12 Months Ended

Dec. 31, 2011

Guarantor Subsidiaries [Abstract]

Schedule Of Guarantor Subsidiaries - Balance Sheet

December 31, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	32,470		$	(1,422	)	$	7,033		$	-		$	38,081
Accounts receivable, less allowances		606			76,816			502			-			77,924
Intercompany receivables		-			273,413			-			(273,413	)		-
Inventories		-			8,032			636			-			8,668
Current deferred income taxes		(650	)		13,059			131			-			12,540
Prepaid income taxes		(114	)		1,689			556			-			2,131
Prepaid expenses		503			10,757			149			-			11,409
Total current assets		32,815			382,344			9,007			(273,413	)		150,753
Investments of deferred compensation plans		-			-			31,629			-			31,629
Properties and equipment, at cost, less accumulated depreciation		11,641			68,755			2,555			-			82,951
Identifiable intangible assets less accumulated amortization		-			58,262			-			-			58,262
Goodwill		-			456,183			4,450			-			460,633
Other assets		7,616			1,552			2,509			-			11,677
Investments in subsidiaries		793,277			21,148			-			(814,425	)		-
Total assets	$	845,349		$	988,244		$	50,150		$	(1,087,838	)	$	795,905
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(683	)	$	48,490		$	418		$	-		$	48,225
Intercompany payables		269,042			-			4,371			(273,413	)		-
Income taxes		-			-			90			-			90
Accrued insurance		489			36,658			-			-			37,147
Accrued compensation		3,828			36,655			604			-			41,087
Other current liabilities		1,719			15,728			1,404			-			18,851
Total current liabilities		274,395			137,531			6,887			(273,413	)		145,400
Deferred income taxes		(12,330	)		51,601			(9,808	)		-			29,463
Long-term debt		166,784			-			-			-			166,784
Deferred compensation liabilities		-			-			30,693			-			30,693
Other liabilities		2,816			4,630			2,435			-			9,881
Stockholders' equity		413,684			794,482			19,943			(814,425	)		413,684
Total liabilities and stockholders' equity	$	845,349		$	988,244		$	50,150		$	(1,087,838	)	$	795,905

December 31, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	45,324		$	(1,571	)	$	6,164		$	-		$	49,917
Accounts receivable, less allowances		802			111,716			481			-			112,999
Intercompany receivables		-			172,426			-			(172,426	)		-
Inventories		-			7,191			537			-			7,728
Current deferred income taxes		(688	)		15,666			120			-			15,098
Prepaid income taxes		2,787			(1,809	)		(208	)		-			770
Prepaid expenses		782			9,244			259			-			10,285
Total current assets		49,007			312,863			7,353			(172,426	)		196,797
Investments of deferred compensation plans		-			-			28,304			-			28,304
Properties and equipment, at cost, less accumulated depreciation		12,513			64,743			2,036			-			79,292
Identifiable intangible assets less accumulated amortization		-			57,858			-			-			57,858
Goodwill		-			453,864			4,479			-			458,343
Other assets		6,049			1,343			2,175			-			9,567
Investments in subsidiaries		716,815			18,696			-			(735,511	)		-
Total assets	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	4,924		$	50,457		$	448		$	-		$	55,829
Intercompany payables		167,067			-			5,359			(172,426	)		-
Income taxes		(7,190	)		8,745			(394	)		-			1,161
Accrued insurance		906			35,586			-			-			36,492
Accrued compensation		4,235			35,016			468			-			39,719
Other current liabilities		1,549			13,447			1,145			-			16,141
Total current liabilities		171,491			143,251			7,026			(172,426	)		149,342
Deferred income taxes		(11,356	)		45,168			(8,727	)		-			25,085
Long-term debt		159,208			-			-			-			159,208
Deferred compensation liabilities		-			-			27,851			-			27,851
Other liabilities		2,992			3,123			511			-			6,626
Stockholders' equity		462,049			717,825			17,686			(735,511	)		462,049
Total liabilities and stockholders' equity	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161

Schedule Of Guarantor Subsidiaries - Income Statement

For the year ended December 31, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,328,425		$	27,545		$	-		$	1,355,970
Cost of services provided and goods sold		-			955,628			14,856			-			970,484
Selling, general and administrative expenses		21,895			172,368			7,997			-			202,260
Depreciation		945			23,496			806			-			25,247
Amortization		1,756			2,496			-			-			4,252
Total costs and expenses		24,596			1,153,988			23,659			-			1,202,243
Income/(loss) from operations		(24,596	)		174,437			3,886			-			153,727
Interest expense		(13,177	)		(587	)		(124	)		-			(13,888	)
Other (expense)/income - net		16,507			(16,591	)		801			-			717
Income/(loss) before income taxes		(21,266	)		157,259			4,563			-			140,556
Income tax (provision)/benefit		6,564			(59,407	)		(1,734	)		-			(54,577	)
Equity in net income of subsidiaries		100,681			3,001			-			(103,682	)		-
Net income	$	85,979		$	100,853		$	2,829		$	(103,682	)	$	85,979
For the year ended December 31, 2010					Guarantor			Non-Guarantor			Consolidating
		Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,254,856		$	25,689		$	-		$	1,280,545
Cost of services provided and goods sold		-			892,596			13,420			-			906,016
Selling, general and administrative expenses		23,262			170,223			8,479			-			201,964
Depreciation		860			22,732			794			-			24,386
Amortization		1,404			3,253			-			-			4,657
Total costs and expenses		25,526			1,088,804			22,693			-			1,137,023
Income/(loss) from operations		(25,526	)		166,052			2,996			-			143,522
Interest expense		(11,596	)		(363	)		-			-			(11,959	)
Other (expense)/income - net		15,520			(15,451	)		2,199			-			2,268
Income/(loss) before income taxes		(21,602	)		150,238			5,195			-			133,831
Income tax (provision)/benefit		6,859			(56,905	)		(1,954	)		-			(52,000	)
Equity in net income of subsidiaries		96,574			3,308			-			(99,882	)		-
Net income	$	81,831		$	96,641		$	3,241		$	(99,882	)	$	81,831
For the year ended December 31, 2009					Guarantor			Non-Guarantor			Consolidating
		Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,166,972		$	23,264		$	-		$	1,190,236
Cost of services provided and goods sold		-			822,788			11,786			-			834,574
Selling, general and administrative expenses		23,199			163,600			10,627			-			197,426
Depreciation		602			20,221			712			-			21,535
Amortization		1,222			5,145			-			-			6,367
Other operating expenses		3,989			-			-			-			3,989
Total costs and expenses		29,012			1,011,754			23,125			-			1,063,891
Income/(loss) from operations		(29,012	)		155,218			139			-			126,345
Interest expense		(11,040	)		(565	)		6			-			(11,599	)
Other (expense)/income - net		5,428			(5,422	)		5,868			-			5,874
Income/(loss) before income taxes		(34,624	)		149,231			6,013			-			120,620
Income tax (provision)/benefit		12,058			(56,543	)		(2,098	)		-			(46,583	)
Equity in net income of subsidiaries		96,603			4,043			-			(100,646	)		-
Income from continuing operations		74,037			96,731			3,915			(100,646	)		74,037
Discontinued Operations		(253	)		-			-			-			(253	)
Net income	$	73,784		$	96,731		$	3,915		$	(100,646	)	$	73,784

Schedule Of Guarantor Subsidiaries - Statement Of Cash Flows

For the year ended December 31, 2011				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	12,444		$	158,159		$	3,740		$	174,343
Cash Flow from Investing Activities:
Capital expenditures		(73	)		(28,145	)		(1,374	)		(29,592	)
Business combinations, net of cash acquired		-			(3,664	)		-			(3,664	)
Other sources/(uses) - net		(191	)		(730	)		63			(858	)
Net cash used by investing activities		(264	)		(32,539	)		(1,311	)		(34,114	)
Cash Flow from Financing Activities:
Purchases of treasury stock		(147,791	)		-			(95	)		(147,886	)
Dividends paid to shareholders		(12,538	)		-			-			(12,538	)
Proceeds from exercise of stock options		8,036			-			-			8,036
Realized excess tax benefit on share based compensation		3,854			-			-			3,854
Debt issuance costs		(2,657	)		-			-			(2,657	)
Change in cash overdrafts payable		9			(835	)		-			(826	)
Change in intercompany accounts		126,040			(124,636	)		(1,404	)		-
Other sources - net		13			-			(61	)		(48	)
Net cash provided/(used) by financing activities		(25,034	)		(125,471	)		(1,560	)		(152,065	)
Net increase/(decrease) in cash and cash equivalents		(12,854	)		149			869			(11,836	)
Cash and cash equivalents at beginning of year		45,324			(1,571	)		6,164			49,917
Cash and cash equivalents at end of period	$	32,470		$	(1,422	)	$	7,033		$	38,081
For the year ended December 31, 2010					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	2,862		$	81,781		$	1,369		$	86,012
Cash Flow from Investing Activities:
Capital expenditures		(18	)		(24,677	)		(944	)		(25,639	)
Business combinations, net of cash acquired		-			(9,469	)		-			(9,469	)
Other sources/(uses) - net		(157	)		(688	)		253			(592	)
Net cash used by investing activities		(175	)		(34,834	)		(691	)		(35,700	)
Cash Flow from Financing Activities:
Purchases of treasury stock		(109,326	)		-			(4	)		(109,330	)
Dividends paid to shareholders		(11,881	)		-			-			(11,881	)
Proceeds from exercise of stock options		5,327			-			-			5,327
Realized excess tax benefit on share based compensation		3,357			-			-			3,357
Change in cash overdrafts payable		1,645			(2,226	)		-			(581	)
Change in intercompany accounts		44,135			(45,071	)		936			-
Other sources - net		49			-			248			297
Net cash provided/(used) by financing activities		(66,694	)		(47,297	)		1,180			(112,811	)
Net increase/(decrease) in cash and cash equivalents		(64,007	)		(350	)		1,858			(62,499	)
Cash and cash equivalents at beginning of year		109,331			(1,221	)		4,306			112,416
Cash and cash equivalents at end of period	$	45,324		$	(1,571	)	$	6,164		$	49,917
For the year ended December 31, 2009				Guarantor			Non-Guarantor
	Parent				Subsidiaries			Subsidiaries		Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	950		$	153,387		$	6,495		$	160,832
Cash Flow from Investing Activities:
Capital expenditures		(448	)		(20,394	)		(654	)		(21,496	)
Business combinations, net of cash acquired		-			(1,919	)		-			(1,919	)
Other sources/(uses) - net		702			(312	)		183			573
Net cash provided/(used) by investing activities		254			(22,625	)		(471	)		(22,842	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		19			2,872			-			2,891
Change in intercompany accounts		140,674			(135,226	)		(5,448	)		-
Dividends paid to shareholders		(8,157	)		-			-			(8,157	)
Purchases of treasury stock		(4,225	)		-			-			(4,225	)
Proceeds from exercise of stock options		545			-			-			545
Realized excess tax benefit on share based compensation		1,955			-			-			1,955
Net decrease in revolving line of credit		(8,200	)		-			-			(8,200	)
Repayment of long-term debt		(14,500	)		(169	)		-			(14,669	)
Other sources/(uses) - net		(49	)		338			369			658
Net cash provided/(used) by financing activities		108,062			(132,185	)		(5,079	)		(29,202	)
Net increase/(decrease) in cash and cash equivalents		109,266			(1,423	)		945			108,788
Cash and cash equivalents at beginning of year		65			202			3,361			3,628
Cash and cash equivalents at end of period	$	109,331		$	(1,221	)	$	4,306		$	112,416

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Schedule Of Provision For Income Taxes

	For the Years Ended December 31,
	2011		2010			2009
Continuing Operations:
Current
U.S. federal	$	40,762	$	46,789		$	36,182
U.S. state and local		5,961		6,981			4,960
Foreign		612		639			462
Deferred
U.S. federal, state and local		7,227		(2,418	)		4,980
Foreign		15		9			(1	)
Total	$	54,577	$	52,000		$	46,583
Discontinued Operations:
Current U.S. federal	$	-	$	-		$	(65	)
Current U.S. state and local		-		-			(5	)
Deferred U.S. federal, state and local		-		-			(77	)
Total	$	-	$	-		$	(147	)

Summary Of Temporary Differences That Give Rise To Deferred Tax Assets/ (Liabilities)

	December 31,
	2011			2010
Accrued liabilities	$	27,687		$	26,334
Stock compensation expense		12,200			10,257
Allowance for uncollectible accounts receivable		1,905			2,695
State net operating loss carryforwards		1,633			1,379
Other		2,845			2,763
Deferred income tax assets		46,270			43,428
Amortization of intangible assets		(42,192	)		(40,135	)
Accelerated tax depreciation		(16,322	)		(10,499	)
Revenue recognition		(1,684	)		-
Currents assets		(1,315	)		(1,148	)
Other		(1,530	)		(1,397	)
Deferred income tax liabilities		(63,043	)		(53,179	)
Net deferred income tax liabilities	$	(16,773	)	$	(9,751	)

Schedule Of Significant Changes To Unrecognized Tax Benefits

	2011			2010			2009
Balance at January 1,	$	704		$	1,010		$	1,202
Unrecognized tax benefits due to positions taken in current year		2,038			119			136
Decrease due to settlement with taxing authorities		-			-			(214	)
Decrease due to expiration of statute of limitations		(130	)		(425	)		(93	)
Other		-			-			(21	)
Balance at December 31,	$	2,612		$	704		$	1,010

Schedule Of Difference Between Actual Income Tax Provision For Continuing Operations And Income Tax Provision Calculated At Statutory U.S. Federal Tax Rate

	For the Years Ended December 31,
	2011			2010			2009
Income tax provision calculated using
the statutory rate of 35%	$	49,195		$	46,841		$	42,217
State and local income taxes,
less federal income tax effect		4,733			4,509			3,837
Nondeductible expenses		1,021			928			854
Impact of deferred compensation plans		(1	)		(27	)		(190	)
Other --net		(371	)		(251	)		(135	)
Income tax provision	$	54,577		$	52,000		$	46,583
Effective tax rate		38.8	%		38.9	%		38.6	%

Schedule Of Income Taxes Paid

2011	$	44,343
2010		49,532
2009		40,872

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Discontinued Operations (Schedule Of Discontinued Operations) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2009
Discontinued Operations [Abstract]
Casualty insurance costs	$ (400)
Loss before income taxes	(400)
All other income taxes	147
Total adjustments	(253)
Total discontinued operations	$ (253)
Earnings/(loss) per share	$ (0.01)
Diluted earnings/(loss) per share	$ (0.02)

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Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 years	Dec. 31, 2010	Dec. 31, 2009
Related Party Transactions [Line Items]
Cancellation agreements, written notice period, days	90
VITAS [Member]
Related Party Transactions [Line Items]
Renewal terms of pharmacy agreements, years	1
Purchases from related party	$ 39.4	$ 36.1	$ 33.1

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Segments And Nature Of The Business (Tables)

12 Months Ended

Dec. 31, 2011

Segments And Nature Of The Business [Abstract]

Schedule Of Segment Data For Continuing Operations

	For the Years Ended December 31,
	2011			2010			2009
Revenues by Type of Service
VITAS
Routine homecare	$	718,658		$	666,562		$	615,408
Continuous care		158,466			153,050			141,272
General inpatient		110,742			105,588			97,356
Estimated BNAF		-			-			1,950
Medicare cap		(1,594	)		610			(1,643	)
Total segment		986,272			925,810			854,343
Roto-Rooter
Sewer and drain cleaning		138,932			135,704			136,503
Plumbing repair and maintenance		177,363			168,625			151,072
Independent contractors		26,711			22,943			21,620
HVAC repair and maintenance		3,410			4,183			4,031
Other products and services		23,282			23,280			22,667
Total segment		369,698			354,735			335,893
Total service revenues and sales	$	1,355,970		$	1,280,545		$	1,190,236
Aftertax Segment Earnings/(Loss)
VITAS	$	80,358		$	79,796		$	71,696
Roto-Rooter		34,879			31,678			33,040
Total		115,237			111,474			104,736
Corporate		(29,258	)		(29,643	)		(30,699	)
Discontinued operations		-			-			(253	)
Net income	$	85,979		$	81,831		$	73,784
Interest Income
VITAS	$	4,293		$	4,852		$	4,581
Roto-Rooter		2,176			2,661			2,587
Total		6,469			7,513			7,168
Corporate		91			175			83
Intercompany eliminations		(6,134	)		(7,244	)		(6,828	)
Total interest income	$	426		$	444		$	423
Interest Expense
VITAS	$	229		$	131		$	374
Roto-Rooter		358			233			186
Total		587			364			560
Corporate		13,301			11,595			11,039
Total interest expense	$	13,888		$	11,959		$	11,599
Income Tax Provision
VITAS	$	48,835		$	48,601		$	43,637
Roto-Rooter		21,353			19,547			20,372
Total		70,188			68,148			64,009
Corporate		(15,611	)		(16,148	)		(17,426	)
Total income tax provision	$	54,577		$	52,000		$	46,583
	For the Years Ended December 31,
	2011			2010			2009
Identifiable Assets
VITAS	$	504,677		$	531,247		$	476,621
Roto-Rooter		212,234			205,601			191,254
Total		716,911			736,848			667,875
Corporate		78,994			93,313			151,595
Total identifiable assets	$	795,905		$	830,161		$	819,470
Additions to Long-Lived Assets
VITAS	$	24,298		$	17,492		$	14,945
Roto-Rooter		9,426			18,035			8,067
Total		33,724			35,527			23,012
Corporate		72			18			448
Total additions to long-lived assets	$	33,796		$	35,545		$	23,460
Depreciation and Amortization
VITAS	$	18,480		$	18,900		$	17,973
Roto-Rooter		8,729			8,289			8,509
Total		27,209			27,189			26,482
Corporate		2,290			1,854			1,420
Total depreciation and amortization	$	29,499		$	29,043		$	27,902

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Summary Of Significant Accounting Policies (Schedule Of Weighted Average Lives Of Property And Equipment) (Details)	12 Months Ended
	Dec. 31, 2011 years
Buildings And Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Weighted average lives of property and equipment, years	10.1
Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Weighted average lives of property and equipment, years	14.4
Machinery And Equipment [Member]
Property, Plant and Equipment [Line Items]
Weighted average lives of property and equipment, years	5.6
Computer Software [Member]
Property, Plant and Equipment [Line Items]
Weighted average lives of property and equipment, years	5.0
Furniture And Fixtures [Member]
Property, Plant and Equipment [Line Items]
Weighted average lives of property and equipment, years	4.7

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Stock-Based Compensation Plans (Schedule Of Cumulative Adjusted EBITDA Earnings Targets And Pools Of Unrestricted Shares To Be Granted) (Details) (Cumulative EBITDA Targets [Member], USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended
	Nov. 30, 2009	May 31, 2007
Cumulative Earnings Before Interest Taxes Depreciation And Amortization Target [Line Items]
Beginning measurement date	January 1, 2010	January 1, 2007
Shares in EBITDA pool	80,000	80,000
Pretax cost of award		$ 5,007
Date of award		November 2009
From The Pool [Member]
Cumulative Earnings Before Interest Taxes Depreciation And Amortization Target [Line Items]
Shares awarded		80,000
Discretionary Shares [Member]
Cumulative Earnings Before Interest Taxes Depreciation And Amortization Target [Line Items]
Shares awarded		16,200
Total Shares [Member]
Cumulative Earnings Before Interest Taxes Depreciation And Amortization Target [Line Items]
Shares awarded		96,200
Three-Year EBITDA Target [Member]
Cumulative Earnings Before Interest Taxes Depreciation And Amortization Target [Line Items]
Cumulative EBITDA target	640,000	465,000
Four-Year EBITDA Target [Member]
Cumulative Earnings Before Interest Taxes Depreciation And Amortization Target [Line Items]
Cumulative EBITDA target	825,000	$ 604,000

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Stock-Based Compensation Plans (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended		12 Months Ended			12 Months Ended
	Dec. 31, 2011 years	Nov. 30, 2009	Dec. 31, 2011 Stock Options [Member]	Dec. 31, 2011 LTIP Award [Member]	Feb. 28, 2011 LTIP Award [Member]	Dec. 31, 2011 Restricted Stock Awards [Member]	Feb. 28, 2011 Restricted Stock Awards [Member]	May 31, 2011 Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock incentive plans	6
Number of shares available to grant under all plans	8,450,000
Number of shares granted for the period indicated							35,713	6,928
Number of shares available to grant under latest added plan	1,750,000
Number of shares issued under one plan	500,000
Shares vesting period, years			three-year	four years		three-or four year
Contractual life of options, years	6.6		10
Stock options, maximum term	10
Number of trading days to achieve stock price hurdles	30
Maximum trading day period available	60
Restricted stock, shares authorized					42,000
Cumulative compensation expense recognized ratably over vesting period, years				4
Cumulative compensation expense related to restricted award				$ 2.7
Shares from a discretionary pool		37,000

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2011

Financial Instruments [Abstract]

Carrying Value, Fair Value And Hierarchy Of Financial Instruments

			Fair Value Measure
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred compensation     plans held in trust	$	31,629	$	31,629	$	-	$	-
Long-term debt		166,784		175,755		-		-

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Hospice Revenue Recognition

12 Months Ended

Dec. 31, 2011

Hospice Revenue Recognition [Abstract]

Hospice Revenue Recognition

2. Hospice Revenue Recognition

VITAS recognizes revenue at the estimated realizable amount due from third-party payers, which are primarily Medicare and Medicaid.  Payers may deny payment for services in whole or in part on the basis that such services are not eligible for coverage and do not qualify for reimbursement.  We estimate denials each period and make adequate provision in the financial statements.  The estimate of denials is based on historical trends and known circumstances and does not vary materially from period to period on an aggregate basis.  Medicare billings are subject to certain limitations, as described below.

