You should read the following discussion together with our unaudited condensed
consolidated financial statements and the related notes included elsewhere in
this quarterly report on Form 10-Q. This discussion contains forward-looking
statements about our business and operations. Statements that are predictive in
nature, that depend upon or refer to future events or conditions or that include
words like "believes," "belief," "expects," "plans," "anticipates," "intends,"
"projects," "estimates," "may," "might," "would," "should" and similar
expressions are intended to be forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. These statements are based on
the beliefs and assumptions of our management based on information currently
available to management. Such forward-looking statements are subject to risks,
uncertainties and other important factors that could cause actual results and
the timing of certain events to differ materially from future results expressed
or implied by such forward-looking statements. These risks and uncertainties
include, but are not limited to, the anticipated impact to our business with
respect to developments related to the COVID-19 pandemic, including, without
limitation, those related to the length and severity of the pandemic, as well as
the timing, availability and adoption of effective medical treatments and
vaccines; the pandemic's impact on our operations, reimbursement and our
consumer population; measures we are taking to respond to the pandemic; the
impact of government regulation and stimulus measures, including the Coronavirus
Aid, Relief, and Economic Security Act ("CARES Act"), Paycheck Protection
Program and Health Care Enhancement Act ("PPPHCE Act"), the Consolidated
Appropriations Act, 2021 ("CAA"), the Covid-Related Tax Relief Act of 2020, the
American Rescue Plan of 2021 ("ARPA") and other stimulus legislation, along with
the related uncertainties regarding the implementation of such stimulus measures
and any future stimulus measures related to COVID-19; increased expenses related
to personal protective equipment ("PPE"), labor, supply chain, or other
expenditures; and workforce disruptions and supply shortages and disruptions;
changes in operational and reimbursement processes and payment structures at the
state or federal levels; changes in Medicaid, Medicare, other government program
and managed care organizations policies and payment rates; changes in, or our
failure to comply with, existing, federal and state laws or regulations, or our
failure to comply with new government laws or regulations on a timely basis;
competition in the healthcare industry; the geographical concentration of our
operations; changes in the case mix of consumers and payment methodologies;
operational changes resulting from the assumption by managed care organizations
of responsibility for managing and paying for our services to consumers; the
nature and success of future financial and/or delivery system reforms; changes
in estimates and judgments associated with critical accounting policies; our
ability to maintain or establish new referral sources; our ability to renew
significant agreements or groups of agreements; our ability to attract and
retain qualified personnel; federal, city and state minimum wage pressure,
including any failure of Illinois or any other governmental entity to enact a
minimum wage offset and/or the timing of any such enactment; changes in payments
and covered services due to the overall economic conditions, including economic
and business conditions resulting from the COVID-19 pandemic, and deficit
spending by federal and state governments; cost containment initiatives
undertaken by state and other third-party payors; our ability to access
financing through the capital and credit markets; our ability to meet debt
service requirements and comply with covenants in debt agreements; business
disruptions due to natural disasters, acts of terrorism, pandemics, riots, civil
insurrection or social unrest, looting, protests, strikes or street
demonstrations; our ability to integrate and manage our information systems; our
ability to prevent cyber-attacks or security breaches to protect our computer
systems and confidential consumer data; our expectations regarding the size and
growth of the market for our services; the acceptance of privatized social
services; our expectations regarding changes in reimbursement rates; eligibility
standards and limits on services imposed by state governmental agencies; the
potential for litigation; discretionary determinations by government officials;
our ability to successfully implement our business model to grow our business;
our ability to continue identifying, pursuing, consummating and integrating
acquisition opportunities and expand into new geographic markets; the impact of
acquisitions and dispositions on our business, including the potential inability
to realize the benefits of the acquisition of Queen City Hospice, LLC and its
affiliate Miracle City Hospice, LLC (together "Queen City Hospice"); the
potential impact of the discontinuation or modification of LIBOR; the
effectiveness, quality and cost of our services; our ability to successfully
execute our growth strategy; changes in tax rates; the impact of public health
emergencies, including the COVID-19 pandemic; the impact of inclement weather or
natural disasters; and various other matters, many of which are beyond our
control. In addition, the risk factors set forth in Part I, Item 1A of our
Annual Report on Form 10-K for the period ended December 31, 2020, filed with
the SEC on March 1, 2021 may result in these differences. You should carefully
review all of these factors. Moreover, our business may be materially adversely
affected by factors that are not currently known to us, by factors that we
currently consider immaterial or by factors that are not specific to us, such as
general economic conditions. These forward-looking statements were based on
information, plans and estimates at the date of this report, and we assume no
obligation to update any forward-looking statements to reflect changes in
underlying assumptions or factors, new information, future events or other
changes, except as may be required by law.