The allowance for doubtful accounts for VITAS comprises the following (in thousands):

	Medicare			Medicaid			Commercial			Other			Total
Beginning Balance January 1, 2010	$	6,268		$	2,535		$	1,630		$	505		$	10,938
Bad debt provision		2,918			2,922			1,745			314			7,899
Write-offs		(2,218	)		(2,653	)		(2,152	)		(436	)		(7,459	)
Other/Contractual adjustments		-			-			-			423			423
Ending Balance December 31, 2010		6,968			2,804			1,223			806			11,801
Bad debt provision		315			4,323			2,245			172			7,055
Write-offs		(2,368	)		(4,030	)		(1,915	)		(1,282	)		(9,595	)
Other/Contractual adjustments		2			-			16			724			742
Ending Balance December 31, 2011	$	4,917		$	3,097		$	1,569		$	420		$	10,003

VITAS is subject to certain limitations on Medicare payments for services.  Specifically, if the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of hospice care such program provided to all Medicare patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate.  None of VITAS' hospice programs exceeded the payment limits on inpatient services in 2011, 2010 or 2009.

VITAS is also subject to a Medicare annual per-beneficiary cap ("Medicare cap").  Compliance with the Medicare cap is measured by comparing the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number between November 1 of each year and October 31 of the following year with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year.

We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare cap.  Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions.  However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the period that will require repayment to the Federal government under the Medicare cap and record the amount as a reduction to service revenue.

During the year ended December 31, 2011, we reversed Medicare cap liability for amounts recorded in the fourth quarter of 2010 for two programs' projected 2011 measurement period liability. This reversal was partially offset by the Medicare cap liability for three programs' projected 2012 measurement period liability.   For the year ended December 31, 2010, we recorded pretax charges in continuing operations for the estimated Medicare cap liability for two programs'projected liability through year end for the 2011 measurement period.  The majority of the liability relates to one program which is VITAS' largest hospice.  This amount was subsequently reversed during the 2011 fiscal year due to increased admission trends.  Shown below is the Medicare cap liability activity for the years ended December 31, 2011 and 2010 (in thousands):

	2011			2010
Beginning Balance January 1,	$	1,371		$	1,981
Expense - 2012 measurement period		2,578			-
Reversal - 2011 measurement period		(786	)		-
Expense - 2011 measurement period		-			1,110
Reversal - 2010 measurement period		-			(1,720	)
Other		(198	)		-
Ending Balance December 31,	$	2,965		$	1,371

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Stock-Based Compensation Plans (Schedule Of Total Stock Option And Award Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stock-Based Compensation Plans [Abstract]
Stock Options, Number of Options, Outstanding at January 1, 2011	2,586,646
Stock Options, Number of Options, Granted	513,100	515,100	508,600
Stock Options, Number of Options, Exercised/Vested	(433,321)
Stock Options, Number of Options, Canceled/Forfeited	(27,902)
Stock Options, Number of Options, Outstanding at December 31, 2011	2,638,523	2,586,646
Stock Options, Number of Options, Vested and Expected to Vest at December 31, 2011	2,630,500
Stock Options, Number of Options, Exercisable at December 31, 2011	1,630,660
Stock Options, Weighted Average Exercise Price, Outstanding at January 1, 2011	$ 47.19
Stock Options, Weighted Average Exercise Price, Granted	$ 65.17
Stock Options, Weighted Average Exercise Price, Exercised/Vested	$ 36.22
Stock Options, Weighted Average Exercise Price, Canceled/Forfeited	$ 51.99
Stock Options, Weighted Average Exercise Price, Outstanding at December 31, 2011	$ 52.44	$ 47.19
Stock Options, Weighted Average Exercise Price, Vested and Expected to Vest at December 31, 2011	$ 52.45
Stock Options, Weighted Average Exercise Price, Exercisable at December 31, 2011	$ 49.22
Stock Options, Weighted Average Remaining Contractual Life (Years), Outstanding at December 31, 2011	6.6
Stock Options, Weighted Average Remaining Contractual Life (Years), Vested and Expected to Vest at December 31, 2011	6.6
Stock Options, Weighted Average Remaining Contractual Life (Years), Exercisable at December 31, 2011	5.5
Stock Options, Aggregate Intrinsic Value, Outstanding at December 31, 2011	$ 12,748
Stock Options, Aggregate Intrinsic Value, Vested and Expected to Vest at December 31, 2011	12,724
Stock Options, Aggregate Intrinsic Value, Exercisable at December 31, 2011	$ 11,506
Stock Awards, Number of Shares, Outstanding at January 1, 2011	151,620
Stock Awards, Number of Shares, Granted	125,741
Stock Awards, Number of Shares, Exercised/Vested	(58,238)
Stock Awards, Number of Shares, Canceled/Forfeited	(4,000)
Stock Awards, Number of Shares, Outstanding at December 31, 2011	215,123	151,620
Stock Awards, Weighted Average Grant-Date Price, Outstanding at January 1, 2011	$ 48.00
Stock Awards, Weighted Average Grant-Date Price, Granted	$ 64.74	$ 57.13	$ 44.54
Stock Awards, Weighted Average Grant-Date Price, Exercised/Vested	$ 57.61
Stock Awards, Weighted Average Grant-Date Price, Canceled/Forfeited	$ 44.02
Stock Awards, Weighted Average Grant-Date Price, Outstanding at December 31, 2011	$ 55.25	$ 48.00

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Properties And Equipment (Tables)

12 Months Ended

Dec. 31, 2011

Properties And Equipment [Abstract]

Schedule Of Properties And Equipment

	December 31,
	2011			2010
Land	$	1,360		$	1,360
Buildings		40,424			32,788
Transportation equipment		19,412			18,837
Machinery and equipment		62,467			58,706
Computer software		44,805			47,203
Furniture and fixtures		58,317			51,277
Projects under development		2,875			1,817
Total properties and equipment		229,660			211,988
Less accumulated depreciation		(146,709	)		(132,696	)
Net properties and equipment	$	82,951		$	79,292

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Recent Accounting Statements

12 Months Ended

Dec. 31, 2011

Recent Accounting Statements [Abstract]

Recent Accounting Statements

22.  Recent Accounting Statements

In May 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-04 – Fair Value Measures.  ASU No. 2011-04 provides amendments to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in U.S. GAAP and IFRS.  The guidance is effective for fiscal years beginning after December 15, 2011.  There was no material impact to the Company's financial statements as a result of ASU No. 2011-04.

In July 2011, the FASB issued ASU No. 2011-07 – Health Care Entities which provides additional guidance to health care entities related to the recognition of patient service revenue and related disclosures.  The additional guidance is effective for fiscal years beginning after December 15, 2011 but early adoption is permitted.  There was no material impact on the Company upon adoption of ASU No. 2011-07.

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Capital Stock Transactions

12 Months Ended

Dec. 31, 2011

Capital Stock Transactions [Abstract]

Capital Stock Transactions

21.  Capital Stock Transactions

On November 7, 2011 our Board of Directors authorized an additional $100 million of stock repurchases under the February 2011 repurchase program.  On February 22, 2011 our Board of Directors authorized $100 million of stock repurchases under the newly established February 2011 repurchase program.  On December 27, 2010 our Board of Directors authorized an additional $70 million to the April 2007 stock repurchase program.  On May 19, 2008 our Board of Directors authorized an additional $56 million to the April 2007 stock repurchase program.  On April 26, 2007, our Board of Directors authorized a $150 million stock repurchase program.  We repurchased the following capital stock for the periods ended December 31, 2011, 2010 and 2009:

	For the Years Ended December 31,
	2011		2010		2009
Shares repurchased		2,602,513		1,648,047		15,900
Weighted average price per share	$	55.28	$	63.14	$	46.65

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Cash and cash equivalents	$ 38,081	$ 49,917	$ 112,416	$ 3,628
Accounts receivable, less allowances	77,924	112,999
Inventories	8,668	7,728
Current deferred income taxes	12,540	15,098
Prepaid income taxes	2,131	770
Prepaid expenses	11,409	10,285
Total current assets	150,753	196,797
Investments of deferred compensation plans	31,629	28,304
Properties and equipment, at cost, less accumulated depreciation	82,951	79,292
Identifiable intangible assets less accumulated amortization	58,262	57,858
Goodwill	460,633	458,343
Other assets	11,677	9,567
Total Assets	795,905	830,161	819,470
Accounts payable	48,225	55,829
Income taxes	90	1,161
Accrued insurance	37,147	36,492
Accrued compensation	41,087	39,719
Other current liabilities	18,851	16,141
Total current liabilities	145,400	149,342
Deferred income taxes	29,463	25,085
Long-term debt	166,784	159,208
Deferred compensation liabilities	30,693	27,851
Other liabilities	9,881	6,626
Stockholders' equity	413,684	462,049
Total liabilities and stockholders' equity	795,905	830,161
Parent Company [Member]
Cash and cash equivalents	32,470	45,324	109,331	65
Accounts receivable, less allowances	606	802
Current deferred income taxes	(650)	(688)
Prepaid income taxes	(114)	2,787
Prepaid expenses	503	782
Total current assets	32,815	49,007
Properties and equipment, at cost, less accumulated depreciation	11,641	12,513
Other assets	7,616	6,049
Investments in subsidiaries	793,277	716,815
Total Assets	845,349	784,384
Accounts payable	(683)	4,924
Intercompany payables	269,042	167,067
Income taxes		(7,190)
Accrued insurance	489	906
Accrued compensation	3,828	4,235
Other current liabilities	1,719	1,549
Total current liabilities	274,395	171,491
Deferred income taxes	(12,330)	(11,356)
Long-term debt	166,784	159,208
Other liabilities	2,816	2,992
Stockholders' equity	413,684	462,049
Total liabilities and stockholders' equity	845,349	784,384
Guarantor Subsidiaries [Member]
Cash and cash equivalents	(1,422)	(1,571)	(1,221)	202
Accounts receivable, less allowances	76,816	111,716
Intercompany receivables	273,413	172,426
Inventories	8,032	7,191
Current deferred income taxes	13,059	15,666
Prepaid income taxes	1,689	(1,809)
Prepaid expenses	10,757	9,244
Total current assets	382,344	312,863
Properties and equipment, at cost, less accumulated depreciation	68,755	64,743
Identifiable intangible assets less accumulated amortization	58,262	57,858
Goodwill	456,183	453,864
Other assets	1,552	1,343
Investments in subsidiaries	21,148	18,696
Total Assets	988,244	909,367
Accounts payable	48,490	50,457
Income taxes		8,745
Accrued insurance	36,658	35,586
Accrued compensation	36,655	35,016
Other current liabilities	15,728	13,447
Total current liabilities	137,531	143,251
Deferred income taxes	51,601	45,168
Other liabilities	4,630	3,123
Stockholders' equity	794,482	717,825
Total liabilities and stockholders' equity	988,244	909,367
Non-Guarantor Subsidiaries [Member]
Cash and cash equivalents	7,033	6,164	4,306	3,361
Accounts receivable, less allowances	502	481
Inventories	636	537
Current deferred income taxes	131	120
Prepaid income taxes	556	(208)
Prepaid expenses	149	259
Total current assets	9,007	7,353
Investments of deferred compensation plans	31,629	28,304
Properties and equipment, at cost, less accumulated depreciation	2,555	2,036
Goodwill	4,450	4,479
Other assets	2,509	2,175
Total Assets	50,150	44,347
Accounts payable	418	448
Intercompany payables	4,371	5,359
Income taxes	90	(394)
Accrued compensation	604	468
Other current liabilities	1,404	1,145
Total current liabilities	6,887	7,026
Deferred income taxes	(9,808)	(8,727)
Deferred compensation liabilities	30,693	27,851
Other liabilities	2,435	511
Stockholders' equity	19,943	17,686
Total liabilities and stockholders' equity	50,150	44,347
Consolidating Adjustments [Member]
Intercompany receivables	(273,413)	(172,426)
Total current assets	(273,413)	(172,426)
Investments in subsidiaries	(814,425)	(735,511)
Total Assets	(1,087,838)	(907,937)
Intercompany payables	(273,413)	(172,426)
Total current liabilities	(273,413)	(172,426)
Stockholders' equity	(814,425)	(735,511)
Total liabilities and stockholders' equity	$ (1,087,838)	$ (907,937)

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Long-Term Debt And Lines Of Credit (Narrative) (Details) (USD $)	1 Months Ended	12 Months Ended
	May 31, 2007	Dec. 31, 2011 days	Dec. 31, 2010
Long-term debt		$ 166,784,000	$ 159,208,000
Revolving credit facility period, years		5
Revolving credit facility		350,000,000
Revolving credit facility, description		LIBOR plus 175 basis points
Revolving credit facility, interest rate description		floating interest rate
Basis points relating to floating interest rate		1.75%
Interest rate of credit agreement		2.11%
Line of credit expansion feature		150,000,000
Senior convertible notes issued	200,000,000
Notes issued price per note	1,000
Underwriting fees per note	$ 27.50
Net proceeds from sale of notes	194,000,000
Notes, maturity date		May 15, 2014
Principal amount of notes		1,000
Notes convertible at any time prior to the close of business prior to stated maturity date of the notes, days		3
Conversion value equals or less than		1,000
Conversion value exceeds		1,000
Aggregate principal amount of the notes		25.00%
Minimum dividend payment required for the adjustment of the conversion rate		$ 0.06
Purchased call options of capital stock		2,477,000
Warrants to purchase of capital stock		2,477,000
Warrants exercise price		$ 105.44
Net cost for purchased call option and sold warrants transactions		27,300,000
Effective rate on Notes after adoption of standard		6.875%
Standby letters of credit issued		29,500,000
Unused lines of credit		$ 320,500,000
Average interest rate for long-term debt		1.90%	1.90%
Convertible Notes [Member]
Initial conversion rate of shares		12.3874
Initial conversion price, per share		$ 80.73
Change In Conversion Rate [Member]
Initial conversion rate of shares		12.5589
Initial conversion price, per share		$ 79.62

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Lease Arrangements (Tables)

12 Months Ended

Dec. 31, 2011

Lease Arrangements [Abstract]

Summary Of Future Minimum Rental Payments And Sublease Rentals To Be Received Under Operating Leases

2012	$	19,797
2013		14,995
2014		12,030
2015		9,725
2016		5,155
Thereafter		2,146
Total minimum rental payments		63,848
Less: minimum sublease rentals		(69	)
Net minimum rental payments	$	63,779

Schedule Of Total Rental Expense Incurred Under Operating Leases For Continuing Operations

	For the Years Ended December 31,
	2011			2010			2009
Total rental payments	$	22,199		$	21,777		$	21,219
Less sublease rentals		(170	)		(237	)		(270	)
Net rental expense	$	22,029		$	21,540		$	20,949

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Guarantor Subsidiaries

12 Months Ended

Dec. 31, 2011

Guarantor Subsidiaries [Abstract]

Guarantor Subsidiaries

23.  Guarantor Subsidiaries

         Our 1.875% Senior Convertible Notes issued on May 14, 2007, are fully and unconditionally guaranteed on an unsecured, joint and severally liable basis by our 100% owned subsidiaries.  The equity method has been used with respect to the parent company's (Chemed) investment in subsidiaries.  No consolidating adjustment column is presented for the condensed consolidating statement of cash flow since there were no signficant consolidating entries for the periods presented.  The following condensed, consolidating financial data present the composition of the parent company, the guarantor subsidiaries and  the non-guarantor subsidiaries as of December 31, 2011 and 2010, and for the years ended December 31, 2011, 2010 and 2009 (in  thousands):

December 31, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	32,470		$	(1,422	)	$	7,033		$	-		$	38,081
Accounts receivable, less allowances		606			76,816			502			-			77,924
Intercompany receivables		-			273,413			-			(273,413	)		-
Inventories		-			8,032			636			-			8,668
Current deferred income taxes		(650	)		13,059			131			-			12,540
Prepaid income taxes		(114	)		1,689			556			-			2,131
Prepaid expenses		503			10,757			149			-			11,409
Total current assets		32,815			382,344			9,007			(273,413	)		150,753
Investments of deferred compensation plans		-			-			31,629			-			31,629
Properties and equipment, at cost, less accumulated depreciation		11,641			68,755			2,555			-			82,951
Identifiable intangible assets less accumulated amortization		-			58,262			-			-			58,262
Goodwill		-			456,183			4,450			-			460,633
Other assets		7,616			1,552			2,509			-			11,677
Investments in subsidiaries		793,277			21,148			-			(814,425	)		-
Total assets	$	845,349		$	988,244		$	50,150		$	(1,087,838	)	$	795,905
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(683	)	$	48,490		$	418		$	-		$	48,225
Intercompany payables		269,042			-			4,371			(273,413	)		-
Income taxes		-			-			90			-			90
Accrued insurance		489			36,658			-			-			37,147
Accrued compensation		3,828			36,655			604			-			41,087
Other current liabilities		1,719			15,728			1,404			-			18,851
Total current liabilities		274,395			137,531			6,887			(273,413	)		145,400
Deferred income taxes		(12,330	)		51,601			(9,808	)		-			29,463
Long-term debt		166,784			-			-			-			166,784
Deferred compensation liabilities		-			-			30,693			-			30,693
Other liabilities		2,816			4,630			2,435			-			9,881
Stockholders' equity		413,684			794,482			19,943			(814,425	)		413,684
Total liabilities and stockholders' equity	$	845,349		$	988,244		$	50,150		$	(1,087,838	)	$	795,905

December 31, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	45,324		$	(1,571	)	$	6,164		$	-		$	49,917
Accounts receivable, less allowances		802			111,716			481			-			112,999
Intercompany receivables		-			172,426			-			(172,426	)		-
Inventories		-			7,191			537			-			7,728
Current deferred income taxes		(688	)		15,666			120			-			15,098
Prepaid income taxes		2,787			(1,809	)		(208	)		-			770
Prepaid expenses		782			9,244			259			-			10,285
Total current assets		49,007			312,863			7,353			(172,426	)		196,797
Investments of deferred compensation plans		-			-			28,304			-			28,304
Properties and equipment, at cost, less accumulated depreciation		12,513			64,743			2,036			-			79,292
Identifiable intangible assets less accumulated amortization		-			57,858			-			-			57,858
Goodwill		-			453,864			4,479			-			458,343
Other assets		6,049			1,343			2,175			-			9,567
Investments in subsidiaries		716,815			18,696			-			(735,511	)		-
Total assets	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	4,924		$	50,457		$	448		$	-		$	55,829
Intercompany payables		167,067			-			5,359			(172,426	)		-
Income taxes		(7,190	)		8,745			(394	)		-			1,161
Accrued insurance		906			35,586			-			-			36,492
Accrued compensation		4,235			35,016			468			-			39,719
Other current liabilities		1,549			13,447			1,145			-			16,141
Total current liabilities		171,491			143,251			7,026			(172,426	)		149,342
Deferred income taxes		(11,356	)		45,168			(8,727	)		-			25,085
Long-term debt		159,208			-			-			-			159,208
Deferred compensation liabilities		-			-			27,851			-			27,851
Other liabilities		2,992			3,123			511			-			6,626
Stockholders' equity		462,049			717,825			17,686			(735,511	)		462,049
Total liabilities and stockholders' equity	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161