Overview



We are a home care services provider operating in three segments: personal care,
hospice and home health. Our services are principally provided in-home under
agreements with federal, state and local government agencies, managed care
organizations, commercial insurers and private individuals. Our consumers are
predominantly "dual eligible," meaning they are eligible to receive both
Medicare and Medicaid benefits. Managed care revenues accounted for 37.9% and
39.1% of our net service revenues during the three months ended March 31, 2021
and 2020, respectively.

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A summary of our financial results for the three months ended March 31, 2021 and 2020 is provided in the table below.





                         For the Three Months Ended March 31,
                             2021                    2020
                                (Amounts in Thousands)
Net service revenues   $         205,302       $         190,216
Net income             $           8,894       $           8,658




As of March 31, 2021, we provided our services in 22 states through 208 offices.
For the three months ended March 31, 2021 and 2020, we served approximately
50,000 and 49,000 discrete individuals, respectively. Our personal care segment
also includes staffing services, with clients including assisted living
facilities, nursing homes and hospice facilities.

COVID-19 Pandemic Update



COVID-19, the disease caused by a novel coronavirus continues to be widespread
throughout the United States and other parts of the world. Governments and
public health officials continue to recommend and mandate precautions to
mitigate the spread of the virus, including closures of and limitations on many
businesses and places of public assembly. As a result, COVID-19 has
significantly affected and continues to affect the overall economic conditions
in the United States. However, the number of cases of COVID-19 has decreased in
the United States in recent months, and many of the restrictions related to the
COVID-19 pandemic in the United States have been relaxed as the result of such
decrease. Moreover, vaccines are expected to be widely available in the second
quarter of 2021 and are currently being distributed across the country. The FDA
continues to facilitate the development of therapeutics to combat COVID-19 as
well as provide oversight for the development of additional vaccines. It is
difficult to predict how long the pandemic will last, how many people are likely
to be affected by it or the duration or types of restrictions that will be
imposed or re-imposed as the situation is continuously evolving. For these and
other reasons, we are unable to predict the long-term impact of the pandemic on
our business at this time.

For the three months ended March 31, 2021, COVID-19-related expenses were
approximately $2.1 million, which were offset by $1.8 million of temporary rate
increases from certain payors in our personal care segment and $0.9 million
related to the utilization of a portion of the funds received from the Provider
Relief Fund in November 2020 and included in cost of service revenues on the
Condensed Consolidated Statements of Income. As of March 31, 2021, the Company
deferred the recognition of $5.1 million of payments received from payors for
COVID-19 reimbursement, included within accrued expenses, which will be
recognized as we incur specific expenses related to the pandemic, such as
expenses related to acquiring additional PPE, or will be returned if
COVID-19-related expenses are not incurred. We are not able to reasonably
predict the total costs we will incur related to the COVID-19 pandemic, and such
costs could be substantial.

With the widespread adverse impacts of the COVID-19 pandemic on the hospitality
and other labor-intensive industries, we continue to believe we will have an
opportunity to increase our hiring of new caregivers for such period of time as
the pandemic continues to have a negative impact on employment in the United
States. However, in the near term, enhanced unemployment benefits have
suppressed the opportunity to attract this new pool of potential caregivers. For
example, the Continued Assistance for Unemployed Workers Act, signed into law on
December 27, 2020, provides up to 50 weeks of unemployment benefits plus an
additional $300 per week in supplemental benefits. Moreover, in the event that
conditions related to the pandemic significantly improve and we return to a
period of low unemployment in the United States, these conditions may hinder our
ability to attract and retain sufficient caregivers.

As the COVID-19 pandemic progresses, federal agencies continue to issue related
regulations and guidance, and the public health emergency continues to evolve,
and, therefore, we cannot currently predict with certainty the extent to which
our business, results of operations, financial condition or liquidity will
ultimately be impacted. We continue to assess the potential impact of COVID-19
and government responses to the pandemic, including the enactment and
implementation of the CARES Act, the PPPHCE Act, the CAA, the ARPA and other
stimulus legislation, on our business, results of operations, financial
condition and cash flows. Given the dynamic nature of these circumstances, the
related financial effect cannot be reasonably estimated at this time but is not
expected to materially adversely impact our business. See Part I, Item 1A-"Risk
Factors - The COVID-19 pandemic could negatively affect our operations, business
and financial condition, and our liquidity could also be negatively impacted,
particularly if the U.S. economy remains unstable for a significant amount of
time" of our Annual Report on Form 10-K for the period ended December 31, 2020,
filed with the SEC on March 1, 2021.