For the year ended December 31, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,328,425		$	27,545		$	-		$	1,355,970
Cost of services provided and goods sold		-			955,628			14,856			-			970,484
Selling, general and administrative expenses		21,895			172,368			7,997			-			202,260
Depreciation		945			23,496			806			-			25,247
Amortization		1,756			2,496			-			-			4,252
Total costs and expenses		24,596			1,153,988			23,659			-			1,202,243
Income/ (loss) from operations		(24,596	)		174,437			3,886			-			153,727
Interest expense		(13,177	)		(587	)		(124	)		-			(13,888	)
Other (expense)/income - net		16,507			(16,591	)		801			-			717
Income/ (loss) before income taxes		(21,266	)		157,259			4,563			-			140,556
Income tax (provision)/ benefit		6,564			(59,407	)		(1,734	)		-			(54,577	)
Equity in net income of subsidiaries		100,681			3,001			-			(103,682	)		-
Net income	$	85,979		$	100,853		$	2,829		$	(103,682	)	$	85,979

For the year ended December 31, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,254,856		$	25,689		$	-		$	1,280,545
Cost of services provided and goods sold		-			892,596			13,420			-			906,016
Selling, general and administrative expenses		23,262			170,223			8,479			-			201,964
Depreciation		860			22,732			794			-			24,386
Amortization		1,404			3,253			-			-			4,657
Total costs and expenses		25,526			1,088,804			22,693			-			1,137,023
Income/ (loss) from operations		(25,526	)		166,052			2,996			-			143,522
Interest expense		(11,596	)		(363	)		-			-			(11,959	)
Other (expense)/income - net		15,520			(15,451	)		2,199			-			2,268
Income/ (loss) before income taxes		(21,602	)		150,238			5,195			-			133,831
Income tax (provision)/ benefit		6,859			(56,905	)		(1,954	)		-			(52,000	)
Equity in net income of subsidiaries		96,574			3,308			-			(99,882	)		-
Net income	$	81,831		$	96,641		$	3,241		$	(99,882	)	$	81,831

For the year ended December 31, 2009				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Net sales and service revenues	$	-		$	1,166,972		$	23,264		$	-		$	1,190,236
Cost of services provided and goods sold		-			822,788			11,786			-			834,574
Selling, general and administrative expenses		23,199			163,600			10,627			-			197,426
Depreciation		602			20,221			712			-			21,535
Amortization		1,222			5,145			-			-			6,367
Other operating expenses		3,989			-			-			-			3,989
Total costs and expenses		29,012			1,011,754			23,125			-			1,063,891
Income/ (loss) from operations		(29,012	)		155,218			139			-			126,345
Interest expense		(11,040	)		(565	)		6			-			(11,599	)
Other (expense)/income - net		5,428			(5,422	)		5,868			-			5,874
Income/ (loss) before income taxes		(34,624	)		149,231			6,013			-			120,620
Income tax (provision)/ benefit		12,058			(56,543	)		(2,098	)		-			(46,583	)
Equity in net income of subsidiaries		96,603			4,043			-			(100,646	)		-
Income from continuing operations		74,037			96,731			3,915			(100,646	)		74,037
Discontinued Operations		(253	)		-			-			-			(253	)
Net income	$	73,784		$	96,731		$	3,915		$	(100,646	)	$	73,784

For the year ended December 31, 2011				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	12,444		$	158,159		$	3,740		$	174,343
Cash Flow from Investing Activities:
Capital expenditures		(73	)		(28,145	)		(1,374	)		(29,592	)
Business combinations, net of cash acquired		-			(3,664	)		-			(3,664	)
Other sources/(uses) - net		(191	)		(730	)		63			(858	)
Net cash used by investing activities		(264	)		(32,539	)		(1,311	)		(34,114	)
Cash Flow from Financing Activities:
Purchases of treasury stock		(147,791	)		-			(95	)		(147,886	)
Dividends paid to shareholders		(12,538	)		-			-			(12,538	)
Proceeds from exercise of stock options		8,036			-			-			8,036
Realized excess tax benefit on share based compensation		3,854			-			-			3,854
Debt issuance costs		(2,657	)		-			-			(2,657	)
Change in cash overdrafts payable		9			(835	)		-			(826	)
Change in intercompany accounts		126,040			(124,636	)		(1,404	)		-
Other sources - net		13			-			(61	)		(48	)
Net cash provided/ (used) by financing activities		(25,034	)		(125,471	)		(1,560	)		(152,065	)
Net increase/(decrease) in cash and cash equivalents		(12,854	)		149			869			(11,836	)
Cash and cash equivalents at beginning of year		45,324			(1,571	)		6,164			49,917
Cash and cash equivalents at end of period	$	32,470		$	(1,422	)	$	7,033		$	38,081

For the year ended December 31, 2010				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	2,862		$	81,781		$	1,369		$	86,012
Cash Flow from Investing Activities:
Capital expenditures		(18	)		(24,677	)		(944	)		(25,639	)
Business combinations, net of cash acquired		-			(9,469	)		-			(9,469	)
Other sources/(uses) - net		(157	)		(688	)		253			(592	)
Net cash used by investing activities		(175	)		(34,834	)		(691	)		(35,700	)
Cash Flow from Financing Activities:
Purchases of treasury stock		(109,326	)		-			(4	)		(109,330	)
Dividends paid to shareholders		(11,881	)		-			-			(11,881	)
Proceeds from exercise of stock options		5,327			-			-			5,327
Realized excess tax benefit on share based compensation		3,357			-			-			3,357
Change in cash overdrafts payable		1,645			(2,226	)		-			(581	)
Change in intercompany accounts		44,135			(45,071	)		936			-
Other sources - net		49			-			248			297
Net cash provided/ (used) by financing activities		(66,694	)		(47,297	)		1,180			(112,811	)
Net increase/(decrease) in cash and cash equivalents		(64,007	)		(350	)		1,858			(62,499	)
Cash and cash equivalents at beginning of year		109,331			(1,221	)		4,306			112,416
Cash and cash equivalents at end of period	$	45,324		$	(1,571	)	$	6,164		$	49,917

For the year ended December 31, 2009				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	950		$	153,387		$	6,495		$	160,832
Cash Flow from Investing Activities:
Capital expenditures		(448	)		(20,394	)		(654	)		(21,496	)
Business combinations, net of cash acquired		-			(1,919	)		-			(1,919	)
Other sources/(uses) - net		702			(312	)		183			573
Net cash provided/(used) by investing activities		254			(22,625	)		(471	)		(22,842	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		19			2,872			-			2,891
Change in intercompany accounts		140,674			(135,226	)		(5,448	)		-
Dividends paid to shareholders		(8,157	)		-			-			(8,157	)
Purchases of treasury stock		(4,225	)		-			-			(4,225	)
Proceeds from exercise of stock options		545			-			-			545
Realized excess tax benefit on share based compensation		1,955			-			-			1,955
Net decrease in revolving line of credit		(8,200	)		-			-			(8,200	)
Repayment of long-term debt		(14,500	)		(169	)		-			(14,669	)
Other sources/(uses) - net		(49	)		338			369			658
Net cash provided/ (used) by financing activities		108,062			(132,185	)		(5,079	)		(29,202	)
Net increase/(decrease) in cash and cash equivalents		109,266			(1,423	)		945			108,788
Cash and cash equivalents at beginning of year		65			202			3,361			3,628
Cash and cash equivalents at end of period	$	109,331		$	(1,221	)	$	4,306		$	112,416

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Valuation And Qualifying Accounts

12 Months Ended

Dec. 31, 2011

Valuation And Qualifying Accounts [Abstract]

Valuation And Qualifying Accounts

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
DR/(CR)
				ADDITIONS
				(CHARGED)
				CREDITED			(CHARGED)
	BALANCE AT			TO COSTS			CREDITED					BALANCE
	BEGINNING			AND			TO OTHER			DEDUCTIONS		AT END
DESCRIPTION	OF PERIOD			EXPENSES			ACCOUNTS			(a)		OF PERIOD
Allowances for doubtful
accounts (b)
For the year 2011	$	(13,332	)	$	(8,686	)	$	(786	)	$	11,280	$	(11,524	)
For the year 2010	$	(12,595	)	$	(9,118	)	$	(472	)	$	8,853	$	(13,332	)
For the year 2009	$	(10,320	)	$	(10,861	)	$	(656	)	$	9,242	$	(12,595	)
Allowances for doubtful
accounts - notes
receivable (c)
For the year 2011	$	(368	)	$	123		$	(60	)	$	-	$	(305	)
For the year 2010	$	(408	)	$	40		$	-		$	-	$	(368	)
For the year 2009	$	(482	)	$	28		$	44		$	2	$	(408	)
(a) With respect to allowances for doubtful accounts, deductions include accounts considered uncollectible or written off, payments, companies divested, etc.
(b) Classified in consolidated balance sheet as a reduction of accounts receivable.
(c) Classified in consolidated balance sheet as a reduction of other assets.

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Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1. Summary of Significant Accounting Policies NATURE OF OPERATIONS We operate through our two wholly-owned subsidiaries: VITAS Healthcare Corporation ("VITAS") and Roto-Rooter Group, Inc. ("Roto-Rooter"). VITAS focuses on hospice care that helps make terminally ill patients' final days as comfortable as possible. Through its team of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter provides plumbing and drain cleaning services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Chemed Corporation and its wholly owned subsidiaries.  All significant intercompany transactions have been eliminated.

We have analyzed the provisions of the Financial Accounting Standards Board ("FASB") authoritative guidance on the consolidation of variable interest entities relative to our contractual relationships with Roto-Rooter's independent contractors and franchisees.  The guidance requires the primary beneficiary of a Variable Interest Entity ("VIE") to consolidate the accounts of the VIE.  Based upon the guidance provided by the FASB, we have concluded that neither the independent contractors nor the franchisees are VIEs.

CASH EQUIVALENTS

Cash equivalents comprise short-term, highly liquid investments, including money market funds that have original maturities of three months or less.

ACCOUNTS AND LOANS RECEIVABLE

Accounts and loans receivable are recorded at the principal balance outstanding less estimated allowances for uncollectible accounts.  For the Roto-Rooter segment, allowances for trade accounts receivable are generally provided for accounts more than 90 days past due, although collection efforts continue beyond that time.  Due to the small number of loans receivable outstanding, allowances for loan losses are determined on a case-by-case basis.  For the VITAS segment, allowances for accounts receivable are provided on accounts based on expected collection rates by payer types. The expected collection rate is based on both historical averages and known current trends.  Final write-off of overdue accounts or loans receivable is made when all reasonable collection efforts have been made and payment is not forthcoming.  We closely monitor our receivables and periodically review procedures for granting credit to attempt to hold losses to a minimum.

As of December 31, 2011, VITAS has approximately $720,000 in unbilled revenue included in accounts receivable (December 31, 2010 - $2.8 million).  The unbilled revenue at VITAS relates to hospice programs currently undergoing focused medical reviews ("FMR").  During FMR, surveyors working on behalf of the U.S. Federal government review certain patient files for compliance with Medicare regulations.  During the time the patient file is under review, we are unable to bill for care provided to those patients.  We make appropriate provisions to reduce our accounts receivable balance for any governmental or other payer reviews resulting in denials of patient service revenue.  We believe our hospice programs comply with all payer requirements at the time of billing.  However, we cannot predict whether future billing reviews or similar audits by payers will result in material denials or reductions in revenue.

CONCENTRATION OF RISK

As of December 31, 2011 and 2010, approximately 51% and 72%, respectively, of VITAS' total accounts receivable balance were due from Medicare and 34% and 20%, respectively, of VITAS' total accounts receivable balance were due from various state Medicaid programs.  Combined accounts receivable from Medicare and Medicaid represent 76% of the net accounts receivable in the accompanying consolidated balance sheet as of December 31, 2011.

As further described in Note 20, we have agreements with one vendor to provide specified pharmacy services for VITAS and its hospice patients.  In 2011 and 2010, respectively, purchases made from this vendor represent over 90% of all pharmacy services used by VITAS.

INVENTORIES

Substantially all of the inventories are either general merchandise or finished goods.  Inventories are stated at the lower of cost or market.  For determining the value of inventories, cost methods that reasonably approximate the first-in, first-out ("FIFO") method are used.

DEPRECIATION AND PROPERTIES AND EQUIPMENT

Depreciation of properties and equipment is computed using the straight-line method over the estimated useful lives of the assets.  Leasehold improvements are amortized over the lesser of the remaining lease terms (excluding option terms) or their useful lives.  Expenditures for maintenance, repairs, renewals and betterments that do not materially prolong the useful lives of the assets are expensed as incurred. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and the resulting gain or loss is reflected currently in income.

Expenditures for major software purchases and software developed for internal use are capitalized and depreciated using the straight-line method over the estimated useful lives of the assets.  For software developed for internal use, external direct costs for materials and services and certain internal payroll and related fringe benefit costs are capitalized in accordance with the FASB's authoritative guidance on accounting for the costs of computer software developed or obtained for internal use.

The weighted average lives of our property and equipment at December 31, 2011, were:

Buildings and building improvements	10.1	yrs.
Transportation equipment	14.4
Machinery and equipment	5.6
Computer software	5.0
Furniture and fixtures	4.7

GOODWILL AND INTANGIBLE ASSETS

Identifiable, definite-lived intangible assets arise from purchase business combinations and are amortized using either an accelerated method or the straight-line method over the estimated useful lives of the assets.  The selection of an amortization method is based on which method best reflects the economic pattern of usage of the asset.  The weighted average lives of our identifiable, definite-lived intangible assets at December 31, 2011, were:

Covenants not to compete	6.4	yrs.
Reacquired franchise rights	6.7
Referral networks	10.0
Customer lists	13.3

The date of our annual goodwill and indefinite-lived intangible asset impairment analysis is October 1.  The VITAS trade name is considered to have an indefinite life.  We also capitalize the direct costs of obtaining licenses to operate either hospice programs or plumbing operations subject to a minimum capitalization threshold.  These costs are amortized over the life of the license using the straight line method.  Certificates of Need (CON), which are required in certain states for hospice operations, are generally granted without expiration and thus, we believe them to be indefinite-lived assets subject to impairment testing.

For valuing the VITAS tradename, we perform a discounted cash flow analysis on the expected theoretical royalty cash stream from the VITAS tradename.  For valuing capitalized CON costs, we perform a discounted cash flow analysis on the expected income from the operating unit projecting income on a "with and without" basis.  This method compares the expected income stream from the operating unit with a theoretical income stream assuming that the applicable state did not have a CON requirement.  The difference in the discounted income streams is attributed as being the fair value of the CON.   Based on these calculations, neither the VITAS tradename nor the capitalized CON costs are impaired.

We consider that Roto-Rooter Corp. (RRC), Roto-Rooter Services Co. (RRSC) and VITAS are appropriate reporting units for testing goodwill impairment.  We consider RRC and RRSC separate reporting units but one operating segment.  This is appropriate as they each have their own set of general ledger accounts that can be analyzed at "one level below an operating segment" per the definition of a reporting unit in FASB guidance.

In September 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-08 – Goodwill Impairment Testing which provides additional guidance related to the impairment testing of goodwill.  ASU No. 2011-08 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.  An entity will no longer be required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.  The revised guidance is effective for fiscal years beginning after December 15, 2011 but early adoption is permitted.  We adopted the new guidelines for our impairment test conducted as of October 1, 2011.  Based on our review of qualitative factors, such as financial performance of the reporting units and the macro-economic environment, we determined it was more likely than not that the fair value of each of our reporting units exceeded their respective recorded values. Accordingly, we concluded that the two-step quantitative goodwill impairment test is not necessary.

LONG-LIVED ASSETS

If we believe a triggering event may have occurred that indicates a possible impairment of our long-lived assets, we perform an estimate and valuation of the future benefits of our long-lived assets (other than goodwill, the VITAS trade name and capitalized CON costs) based on key financial indicators. If the projected undiscounted cash flows of a major business unit indicate that property and equipment or identifiable, definite-lived intangible assets have been impaired, a write-down to fair value is made.

OTHER ASSETS

Debt issuance costs are included in other assets.  Issuance costs related to revolving credit agreements are amortized using the straight line method, over the life of the agreement.  All are other issuance costs are amortized using the effective interest method over the life of the debt

REVENUE RECOGNITION

Both the VITAS segment and Roto-Rooter segment recognize service revenues and sales when the earnings process has been completed.  Generally, this occurs when services are provided or products are delivered.  Sales of Roto-Rooter products, including drain cleaning machines and drain cleaning solution, comprise less than 3% of our total service revenues and sales for each of the three years in the period ended December 31, 2011

CHARITY CARE

VITAS provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines that the patient does not have the financial wherewithal to make payment.  There is no revenue or associated accounts receivable in the accompanying consolidated financial statements related to charity care.

The cost of providing charity care during the years ended December 31, 2011, 2010 and 2009 was $7.3 million, $7.2 million and $6.3 million, respectively.  The cost of charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care

SALES TAX

The Roto-Rooter segment collects sales tax from customers when required by state and federal laws.  We record the amount of sales tax collected net in the accompanying consolidated statement of income.

GUARANTEES

In the normal course of business, Roto-Rooter enters into various guarantees and indemnifications in our relationships with customers and others.  These arrangements include guarantees of services for periods ranging from one day to one year and product satisfaction guarantees.  Mainly due to our technicians being commission-based, guarantees and indemnifications do not materially impact our financial condition, results of operations or cash flows.  Therefore, no liability for guarantees has been recorded as of December 31, 2011 or 2010.

OPERATING EXPENSES

Cost of services provided and goods sold (excluding depreciation) includes salaries, wages and benefits of service providers and field personnel, material costs, medical supplies and equipment, pharmaceuticals, insurance costs, service vehicle costs and other expenses directly related to providing service revenues or generating sales.  Selling, general and administrative expenses include salaries, wages, stock option expense and benefits of selling, marketing and administrative employees, advertising expenses, communications and branch telephone expenses, office rent and operating costs, legal, banking and professional fees and other administrative costs.  The cost associated with VITAS sales personnel is included in cost of services provided and goods sold (excluding depreciation).

ADVERTISING

We expense the production costs of advertising the first time the advertising takes place.  The costs of telephone directory listings are expensed when the directories are placed in circulation.  These directories are generally in circulation for approximately one year, at which point they are typically replaced by the publisher with a new directory.  We generally pay for directory placement assuming it is in circulation for one year.  If the directory is in circulation for less than or greater than one year, we receive a credit or additional billing, as necessary.  We do not control the timing of when a new directory is placed in circulation.  Advertising expense in continuing operations for the year ended December 31, 2011, was $27.2 million (2010 – $27.7 million; 2009 - $27.0 million).

COMPUTATION OF EARNINGS PER SHARE

Earnings per share are computed using the weighted average number of shares of capital stock outstanding.  Diluted earnings per share reflect the dilutive impact of our outstanding stock options and nonvested stock awards.  Stock options whose exercise price is greater than the average market price of our stock are excluded from the computation of diluted earnings per share.

STOCK-BASED COMPENSATION PLANS

Stock-based compensation cost is measured at the grant date, based on the fair value of the award and recognized as expense over the employee's requisite service period on a straight-line basis.

INSURANCE ACCRUALS

For our Roto-Rooter segment and Corporate Office, we self-insure for all casualty insurance claims (workers' compensation, auto liability and general liability).  As a result, we closely monitor and frequently evaluate our historical claims experience to estimate the appropriate level of accrual for self-insured claims.  Our third-party administrator ("TPA") processes and reviews claims on a monthly basis.  Currently, our exposure on any single claim is capped at $500,000.  In developing our estimates, we accumulate historical claims data for the previous 10 years to calculate loss development factors ("LDF") by insurance coverage type.  LDFs are applied to known claims to estimate the ultimate potential liability for known and unknown claims for each open policy year.  LDFs are updated annually.  Because this methodology relies heavily on historical claims data, the key risk is whether the historical claims are an accurate predictor of future claims exposure.  The risk also exists that certain claims have been incurred and not reported on a timely basis.  To mitigate these risks, in conjunction with our TPA, we closely monitor claims to ensure timely accumulation of data and compare claims trends with the industry experience of our TPA.

For the VITAS segment, we self-insure for workers' compensation claims.  Currently, VITAS' exposure on any single claim is capped at $750,000. For VITAS' self-insurance accruals for workers' compensation, the valuation methods used are similar to those used internally for our other business units.

Our casualty insurance liabilities are recorded gross before any estimated recovery for amounts exceeding our stop loss limits.  Estimated recoveries from insurance carriers are recorded as accounts receivable

TAXES ON INCOME

Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on the date of enactment.

We are subject to income taxes in Canada, U.S. federal and most state jurisdictions.  Significant judgment is required to determine our provision for income taxes.  Our financial statements reflect expected future tax consequences of such uncertain positions assuming the taxing authorities' full knowledge of the position and all relevant facts

CONTINGENCIES

We are subject to various lawsuits and claims in the normal course of our business.  In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary.  We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable.   We record legal fees associated with legal and regulatory actions as the costs are incurred.  We disclose material loss contingencies that are probable but not reasonably estimable and those that are at least reasonably possible

ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.  Disclosures of aftertax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments

RECLASSIFICATIONS

Certain reclassifications have been made to prior-year amounts to conform to current year classifications.  In 2011 we reclassified capitalized direct costs of obtaining licenses to operate plumbing locations and hospice programs from other long-term assets to intangible assets.

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2011

Summary Of Significant Accounting Policies [Abstract]

Nature Of Operations

NATURE OF OPERATIONS

We operate through our two wholly-owned subsidiaries: VITAS Healthcare Corporation ("VITAS") and Roto-Rooter Group, Inc. ("Roto-Rooter"). VITAS focuses on hospice care that helps make terminally ill patients' final days as comfortable as possible. Through its team of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter provides plumbing and drain cleaning services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

Principles Of Consolidation

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Chemed Corporation and its wholly owned subsidiaries.  All significant intercompany transactions have been eliminated.

We have analyzed the provisions of the Financial Accounting Standards Board ("FASB") authoritative guidance on the consolidation of variable interest entities relative to our contractual relationships with Roto-Rooter's independent contractors and franchisees.  The guidance requires the primary beneficiary of a Variable Interest Entity ("VIE") to consolidate the accounts of the VIE.  Based upon the guidance provided by the FASB, we have concluded that neither the independent contractors nor the franchisees are VIEs.

Cash Equivalents

CASH EQUIVALENTS

Cash equivalents comprise short-term, highly liquid investments, including money market funds that have original maturities of three months or less.

Accounts And Loans Receivable

ACCOUNTS AND LOANS RECEIVABLE

Accounts and loans receivable are recorded at the principal balance outstanding less estimated allowances for uncollectible accounts.  For the Roto-Rooter segment, allowances for trade accounts receivable are generally provided for accounts more than 90 days past due, although collection efforts continue beyond that time.  Due to the small number of loans receivable outstanding, allowances for loan losses are determined on a case-by-case basis.  For the VITAS segment, allowances for accounts receivable are provided on accounts based on expected collection rates by payer types. The expected collection rate is based on both historical averages and known current trends.  Final write-off of overdue accounts or loans receivable is made when all reasonable collection efforts have been made and payment is not forthcoming.  We closely monitor our receivables and periodically review procedures for granting credit to attempt to hold losses to a minimum.

As of December 31, 2011, VITAS has approximately $720,000 in unbilled revenue included in accounts receivable (December 31, 2010 - $2.8 million).  The unbilled revenue at VITAS relates to hospice programs currently undergoing focused medical reviews ("FMR").  During FMR, surveyors working on behalf of the U.S. Federal government review certain patient files for compliance with Medicare regulations.  During the time the patient file is under review, we are unable to bill for care provided to those patients.  We make appropriate provisions to reduce our accounts receivable balance for any governmental or other payer reviews resulting in denials of patient service revenue.  We believe our hospice programs comply with all payer requirements at the time of billing.  However, we cannot predict whether future billing reviews or similar audits by payers will result in material denials or reductions in revenue.

Concentration Of Risk

CONCENTRATION OF RISK

As of December 31, 2011 and 2010, approximately 51% and 72%, respectively, of VITAS' total accounts receivable balance were due from Medicare and 34% and 20%, respectively, of VITAS' total accounts receivable balance were due from various state Medicaid programs.  Combined accounts receivable from Medicare and Medicaid represent 76% of the net accounts receivable in the accompanying consolidated balance sheet as of December 31, 2011.

As further described in Note 20, we have agreements with one vendor to provide specified pharmacy services for VITAS and its hospice patients.  In 2011 and 2010, respectively, purchases made from this vendor represent over 90% of all pharmacy services used by VITAS.

Inventories

INVENTORIES

Substantially all of the inventories are either general merchandise or finished goods.  Inventories are stated at the lower of cost or market.  For determining the value of inventories, cost methods that reasonably approximate the first-in, first-out ("FIFO") method are used.

Depreciation And Properties And Equipment

DEPRECIATION AND PROPERTIES AND EQUIPMENT

Depreciation of properties and equipment is computed using the straight-line method over the estimated useful lives of the assets.  Leasehold improvements are amortized over the lesser of the remaining lease terms (excluding option terms) or their useful lives.  Expenditures for maintenance, repairs, renewals and betterments that do not materially prolong the useful lives of the assets are expensed as incurred. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and the resulting gain or loss is reflected currently in income.

Expenditures for major software purchases and software developed for internal use are capitalized and depreciated using the straight-line method over the estimated useful lives of the assets.  For software developed for internal use, external direct costs for materials and services and certain internal payroll and related fringe benefit costs are capitalized in accordance with the FASB's authoritative guidance on accounting for the costs of computer software developed or obtained for internal use.

The weighted average lives of our property and equipment at December 31, 2011, were:

Buildings and building improvements	10.1	yrs.
Transportation equipment	14.4
Machinery and equipment	5.6
Computer software	5.0
Furniture and fixtures	4.7

GOODWILL AND INTANGIBLE ASSETS

Identifiable, definite-lived intangible assets arise from purchase business combinations and are amortized using either an accelerated method or the straight-line method over the estimated useful lives of the assets.  The selection of an amortization method is based on which method best reflects the economic pattern of usage of the asset.  The weighted average lives of our identifiable, definite-lived intangible assets at December 31, 2011, were:

Goodwill And Intangible Assets

Covenants not to compete	6.4	yrs.
Reacquired franchise rights	6.7
Referral networks	10.0
Customer lists	13.3

The date of our annual goodwill and indefinite-lived intangible asset impairment analysis is October 1.  The VITAS trade name is considered to have an indefinite life.  We also capitalize the direct costs of obtaining licenses to operate either hospice programs or plumbing operations subject to a minimum capitalization threshold.  These costs are amortized over the life of the license using the straight line method.  Certificates of Need (CON), which are required in certain states for hospice operations, are generally granted without expiration and thus, we believe them to be indefinite-lived assets subject to impairment testing.

For valuing the VITAS tradename, we perform a discounted cash flow analysis on the expected theoretical royalty cash stream from the VITAS tradename.  For valuing capitalized CON costs, we perform a discounted cash flow analysis on the expected income from the operating unit projecting income on a "with and without" basis.  This method compares the expected income stream from the operating unit with a theoretical income stream assuming that the applicable state did not have a CON requirement.  The difference in the discounted income streams is attributed as being the fair value of the CON.   Based on these calculations, neither the VITAS tradename nor the capitalized CON costs are impaired.

We consider that Roto-Rooter Corp. (RRC), Roto-Rooter Services Co. (RRSC) and VITAS are appropriate reporting units for testing goodwill impairment.  We consider RRC and RRSC separate reporting units but one operating segment.  This is appropriate as they each have their own set of general ledger accounts that can be analyzed at "one level below an operating segment" per the definition of a reporting unit in FASB guidance.

In September 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-08 – Goodwill Impairment Testing which provides additional guidance related to the impairment testing of goodwill.  ASU No. 2011-08 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test.  An entity will no longer be required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount.  The revised guidance is effective for fiscal years beginning after December 15, 2011 but early adoption is permitted.  We adopted the new guidelines for our impairment test conducted as of October 1, 2011.  Based on our review of qualitative factors, such as financial performance of the reporting units and the macro-economic environment, we determined it was more likely than not that the fair value of each of our reporting units exceeded their respective recorded values. Accordingly, we concluded that the two-step quantitative goodwill impairment test is not necessary.

Long-Lived Assets

LONG-LIVED ASSETS

If we believe a triggering event may have occurred that indicates a possible impairment of our long-lived assets, we perform an estimate and valuation of the future benefits of our long-lived assets (other than goodwill, the VITAS trade name and capitalized CON costs) based on key financial indicators. If the projected undiscounted cash flows of a major business unit indicate that property and equipment or identifiable, definite-lived intangible assets have been impaired, a write-down to fair value is made.

Other Assets

OTHER ASSETS

Debt issuance costs are included in other assets.  Issuance costs related to revolving credit agreements are amortized using the straight line method, over the life of the agreement.  All are other issuance costs are amortized using the effective interest method over the life of the debt

Revenue Recognition

REVENUE RECOGNITION

Both the VITAS segment and Roto-Rooter segment recognize service revenues and sales when the earnings process has been completed.  Generally, this occurs when services are provided or products are delivered.  Sales of Roto-Rooter products, including drain cleaning machines and drain cleaning solution, comprise less than 3% of our total service revenues and sales for each of the three years in the period ended December 31, 2011

Charity Care

CHARITY CARE

VITAS provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines that the patient does not have the financial wherewithal to make payment.  There is no revenue or associated accounts receivable in the accompanying consolidated financial statements related to charity care.

The cost of providing charity care during the years ended December 31, 2011, 2010 and 2009 was $7.3 million, $7.2 million and $6.3 million, respectively.  The cost of charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care

Sales Tax

SALES TAX

The Roto-Rooter segment collects sales tax from customers when required by state and federal laws.  We record the amount of sales tax collected net in the accompanying consolidated statement of income.

Guarantees

GUARANTEES

In the normal course of business, Roto-Rooter enters into various guarantees and indemnifications in our relationships with customers and others.  These arrangements include guarantees of services for periods ranging from one day to one year and product satisfaction guarantees.  Mainly due to our technicians being commission-based, guarantees and indemnifications do not materially impact our financial condition, results of operations or cash flows.  Therefore, no liability for guarantees has been recorded as of December 31, 2011 or 2010.

Operating Expenses

OPERATING EXPENSES

Cost of services provided and goods sold (excluding depreciation) includes salaries, wages and benefits of service providers and field personnel, material costs, medical supplies and equipment, pharmaceuticals, insurance costs, service vehicle costs and other expenses directly related to providing service revenues or generating sales.  Selling, general and administrative expenses include salaries, wages, stock option expense and benefits of selling, marketing and administrative employees, advertising expenses, communications and branch telephone expenses, office rent and operating costs, legal, banking and professional fees and other administrative costs.  The cost associated with VITAS sales personnel is included in cost of services provided and goods sold (excluding depreciation).

Advertising

ADVERTISING

We expense the production costs of advertising the first time the advertising takes place.  The costs of telephone directory listings are expensed when the directories are placed in circulation.  These directories are generally in circulation for approximately one year, at which point they are typically replaced by the publisher with a new directory.  We generally pay for directory placement assuming it is in circulation for one year.  If the directory is in circulation for less than or greater than one year, we receive a credit or additional billing, as necessary.  We do not control the timing of when a new directory is placed in circulation.  Advertising expense in continuing operations for the year ended December 31, 2011, was $27.2 million (2010 – $27.7 million; 2009 - $27.0 million).

Computation Of Earnings Per Share

COMPUTATION OF EARNINGS PER SHARE

Earnings per share are computed using the weighted average number of shares of capital stock outstanding.  Diluted earnings per share reflect the dilutive impact of our outstanding stock options and nonvested stock awards.  Stock options whose exercise price is greater than the average market price of our stock are excluded from the computation of diluted earnings per share.

Stock-Based Compensation Plans

STOCK-BASED COMPENSATION PLANS

Stock-based compensation cost is measured at the grant date, based on the fair value of the award and recognized as expense over the employee's requisite service period on a straight-line basis.

Insurance Accruals

INSURANCE ACCRUALS

For our Roto-Rooter segment and Corporate Office, we self-insure for all casualty insurance claims (workers' compensation, auto liability and general liability).  As a result, we closely monitor and frequently evaluate our historical claims experience to estimate the appropriate level of accrual for self-insured claims.  Our third-party administrator ("TPA") processes and reviews claims on a monthly basis.  Currently, our exposure on any single claim is capped at $500,000.  In developing our estimates, we accumulate historical claims data for the previous 10 years to calculate loss development factors ("LDF") by insurance coverage type.  LDFs are applied to known claims to estimate the ultimate potential liability for known and unknown claims for each open policy year.  LDFs are updated annually.  Because this methodology relies heavily on historical claims data, the key risk is whether the historical claims are an accurate predictor of future claims exposure.  The risk also exists that certain claims have been incurred and not reported on a timely basis.  To mitigate these risks, in conjunction with our TPA, we closely monitor claims to ensure timely accumulation of data and compare claims trends with the industry experience of our TPA.

For the VITAS segment, we self-insure for workers' compensation claims.  Currently, VITAS' exposure on any single claim is capped at $750,000. For VITAS' self-insurance accruals for workers' compensation, the valuation methods used are similar to those used internally for our other business units.

Our casualty insurance liabilities are recorded gross before any estimated recovery for amounts exceeding our stop loss limits.  Estimated recoveries from insurance carriers are recorded as accounts receivable

Taxes On Income

TAXES ON INCOME

Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on the date of enactment.

We are subject to income taxes in Canada, U.S. federal and most state jurisdictions.  Significant judgment is required to determine our provision for income taxes.  Our financial statements reflect expected future tax consequences of such uncertain positions assuming the taxing authorities' full knowledge of the position and all relevant facts

Contingencies

CONTINGENCIES

We are subject to various lawsuits and claims in the normal course of our business.  In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary.  We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable.   We record legal fees associated with legal and regulatory actions as the costs are incurred.  We disclose material loss contingencies that are probable but not reasonably estimable and those that are at least reasonably possible

Estimates

ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.  Disclosures of aftertax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments

Reclassifications

RECLASSIFICATIONS

Certain reclassifications have been made to prior-year amounts to conform to current year classifications.  In 2011 we reclassified capitalized direct costs of obtaining licenses to operate plumbing locations and hospice programs from other long-term assets to intangible assets.

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Income Taxes (Schedule Of Difference Between Actual Income Tax Provision For Continuing Operations And Income Tax Provision Calculated At Statutory U.S. Federal Tax Rate) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Abstract]
Income tax provision calculated using the statutory rate of 35%	$ 49,195	$ 46,841	$ 42,217
State and local income taxes, less federal income tax effect	4,733	4,509	3,837
Nondeductible expenses	1,021	928	854
Impact of deferred compensation plans	(1)	(27)	(190)
Other --net	(371)	(251)	(135)
Income tax provision	$ 54,577	$ 52,000	$ 46,583
Effective tax rate	38.80%	38.90%	38.60%
Statutory rate	35.00%

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Schedule Of Discontinued Operations

	For the Years Ended December 31,
	2011		2010		2009
Adjustment to accruals of operations discontinued in prior years:
Casualty insurance costs	$	-	$	-	$	(400	)
Loss before income taxes		-		-		(400	)
All other income taxes		-		-		147
Total adjustments		-		-		(253	)
Total discontinued operations	$	-	$	-	$	(253	)
Earnings/(loss) per share	$	-	$	-	$	(0.01	)
Diluted earnings/(loss) per share	$	-	$	-	$	(0.02	)

Schedule Of Estimated Timing Of Payments Of Liabilities

2012	$	826
2013		300
Thereafter		601
	$	1,727

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Summary Of Significant Accounting Policies (Schedule Of Weighted Average Lives Of Identifiable, Definite-Lived Intangible Assets) (Details)	12 Months Ended
	Dec. 31, 2011 years
Covenants Not To Compete [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted average lives of identifiable, definite-lived intangible assets, years	6.4
Reacquired Franchise Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted average lives of identifiable, definite-lived intangible assets, years	6.7
Referral Networks [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted average lives of identifiable, definite-lived intangible assets, years	10.0
Customer Lists [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted average lives of identifiable, definite-lived intangible assets, years	13.3

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Business Combinations (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Apr. 29, 2011
Business Combinations [Abstract]
Number of locations in Alabama				3
Number of counties served				10
Number of businesses acquired		4	2
Business combinations, net of cash acquired	$ 3,664	$ 9,469	$ 1,919

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Consolidated Statement Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Continuing Operations
Service revenues and sales	$ 1,355,970	$ 1,280,545	$ 1,190,236
Cost of services provided and goods sold (excluding depreciation)	970,484	906,016	834,574
Selling, general and administrative expenses	202,260	201,964	197,426
Depreciation	25,247	24,386	21,535
Amortization	4,252	4,657	6,367
Other operating expenses (Note 7)			3,989
Total costs and expenses	1,202,243	1,137,023	1,063,891
Income from operations	153,727	143,522	126,345
Interest expense	(13,888)	(11,959)	(11,599)
Other income--net (Note 11)	717	2,268	5,874
Income before income taxes	140,556	133,831	120,620
Income taxes (Note 12)	(54,577)	(52,000)	(46,583)
Income from continuing operations	85,979	81,831	74,037
Discontinued Operations, Net of Income Taxes (note 9)			(253)
Net income	$ 85,979	$ 81,831	$ 73,784
Earnings Per Share (Note 16)
Income from continuing operations	$ 4.19	$ 3.62	$ 3.30
Net Income	$ 4.19	$ 3.62	$ 3.29
Average number of shares outstanding	20,523	22,587	22,451
Diluted Earnings Per Share (Note 16)
Income from continuing operations	$ 4.10	$ 3.55	$ 3.26
Net Income	$ 4.10	$ 3.55	$ 3.24
Average number of shares outstanding	20,945	23,031	22,742

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Pension And Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2011

Pension And Retirement Plans [Abstract]

Schedule Of Expenses For Retirement, Profit-Sharing Plans, Excess Benefit Plans And Other Similar Plans

For the Years Ended December 31,
2011		2010		2009
$	9,408	$	11,444	$	15,143

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Legal And Regulatory Matters (Details)	1 Months Ended
	Aug. 31, 2009	Apr. 30, 2005
Legal And Regulatory Matters [Abstract]
Number of patients	59	320

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Consolidated Statement Of Changes In Stockholders' Equity (USD $) In Thousands	Capital Stock [Member]	Paid-In Capital [Member]	Retained Earnings [Member]	Treasury Stock-At Cost [Member]	Deferred Compensation Payable In Company Stock [Member]	Total
Balance at Dec. 31, 2008	$ 29,515	$ 313,516	$ 337,739	$ (285,977)	$ 2,038	$ 396,831
Net income			73,784			73,784
Dividends paid			(8,157)			(8,157)
Stock awards and exercise of stock options (Note 4)	376	21,741		(7,305)		14,812
Purchases of treasury stock (Note 21)				(742)		(742)
Other		633		83	(82)	634
Balance at Dec. 31, 2009	29,891	335,890	403,366	(293,941)	1,956	477,162
Net income			81,831			81,831
Dividends paid			(11,881)			(11,881)
Stock awards and exercise of stock options (Note 4)	491	28,541		(10,615)		18,417
Purchases of treasury stock (Note 21)				(104,139)		(104,139)
Other		576		80	3	659
Balance at Dec. 31, 2010	30,382	365,007	473,316	(408,615)	1,959	462,049
Net income			85,979			85,979
Dividends paid			(12,538)			(12,538)
Stock awards and exercise of stock options (Note 4)	555	33,218		(11,576)		22,197
Purchases of treasury stock (Note 21)				(143,970)		(143,970)
Other		(131)		70	28	(33)
Balance at Dec. 31, 2011	$ 30,937	$ 398,094	$ 546,757	$ (564,091)	$ 1,987	$ 413,684