See "Liquidity and Capital Resources" below for additional information regarding funds received related to COVID-19 relief.

Acquisitions

In addition to our organic growth, we have grown through acquisitions that have expanded our presence in current markets or facilitated our entry into new markets where in-home care has been moving to managed care organizations.



On July 1, 2020, we completed the acquisition of A Plus for approximately $14.5
million, including the amount of excess cash held by A Plus at the closing of
the acquisition (approximately $2.8 million), with funding provided by available
cash. With the purchase of A Plus, we expanded our personal care services in the
state of Montana.

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On November 1, 2020, we completed the acquisition of County Homemakers for
approximately $15.8 million, including the amount of acquired excess cash held
by County Homemakers at the closing of the acquisition (approximately $1.1
million), with funding provided by available cash. With the purchase of County
Homemakers, we expanded our personal care services in the state of Pennsylvania.

On December 4, 2020, we completed the acquisition of Queen City Hospice for
approximately $194.8 million, including the amount of acquired excess cash held
by Queen City Hospice at the closing of the acquisition (approximately $15.4
million). With the purchase of Queen City Hospice, we expanded our hospice
services in the state of Ohio. Additionally, on December 1, 2020, we completed
the acquisition of SunLife Home Care for approximately $1.7 million. With the
purchase of SunLife Home Care, we expanded our personal care services in the
state of Arizona. We funded these acquisitions through a combination of our
revolving credit facility and available cash.

Revenue by Payor and Significant States



Our payor clients are principally federal, state and local governmental agencies
and managed care organizations. The federal, state and local programs under
which the agencies operate are subject to legislative, budgetary and other risks
that can influence reimbursement rates. We are experiencing a transition of
business from government payors to managed care organizations, which we believe
aligns with our emphasis on coordinated care and the reduction of the need for
acute care.

For the three months ended March 31, 2021 and 2020, our revenue by payor and significant states by segment were as follows:





                                                                         Personal Care
                                                             For the Three Months Ended March 31,
                                                         2021                                     2020
                                                               % of Segment                             % of Segment
                                               Amount           Net Service             Amount           Net Service
                                           (in Thousands)        Revenues           (in Thousands)        Revenues
State, local and other governmental
programs                                  $         80,849              49.0   %   $         79,346              49.4   %
Managed care organizations                          75,456              45.8                 72,110              44.9
Private pay                                          4,903               3.0                  5,270               3.3
Commercial insurance                                 2,346               1.4                  2,576               1.6
Other                                                1,314               0.8                  1,363               0.8
Total personal care segment net service
revenues                                  $        164,868             100.0   %   $        160,665             100.0   %
Illinois                                  $         73,385              44.5   %   $         71,545              44.5   %
New York                                            27,575              16.7                 31,838              19.8
New Mexico                                          23,593              14.3                 20,694              12.9
All other states                                    40,315              24.5                 36,588              22.8
Total personal care segment net service
revenues                                  $        164,868             100.0   %   $        160,665             100.0   %







                                                                               Hospice
                                                                For the Three Months Ended March 31,
                                                            2021                                     2020
                                                                   % of Segment                            % of Segment
                                                  Amount            Net Service            Amount           Net Service
                                              (in Thousands)         Revenues          (in Thousands)        Revenues
Medicare                                     $         33,985               94.2   %   $        23,219              92.1   %
Managed care organizations                              1,487                4.1                 1,385               5.5
Other                                                     622                1.7                   608               2.4
Total hospice segment net service revenues   $         36,094              100.0   %   $        25,212             100.0   %
Ohio                                         $         14,114               39.1   %   $             -                 -   %
New Mexico                                              9,230               25.6                11,009              43.7
All other states                                       12,750               35.3                14,203              56.3
Total hospice segment net service revenues   $         36,094              100.0   %   $        25,212             100.0   %


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With the acquisition of Queen City Hospice, the Company expanded our hospice services in the state of Ohio.