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Loans Receivable From Independent Contractors (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 days	Dec. 31, 2010
Independent Contractor Operations [Line Items]
Number of days' written notice required for the cancellation of the contract	90
Number of independent contractors under sublicensing agreements	64
Maximum exposure to loss from arrangements with independent contractors	$ 1.1	$ 1.1
Percentage of labor sales	40.00%
Maximum [Member]
Independent Contractor Operations [Line Items]
Terms of the loans to independent contractors	5.4
Interest rates on loans	8.00%
Minimum [Member]
Independent Contractor Operations [Line Items]
Terms of loans in months to independent contractors	2.5
Interest rates on loans	0.00%

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Long-Term Debt And Lines Of Credit (Schedule Of Total Amounts Of Interest Paid) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Long-Term Debt And Lines Of Credit [Abstract]
Interest paid	$ 4,754	$ 4,113	$ 4,667

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Guarantor Subsidiaries (Narrative) (Details)	12 Months Ended
	Dec. 31, 2011
Guarantor Subsidiaries [Abstract]
Percent of Senior Convertible Notes	1.875%
Percent of owned subsidiaries	100.00%

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Long-Term Debt And Lines Of Credit (Tables)

12 Months Ended

Dec. 31, 2011

Long-Term Debt And Lines Of Credit [Abstract]

Debt Amounts Included In Consolidated Balance Sheet

	December 31,
	2011			2010
Principal amount of convertible debentures	$	186,956		$	186,956
Unamortized debt discount		(20,172	)		(27,748	)
Carrying amount of convertible debentures	$	166,784		$	159,208
Additional paid in capital (net of tax)	$	31,310		$	31,310

Interest Expense Included In Consolidated Income Statement

	December 31,
	2011		2010		2009
Cash interest expense	$	5,175	$	4,224	$	4,350
Non-cash amortization of debt discount		7,576		7,081		6,617
Amortization of debt costs		1,137		654		632
Total interest expense	$	13,888	$	11,959	$	11,599

Schedule Of Total Amounts Of Interest Paid

2011	$	4,754
2010		4,113
2009		4,667

Financial Debt Covenants

Description	Requirement	Chemed
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj.
EBITDA)	< 3.50 to 1.00	1.09 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash
Flow/Consolidated Fixed Charges)	> 1.50 to 1.00	2.47 to 1.00
Annual Operating Lease Commitment	< $30.0 million	$19.8 million

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Stock-Based Compensation Plans (Schedule Of Other Data For Stock Option And Stock Awards) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation related to nonvested options and awards at end of year	$ 9,851
Weighted average period over which unrecognized compensation cost of nonvested options and awards to be recognized (years)	1.8
Actual income tax benefit realized from options exercised during the year	4,764
Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation related to nonvested options and awards at end of year	$ 5,995
Weighted average period over which unrecognized compensation cost of nonvested options and awards to be recognized (years)	1.8

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Pension And Retirement Plans

12 Months Ended

Dec. 31, 2011

Pension And Retirement Plans [Abstract]

Pension And Retirement Plans

15. Pension and Retirement Plans

Retirement obligations under various plans cover substantially all full-time employees who meet age and/or service eligibility requirements. The major plans providing retirement benefits to our employees are defined contribution plans.  Expenses charged to continuing operations for our retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

For the Years Ended December 31,
2011		2010		2009
$	9,408	$	11,444	$	15,143

These expenses include the impact of market gains and losses on assets held in deferred compensation plans.

We have excess benefit plans for key employees whose participation in the qualified plans is limited by U.S. Employee Retirement Income Security Act requirements. Benefits are determined based on theoretical participation in the qualified plans.  Benefits are only invested in mutual funds, and participants are not permitted to diversify accumulated benefits in shares of our stock. Trust assets invested in shares of our stock are included in treasury stock, and the corresponding liability is included in a separate component of stockholders' equity. At December 31, 2011, these trusts held 97,428 shares or $2.0 million of our stock (2010 – 99,494 shares or $2.0 million).

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Stock-Based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation Plans [Abstract]

Schedule Of Total Stock Option And Award Activity

	Stock Options									Stock Awards
				Weighted Average				Aggregate					Weighted
						Remaining		Intrinsic					Average
	Number of			Exercise		Contractual		Value		Number of			Grant-Date
	Options			Price		Life (Years)		(thousands)		Shares			Price
Outstanding at January 1, 2011		2,586,646		$	47.19						151,620		$	48.00
Granted		513,100			65.17						125,741			64.74
Exercised/Vested		(433,321	)		36.22						(58,238	)		57.61
Canceled/ Forfeited		(27,902	)		51.99						(4,000	)		44.02
Outstanding at December 31, 2011		2,638,523			52.44		6.6	$	12,748		215,123			55.25
Vested and expected to vest
at December 31, 2011		2,630,500			52.45		6.6		12,724	n.a.			n.a.
Exercisable at December 31, 2011		1,630,660			49.22		5.5		11,506	n.a.			n.a.

Schedule Of Fair Value Assumptions Used To Value The Grants

	2011			2010			2009
Stock price on date of issuance	$	65.17		$	52.76		$	44.02
Grant date fair value per share	$	19.08		$	15.21		$	14.04
Number of options granted		513,100			515,100			508,600
Expected term (years)		4.9			5.1			5.1
Risk free rate of return		2.35	%		2.43	%		1.74	%
Volatility		32.8	%		33.5	%		35.0	%
Dividend yield		1.0	%		1.5	%		0.6	%
Forfeiture rate		-			1.6	%		2.0	%

Schedule Of Other Data For Stock Option And Stock Award Activity

	Years Ended December 31,
	2011		2010		2009
Total compensation cost of stock-based compensation
plans charged against income	$	14,237	$	14,961	$	15,726
Total income tax benefit recognized in income for stock
based compensation plans		5,232		5,499		5,780
Total intrinsic value of stock options exercised		12,925		10,096		5,079
Total intrinsic value of stock awards vested during the period		3,757		8,437		5,604
Per-share weighted averaged grant-date fair value of
stock awards granted		64.74		57.13		44.54

Schedule Of Other Data For Stock Options And Stock Awards

	Stock		Stock
	Options		Awards
Total unrecognized compensation related to nonvested options and awards at end of year	$	9,851	$	5,995
Weighted average period over which unrecognized compensation cost of nonvested options
and awards to be recognized (years)		1.8		1.8
Actual income tax benefit realized from options exercised during the year	$	4,764	n.a.

Schedule Of Price Targets And Pools Of Unrestricted Shares To Be Granted

	February 2011 Price Targets for the						May 2009 Price Targets for the
	three years ending February 18, 2014						three years ending February 28, 2012
Price target	$	79.00	$	85.00	$	90.00	$	54.00	$	58.00	$	62.00
Number of shares in the pool		25,000		25,000		25,000		22,500		33,750		33,750
Shares awarded:
From the pool		-		-		-		22,500		33,750		33,750
Discretionary shares		-		-		-		5,400		7,350		7,350
Total shares		-		-		-		27,900		41,100		41,100
Pretax cost of award (in thousands)	n.a.		n.a.		n.a.		$	1,799	$	2,935	$	3,012
Date of award	n.a.		n.a.		n.a.		April 2010		December 2010		January 2011

Schedule Of Cumulative Adjusted EBITDA Earnings Targets And Pools Of Unrestricted Shares To Be Granted

	Cumulative EBITDA Targets
	November 2009		May 2007
Beginning measurement date	January 1, 2010		January 1, 2007
Three-year EBITDA Target (in thousands)	$	640,000	$	465,000
Four-year EBITDA target (in thousands)		825,000		604,000
Shares in EBITDA pool		80,000		80,000
Shares awarded:
From the pool		-		80,000
Discretionary shares		-		16,200
Total shares		-		96,200
Pretax cost of award (in thousands)		-	$	5,007
Date of award	n.a.		November 2009

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Capital Stock Transactions (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Nov. 07, 2011	Feb. 22, 2011	Dec. 27, 2010	May 19, 2008	Apr. 26, 2007
Capital Stock Transactions [Abstract]
Capital stock authorized for repurchases				$ 100	$ 100	$ 70	$ 56	$ 150
Shares repurchased	2,602,513	1,648,047	15,900
Weighted average price per share	$ 55.28	$ 63.14	$ 46.65

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Financial Instruments

12 Months Ended

Dec. 31, 2011

Financial Instruments [Abstract]

Financial Instruments

17.   Financial Instruments

FASB's authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements.  Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities.  Level 2 measurements use significant other observable inputs.  Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions.  In recording the fair value of assets and liabilities, companies must use the most reliable measurement available.

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of

December 31, 2011 (in thousands):

			Fair Value Measure
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred compensation     plans held in trust	$	31,629	$	31,629	$	-	$	-
Long-term debt		166,784		175,755		-		-

For cash and cash equivalents, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments.

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Segments And Nature Of The Business (Schedule Of Segment Data For Continuing Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Total service revenues and sales	$ 1,355,970	$ 1,280,545	$ 1,190,236
Net income	85,979	81,831	73,784
Total interest income	426	444	423
Total interest expense	13,888	11,959	11,599
Total income tax provision	54,577	52,000	46,583
Total identifiable assets	795,905	830,161	819,470
Total additions to long-lived assets	33,796	35,545	23,460
Total depreciation and amortization	29,499	29,043	27,902
VITAS [Member]
Segment Reporting Information [Line Items]
Net income	80,358	79,796	71,696
Total interest income	4,293	4,852	4,581
Total interest expense	229	131	374
Total income tax provision	48,835	48,601	43,637
Total identifiable assets	504,677	531,247	476,621
Total additions to long-lived assets	24,298	17,492	14,945
Total depreciation and amortization	18,480	18,900	17,973
Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Net income	34,879	31,678	33,040
Total interest income	2,176	2,661	2,587
Total interest expense	358	233	186
Total income tax provision	21,353	19,547	20,372
Total identifiable assets	212,234	205,601	191,254
Total additions to long-lived assets	9,426	18,035	8,067
Total depreciation and amortization	8,729	8,289	8,509
Corporate [Member]
Segment Reporting Information [Line Items]
Net income	(29,258)	(29,643)	(30,699)
Total interest income	91	175	83
Total interest expense	13,301	11,595	11,039
Total income tax provision	(15,611)	(16,148)	(17,426)
Total identifiable assets	78,994	93,313	151,595
Total additions to long-lived assets	72	18	448
Total depreciation and amortization	2,290	1,854	1,420
Discontinued Operations [Member]
Segment Reporting Information [Line Items]
Net income			(253)
Intercompany Eliminations [Member]
Segment Reporting Information [Line Items]
Total interest income	(6,134)	(7,244)	(6,828)
Routine Homecare [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	718,658	666,562	615,408
Continuous Care [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	158,466	153,050	141,272
General Inpatient [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	110,742	105,588	97,356
Estimated BNAF [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales			1,950
Medicare Cap [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	(1,594)	610	(1,643)
Sewer And Drain Cleaning [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	138,932	135,704	136,503
Plumbing Repair And Maintenance [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	177,363	168,625	151,072
Independent Contractors [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	26,711	22,943	21,620
HVAC Repair And Maintenance [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	3,410	4,183	4,031
Segment Total [Member]
Segment Reporting Information [Line Items]
Net income	115,237	111,474	104,736
Total interest income	6,469	7,513	7,168
Total interest expense	587	364	560
Total income tax provision	70,188	68,148	64,009
Total identifiable assets	716,911	736,848	667,875
Total additions to long-lived assets	33,724	35,527	23,012
Total depreciation and amortization	27,209	27,189	26,482
Segment Total [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	986,272	925,810	854,343
Segment Total [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	369,698	354,735	335,893
Other Products And Services [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	$ 23,282	$ 23,280	$ 22,667
Medicare And Medicaid Reimbursement Programs [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Relative contribution of each segment to service revenues and sales (Percentage)	90.00%
Sales [Member] | VITAS [Member]
Segment Reporting Information [Line Items]
Relative contribution of each segment to service revenues and sales (Percentage)	73.00%	72.00%
Sales [Member] | Roto-Rooter [Member]
Segment Reporting Information [Line Items]
Relative contribution of each segment to service revenues and sales (Percentage)	27.00%	28.00%

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Consolidated Statement Of Changes In Stockholders' Equity (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statement Of Changes In Stockholders' Equity [Abstract]
Dividends paid per share	$ 0.6	$ 0.52	$ 0.36

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Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents (Note 10)	$ 38,081	$ 49,917
Accounts receivable less allowances of $11,524 (2010 - $13,332)	77,924	112,999
Inventories	8,668	7,728
Current deferred income taxes (Note 12)	12,540	15,098
Prepaid income taxes	2,131	770
Prepaid expenses	11,409	10,285
Total current assets	150,753	196,797
Investments of deferred compensation plans held in trust (Notes 15 and 17)	31,629	28,304
Properties and equipment, at cost, less accumulated depreciation (Note 13)	82,951	79,292
Identifiable intangible assets less accumulated amortization of $28,904 (2010 - $27,438) (Note 6)	58,262	57,858
Goodwill	460,633	458,343
Other assets	11,677	9,567
Total Assets	795,905	830,161
Liabilities
Accounts payable	48,225	55,829
Income taxes (Note 12)	90	1,161
Accrued insurance	37,147	36,492
Accrued compensation	41,087	39,719
Other current liabilities	18,851	16,141
Total current liabilities	145,400	149,342
Deferred income taxes (Note 12)	29,463	25,085
Long-term debt (Note 3)	166,784	159,208
Deferred compensation liabilities (Note 15)	30,693	27,851
Other liabilities	9,881	6,626
Total Liabilities	382,221	368,112
Commitments and contingencies (Notes 14 and 19)
Stockholders' Equity
Capital stock - authorized 80,000,000 shares $1 par; issued 30,936,925 shares (2010 - 30,381,863 shares)	30,937	30,382
Paid-in capital	398,094	365,007
Retained earnings	546,757	473,316
Treasury stock - 11,880,051 shares (2010 - 9,103,185 shares), at cost	(564,091)	(408,615)
Deferred compensation payable in Company stock (Note 15)	1,987	1,959
Total Stockholders' Equity	413,684	462,049
Total liabilities and stockholders' equity	$ 795,905	$ 830,161

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Cash Overdrafts And Cash Equivalents

12 Months Ended

Dec. 31, 2011

Cash Overdrafts And Cash Equivalents [Abstract]

Cash Overdrafts And Cash Equivalents

10.           Cash Overdrafts and Cash Equivalents

Included in accounts payable are cash overdrafts of $10.3 million and $11.1 million as of December 31, 2011 and 2010, respectively.

From time to time throughout the year, we invest excess cash in money market funds or repurchase agreements directly with major commercial banks. We do not physically hold the collateral for repurchase agreements, but the term is less than 10 days.  We closely monitor the creditworthiness of the institutions with which we invest our overnight funds and the quality of the collateral underlying those investments. We had $32.5 million in cash equivalents as of December 31, 2011.  There was $45.5 million in cash equivalents as of December 31, 2010.  The weighted average rate of return for our cash equivalents was 0.1% in both 2011 and 2010.

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Valuation And Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Allowances For Doubtful Accounts [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
BALANCE AT BEGINNING OF PERIOD	$ (13,332)	[1]	$ (12,595)	[1]	$ (10,320)	[1]
(CHARGED) CREDITED TO COSTS AND EXPENSES	(8,686)	[1]	(9,118)	[1]	(10,861)	[1]
(CHARGED) CREDITED TO OTHER ACCOUNTS	(786)	[1]	(472)	[1]	(656)	[1]
DEDUCTIONS	11,280	[1],[2]	8,853	[1],[2]	9,242	[1],[2]
BALANCE AT END OF PERIOD	(11,524)	[1]	(13,332)	[1]	(12,595)	[1]
Allowances For Doubtful Accounts - Notes Receivable [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
BALANCE AT BEGINNING OF PERIOD	(368)	[3]	(408)	[3]	(482)	[3]
(CHARGED) CREDITED TO COSTS AND EXPENSES	123	[3]	40	[3]	28	[3]
(CHARGED) CREDITED TO OTHER ACCOUNTS	(60)	[3]			44	[3]
DEDUCTIONS					2	[2],[3]
BALANCE AT END OF PERIOD	$ (305)	[3]	$ (368)	[3]	$ (408)	[3]

[1] Classified in consolidated balance sheet as a reduction of accounts receivable.

[2] With respect to allowances for doubtful accounts, deductions include accounts considered uncollectible or written off, payments, companies divested, etc.

[3] Classified in consolidated balance sheet as a reduction of other assets.

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Financial Instruments (Carrying Value, Fair Value And Hierarchy Of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust, carrying value	$ 31,629	$ 28,304
Long-term debt, carrying value	166,784	159,208
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust	31,629
Long-term debt	175,755
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust
Long-term debt
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust
Long-term debt

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Earnings Per Share (Schedule Of Computation Of Earnings Per Share) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Earnings Per Share [Abstract]
Income from Continuing Operations, Income, Earnings	$ 85,979,000	$ 81,831,000	$ 74,037,000
Income from Continuing Operations, Earnings per Share	$ 4.19	$ 3.62	$ 3.30
Income from Continuing Operations, Diluted Earnings per Share	$ 4.10	$ 3.55	$ 3.26
Net Income, Earnings	85,979,000	81,831,000	73,784,000
Net Income, Earnings per Share	$ 4.19	$ 3.62	$ 3.29
Net Income, Diluted Earnings per Share	$ 4.10	$ 3.55	$ 3.24
Income from Continuing Operations, Earnings, Shares	20,523,000	22,587,000	22,451,000
Dilutive stock options	335,000	348,000	229,000
Nonvested stock awards	87,000	96,000	62,000
Income from Continuing Operations, Diluted Earnings, Shares	20,945,000	23,031,000	22,742,000
Stock options excluded from computation of earnings per share	1,300,000	970,900	819,917
Issuance of Notes that may impact future diluted earnings per share	$ 200,000,000

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Feb. 15, 2012	Jun. 30, 2011
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2011
Entity Registrant Name	CHEMED CORP
Entity Central Index Key	0000019584
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		19,148,645
Entity Public Float			$ 1,360,861,743
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes

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Other Income - Net

12 Months Ended

Dec. 31, 2011

Other Income - Net [Abstract]

Other Income - Net

11.      Other Income—Net

Other income—net from continuing operations comprises the following (in thousands):

	For the Years Ended December31,
	2011			2010			2009
Market value gains on assets held in deferred
compensation trust	$	798		$	2,210		$	5,802
Loss on disposal of property and equipment		(441	)		(425	)		(369	)
Interest income		426			444			423
Other - net		(66	)		39			18
Total other income	$	717		$	2,268		$	5,874

The offset for market value gains or losses on assets held in deferred compensation trust is recorded in selling, general and administrative expenses.

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Income Taxes (Schedule Of Provision For Income Taxes) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Abstract]
Current, U.S. federal	$ 40,762	$ 46,789	$ 36,182
Current, U.S. state and local	5,961	6,981	4,960
Current, Foreign	612	639	462
Deferred, U.S. federal, state and local	7,227	(2,418)	4,980
Deferred, Foreign	15	9	(1)
Total	54,577	52,000	46,583
Discontinued Operations, Current U.S. federal			(65)
Discontinued Operations, Current U.S. state and local			(5)
Discontinued Operations, Deferred U.S. federal, state and local			(77)
Total			$ (147)

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Pension And Retirement Plans (Schedule Of Expenses For Retirement, Profit-Sharing Plans, Excess Benefit Plans And Other Similar Plans) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Pension And Retirement Plans [Abstract]
Defined contribution plans	$ 9,408,000	$ 11,444,000	$ 15,143,000
Number of treasury stock shares held	97,428	99,494
Treasury stock held value	$ 2,000,000	$ 2,000,000

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Consolidated Balance Sheet (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheet [Abstract]
Accounts receivable, allowances	$ 11,524	$ 13,332
Identifiable intangible assets, accumulated amortization	$ 28,904	$ 27,438
Capital stock - authorized	80,000,000	80,000,000
Capital stock - par value	$ 1	$ 1
Capital stock - issued	30,936,925	30,381,863
Treasury stock	11,880,051	9,103,185

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Segments And Nature Of The Business

12 Months Ended

Dec. 31, 2011

Segments And Nature Of The Business [Abstract]

Segments And Nature Of The Business

5.      Segments and Nature of the Business

Our segments include the VITAS segment and the Roto-Rooter segment.  Relative contributions of each segment to service revenues and sales were 73% and 27%, respectively, in 2011 and 72% and 28%, respectively, in 2010.  The vast majority of our service revenues and sales from continuing operations are generated from business within the United States.

The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the RRSC and RRC operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics.  The characteristics of these operating segments and the basis for aggregation are reviewed annually.  Accordingly, the reportable segments are defined as follows:

· The VITAS segment provides hospice services for patients with terminal illnesses.  This type of care is aimed at making the terminally ill patient's end of life as comfortable and pain-free as possible.  Hospice care is typically available to patients who have been initially certified or re-certified as terminally ill (i.e., a prognosis of six months or less) by their attending physician, if any, and the hospice physician.  VITAS offers all levels of hospice care in a given market, including routine home care, inpatient care and continuous care.  Over 90% of VITAS' revenues are derived through the Medicare and Medicaid reimbursement programs.

· The Roto-Rooter segment provides repair and maintenance services to residential and commercial accounts using the Roto-Rooter registered service marks. Such services include plumbing and sewer, drain and pipe cleaning. They are delivered through company-owned and operated territories, independent contractor-operated territories and franchised locations. This segment also manufactures and sells products and equipment used to provide such services.

· We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as "Corporate".  Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation.  Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements.

Segment data for our continuing operations are set forth below (in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Revenues by Type of Service
VITAS
Routine homecare	$	718,658		$	666,562		$	615,408
Continuous care		158,466			153,050			141,272
General inpatient		110,742			105,588			97,356
Estimated BNAF		-			-			1,950
Medicare cap		(1,594	)		610			(1,643	)
Total segment		986,272			925,810			854,343
Roto-Rooter
Sewer and drain cleaning		138,932			135,704			136,503
Plumbing repair and maintenance		177,363			168,625			151,072
Independent contractors		26,711			22,943			21,620
HVAC repair and maintenance		3,410			4,183			4,031
Other products and services		23,282			23,280			22,667
Total segment		369,698			354,735			335,893
Total service revenues and sales	$	1,355,970		$	1,280,545		$	1,190,236
Aftertax Segment Earnings/(Loss)
VITAS	$	80,358		$	79,796		$	71,696
Roto-Rooter		34,879			31,678			33,040
Total		115,237			111,474			104,736
Corporate		(29,258	)		(29,643	)		(30,699	)
Discontinued operations		-			-			(253	)
Net income	$	85,979		$	81,831		$	73,784
Interest Income
VITAS	$	4,293		$	4,852		$	4,581
Roto-Rooter		2,176			2,661			2,587
Total		6,469			7,513			7,168
Corporate		91			175			83
Intercompany eliminations		(6,134	)		(7,244	)		(6,828	)
Total interest income	$	426		$	444		$	423
Interest Expense
VITAS	$	229		$	131		$	374
Roto-Rooter		358			233			186
Total		587			364			560
Corporate		13,301			11,595			11,039
Total interest expense	$	13,888		$	11,959		$	11,599
Income Tax Provision
VITAS	$	48,835		$	48,601		$	43,637
Roto-Rooter		21,353			19,547			20,372
Total		70,188			68,148			64,009
Corporate		(15,611	)		(16,148	)		(17,426	)
Total income tax provision	$	54,577		$	52,000		$	46,583
	For the Years Ended December 31,
	2011			2010			2009
Identifiable Assets
VITAS	$	504,677		$	531,247		$	476,621
Roto-Rooter		212,234			205,601			191,254
Total		716,911			736,848			667,875
Corporate		78,994			93,313			151,595
Total identifiable assets	$	795,905		$	830,161		$	819,470
Additions to Long-Lived Assets
VITAS	$	24,298		$	17,492		$	14,945
Roto-Rooter		9,426			18,035			8,067
Total		33,724			35,527			23,012
Corporate		72			18			448
Total additions to long-lived assets	$	33,796		$	35,545		$	23,460
Depreciation and Amortization
VITAS	$	18,480		$	18,900		$	17,973
Roto-Rooter		8,729			8,289			8,509
Total		27,209			27,189			26,482
Corporate		2,290			1,854			1,420
Total depreciation and amortization	$	29,499		$	29,043		$	27,902

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Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

4. Stock-Based Compensation Plans

We have six stock incentive plans under which 8,450,000 shares can be issued to key employees through a grant of stock awards and/or options to purchase shares.  The Compensation/Incentive Committee ("CIC") of the Board of Directors administers these plans.  All options granted under these plans provide for a purchase price equal to the market value of the stock at the date of grant.  The latest plan, covering a total of 1,750,000 shares, was adopted in May 2010.  The plans are not qualified, restricted or incentive plans under the U.S. Internal Revenue Code.  The terms of each plan differ slightly; however, stock options issued under the plans generally have a maximum term of 10 years.  Under one plan, adopted in 1999, up to 500,000 shares may be issued to employees who are not our officers or directors.

    We grant stock options and restricted stock awards to our officers, other key employees and directors to better align their long-term interests with those of our shareholders.  We grant stock options at an exercise price equal to the market price of our stock on the date of grant.  Options generally vest evenly annually over a three-year period and have a contractual life of 10 years.  Restricted stock awards generally cliff vest over a three-or four year period.  Immediately vesting stock awards are generally granted to our non-employee directors annually at the time of our Annual Meeting.

In February 2011, the CIC granted 35,713 restricted stock awards to certain key employees.  These shares cliff vest in February 2015.  In May 2011, the CIC granted 6,928 unrestricted shares to stock to the Company's outside directors.

The following table summarizes total stock option and stock award activity during 2011:

	Stock Options									Stock Awards
				Weighted Average				Aggregate					Weighted
						Remaining		Intrinsic					Average
	Number of			Exercise		Contractual		Value		Number of			Grant-Date
	Options			Price		Life (Years)		(thousands)		Shares			Price
Outstanding at January 1, 2011		2,586,646		$	47.19						151,620		$	48.00
Granted		513,100			65.17						125,741			64.74
Exercised/Vested		(433,321	)		36.22						(58,238	)		57.61
Canceled/ Forfeited		(27,902	)		51.99						(4,000	)		44.02
Outstanding at December 31, 2011		2,638,523			52.44		6.6	$	12,748		215,123			55.25
Vested and expected to vest
at December 31, 2011		2,630,500			52.45		6.6		12,724	n.a.			n.a.
Exercisable at December 31, 2011		1,630,660			49.22		5.5		11,506	n.a.			n.a.

We estimate the fair value of stock options using the Black-Scholes valuation model, consistent with the provisions of the FASB's and the Securities and Exchange Commission's ("SEC") guidance.  We determine expected term, volatility, dividend yield and forfeiture rate based on our historical experience.  We believe that historical experience is the best indicator of these factors.  Prior to 2011, we separated the participants into two groups for purposes of calculating the fair value of options.  Beginning in 2011, we valued all participants' options as a single group because segregation of data did not provide significantly different results for determining compensation expense for stock options.  Data for 2010 and 2009 have been combined to present the weighted average information of previously segregated data.  The assumptions we used to value the 2011, 2010 and 2009 grants are as follows:

	2011			2010			2009
Stock price on date of issuance	$	65.17		$	52.76		$	44.02
Grant date fair value per share	$	19.08		$	15.21		$	14.04
Number of options granted		513,100			515,100			508,600
Expected term (years)		4.9			5.1			5.1
Risk free rate of return		2.35	%		2.43	%		1.74	%
Volatility		32.8	%		33.5	%		35.0	%
Dividend yield		1.0	%		1.5	%		0.6	%
Forfeiture rate		-			1.6	%		2.0	%

Other data for stock option and stock award activity include (in thousands, except per-share amounts):

	Years Ended December 31,
	2011		2010		2009
Total compensation cost of stock-based compensation
plans charged against income	$	14,237	$	14,961	$	15,726
Total income tax benefit recognized in income for stock
based compensation plans		5,232		5,499		5,780
Total intrinsic value of stock options exercised		12,925		10,096		5,079
Total intrinsic value of stock awards vested during the period		3,757		8,437		5,604
Per-share weighted averaged grant-date fair value of
stock awards granted		64.74		57.13		44.54

Other data for stock options and stock awards for 2011 include (dollar amounts in thousands):

	Stock		Stock
	Options		Awards
Total unrecognized compensation related to nonvested options and awards at end of year	$	9,851	$	5,995
Weighted average period over which unrecognized compensation cost of nonvested options
and awards to be recognized (years)		1.8		1.8
Actual income tax benefit realized from options exercised during the year	$	4,764	n.a.

EXECUTIVE LONG-TERM INCENTIVE PLAN ("LTIP")

Our shareholders approved in May 2002 the adoption of the LTIP covering our officers and certain key employees.  The CIC periodically approves a pool of shares to be awarded based on stock price targets, EBITDA targets, time-based vesting and a discretionary component for the LTIP.

The CIC established price targets and pools of unrestricted shares to be granted if the closing stock price reaches the target price for 30 of 60 consecutive trading days during the specified three-year period:

	February 2011 Price Targets for the						May 2009 Price Targets for the
	three years ending February 18, 2014						three years ending February 28, 2012
Price target	$	79.00	$	85.00	$	90.00	$	54.00	$	58.00	$	62.00
Number of shares in the pool		25,000		25,000		25,000		22,500		33,750		33,750
Shares awarded:
From the pool		-		-		-		22,500		33,750		33,750
Discretionary shares		-		-		-		5,400		7,350		7,350
Total shares		-		-		-		27,900		41,100		41,100
Pretax cost of award (in thousands)	n.a.		n.a.		n.a.		$	1,799	$	2,935	$	3,012
Date of award	n.a.		n.a.		n.a.		April 2010		December 2010		January 2011

The CIC also established cumulative adjusted EBITDA Earnings Targets for three-year and four year periods and pools of unrestricted shares to be granted upon the attainment of either target:

	Cumulative EBITDA Targets
	November 2009		May 2007
Beginning measurement date	January 1, 2010		January 1, 2007
Three-year EBITDA Target (in thousands)	$	640,000	$	465,000
Four-year EBITDA target (in thousands)		825,000		604,000
Shares in EBITDA pool		80,000		80,000
Shares awarded:
From the pool		-		80,000
Discretionary shares		-		16,200
Total shares		-		96,200
Pretax cost of award (in thousands)		-	$	5,007
Date of award	n.a.		November 2009

The above pretax costs of the LTIP awards include related payroll taxes and savings plan contributions and are included in the "Selling, general and administrative expenses" line of the consolidated income statement.

In February 2011, the CIC approved a time-based LTIP award of 42,000 shares of restricted stock to certain key employees.  The restricted shares cliff vest four years from the date of issuance.  The cumulative compensation expense related to the restricted award is $2.7 million and will be recognized ratably over the 4 year vesting period.  We assumed no forfeitures in determining the cumulative compensation expense of the grant.  In November 2009, the CIC established a discretionary pool of 37,000 shares of capital stock.

EMPLOYEE STOCK PURCHASE PLAN ("ESPP")

The ESPP allows eligible participants to purchase our shares through payroll deductions at current market value.  We pay administrative and broker fees associated with the ESPP.  Shares purchased for the ESPP are purchased on the open market and credited directly to participants' accounts.  In accordance with the FASB's guidance, the ESPP is non-compensatory.

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Earnings Per Share

12 Months Ended

Dec. 31, 2011

Earnings Per Share [Abstract]

Earnings Per Share

16. Earnings Per Share

The computation of earnings per share follows (in thousands, except per share data):

	Income from Continuing Operations						Net Income
For the Years Ended December 31,	Income		Shares		Earnings per Share		Income		Shares		Earnings per Share
2011
Earnings	$	85,979		20,523	$	4.19	$	85,979		20,523	$	4.19
Dilutive stock options		-		335				-		335
Nonvested stock awards		-		87				-		87
Diluted earnings	$	85,979		20,945	$	4.10	$	85,979		20,945	$	4.10
2010
Earnings	$	81,831		22,587	$	3.62	$	81,831		22,587	$	3.62
Dilutive stock options		-		348				-		348
Nonvested stock awards		-		96				-		96
Diluted earnings	$	81,831		23,031	$	3.55	$	81,831		23,031	$	3.55
2009
Earnings	$	74,037		22,451	$	3.30	$	73,784		22,451	$	3.29
Dilutive stock options		-		229				-		229
Nonvested stock awards		-		62				-		62
Diluted earnings	$	74,037		22,742	$	3.26	$	73,784		22,742	$	3.24

During 2011, 1.3 million stock options were excluded from the computation of diluted earnings per share as their exercise prices were greater than the average market price during most of the year.  During 2010, 970,900 stock options were also excluded.  During 2009, 819,917 stock options were also excluded.

Diluted earnings per share may be impacted in future periods as the result of the issuance of our $200 million Notes and related purchased call options and sold warrants.  Per FASB's authoritative guidance on the effect of contingently convertible instruments on diluted earnings per share and convertible bonds with issuer option to settle for cash upon conversion, we will not include any shares related to the Notes in our calculation of diluted earnings per share until our average stock price for a quarter exceeds the current conversion price.  We would then include in our diluted earnings per share calculation those shares issuable using the treasury stock method.  The amount of shares issuable is based upon the amount by which the average stock price for the quarter exceeds the conversion price.  The purchased call option does not impact the calculation of diluted earnings per share, as it is always anti-dilutive. The sold warrants become dilutive when our average stock price for a quarter exceeds the strike price of the warrant.

The following table provides examples of how changes in our stock price impact the number of shares that would be included in our diluted earnings per share calculation at December 31, 2011.  It also shows the impact on the number of shares issuable upon conversion of the Notes and settlement of the purchased call options and sold warrants:

		Shares				Total Treasury		Shares Due			Incremental
		Underlying 1.875%				Method		to the Company			Shares Issued by
Share		Convertible		Warrant		Incremental		under Notes			the Company
Price		Notes		Shares		Shares (a)		Hedges			upon Conversion (b)
$	80.73		32,140		-		32,140		(34,382	)		(2,242	)
$	90.73		287,382		-		287,382		(307,433	)		(20,051	)
$	100.73		491,947		-		491,947		(526,270	)		(34,323	)
$	110.73		659,562		119,997		779,559		(705,580	)		73,979
$	120.73		799,411		318,107		1,117,518		(855,187	)		262,331
$	130.73		917,865		485,908		1,403,773		(981,905	)		421,868
a) Represents the number of incremental shares that must be included in the calculation of diluted shares under U.S. GAAP.
b) Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement of the note hedges and warrants.

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Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

12.      Income Taxes

The provision for income taxes comprises the following (in thousands):

	For the Years Ended December 31,
	2011		2010			2009
Continuing Operations:
Current
U.S. federal	$	40,762	$	46,789		$	36,182
U.S. state and local		5,961		6,981			4,960
Foreign		612		639			462
Deferred
U.S. federal, state and local		7,227		(2,418	)		4,980
Foreign		15		9			(1	)
Total	$	54,577	$	52,000		$	46,583
Discontinued Operations:
Current U.S. federal	$	-	$	-		$	(65	)
Current U.S. state and local		-		-			(5	)
Deferred U.S. federal, state and local		-		-			(77	)
Total	$	-	$	-		$	(147	)

A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands):

	December 31,
	2011			2010
Accrued liabilities	$	27,687		$	26,334
Stock compensation expense		12,200			10,257
Allowance for uncollectible accounts receivable		1,905			2,695
State net operating loss carryforwards		1,633			1,379
Other		2,845			2,763
Deferred income tax assets		46,270			43,428
Amortization of intangible assets		(42,192	)		(40,135	)
Accelerated tax depreciation		(16,322	)		(10,499	)
Revenue recognition		(1,684	)		-
Currents assets		(1,315	)		(1,148	)
Other		(1,530	)		(1,397	)
Deferred income tax liabilities		(63,043	)		(53,179	)
Net deferred income tax liabilities	$	(16,773	)	$	(9,751	)

Included in other assets at December 31, 2011, are deferred income tax assets of $150,000 (2010 - $236,000).  At December 31, 2011 and 2010, state net operating loss carryforwards were $31.0 million and $26.0 million, respectively.  These net operating losses will expire, in varying amounts, between 2012 and 2031.  Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets.

After FASB's adoption of FASB's guidance on accounting for uncertain income taxes in 2007, we had approximately $1.3 million in unrecognized tax benefits.  The majority of this amount would affect our effective tax rate, if recognized in a future period.  The years ended December 31, 2008 and forward remain open for review for Federal income tax purposes.  The earliest open year relating to any of our material state jurisdictions is the fiscal year ended December 31, 2006. During the next twelve months, we do not anticipate a material net change in unrecognized tax benefits.

As permitted by this guidance, we classify interest related to our accrual for uncertain tax positions in separate interest accounts.  As of December 31, 2011 and 2010, we have approximately $252,000 and $114,000, respectively, accrued in interest payable related to uncertain tax positions.  These accruals are included in other current liabilities in the accompanying consolidated balance sheet.  Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material.

A roll forward of the significant changes to our unrecognized tax benefits is as follows (in thousands):

	2011			2010			2009
Balance at January 1,	$	704		$	1,010		$	1,202
Unrecognized tax benefits due to positions taken in current year		2,038			119			136
Decrease due to settlement with taxing authorities		-			-			(214	)
Decrease due to expiration of statute of limitations		(130	)		(425	)		(93	)
Other		-			-			(21	)
Balance at December 31,	$	2,612		$	704		$	1,010

The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Income tax provision calculated using
the statutory rate of 35%	$	49,195		$	46,841		$	42,217
State and local income taxes,
less federal income tax effect		4,733			4,509			3,837
Nondeductible expenses		1,021			928			854
Impact of deferred compensation plans		(1	)		(27	)		(190	)
Other --net		(371	)		(251	)		(135	)
Income tax provision	$	54,577		$	52,000		$	46,583
Effective tax rate		38.8	%		38.9	%		38.6	%

Summarized below are the total amounts of income taxes paid during the years ended December 31 (in thousands):

2011	$	44,343
2010		49,532
2009		40,872

Provision has not been made for additional taxes on $35.1 million of undistributed earnings of our domestic subsidiaries.  Should we elect to sell our interest in all of these businesses rather than to effect a tax-free liquidation, additional taxes amounting to approximately $12.9 million would be incurred based on current income tax rates.

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Income Taxes (Schedule Of Income Taxes Paid) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Income Taxes [Abstract]
Income taxes paid	$ 44,343	$ 49,532	$ 40,872

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Business Combinations

12 Months Ended

Dec. 31, 2011

Business Combinations [Abstract]

Business Combinations

8.      Business Combinations

On April 29, 2011, our VITAS segment completed an acquisition of the operating assets of Family Comfort Hospice which is based in Alabama.  This acquisition adds three central Alabama locations serving ten counties to VITAS' network of hospice programs.  We made no acquisitions within the Roto-Rooter segment.  The purchase price of this acquisition is allocated as follows (in thousands):

Working capital	$	382
Identifiable intangible assets		951
Goodwill		2,320
Other assets and liabilities - net		11
	$	3,664

During 2010, we completed four business combinations within the Roto-Rooter segment for $9.5 million in cash to increase our market penetration in Kansas City, Missouri, St. Louis, Missouri, Jefferson City, Missouri and Spokane Washington.  We made no acquisitions within the VITAS segment during 2010.  The purchase price of these acquisitions was allocated as follows (in thousands):

Working capital	$	268
Identifiable intangible assets		589
Goodwill		8,225
Other assets and liabilities - net		387
	$	9,469

During 2009, we completed two business combinations within the Roto-Rooter segment for $1.9 million in cash to increase our market penetration in Detroit, Michigan and Grand Rapids, Michigan.  We made no acquisitions within the VITAS segment during 2009.