Home Health
                                                               For the

Three Months Ended March 31,


                                                          2021                                       2020
                                                                  % of Segment                             % of Segment
                                               Amount             Net Service              Amount           Net Service
                                           (in Thousands)           Revenues           (in Thousands)        Revenues
Medicare                                  $          3,502                 80.7   %   $          3,470              80.0   %
Managed care organizations                             798                 18.4                    807              18.6
Other                                                   40                  0.9                     62               1.4
Total home health segment net service
revenues                                  $          4,340                100.0   %   $          4,339             100.0   %
New Mexico                                $          4,340                100.0   %   $          4,339             100.0   %
Total home health segment net service
revenues                                  $          4,340                100.0   %   $          4,339             100.0   %






We derive a significant amount of our net service revenues in Illinois, which
represented 35.8% and 37.7% of our net service revenues for the three months
ended March 31, 2021 and 2020, respectively.

A significant amount of our net service revenues are derived from one payor client, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 20.4% and 23.2% of our net service revenues for the three months ended March 31, 2021 and 2020, respectively.



On November 26, 2019, the City of Chicago voted to approve additional increases
in the Chicago minimum wage to $14 per hour beginning July 1, 2020 to $15 per
hour beginning July 1, 2021.

The state of Illinois finalized its fiscal year 2021 budget, with in-home care
rates to be increased by 7.1% to $23.40 from $21.84, effective January 1, 2021,
contingent upon federal CMS approval. Although federal CMS approval was obtained
by the state, as a result of on-going state revenue declines due to COVID-19 and
the failure of the November 2020 referendum to revise the Illinois income tax
code, on December 15, 2020, the Governor of Illinois announced a delay in the
implementation of the scheduled rate increase to April 1, 2021, at which time
such rate increase went into effect.

On February 17, 2021, the Governor of Illinois introduced his fiscal year 2022
proposed budget, including a statewide rate increase from $23.40 to $24.96
effective January 1, 2022. State trade associations are advocating to accelerate
the rate increase to July 1, 2021 (the beginning of the state's next fiscal
year), to coincide with the increase of the minimum wage to $15 per hour,
because the ARPA provides for a 10 percentage point increase in federal matching
funds for Medicaid home and community-based services from April 1, 2021, through
March 30, 2022, provided the state satisfies certain conditions, but there can
be no assurances that this will occur.

Our business will benefit from the rate increases noted above, but there is no
assurance that additional offsetting rate increases will be adopted in Illinois
for fiscal years beyond fiscal year 2021, and our financial performance will be
adversely impacted for any periods in which an additional offsetting
reimbursement rate increase is not in effect.

Impact of Changes in Medicare and Medicaid Reimbursement

Home Health



Home health services provided to Medicare beneficiaries are paid under the
Medicare Home Health Prospective Payment System ("HHPPS"). CMS updates the HHPPS
payment rates each calendar year. Effective calendar year 2021, HHPPS rates
increased by 2.0%, which reflects a 2.3% market basket update, reduced by a
multifactor productivity adjustment of 0.3 percentage points. CMS expects
Medicare payments to home health agencies in 2021 to increase in the aggregate
by 1.9% after accounting for a 0.1 percentage point decrease in payments to home
health agencies due to changes in the rural add-on percentages mandated by the
Bipartisan Budget Act of 2018. Home health providers that do not comply with
quality data reporting requirements are subject to a 2 percentage point
reduction to their market basket update.

Historically, CMS paid home health providers 50% to 60% of anticipated payment
at the beginning of a patient's care episode through a request for anticipated
payment ("RAP"). However, to address potential program integrity risks, CMS has
phased out RAP payments. In calendar year 2021, CMS will not provide any
up-front payments in response to a RAP but will continue to require home health
providers to submit streamlined RAPs as notice that a beneficiary is under a
home health period of care. In calendar year 2022, CMS will replace the RAP with
a "Notice of Admission."

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Hospice

Hospice services provided to Medicare beneficiaries are paid under the Medicare
Hospice Prospective Payment System, under which CMS sets a daily rate for each
day a patient is enrolled in the hospice benefit. CMS updates these rates each
federal fiscal year. Effective October 1, 2020, CMS increased hospice payment
rates by 2.4%. This reflected a 2.4% market basket increase reduced by the
multifactor productivity adjustment of 0.0 percentage points. Additionally, the
aggregate cap, which limits the total Medicare reimbursement that a hospice may
receive based on an annual per-beneficiary cap amount and the number of Medicare
patients served, was updated to $30,683.93 for federal fiscal year 2021. If a
hospice's Medicare payments exceed its aggregate cap, it must repay Medicare the
excess amount.