The unaudited pro forma results of operations, assuming purchase business combinations completed in 2011 and 2010 were completed on January 1, 2010, do not materially impact the accompanying consolidated financial statements.  The results of operations of each of the above business combinations are included in our results of operations from the date of the respective acquisition.

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Long-Term Debt And Lines Of Credit (Financial Debt Covenants) (Details)	12 Months Ended
	Dec. 31, 2011
Annual Operating Lease Commitment, Requirement	30,000,000
Annual Operating Lease Commitment, Chemed	19,800,000
Maximum [Member]
Leverage Ratio (Consolidated Indebtedness/Consolidated Adjustment EBITDA), Requirement	3.50
Leverage Ratio (Consolidated Indebtedness Consolidated Adjustment EBITDA), Chemed	1.09
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Requirement	1.50
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Chemed	2.47
Minimum [Member]
Leverage Ratio (Consolidated Indebtedness/Consolidated Adjustment EBITDA), Requirement	1.0
Leverage Ratio (Consolidated Indebtedness Consolidated Adjustment EBITDA), Chemed	1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Requirement	1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Chemed	1.00

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Intangible Assets

12 Months Ended

Dec. 31, 2011

Intangible Assets [Abstract]

Intangible Assets

6.      Intangible Assets

Amortization of definite-lived intangible assets from continuing operations for the years ended December 31, 2011, 2010, 2009 was $1.5 million, $2.1 million and $4.0 million, respectively.  The following is a schedule by year of projected amortization expense for definite-lived intangible assets (in thousands):

2012	$	1,487
2013		1,487
2014		508
2015		277
2016		242
Thereafter		307

The balance in identifiable intangible assets comprises the following (in thousands):

	Gross		Accumulated			Net Book
	Asset		Amortization			Value
December 31, 2011
Referral networks	$	21,729	$	(18,647	)	$	3,082
Covenants not to compete		9,286		(8,885	)		401
Customer lists		1,222		(1,118	)		104
Reacquired franchise rights		974		(254	)		720
Subtotal - definite-lived intangibles		33,211		(28,904	)		4,307
VITAS trade name		51,300		-			51,300
Operating licenses		2,655		-			2,655
Total	$	87,166	$	(28,904	)	$	58,262
December 31, 2010
Referral networks	$	21,140	$	(17,427	)	$	3,713
Covenants not to compete		9,211		(8,814	)		397
Customer lists		1,223		(1,089	)		134
Reacquired franchise rights		974		(108	)		866
Subtotal - definite-lived intangibles		32,548		(27,438	)		5,110
VITAS trade name		51,300		-			51,300
Operating licenses		1,448		-			1,448
Total	$	85,296	$	(27,438	)	$	57,858

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Other Operating Expenses

12 Months Ended

Dec. 31, 2011

Other Operating Expenses [Abstract]

Other Operating Expenses

7. Other Operating Expenses

There were no other operating expenses from continuing operations for the periods ended December 31, 2011 and 2010.  For the twelve-month period ended December 31, 2009, we recorded pretax expenses of $4.0 million related to the costs of a contested proxy solicitation.

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Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

9.      Discontinued Operations

Discontinued operations comprise (in thousands, except per share amounts):

	For the Years Ended December 31,
	2011		2010		2009
Adjustment to accruals of operations discontinued in prior years:
Casualty insurance costs	$	-	$	-	$	(400	)
Loss before income taxes		-		-		(400	)
All other income taxes		-		-		147
Total adjustments		-		-		(253	)
Total discontinued operations	$	-	$	-	$	(253	)
Earnings/(loss) per share	$	-	$	-	$	(0.01	)
Diluted earnings/(loss) per share	$	-	$	-	$	(0.02	)

In December 2009, we recorded a $400,000 pretax charge for residual casualty insurance claims related to our discontinued operations.

At December 31, 2011 and 2010, the accrual for our estimated liability for potential environmental cleanup and related costs arising from the sale of DuBois amounted to $1.7 million.  Of the 2011 balance, $826,000 is included in other current liabilities and $901,000 is included in other liabilities (long-term).   The estimated timing of payments of these liabilities follows (in thousands):

2012	$	826
2013		300
Thereafter		601
	$	1,727

We are contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million.  On the basis of a continuing evaluation of the potential liability, we believe it is not probable this additional liability will be paid.  Accordingly, no provision for this contingent liability has been recorded.  The potential liability is not insured, and the recorded liability does not assume the recovery of insurance proceeds.  Also, the environmental liability has not been discounted because it is not possible to reliably project the timing of payments.  We believe that any adjustments to our recorded liability will not materially adversely affect our financial position, results of operations or cash flows.

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Stock-Based Compensation Plans (Schedule Of Other Data For Stock Option And Stock Award Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stock-Based Compensation Plans [Abstract]
Total compensation cost of stock-based compensation plans charged against income	$ 14,237	$ 14,961	$ 15,726
Total income tax benefit recognized in income for stock based compensation plans	5,232	5,499	5,780
Total intrinsic value of stock options exercised	12,925	10,096	5,079
Total intrinsic value of stock awards vested during the period	$ 3,757	$ 8,437	$ 5,604
Per-share weighted averaged grant-date fair value of stock awards granted	$ 57.61
Per-share weighted averaged grant-date fair value of stock awards granted	$ 64.74	$ 57.13	$ 44.54

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Properties And Equipment (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Properties And Equipment [Abstract]
Net book value of computer software	$ 15.4	$ 18.9
Depreciation expense for computer software	$ 5.6	$ 5.9	$ 4.2

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Stock-Based Compensation Plans (Schedule Of Price Targets And Pools Of Unrestricted Shares To Be Granted) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	1 Months Ended
	Feb. 28, 2011	Mar. 31, 2009
Year One [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Price target	$ 54.00	$ 79.00
Number of shares in the pool	22,500	25,000
Pretax cost of award	$ 1,799
Date of award	April 2010
Year One [Member] | From The Pool [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	22,500
Year One [Member] | Discretionary Shares [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	5,400
Year One [Member] | Total Shares [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	27,900
Year Two [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Price target	$ 58.00	$ 85.00
Number of shares in the pool	33,750	25,000
Pretax cost of award	2,935
Date of award	December 2010
Year Two [Member] | From The Pool [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	33,750
Year Two [Member] | Discretionary Shares [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	7,350
Year Two [Member] | Total Shares [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	41,100
Year Three [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Price target	$ 62.00	$ 90.00
Number of shares in the pool	33,750	25,000
Pretax cost of award	$ 3,012
Date of award	January 2011
Year Three [Member] | From The Pool [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	33,750
Year Three [Member] | Discretionary Shares [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	7,350
Year Three [Member] | Total Shares [Member]
Price Targets And Pools Of Shares To Be Granted [Line Items]
Shares awarded	41,100

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Statement Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net cash provided by operating activities	$ 174,343	$ 86,012	$ 160,832
Capital expenditures	(29,592)	(25,639)	(21,496)
Business combinations, net of cash acquired	(3,664)	(9,469)	(1,919)
Other sources/(uses) - net	(858)	(592)	573
Net cash used by investing activities	(34,114)	(35,700)	(22,842)
Purchases of treasury stock	(147,886)	(109,330)	(4,225)
Dividends paid to shareholders	(12,538)	(11,881)	(8,157)
Proceeds from exercise of stock options	8,036	5,327	545
Realized excess tax benefit on share based compensation	3,854	3,357	1,955
Debt issuance costs	(2,657)
Change in cash overdrafts payable	(826)	(581)	2,891
Change in intercompany accounts
Net decrease in revolving line of credit			(8,200)
Repayment of long-term debt			(14,669)
Other sources/(uses) - net	(48)	297	658
Net cash used by financing activities	(152,065)	(112,811)	(29,202)
Increase/(decrease) in cash and cash equivalents	(11,836)	(62,499)	108,788
Cash and cash equivalents at beginning of year	49,917	112,416	3,628
Cash and cash equivalents at end of year	38,081	49,917	112,416
Parent Company [Member]
Net cash provided by operating activities	12,444	2,862	950
Capital expenditures	(73)	(18)	(448)
Business combinations, net of cash acquired
Other sources/(uses) - net	(191)	(157)	702
Net cash used by investing activities	(264)	(175)	254
Purchases of treasury stock	(147,791)	(109,326)	(4,225)
Dividends paid to shareholders	(12,538)	(11,881)	(8,157)
Proceeds from exercise of stock options	8,036	5,327	545
Realized excess tax benefit on share based compensation	3,854	3,357	1,955
Debt issuance costs	(2,657)
Change in cash overdrafts payable	9	1,645	19
Change in intercompany accounts	126,040	44,135	140,674
Net decrease in revolving line of credit			(8,200)
Repayment of long-term debt			(14,500)
Other sources/(uses) - net	13	49	(49)
Net cash used by financing activities	(25,034)	(66,694)	108,062
Increase/(decrease) in cash and cash equivalents	(12,854)	(64,007)	109,266
Cash and cash equivalents at beginning of year	45,324	109,331	65
Cash and cash equivalents at end of year	32,470	45,324	109,331
Guarantor Subsidiaries [Member]
Net cash provided by operating activities	158,159	81,781	153,387
Capital expenditures	(28,145)	(24,677)	(20,394)
Business combinations, net of cash acquired	(3,664)	(9,469)	(1,919)
Other sources/(uses) - net	(730)	(688)	(312)
Net cash used by investing activities	(32,539)	(34,834)	(22,625)
Purchases of treasury stock
Dividends paid to shareholders
Proceeds from exercise of stock options
Realized excess tax benefit on share based compensation
Debt issuance costs
Change in cash overdrafts payable	(835)	(2,226)	2,872
Change in intercompany accounts	(124,636)	(45,071)	(135,226)
Net decrease in revolving line of credit
Repayment of long-term debt			(169)
Other sources/(uses) - net			338
Net cash used by financing activities	(125,471)	(47,297)	(132,185)
Increase/(decrease) in cash and cash equivalents	149	(350)	(1,423)
Cash and cash equivalents at beginning of year	(1,571)	(1,221)	202
Cash and cash equivalents at end of year	(1,422)	(1,571)	(1,221)
Non-Guarantor Subsidiaries [Member]
Net cash provided by operating activities	3,740	1,369	6,495
Capital expenditures	(1,374)	(944)	(654)
Business combinations, net of cash acquired
Other sources/(uses) - net	63	253	183
Net cash used by investing activities	(1,311)	(691)	(471)
Purchases of treasury stock	(95)	(4)
Dividends paid to shareholders
Proceeds from exercise of stock options
Realized excess tax benefit on share based compensation
Debt issuance costs
Change in cash overdrafts payable
Change in intercompany accounts	(1,404)	936	(5,448)
Net decrease in revolving line of credit
Repayment of long-term debt
Other sources/(uses) - net	(61)	248	369
Net cash used by financing activities	(1,560)	1,180	(5,079)
Increase/(decrease) in cash and cash equivalents	869	1,858	945
Cash and cash equivalents at beginning of year	6,164	4,306	3,361
Cash and cash equivalents at end of year	$ 7,033	$ 6,164	$ 4,306

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Stock-Based Compensation Plans (Schedule Of Fair Value Assumptions Used To Value The Grants) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stock-Based Compensation Plans [Abstract]
Stock price on date of issuance	$ 65.17	$ 52.76	$ 44.02
Grant date fair value per share	$ 19.08	$ 15.21	$ 14.04
Number of options granted	513,100	515,100	508,600
Expected term (years)	4.9	5.1	5.1
Risk free rate of return	2.35%	2.43%	1.74%
Volatility	32.80%	33.50%	35.00%
Dividend yield	1.00%	1.50%	0.60%
Forfeiture rate		1.60%	2.00%

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Earnings Per Share (Changes In Stock Price Impact On Number Of Shares Included In Diluted Earnings Per Share And Issuable Upon Conversion Of Notes) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011
Earning Per Share [Line Items]
Percent of Senior Convertible Notes	1.875%
80.73 [Member]
Earning Per Share [Line Items]
Share Price	80.73
Conversion of stock, shares converted	(2,242)	[1]
Total Treasury Method Incremental Shares	32,140	[2]
80.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	32,140
80.73 [Member] | Shares Due To Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(34,382)
90.73 [Member]
Earning Per Share [Line Items]
Share Price	90.73
Conversion of stock, shares converted	(20,051)	[1]
Total Treasury Method Incremental Shares	287,382	[2]
90.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	287,382
90.73 [Member] | Shares Due To Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(307,433)
100.73 [Member]
Earning Per Share [Line Items]
Share Price	100.73
Conversion of stock, shares converted	(34,323)	[1]
Total Treasury Method Incremental Shares	491,947	[2]
100.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	491,947
100.73 [Member] | Shares Due To Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(526,270)
110.73 [Member]
Earning Per Share [Line Items]
Share Price	110.73
Conversion of stock, shares converted	73,979	[1]
Warrant shares	119,997
Total Treasury Method Incremental Shares	779,559	[2]
110.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	659,562
110.73 [Member] | Shares Due To Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(705,580)
120.73 [Member]
Earning Per Share [Line Items]
Share Price	120.73
Conversion of stock, shares converted	262,331	[1]
Warrant shares	318,107
Total Treasury Method Incremental Shares	1,117,518	[2]
120.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	799,411
120.73 [Member] | Shares Due To Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(855,187)
130.73 [Member]
Earning Per Share [Line Items]
Share Price	130.73
Conversion of stock, shares converted	421,868	[1]
Warrant shares	485,908
Total Treasury Method Incremental Shares	1,403,773	[2]
130.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	917,865
130.73 [Member] | Shares Due To Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(981,905)

[1] Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement of the note hedges and warrants.

[2] Represents the number of incremental shares that must be included in the calculation of diluted shares under U.S. GAAP.

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Hospice Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2011

Hospice Revenue Recognition [Abstract]

Schedule Of Allowance For Doubtful Accounts

	Medicare			Medicaid			Commercial			Other			Total
Beginning Balance January 1, 2010	$	6,268		$	2,535		$	1,630		$	505		$	10,938
Bad debt provision		2,918			2,922			1,745			314			7,899
Write-offs		(2,218	)		(2,653	)		(2,152	)		(436	)		(7,459	)
Other/Contractual adjustments		-			-			-			423			423
Ending Balance December 31, 2010		6,968			2,804			1,223			806			11,801
Bad debt provision		315			4,323			2,245			172			7,055
Write-offs		(2,368	)		(4,030	)		(1,915	)		(1,282	)		(9,595	)
Other/Contractual adjustments		2			-			16			724			742
Ending Balance December 31, 2011	$	4,917		$	3,097		$	1,569		$	420		$	10,003

Medicare Cap Liability

	2011			2010
Beginning Balance January 1,	$	1,371		$	1,981
Expense - 2012 measurement period		2,578			-
Reversal - 2011 measurement period		(786	)		-
Expense - 2011 measurement period		-			1,110
Reversal - 2010 measurement period		-			(1,720	)
Other		(198	)		-
Ending Balance December 31,	$	2,965		$	1,371

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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011 years	Dec. 31, 2010	Dec. 31, 2009
Summary Of Significant Accounting Policies [Line Items]
Percentage, plumbing and drain cleaning service offered to domestic population	90.00%
Unbilled revenue	$ 720,000	$ 2,800,000
Cost of providing charity care	7,300,000	7,200,000	6,300,000
Advertising expense in continuing operations	27,200,000	27,700,000	27,000,000
Number of previous years accumulate historical claims data for developing estimates	10
VITAS [Member]
Summary Of Significant Accounting Policies [Line Items]
Exposure on single claim	750,000
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Guarantees of services, period	one day
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Guarantees of services, period	one year
Exposure on single claim	$ 500,000
Roto-Rooter Products, Including Drain Cleaning Machines And Drain Cleaning Solution [Member] | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	3.00%	3.00%	3.00%
Medicare Cap [Member] | Accounts Receivable [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	51.00%	72.00%
Medicare And Medicaid Reimbursement Programs [Member] | VITAS [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	90.00%	90.00%
Medicare And Medicaid Reimbursement Programs [Member] | Accounts Receivable [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	76.00%
Medicaid Programs [Member] | Accounts Receivable [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	34.00%	20.00%

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Lease Arrangements

12 Months Ended

Dec. 31, 2011

Lease Arrangements [Abstract]

Lease Arrangements

14.     Lease Arrangements

We have operating leases that cover our corporate office headquarters, various warehouse and office facilities, office equipment and transportation equipment. The remaining terms of these leases range from one year to eight years, and in most cases we expect that these leases will be renewed or replaced by other leases in the normal course of business. We have no significant capital leases as of December 31, 2011 or 2010.

The following is a summary of future minimum rental payments and sublease rentals to be received under operating leases that have initial or remaining noncancelable terms in excess of one year at December 31, 2011 (in thousands):

2012	$	19,797
2013		14,995
2014		12,030
2015		9,725
2016		5,155
Thereafter		2,146
Total minimum rental payments		63,848
Less: minimum sublease rentals		(69	)
Net minimum rental payments	$	63,779

Total rental expense incurred under operating leases for continuing operations follows (in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Total rental payments	$	22,199		$	21,777		$	21,219
Less sublease rentals		(170	)		(237	)		(270	)
Net rental expense	$	22,029		$	21,540		$	20,949

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Legal And Regulatory Matters

12 Months Ended

Dec. 31, 2011

Legal And Regulatory Matters [Abstract]

Legal And Regulatory Matters

19.   Legal and Regulatory Matters

Litigation

On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed.  They also seek payment of penalties, interest and plaintiffs' attorney fees.  We contest these allegations.  In September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment.  We are unable to estimate our potential liability, if any, with respect to this case.

VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White.  This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives.  The case seeks payment of penalties, interest and Plaintiffs' attorney fees.  We contest these allegations.  In December 2009, the trial court denied Plaintiffs' motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court's denial on the off-the-clock and sales representation exemption claims.  Plaintiffs have filed an appeal of this decision.  We are unable to estimate our potential liability or potential range of loss, if any, with respect to this case.

On November 14, 2011 Luann and Michael Cosgrove and Dawn Mills filed a class action lawsuit against          Roto-Rooter in Minnesota state district court for the 4th Judicial District alleging unnecessary excavation work in Minnesota.  We removed the case to federal court.  Plaintiffs seek damages, injunctive relief, attorney fees and interest.  We contest these allegations.  This lawsuit is in its early stage and we are unable to estimate our potential liability, if any, with respect to these allegations.

On January 12, 2012, the Greater Pennsylvania Carpenters Pension Fund filed a putative class action lawsuit in the United States District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Tim O'Toole.  It alleges violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants. The suit, Greater Pennsylvania Carpenters Pension Fund v. Chemed Corp., et al., Civil Action No. 1:12-cv-28 (S.D. Ohio), concerns the VITAS hospice segment of the Company's business.   Plaintiff seeks, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and November 16, 2011, compensatory damages in an unspecified amount and attorneys' fees and expenses, arising from defendants' failure to disclose an alleged fraudulent scheme to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.   Defendants believe the allegations are without merit, and intend to defend vigorously against them.

Regardless of outcome, defense of litigation adversely affects us through defense costs, diversion of our time and related publicity.

Regulatory Matters

In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter.  In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review.   In February 2010, VITAS received a companion civil investigative demand ("CID") from the State of Texas Attorney General's Office, seeking related documents. In September 2010, it received a second CID and a second administrative subpoena seeking related documents.  In April 2011, the U.S. Attorney provided the Company with a copy of qui tam complaint filed under seal in the U.S. District Court for the Northern District of Texas.  The Court unsealed this complaint in November 2011.  The U.S. Attorney and the Attorney General for the State of Texas filed a notice in November 2011 that they had decided not to intervene at that time in the case.  They continue to investigate its allegations.  It was brought by Michael Rehfelt, a former Vitas San Antonio program general manager, against Vitas, the program's former Regional Vice President Keith Becker, its former Medical Director Justos Cisneros, and their current employers:  Wellmed Medical Management, Care Level Management LLC, and Inspiris Inc.  It alleges admission and recertification of inappropriate patients, backdating revocations, and conspiring with HMO defendants to admit inappropriate patients to hospice.  In June 2011, the U.S. Attorney provided the Company with a partially unsealed second qui tam complaint filed under seal in the U.S. District court for the Western District of Texas.  In June 2011, the U.S. Attorney also provided the Company with a partially unsealed third qui tam complaint filed under seal in the Northern District of Illinois, Eastern Division.  We are conferring with the U.S. Attorney regarding the Company's defenses to each complaint's allegations.  We can neither predict the outcome of this investigation nor estimate our potential liability, if any.  We believe that we are in compliance with Medicare and Medicaid rules and regulations applicable to hospice providers.

In April 2005, the Office of Inspector General ("OIG") for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS' alleged failure to appropriately bill Medicare and Medicaid for hospice services.  As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS' three largest programs for review.  It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges.  During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us.  The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florida with prejudice in July 2007.  The plaintiffs appealed this dismissal, which the Court of Appeals affirmed.  The government continues to investigate the complaint's allegations.  In March 2009, we received a letter from the government reiterating the basis of their investigation.  We are unable to estimate our potential liability, if any, with respect to this matter.

The costs to comply with either of these investigations were not material for any period presented.  Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity.

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Loans Receivable From Independent Contractors (Schedule Of Independent Contractors) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Loans Receivable From Independent Contractors [Abstract]
Revenues	$ 26,711	$ 22,943	$ 21,620
Pretax profits	$ 13,320	$ 10,695	$ 9,466

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Capital Stock Transactions (Tables)

12 Months Ended

Dec. 31, 2011

Capital Stock Transactions [Abstract]

Schedule Of Capital Stock Repurchases

	For the Years Ended December 31,
	2011		2010		2009
Shares repurchased		2,602,513		1,648,047		15,900
Weighted average price per share	$	55.28	$	63.14	$	46.65

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Other Income - Net (Tables)

12 Months Ended

Dec. 31, 2011

Other Income - Net [Abstract]

Schedule Of Other Income - Net From Continuing Operations

	For the Years Ended December31,
	2011			2010			2009
Market value gains on assets held in deferred
compensation trust	$	798		$	2,210		$	5,802
Loss on disposal of property and equipment		(441	)		(425	)		(369	)
Interest income		426			444			423
Other - net		(66	)		39			18
Total other income	$	717		$	2,268		$	5,874

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Consolidated Statement Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash Flows from Operating Activities
Net income	$ 85,979	$ 81,831	$ 73,784
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	29,499	29,043	27,902
Provision for uncollectible accounts receivable	8,563	9,078	10,833
Stock option expense	8,376	7,762	8,639
Amortization of discount on convertible notes	7,576	7,081	6,617
Provision for deferred income taxes (Note 12)	7,242	(2,409)	4,979
Noncash portion of long-term incentive compensation	2,595	4,161	4,385
Amortization of debt issuance costs	1,137	654	632
Discontinued operations (Note 9)			253
Changes in operating assets and liabilities, excluding amounts acquired in business combinations:
Decrease/(increase) in accounts receivable	26,896	(68,656)	33,754
Decrease/(increase) in inventories	(940)	(151)	29
Decrease/(increase) in prepaid expenses	(1,124)	332	(455)
Increase/(decrease) in accounts payable and other current liabilities	(1,397)	13,810	(8,109)
Increase in income taxes	2,708	4,825	623
Increase in other assets	(4,009)	(4,398)	(1,678)
Increase in other liabilities	4,548	5,999	272
Excess tax benefit on share-based compensation	(3,854)	(3,357)	(1,955)
Other sources	548	407	327
Net cash provided by operating activities	174,343	86,012	160,832
Cash Flows from Investing Activities
Capital expenditures	(29,592)	(25,639)	(21,496)
Business combinations, net of cash acquired (Note 8)	(3,664)	(9,469)	(1,919)
Other uses	(858)	(592)	573
Net cash used by investing activities	(34,114)	(35,700)	(22,842)
Cash Flows from Financing Activities
Purchases of treasury stock (Note 21)	(147,886)	(109,330)	(4,225)
Dividends paid	(12,538)	(11,881)	(8,157)
Proceeds from exercise of stock options (Note 4)	8,036	5,327	545
Excess tax benefit on share-based compensation	3,854	3,357	1,955
Debt issuance costs	(2,657)
Increase/(decrease) in cash overdraft payable	(826)	(581)	2,891
Repayment of long-term debt (Note 3)			(14,669)
Net change in revolving line of credit			(8,200)
Other sources/(uses)	(48)	297	658
Net cash used by financing activities	(152,065)	(112,811)	(29,202)
Increase/(decrease) in cash and cash equivalents	(11,836)	(62,499)	108,788
Cash and cash equivalents at beginning of year	49,917	112,416	3,628
Cash and cash equivalents at end of year	$ 38,081	$ 49,917	$ 112,416

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Lease Arrangements (Summary Of Future Minimum Rental Payments And Sublease Rentals To Be Received Under Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011
Lease Arrangements [Abstract]
2012	$ 19,797
2013	14,995
2014	12,030
2015	9,725
2016	5,155
Thereafter	2,146
Total minimum rental payments	63,848
Less: minimum sublease rentals	(69)
Net minimum rental payments	$ 63,779

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Long-Term Debt And Lines Of Credit

12 Months Ended

Dec. 31, 2011

Long-Term Debt And Lines Of Credit [Abstract]

Long-Term Debt And Lines Of Credit

3.      Long-Term Debt and Lines of Credit

As of December 31, 2011, we have long-term debt of $166.8 million (December 31, 2010 - $159.2 million).  This long-term debt is related in its entirety to our Convertible Notes that are due in full in 2014.

2011 REFINANCING

On March 1, 2011, we replaced our existing credit agreement with our Revolving Credit Facility ("2011 Credit Agreement").  Terms of the 2011 Credit Agreement consist of a five-year, $350 million revolving credit facility.  This 2011 Credit Agreement has a floating interest rate that is currently LIBOR plus 175 basis points (2.11% at December 31, 2011).  The 2011 Credit Agreement also includes a $150 million expansion feature.  Debt issuance costs written-off related to the previous existing credit agreement are not material.

CONVERTIBLE NOTES

In May 2007, we issued $200 million of Senior Convertible Notes due 2014 (the "Notes") at a price of $1,000 per Note, less an underwriting fee of $27.50 per Note.  We received approximately $194 million in net proceeds from the sale of the Notes after paying underwriting fees, legal and other expenses.  We pay interest on the Notes on May 15 and November 15 of each year, beginning on November 15, 2007. The Notes mature on May 15, 2014. The Notes are guaranteed on an unsecured senior basis by each of our subsidiaries that are a borrower or a guarantor under any senior credit facility, as defined in the Indenture.  The Notes were convertible, under certain circumstances, into our Capital Stock at an initial conversion rate of 12.3874 shares per $1,000 principal amount of Notes.  This conversion rate is equivalent to an initial conversion price of approximately $80.73 per share. Prior to March 1, 2014, holders may convert their Notes under certain circumstances. On and after March 1, 2014, the Notes will be convertible at any time prior to the close of business three days prior to the stated maturity date of the Notes. Upon conversion of a Note, if the conversion value is $1,000 or less, holders will receive cash equal to the lesser of $1,000 or the conversion value of the number of shares of our Capital Stock. If the conversion value exceeds $1,000, in addition to this, holders will receive shares of our Capital Stock for the excess amount.  The Indenture contains customary terms and covenants that upon certain events of default, including without limitation, failure to pay when due any principal amount, a fundamental change or certain cross defaults in other agreements or instruments, occurring and continuing; either the trustee or the holders of 25% in aggregate principal amount of the Notes may declare the principal of the Notes and any accrued and unpaid interest through the date of such declaration immediately due and payable. In the case of certain events of bankruptcy or insolvency relating to any significant subsidiary or to us, the principal amount of the Notes and accrued interest automatically becomes due and payable.

The conversion rate on the Notes is adjusted upon certain corporate events including a quarterly dividend payment in excess of $0.06 per share.  We have increased the dividend per share periodically since issuing the Notes.  This has the effect of changing the conversion rate to 12.5589 ($79.62 per share) at December 31, 2011.

Pursuant to the FASB's guidance on accounting for derivative instruments indexed to, and potentially settled in a company's own stock as well as the guidance on the meaning of "indexed to a company's own stock," the Notes are accounted for as convertible debt in the accompanying consolidated balance sheet and the embedded options within the Notes have not been accounted for as separate derivatives.  FASB's guidance requires all such convertible debentures to be separately accounted for as debt and equity pieces of the instrument.  At inception of the convertible instrument, cash flows related to the convertible instrument are to be discounted using a market rate of interest.

The following amounts are included in our consolidated balance sheet related to the Notes (in thousands):

	December 31,
	2011			2010
Principal amount of convertible debentures	$	186,956		$	186,956
Unamortized debt discount		(20,172	)		(27,748	)
Carrying amount of convertible debentures	$	166,784		$	159,208
Additional paid in capital (net of tax)	$	31,310		$	31,310

In conjunction with the Notes, we entered into a purchased call transaction and a warrant transaction (written call) with JPMorgan Chase, National Association and Citibank, N.A. (the "Counterparties").  The purchased call options cover approximately 2,477,000 shares of our Capital Stock, which under most circumstances represents the maximum number of shares of Capital Stock that underlie the Notes.  Concurrently with entering into the purchased call options, we entered into warrant transactions with each of the Counterparties. Pursuant to the warrant transactions, we sold to the Counterparties warrants to purchase in the aggregate approximately 2,477,000 shares of our Capital Stock. In most cases, the sold warrants may not be exercised prior to the maturity of the Notes.

The purchased call options and sold warrants are separate contracts with the Counterparties, are not part of the terms of the Notes and do not affect the rights of holders under the Notes. A holder of the Notes will not have any rights with respect to the purchased call options or the sold warrants.  The purchased call options are expected to reduce the potential dilution upon conversion of the Notes if the market value per share of the Capital Stock at the time of exercise is greater than the conversion price of the Notes at time of exercise. The sold warrants have an exercise price of $105.44 and are expected to result in some dilution should the price of our Capital Stock exceed this exercise price.

Our net cost for these transactions was approximately $27.3 million.  Pursuant to FASB's authoritative guidance, the purchased call option and the sold warrants are accounted for as equity transactions.  Therefore, our net cost was recorded as a decrease in stockholders' equity in the accompanying consolidated balance sheet.

The following amounts comprise interest expense included in our consolidated income statement (in thousands):

	December 31,
	2011		2010		2009
Cash interest expense	$	5,175	$	4,224	$	4,350
Non-cash amortization of debt discount		7,576		7,081		6,617
Amortization of debt costs		1,137		654		632
Total interest expense	$	13,888	$	11,959	$	11,599

The unamortized debt discount is amortized using the effective interest method over the remaining life of the Notes.  The effective rate on the Notes after adoption of the standard is 6.875%. The average interest rate for our long-term debt was 1.9% for the years ended December 31, 2011 and 2010.

Capitalized interest was not material for any of the periods shown.  Summarized below are the total amounts of interest paid during the years ended December 31 (in thousands):

2011	$	4,754
2010		4,113
2009		4,667

DEBT COVENANTS

Collectively, the 2011 Credit Agreement and the Notes require us to meet certain restrictive non-financial and financial covenants. We are in compliance with all non-financial debt covenants as of December 31, 2011.  The restrictive financial covenants are defined in the 2011 Credit Agreement and include maximum leverage ratios, minimum fixed charge coverage and consolidated net worth ratios, limits on operating leases and minimum asset value limits.  We are in compliance with the financial debt covenants as of December 31, 2011, as follows:

Description	Requirement	Chemed
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj.
EBITDA)	< 3.50 to 1.00	1.09 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash
Flow/Consolidated Fixed Charges)	> 1.50 to 1.00	2.47 to 1.00
Annual Operating Lease Commitment	< $30.0 million	$19.8 million

We have issued $29.5 million in standby letters of credit as of December 31, 2011, mainly for insurance purposes.  Issued letters of credit reduce our available credit under the revolving credit agreement.  As of December 31, 2011, we have approximately $320.5 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the expansion feature.

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Long-Term Debt And Lines Of Credit (Interest Expense Included In Consolidated Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Long-Term Debt And Lines Of Credit [Abstract]
Cash interest expense	$ 5,175	$ 4,224	$ 4,350
Non-cash amortization of debt discount	7,576	7,081	6,617
Amortization of debt costs	1,137	654	632
Total interest expense	$ 13,888	$ 11,959	$ 11,599

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Income Taxes (Schedule Of Significant Changes To Unrecognized Tax Benefits) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2007
Income Taxes [Abstract]
Balance at January 1,	$ 704	$ 1,010	$ 1,202	$ 1,300
Unrecognized tax benefits due to positions taken in current year	2,038	119	136
Decrease due to settlement with taxing authorities			(214)
Decrease due to expiration of statute of limitations	(130)	(425)	(93)
Other			(21)
Balance at December 31,	$ 2,612	$ 704	$ 1,010	$ 1,300

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Intangible Assets (Schedule By Year Of Projected Amortization Expense For Definite-Lived Intangible Assets) (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Intangible Assets [Abstract]
2012	$ 1,487,000
2013	1,487,000
2014	508,000
2015	277,000
2016	242,000
Thereafter	307,000
Amortization of definite-lived intangible assets	$ 1,500,000	$ 2,100,000	$ 4,000,000

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Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions

20.      Related Party Transactions

VITAS has two pharmacy services agreements ("Agreements") with Omnicare, Inc. and its subsidiaries ("OCR") whereby OCR provides specified pharmacy services for VITAS and its hospice patients in geographical areas served by both VITAS and OCR.  The Agreements renew automatically for one-year terms.  Either party may cancel the Agreements at the end of any term by giving 90 days prior written notice.  VITAS made purchases from OCR of $39.4 million, $36.1 million and $33.1 million for the years ended December 31, 2011, 2010 and 2009, respectively. VITAS' accounts payable to OCR and its subsidiaries are not material at December 31, 2011 and 2010.

Mr. Joel F. Gemunder retired as President and Chief Executive Officer of OCR during the third quarter of 2010 and is a director of the Company.  Ms. Andrea Lindell is a director of both OCR and the Company.  We believe that the terms of these agreements are no more or less favorable to VITAS than we could negotiate with an unrelated party.

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Discontinued Operations (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2009	Dec. 31, 2011 DuBois [Member]	Dec. 31, 2010 DuBois [Member]	Dec. 31, 2011 Maximum [Member] DuBois [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Estimated liability for potential environmental cleanup and related costs from the sale		$ 1,700,000	$ 1,700,000
Discontinued operations, amount included in other current liabilities		826,000
Discontinued operations, amount included in other liabilities (long-term)		901,000
Contingent liability for incurring additional environmental cleanup and related costs				14,900,000
Casualty insurance claims	$ (400,000)

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2011

Intangible Assets [Abstract]

Schedule By Year Of Projected Amortization Expense For Definite-Lived Intangible Assets

2012	$	1,487
2013		1,487
2014		508
2015		277
2016		242
Thereafter		307

Schedule Of Intangible Assets

	Gross		Accumulated			Net Book
	Asset		Amortization			Value
December 31, 2011
Referral networks	$	21,729	$	(18,647	)	$	3,082
Covenants not to compete		9,286		(8,885	)		401
Customer lists		1,222		(1,118	)		104
Reacquired franchise rights		974		(254	)		720
Subtotal - definite-lived intangibles		33,211		(28,904	)		4,307
VITAS trade name		51,300		-			51,300
Operating licenses		2,655		-			2,655
Total	$	87,166	$	(28,904	)	$	58,262
December 31, 2010
Referral networks	$	21,140	$	(17,427	)	$	3,713
Covenants not to compete		9,211		(8,814	)		397
Customer lists		1,223		(1,089	)		134
Reacquired franchise rights		974		(108	)		866
Subtotal - definite-lived intangibles		32,548		(27,438	)		5,110
VITAS trade name		51,300		-			51,300
Operating licenses		1,448		-			1,448
Total	$	85,296	$	(27,438	)	$	57,858

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Properties And Equipment

12 Months Ended

Dec. 31, 2011

Properties And Equipment [Abstract]

Properties And Equipment

13.   Properties and Equipment

A summary of properties and equipment follows (in thousands):

	December 31,
	2011			2010
Land	$	1,360		$	1,360
Buildings		40,424			32,788
Transportation equipment		19,412			18,837
Machinery and equipment		62,467			58,706
Computer software		44,805			47,203
Furniture and fixtures		58,317			51,277
Projects under development		2,875			1,817
Total properties and equipment		229,660			211,988
Less accumulated depreciation		(146,709	)		(132,696	)
Net properties and equipment	$	82,951		$	79,292

The net book value of computer software at December 31, 2011 and 2010, was $15.4 million and $18.9 million, respectively.  Depreciation expense for computer software was $5.6 million, $5.9 million and $4.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net sales and service revenues	$ 1,355,970	$ 1,280,545	$ 1,190,236
Cost of services provided and goods sold	970,484	906,016	834,574
Selling, general and administrative expenses	202,260	201,964	197,426
Depreciation	25,247	24,386	21,535
Amortization	4,252	4,657	6,367
Other operating expenses			3,989
Total costs and expenses	1,202,243	1,137,023	1,063,891
Income/ (loss) from operations	153,727	143,522	126,345
Interest expense	(13,888)	(11,959)	(11,599)
Other (expense)/income - net	717	2,268	5,874
Income before income taxes	140,556	133,831	120,620
Income tax (provision)/ benefit	(54,577)	(52,000)	(46,583)
Income from continuing operations	85,979	81,831	74,037
Discontinued Operations			(253)
Net income	85,979	81,831	73,784
Parent Company [Member]
Selling, general and administrative expenses	21,895	23,262	23,199
Depreciation	945	860	602
Amortization	1,756	1,404	1,222
Other operating expenses			3,989
Total costs and expenses	24,596	25,526	29,012
Income/ (loss) from operations	(24,596)	(25,526)	(29,012)
Interest expense	(13,177)	(11,596)	(11,040)
Other (expense)/income - net	16,507	15,520	5,428
Income before income taxes	(21,266)	(21,602)	(34,624)
Income tax (provision)/ benefit	6,564	6,859	12,058
Equity in net income of subsidiaries	100,681	96,574	96,603
Income from continuing operations			74,037
Discontinued Operations			(253)
Net income	85,979	81,831	73,784
Guarantor Subsidiaries [Member]
Net sales and service revenues	1,328,425	1,254,856	1,166,972
Cost of services provided and goods sold	955,628	892,596	822,788
Selling, general and administrative expenses	172,368	170,223	163,600
Depreciation	23,496	22,732	20,221
Amortization	2,496	3,253	5,145
Total costs and expenses	1,153,988	1,088,804	1,011,754
Income/ (loss) from operations	174,437	166,052	155,218
Interest expense	(587)	(363)	(565)
Other (expense)/income - net	(16,591)	(15,451)	(5,422)
Income before income taxes	157,259	150,238	149,231
Income tax (provision)/ benefit	(59,407)	(56,905)	(56,543)
Equity in net income of subsidiaries	3,001	3,308	4,043
Income from continuing operations			96,731
Net income	100,853	96,641	96,731
Non-Guarantor Subsidiaries [Member]
Net sales and service revenues	27,545	25,689	23,264
Cost of services provided and goods sold	14,856	13,420	11,786
Selling, general and administrative expenses	7,997	8,479	10,627
Depreciation	806	794	712
Total costs and expenses	23,659	22,693	23,125
Income/ (loss) from operations	3,886	2,996	139
Interest expense	(124)		6
Other (expense)/income - net	801	2,199	5,868
Income before income taxes	4,563	5,195	6,013
Income tax (provision)/ benefit	(1,734)	(1,954)	(2,098)
Income from continuing operations			3,915
Net income	2,829	3,241	3,915
Consolidating Adjustments [Member]
Net sales and service revenues
Cost of services provided and goods sold
Selling, general and administrative expenses
Depreciation
Amortization
Other operating expenses
Total costs and expenses
Income/ (loss) from operations
Interest expense
Other (expense)/income - net
Income before income taxes
Income tax (provision)/ benefit
Equity in net income of subsidiaries	(103,682)	(99,882)	(100,646)
Income from continuing operations			(100,646)
Discontinued Operations
Net income	$ (103,682)	$ (99,882)	$ (100,646)