New York CDPAP

On February 11, 2021, the state of New York announced its initial selection of
parties to enter into contracts as a Lead Fiscal Intermediary under its
previously announced Request for Offer ("RFO") process related to its Consumer
Directed Personal Assistance Program ("CDPAP"), in which the Company currently
participates as a provider. The Company was not one of the selected entities in
the initial RFO process. The announcement followed an extended RFO process first
begun in 2019, with responses originally due in February 2020. Management
believes changes are unlikely to occur during an estimated nine to 12 month
transition period and does not expect a financial impact in 2021. Based on its
current run rate, the Company estimates it will receive $52 million and $4
million in revenue and operating income, respectively, from the program for the
year ended December 31, 2021. The Company continues to explore its options,
including appeals, other arrangements under which the Company may continue to
provide these services, and expense reductions to minimize any potential final
impact of the RFO process.

On April 6, 2021, the New York Legislature finalized the fiscal year 2022 state
budget. Among the actions taken since the Governor's proposed budget, the
legislature included a provision to add one or two entities per county to those
awarded the Lead Fiscal Intermediary, based on the scoring of the original RFO.
As scoring of RFOs was not publicly released, it is unknown at this time if the
Company's score ranked high enough to qualify for these additional awards. In
the meantime, we continue to pursue other arrangements including our protest of
the award, which was filed and accepted on March 19, 2021. We are awaiting a
response to the formal protest.

Components of our Statements of Income

Net Service Revenues



We generate net service revenues by providing our services directly to consumers
and primarily on an hourly basis in our personal care segment, on a daily basis
in our hospice segment and on an episodic basis in our home health segment. We
receive payment for providing such services from our payor clients, including
federal, state and local governmental agencies, managed care organizations,
commercial insurers and private pay consumers.

In our personal care segment, net service revenues are principally provided
based on authorized hours, determined by the relevant agency, at an hourly rate,
which is either contractual or fixed by legislation, and are recognized at the
time services are rendered. In our hospice segment, net service revenues are
provided based on daily rates for each of the levels of care and are recognized
as services are provided. In our home health segment, net service revenues are
based on an episodic basis at a stated rate and recognized based on the number
of days elapsed during a period of care within the reporting period. We also
record estimated implicit price concessions (based primarily on historical
collection experience) related to uninsured accounts to record revenues.

Cost of Service Revenues



We incur direct care wages, payroll taxes and benefit-related costs in
connection with providing our services. We also provide workers' compensation
and general liability coverage for our employees. Employees are also reimbursed
for their travel time and related travel costs in certain instances.

General and Administrative Expenses



Our general and administrative expenses include our costs for operating our
network of local agencies and our administrative offices. Our agency expenses
consist of costs for supervisory personnel, our community care supervisors and
office administrative costs. Personnel costs include wages, payroll taxes, and
employee benefits. Facility costs include rents, utilities, and postage,
telephone and office expenses. Our corporate and support center expenses include
costs for accounting, information systems, human resources, billing and
collections, contracting, marketing and executive leadership. These expenses
consist of compensation, including stock-based compensation, payroll taxes,
employee benefits, legal, accounting and other professional fees, travel,
general insurance, rents, provision for doubtful accounts and related facility
costs. Expenses related to streamlining our operations such as costs related to
terminated employees, termination of professional services relationships, other
contract termination costs and asset write-offs are also included in general and
administrative expenses.

Depreciation and Amortization Expenses

Depreciable assets consist principally of furniture and equipment, network administration and telephone equipment, and operating system software. Depreciable and leasehold assets are depreciated or amortized on a straight-line method over their useful lives or, if less and if


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applicable, their lease terms. We amortize our intangible assets with finite
lives, consisting of customer and referral relationships, trade names,
trademarks and non-competition agreements, using straight line or accelerated
methods based upon their estimated useful lives.

Interest Expense

Interest expense is reported when incurred and principally consists of interest and unused credit line fees on the credit facility.

Income Tax Expense



All of our income is from domestic sources. We incur state and local taxes in
states in which we operate. The effective income tax rate was 19.0% and 14.2%
for the three months ended March 31, 2021 and 2020, respectively, compared to
our federal statutory rate of 21%. The difference between our federal statutory
and effective income tax rates was principally due to an excess tax benefit and
the use of federal employment tax credits, offset by the inclusion of state
taxes and non-deductible compensation.

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